IDEAS home Printed from https://ideas.repec.org/a/pid/journl/v55y2016i4p705-714.html
   My bibliography  Save this article

Is Innovation in Pakistan Driven by Specialisation or Diversity?

Author

Listed:
  • Adeel Ali

    (Project Economist/Research Assistant, Applied Economics Research Centre, University of Karachi, Karachi)

  • Faizan Iftikhar

    (Assistant Professor, Applied Economics Research Centre, University of Karachi, Karachi)

  • Muhammad Sabihuddin Butt

    (Associate Professor, Applied Economics Research Centre, University of Karachi, Karachi)

Abstract

Innovation is among the main drivers of industrial development leading to economic growth. However, the question triggers that what drives innovation? Is innovation driven by specialisation or diversification? The literature has supported both, the specialisation and diversification as driver of innovation. Therefore, the purpose of this paper is to explore the determinants of innovation in Pakistan with a special emphasis on specialisation and diversity. The analysis is based on the cross sectional data set of 784 firms across 13 different cities of Pakistan, i.e. Investment Climate Survey (ICS) 2007, compiled by the World Bank Enterprise Group. Our findings have showed the positive relation between innovation and diversity i.e. diversity is conducive to innovation. On the other hand, specialisation has a negative effect i.e. it hinders innovation in cities of Pakistan.

Suggested Citation

  • Adeel Ali & Faizan Iftikhar & Muhammad Sabihuddin Butt, 2016. "Is Innovation in Pakistan Driven by Specialisation or Diversity?," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 55(4), pages 705-714.
    • Handle: RePEc:pid:journl:v:55:y:2016:i:4:p:705-714
    as

