Proximity and its impact on the formation of product and process innovation networks among producer firms

ABSTRACTInformal networks among manufacturing firms play an important role in the transfer of knowledge in industrial clusters. Proximity facilitates the networking process; however, empirical evidence on the relationship between multiple proximity dimensions and different kinds of innovation networks is scarce, especially in developing economies. Using multiple regression quadratic assignment procedures (MRQAP), this paper studies the relationship between four proximity dimensions and innovation networks for new product and new process innovations in the Lahore textile cluster in Pakistan. Our findings suggest that both geographical and non-geographical proximity dimensions show a distinct impact on product and process innovations networks.KEYWORDS: networksproximityinnovationindustrial clustersdeveloping economiesJEL: D85L14O18R12 DISCLOSURE STATEMENTNo potential conflict of interest was reported by the authors.Notes1. These definitions are commonly used in innovation measurement efforts, for example, the OSLO manual or Community Innovation Surveys.2. See http://ntu.edu.pk/3. See http://www.pbs.gov.pk/sites/default/files/other/PSIC_2010.pdf4. We use UCINET6 software to calculate cosine similarity index.Additional informationFundingThis study was supported by the Higher Education Commission of Pakistan [grant number PD/OS-II/Batch-8/Final/2013/10088].