This paper explores the factors that determine innovation by service firms, and in particular the contribution of intra- and extra-regional connectivity. Subsequently, it is examined how service firms' innovation activity relates to productivity and export behaviour. The empirical analysis is based on matched data from the 2005 UK Innovation Survey - the UK component of the 4th Community Innovation Survey (CIS) - and the Annual Business Inquiry for Northern Ireland. Evidence is found of negative intra-regional embeddedness effects, but there is a positive contribution to innovation from extra-regional connectivity, particularly links to customers. Relationships between innovation, exporting, and productivity prove complex, but suggest that innovation itself is not sufficient to generate productivity improvements. Only when innovation is combined with increased export activity are productivity gains evident.
Bibliographical noteThis is an Author's Accepted Manuscript of an article published in Love, J. H., Roper, S., & Hewitt-Dundas, N. (2010). Service innovation, embeddedness and business performance: evidence from Northern Ireland. Regional studies, 44(8), 983-1004. 2010 © Regional Studies Association, Taylor & Francis, available online at: http://www.tandfonline.com/10.1080/00343400903401568
- service firms
- regional connectivity
- export behaviour
- 2005 UK Innovation Survey
- 4th Community Innovation Survey
- Annual Business Inquiry for Northern Ireland