    Download full text from publisher

    File URL: http://www.pide.org.pk/pdf/PDR/2016/Volume4/705-714.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Romer, Paul M, 1986. "Increasing Returns and Long-run Growth," Journal of Political Economy, University of Chicago Press, vol. 94(5), pages 1002-1037, October.
    2. Hans Lööf & Almas Heshmati, 2003. "The link between firm-level innovation and aggregate productivity growth: a cross-country examination," Research Evaluation, Oxford University Press, vol. 12(2), pages 131-147, August.
    3. Lee, Cassey, 2004. "The Determinants of Innovation in the Malaysian Manufacturing Sector: An Econometric Analysis at the Firm Level," Centre on Regulation and Competition (CRC) Working papers 30670, University of Manchester, Institute for Development Policy and Management (IDPM).
    4. Rachel Griffith & Elena Huergo & Jacques Mairesse & Bettina Peters, 2006. "Innovation and Productivity Across Four European Countries," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 22(4), pages 483-498, Winter.
    5. Krugman, Paul, 1991. "Increasing Returns and Economic Geography," Journal of Political Economy, University of Chicago Press, vol. 99(3), pages 483-499, June.
    6. Glaeser, Edward L & Hedi D. Kallal & Jose A. Scheinkman & Andrei Shleifer, 1992. "Growth in Cities," Journal of Political Economy, University of Chicago Press, vol. 100(6), pages 1126-1152, December.
      • Edward L. Glaeser & Hedi D. Kallal & Jose A. Scheinkman & Andrei Shleifer, 1991. "Growth in Cities," NBER Working Papers 3787, National Bureau of Economic Research, Inc.
      • Glaeser, Edward Ludwig & Kallal, Hedi D. & Scheinkman, Jose A. & Shleifer, Andrei, 1992. "Growth in Cities," Scholarly Articles 3451309, Harvard University Department of Economics.
    7. K. J. Arrow, 1971. "The Economic Implications of Learning by Doing," Palgrave Macmillan Books, in: F. H. Hahn (ed.), Readings in the Theory of Growth, chapter 11, pages 131-149, Palgrave Macmillan.
    8. Scherer, F. M., 1983. "The propensity to patent," International Journal of Industrial Organization, Elsevier, vol. 1(1), pages 107-128, March.
    9. Hughes, Kirsty S., 1986. "Exports and innovation: A simultaneous model," European Economic Review, Elsevier, vol. 30(2), pages 383-399, April.
    10. Richard C. Levin & Alvin K. Klevorick & Richard R. Nelson & Sidney G. Winter, 1987. "Appropriating the Returns from Industrial Research and Development," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 18(3, Specia), pages 783-832.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Feldman, Maryann P. & Audretsch, David B., 1999. "Innovation in cities:: Science-based diversity, specialization and localized competition," European Economic Review, Elsevier, vol. 43(2), pages 409-429, February.
    2. Thomas Doring & Jan Schnellenbach, 2006. "What do we know about geographical knowledge spillovers and regional growth?: A survey of the literature," Regional Studies, Taylor & Francis Journals, vol. 40(3), pages 375-395.
    3. Luis Suarez-Villa & Wallace Walrod, 1997. "Operational Strategy, R&D and Intra-metropolitan Clustering in a Polycentric Structure: The Advanced Electronics Industries of the Los Angeles Basin," Urban Studies, Urban Studies Journal Limited, vol. 34(9), pages 1343-1380, August.
    4. Andrés Rodríguez-Pose & Riccardo Crescenzi, 2008. "Mountains in a flat world: why proximity still matters for the location of economic activity," Cambridge Journal of Regions, Economy and Society, Cambridge Political Economy Society, vol. 1(3), pages 371-388.
    5. William Bowen & Mark Atlas & Sugie Lee, 2009. "Industrial agglomeration and the regional scientific explanation of perceived environmental injustice," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 43(4), pages 1013-1031, December.
    6. Baptista, Rui & Swann, Peter, 1998. "Do firms in clusters innovate more?," Research Policy, Elsevier, vol. 27(5), pages 525-540, September.
    7. Yuandi Wang & Lutao Ning & Jian Li & Martha Prevezer, 2016. "Foreign Direct Investment Spillovers and the Geography of Innovation in Chinese Regions: The Role of Regional Industrial Specialization and Diversity," Regional Studies, Taylor & Francis Journals, vol. 50(5), pages 805-822, May.
    8. Harabi, Najib, 1994. "Technischer Fortschritt in der Schweiz: Empirische Ergebnisse aus industrieökonomischer Sicht [Technischer Fortschritt in der Schweiz:Empirische Ergebnisse aus industrieökonomischer Sicht]," MPRA Paper 6725, University Library of Munich, Germany.
    9. Wilfried Koch, 2005. "Neighborhood Effects In The Solow Model With Spatial Externalities," ERSA conference papers ersa05p723, European Regional Science Association.
    10. Rita Almeida & Ana M. Fernandes, 2013. "Explaining local manufacturing growth in Chile: the advantages of sectoral diversity," Applied Economics, Taylor & Francis Journals, vol. 45(16), pages 2201-2213, June.
    11. Olof Ejermo, 2005. "Technological Diversity and Jacobs’ Externality Hypothesis Revisited," Growth and Change, Wiley Blackwell, vol. 36(2), pages 167-195, June.
    12. Jennifer Day & Peter Ellis, 2013. "Growth in Indonesia's manufacturing sectors: Urban and localization contributions," Regional Science Policy & Practice, Wiley Blackwell, vol. 5(3), pages 343-368, August.
    13. Le Blanc, Gilles, 2000. "Regional Specialization, Local Externalities And Clustering In Information Technology Industries," ERSA conference papers ersa00p168, European Regional Science Association.
    14. Michael J. Orlando, 2000. "On the importance of geographic and technological proximity for R&D spillovers : an empirical investigation," Research Working Paper RWP 00-02, Federal Reserve Bank of Kansas City.
    15. Rita Almeida, 2007. "Local Economic Structure and Growth," Spatial Economic Analysis, Taylor & Francis Journals, vol. 2(1), pages 65-90.
    16. Nelson, Andrew J., 2009. "Measuring knowledge spillovers: What patents, licenses and publications reveal about innovation diffusion," Research Policy, Elsevier, vol. 38(6), pages 994-1005, July.
    17. Haedo, Christian & Mouchart, Michel, 2018. "Automatic biclustering of regions and sectors," LIDAM Discussion Papers ISBA 2018026, Université catholique de Louvain, Institute of Statistics, Biostatistics and Actuarial Sciences (ISBA).
    18. Xiaobing Shuai, 2013. "Will specialization continue forever? A case study of interactions between industry specialization and diversity," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 50(1), pages 1-24, February.
    19. Andrew Perumal, 2017. "42 Years of Urban Growth and Industry Composition," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 45(2), pages 133-147, June.
    20. ZHAO Ting & ZHAO Wei, 2012. "Dynamic Externalities and Manufacturing Productivity: An empirical comparison among China's top three municipalities," Discussion papers 12072, Research Institute of Economy, Trade and Industry (RIETI).

    More about this item

    Keywords

    Innovation; Specialisation; Diversity; Logistic Regression;
    All these keywords.

    JEL classification:

    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions; Probabilities
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pid:journl:v:55:y:2016:i:4:p:705-714. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Khurram Iqbal (email available below). General contact details of provider: https://edirc.repec.org/data/pideipk.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.