Joris Knoben

Employment from new firm formation in the Netherlands: Agglomeration economies and the Knowledge Spillover Theory of Entrepreneurship

Within the recent literature on the geography of new firm formation, much attention is given to the role of regional knowledge sources based on the Knowledge Spillover Theory of Entrepreneurship. At the same time, several other studies show the importance of agglomeration economies for new firm formation. The goal of this study is to assess the relative importance of these determinants for differences in the share of employment creation from new firms at the level of municipalities for the period of 1999–2006 in the Netherlands. It is found that the traditional drivers of new firm formation, such as economic growth and agglomeration effects, have a much stronger effect on new firm formation compared to measures of the regional knowledge base. Moreover, it is shown that when not correcting for the presence of agglomeration effects, the role of local knowledge resources is easily over-estimated, pointing to the dangers of misspecifications of models. The results imply that the knowledge spillover theory of entrepreneurship should, at least for the Netherlands, not be exaggerated.

The Effects of Spatial Mobility on the Performance of Firms

Abstract A considerable body of research has analyzed the impact of a firm’s geographic position and levels of organizational and territorial embeddedness on its performance. Generally these studies have assumed that firms are immobile. Research that has focused on the effects of the relocation of firms has treated firms mainly as atomistic actors that can move freely in geographic space and has tended to neglect the influence of changes in a firm’s geographic position and level of organizational and territorial embeddedness. We integrated insights from both streams of literature to answer the research question, “What are the effects of relocation on a firm’s performance, and what is the influence of a firm’s geographic position and its level of organizational and territorial embeddedness on this relationship?” On the basis of our analysis of data from a survey of managers of Dutch automation services firms, we found that the degree of impact of a firm’s relocation on its performance depends on the characteristics of the relocation. For example, a move to an urbanized region hampers performance, whereas a move to a research and development-intensive region fosters a higher level of performance. Furthermore, firms with high levels of organizational embeddedness suffer in the short term from relocation, but benefit in the long run.

The Geographic Distance of Relocation Search: An Extended Resource-Based Perspective

Abstract On the basis of the extended resource-based view of firms, access to external resources can be argued to depend on a firm’s location. In this article, I test the notion that firms take the availability of these external resources at a given location into account in the distance of their relocation search. The results show that firms take the strength of, and distance to their interorganizational relationships, as well as regional characteristics, into account when determining the distance of their relocation search. They provide empirical validation of the importance of external resources in the resource-based view of firms. Moreover, they show how a particular type of dynamics, namely, location dynamics, can be used by firms to gain access to resources that can subsequently lead to competitive advantage.

Agglomeration and firm performance: One firm’s medicine is another firm’s poison

In this paper, we aim to reduce the ambiguity surrounding the agglomeration–performance relationship. We do so by taking firm-level and agglomeration-level heterogeneity into account simultaneously and focusing on the interactions between these two levels of analysis in explaining the effect of agglomeration on firm performance. Our central argument is that while some firms will benefit from agglomeration, others will be harmed by it. To assess our claims, we estimate multilevel models on firms’ productivity with nonlinear interaction effects between the agglomeration-level (urbanization, specialization, and knowledge intensity) and firm-level variables (size, internal knowledge base, and face-to-face contacts) using data from a sample of Dutch firms. Our results show that the effects of different dimensions of agglomeration on firm performance are strongly and nonlinearly moderated by firm characteristics. Moreover, the moderation effect is not uniform across the different agglomeration dimensions.

Employment dynamics on business estates

The central question of this paper is: “What is the magnitude of different forms of employment dynamics on business estates in the Netherlands between 2000 and 2005 and to what extent are the employment dynamics on business estates different from employment dynamics in general?” In order to answer this question, we examine three kinds of local employment dynamics: (1) entries and exits, (2) inter-municipal relocation and (3) the growth/decline of existing firms. We find that new firm formation and inter-municipal relocation do not lead to employment growth on business estates. However, the in situ employment growth on business estates is higher than the general employment growth in the Netherlands. Therefore, it can be concluded that business estates play an important role in local employment dynamics by facilitating the growth of incumbent firms.

