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Digitization and Knowledge Spillover Effectiveness—Evidence from the “German Mittelstand”

Author

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  • Till Proeger

    (Georg-August University of Goettingen)

  • Petrik Runst

    (Georg-August University of Goettingen)

Abstract

The knowledge spillover theory of entrepreneurship (KSTE) considers determinants of knowledge diffusion as well as their impact on entrepreneurial activities and growth. Extending the KSTE, the role of incumbent firms for the broad diffusion of new knowledge has been emphasized. For those firms, the barriers to an effective flow of information are considered using the concepts of knowledge filters and absorptive capacities. Both concepts enable the derivation of institutional measures to penetrate knowledge filters and systematically increase absorptive capacities. We interpret the process of digitization as a central process of knowledge spillover in recent years and determine digitization-related knowledge filters for particular domains of firm decision-making. Using a consultant-based in-depth evaluation of 200 small and medium-sized enterprises (SMEs) conducted in the context of a federal innovation program, structural drivers, firm clusters, and domain-specific knowledge filters for digitization are determined. We find little evidence for structural drivers of knowledge spillover effectiveness. However, as firms are clustered according to their digitization pattern, we show that firms realize high degrees of digitization in most domains or in none, leading us to argue that domain-specific knowledge filters are weak. Rather, knowledge spillover in digitization can be considered a process with initially strong general knowledge filter and—once this filter has been penetrated—weaker subsequent domain-specific knowledge filters. Policy and managerial implications for increasing digitization-related knowledge spillovers in SMEs are discussed.

Suggested Citation

  • Till Proeger & Petrik Runst, 2020. "Digitization and Knowledge Spillover Effectiveness—Evidence from the “German Mittelstand”," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 11(4), pages 1509-1528, December.
    • Handle: RePEc:spr:jknowl:v:11:y:2020:i:4:d:10.1007_s13132-019-00622-3
    DOI: 10.1007/s13132-019-00622-3
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    Cited by:

    1. Meub, Lukas & Proeger, Till, 2022. "Künstliche Intelligenz in Handwerk und Mittelstand: Ein Forschungsüberblick," ifh Forschungsberichte 1, Volkswirtschaftliches Institut für Mittelstand und Handwerk an der Universität Göttingen (ifh).
    2. Malodia, Suresh & Mishra, Mahima & Fait, Monica & Papa, Armando & Dezi, Luca, 2023. "To digit or to head? Designing digital transformation journey of SMEs among digital self-efficacy and professional leadership," Journal of Business Research, Elsevier, vol. 157(C).
    3. Alessandra Colombelli & Emilio Paolucci & Elisabetta Raguseo & Gianluca Elia, 2023. "The creation of digital innovative start-ups: the role of digital knowledge spillovers and digital skill endowment," Post-Print hal-04138894, HAL.
    4. Thomä, Jörg, 2022. "An urban-rural divide (or not?): Small firm location and the use of digital technologies," ifh Working Papers 37/2022, Volkswirtschaftliches Institut für Mittelstand und Handwerk an der Universität Göttingen (ifh).
    5. Anita Thonipara & Rolf Sternberg & Till Proeger & Lukas Haefner, 2023. "Digital divide, craft firms’ websites and urban-rural disparities—empirical evidence from a web-scraping approach [Digital Divide, Websites von Handwerksunternehmen und städtisch-ländliche Disparit," Review of Regional Research: Jahrbuch für Regionalwissenschaft, Springer;Gesellschaft für Regionalforschung (GfR), vol. 43(1), pages 69-99, April.
    6. Bhandari, Krishna Raj & Zámborský, Peter & Ranta, Mikko & Salo, Jari, 2023. "Digitalization, internationalization, and firm performance: A resource-orchestration perspective on new OLI advantages," International Business Review, Elsevier, vol. 32(4).
    7. Alessandra Colombelli & Emilio Paolucci & Elisabetta Raguseo & Gianluca Elia, 2024. "The creation of digital innovative start-ups: the role of digital knowledge spillovers and digital skill endowment," Small Business Economics, Springer, vol. 62(3), pages 917-937, March.

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    More about this item

    Keywords

    Digitization; Knowledge filter; Knowledge spillover theory of entrepreneurship; Small and medium enterprises;
    All these keywords.

    JEL classification:

    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • K23 - Law and Economics - - Regulation and Business Law - - - Regulated Industries and Administrative Law
    • L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation

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