Scandinavian Working Papers in Economics
Papers in Innovation Studies,
Lund University, CIRCLE - Centre for Innovation Research
No 2013/24: Technological competencies and firm performance: Analyzing the importance of internal and external competencies
Markus Grillitsch () and Magnus Nilsson ()
Additional contact information
Markus Grillitsch: CIRCLE, Lund University, Postal: CIRCLE, Lund University, PO Box 117, SE-22100 Lund, Sweden
Magnus Nilsson: CIRCLE, Lund University, Postal: CIRCLE, Lund University, PO Box 117, SE-22100 Lund, Sweden
Abstract: In this paper, we analyze the relationship between technological competencies (TC) and firm performance. Theoretically, the importance of TC is well established and widely accepted. Therefore, it is surprising that a number of empirical studies have been unable to confirm a substantial positive relationship between TC and firm performance. We identify two major reasons for this: [i] affected by the availability and choice of indicators existing studies are often biased towards large firms; and [ii] they frequently do not consider both internal and potential access to firm-external TC. This paper discusses conceptually the interplay between firm-internal and firm-external TC as well as the mediating effect of firm size. These relationships are then analyzed empirically using Swedish micro data on 15,682 firms in 290 Swedish municipalities. Novel indicators based on occupational statistics are combined with measures of time-distance accessibility to study internal and external TC. The results provide evidence for a positive relationship between firm growth and TC. In particular, the combination of firm-internal and firm-external competencies seems to be conducive for growth. Lastly, our study suggests that firm size is an important factor to further our understanding about these relationships. Based on this we identify a number of future research questions to be addressed.
Keywords: technological competencies; firm performance; accessibility; knowledge; innovation; geography
31 pages, September 19, 2013
Full text files
201324_Grillitsch_Nilsson.pdf
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