The importance of external knowledge sources for the newness of innovations of South African firms

Relatively little is known about the importance of different types of external knowledge sources for the innovation outcomes of firms. Recently, several studies have been published that have started to fill this gap by studying the effects of different types of external knowledge sources on the innovativeness of firms. We add to this literature by taking a wider range of different external knowledge sources into account, by focusing on more different levels of novelty of innovations and by studying firms in an emerging economy (i.e., South Africa). The findings indicate that there are significant differences between the effects of different types of external knowledge sources. Furthermore, it is found that there is an inverted U-shaped relation between the level of diversity of utilised external knowledge sources and innovation outcomes. The findings strongly support to idea that it is useful to distinguish many different types of external knowledge sources as well as different levels of novelty of innovations.

Human capital and innovation in Sub-Saharan countries: a firm-level study

AbstractThis paper contributes to the scarce literature on the relationship between human capital and innovation at the firm-level. In this paper we examine whether human capital endowments, such as the general level of schooling within a firm, and practices of firms, such as formal training and employee slack time, have a positive relationship with the innovative output of firms. We contribute by using a more sophisticated approach and analyse how different combinations of human capital elements affect innovation. We study this relationship in Sub-Saharan countries where the general level of human capital is lower compared with developed countries. The results illustrate that internal mechanisms that spur human capital are of particular importance for innovative output in this context. In addition, our results indicate that specific combinations of human capital elements can even have negative effects. In particular, for firms in the manufacturing sector that offer employee slack, the effect of employee ...

Contradictory yet Coherent? Inconsistency in Performance Feedback and R&D Investment Change

In this paper, we study to what extent inconsistent feedback signals about performance affect firm adaptive behavior in terms of changes made to research-and-development (R&D) investments. We argue that inconsistency in performance feedback—based on discrepancies between two distinct performance signals—affects the degree to which such investments will be changed. Our aim is to show that accounting for inconsistent performance feedback is necessary as predictions for the direction of change in R&D investments based on the individual performance feedback signals are contradictory. Furthermore, we contribute by proposing a holistic consideration mechanism as an alternative to the selective attention mechanism previously applied to inconsistent performance feedback. Our findings show that the impact of inconsistency depends on the exact configuration of the underlying performance feedback signal discrepancies. While consistently negative performance feedback signals would amplify their impact in stimulating increased R&D investments, inconsistent performance feedback signals created more nuanced effects. Having lower performance compared to an industry-based peer group—despite doing well compared to the previous year—made firms decrease their R&D investments. For the opposite case of inconsistent performance feedback, we did not find an effect on change in R&D investments. These findings support to a degree our contention that explaining the effects of inconsistent performance feedback requires a holistic consideration theoretical mechanism instead of one involving selective attention. In sum, these findings suggest future research should take into account the differences between distinct instances of inconsistent performance feedback.

Effect of knowledge sources on firm-level innovation in Tanzania

ABSTRACT This paper analyses the impact of different sources of knowledge on product and process innovation in Tanzania using firm-level data. We specifically analyse the separate impacts of internal knowledge, external knowledge and the combined impact of both types of knowledge on firms’ product and process innovation decisions. The analysis reveals that the purchase of machinery, equipment or software, year of firm establishment, the sector a firm belongs to, and internal research and development impact on product and process innovation. Product innovation is more constrained by a lack of external knowledge than process innovation. External research and development do not affect product or process innovation and the joint effect of internal and external knowledge on product innovation exceeds the separate effects of internal and external knowledge on innovation. Furthermore, external knowledge acquisition and firm spending on internal research and development affect product and process innovation more effectively for older firms and firms in the services sector. Finally, the interaction of external and internal knowledge raises chances of undertaking product and process innovation with internal and external knowledge having greater impact on innovation when internal and external knowledge complement each other than when utilized separately.

Paralyzed by the dashboard light: Environmental characteristics and firm’s scanning capabilities in East Africa:

Firms in East Africa face highly uncertain environments, fueling environmental dynamism, changes in industry structures, and enhanced competitive dynamics. In order to understand the opportunities and challenges within such an environment, extant theory argues that firms need to develop scanning capabilities. However, since the effect of environmental characteristics on the development of firm capabilities in lower income countries is unclear, we analyze how different environmental characteristics drive or hamper such capabilities. We focus specifically on scanning capabilities that allow firms to respond swiftly to changing needs by monitoring their environment. We include four environmental characteristics: environmental dynamism, heterogeneity, formal and informal competition. We investigate this in Kenya, Tanzania, and Uganda, from which we mustered a sample of 440 manufacturing firms. Our main results indicate that environmental dynamism and informal competition have a paralyzing effect on the development of firms’ scanning capabilities in East Africa, which implies that environmental characteristics may hamper rather than help the development of firm capabilities.