Absorptive Capacity and Regional Patterns of Innovation

This paper considers whether differences in absorptive capacity at the firm-level are determinants of regional variations in innovation performance. Differences in firms ’ absorptive capacity are also due to sectoral and technological specificities. Both firms ’ absorptive capacity and sectoral structure differ widely across regions: this analysis focuses on the former while controlling for the latter aspect in order to evaluate regional differences in firms ’ propensity to innovate. The empirical analysis is based on the use of two different and complementary firm-level databases covering UK enterprises. First, the UK Innovation Survey 2005 (UK CIS4) and second, the newly collected Small and Medium-sized Enterprises Survey carried out by the Centre for Business Research at the University of Cambridge. The use of two data sets allows for comparisons on a wide range of indicators on firms ’ absorptive capacity and for different types of innovation. The CIS4 database provides information on a large sample of firms while the CBR allows for more comprehensive details on firms ’ characteristics in terms of innovative strategies and absorptive capacity. Furthermore, the analysis incorporates complementary evidence based on in-depth case study analysis of thirteen companies included in the CB