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Innovation in New Zealand: Issues of Firm Size, Local Market Size and Economic Geography

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In this paper we report empirical evidence from a mixed methods approach to investigating the drivers of innovation in New Zealand. The evidence comes from a primary questionnaire survey we conducted across seventy-five local firms plus fifteen face-to-face case study interviews. Our survey response data is analysed using four different types of probability models and the various models are all found to be largely consistent with each other. The insights from these estimation methods are then bolstered by detailed follow-up case studies of individual firms in different industries and product groups regarding their innovation and competition experiences. Our results from both forms of evidence-gathering suggest that in a small and isolated local market such as New Zealand, smallness in terms of firm size may not be an advantage for innovation. The reason appears to be that the notion of ‘small’ itself may have an absolute minimum threshold, below which translating entrepreneurship into innovation becomes problematic. As such, applying theories of local economic development to local economies which exhibit similar features to New Zealand may require us to adjust our thinking in order to take account of different absolute scale effects in different types of economies.

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  • Philip McCann & Les Oxley & Hong Shangqin, 2009. "Innovation in New Zealand: Issues of Firm Size, Local Market Size and Economic Geography," Working Papers in Economics 09/04, University of Canterbury, Department of Economics and Finance.
    • Handle: RePEc:cbt:econwp:09/04
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    1. Fabling, Richard, 2007. "Just How Innovative are New Zealand Firms? Quantifying & Relating Organisational and Marketing Innovation to Traditional Science & Technology Indicators," Occasional Papers 07/4, Ministry of Economic Development, New Zealand.
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    8. Tether, B. S. & Smith, I. J. & Thwaites, A. T., 1997. "Smaller enterprises and innovation in the UK: the SPRU innovations database revisited," Research Policy, Elsevier, vol. 26(1), pages 19-32, March.
    9. Louviere,Jordan J. & Hensher,David A. & Swait,Joffre D., 2000. "Stated Choice Methods," Cambridge Books, Cambridge University Press, number 9780521788304, January.
    10. Roper, Stephen & Hewitt-Dundas, Nola, 2008. "Innovation persistence: Survey and case-study evidence," Research Policy, Elsevier, vol. 37(1), pages 149-162, February.
    11. International Monetary Fund, 2004. "New Zealand: Selected Issues," IMF Staff Country Reports 2004/127, International Monetary Fund.
    12. Zoltan J. Acs, 2005. "Innovation and the Growth of Cities," Contributions to Economic Analysis, in: Urban Dynamics and Growth: Advances in Urban Economics, pages 635-658, Emerald Group Publishing Limited.
    13. Ron Crawford & Richard Fabling & Arthur Grimes & Nick Bonner, 2007. "National R&D and Patenting: Is New Zealand an Outlier?," New Zealand Economic Papers, Taylor & Francis Journals, vol. 41(1), pages 69-90.
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    Cited by:

    1. Alsharkas Zeina, 2014. "Firm Size, Competition, Financing and Innovation," International Journal of Management and Economics, Warsaw School of Economics, Collegium of World Economy, vol. 44(1), pages 51-73, December.
    2. David Deakins & David North & Jo Bensemann, 2015. "Paradise lost? The case of technology-based small firms in New Zealand in the post-global financial crisis economic environment," Venture Capital, Taylor & Francis Journals, vol. 17(1-2), pages 129-150, April.
    3. METAXAS, Theodore, 2011. "Territorial Assets And Firms’ Competitiveness In Southern Europe: Industrial Vs Commercial Firms Using Exploratory Factor Analysis," Regional and Sectoral Economic Studies, Euro-American Association of Economic Development, vol. 11(1).
    4. Noori, Javad & Bagheri Nasrabadi, Mahdi & Yazdi, Najmoddin & Babakhan, Ali Reza, 2017. "Innovative performance of Iranian knowledge-based firms: Large firms or SMEs?," Technological Forecasting and Social Change, Elsevier, vol. 122(C), pages 179-185.
    5. Metaxas, Theodore & Kallioras, Dimitris, 2013. "Small and medium-sized firms' competitiveness and territorial characteristics/assets: The cases of Bari, Varna and Thessaloniki," MPRA Paper 52446, University Library of Munich, Germany.
    6. Theodore METAXAS & Athina ECONOMOU, 2016. "Assesing The Determinantts Of Firms’ Competitiveness In Greece: A Structural Equation Modeling Analysys," Review of Economic and Business Studies, Alexandru Ioan Cuza University, Faculty of Economics and Business Administration, issue 17, pages 91-113, June.
    7. Metaxas, Theodore & Duquenne, Marie Noelle, 2015. "Small and Medium Sized Firms’ Competitiveness and Territorial Characteristics by using a MLR approach," MPRA Paper 66848, University Library of Munich, Germany.
    8. Song, ChiUng & Oh, Wankeun, 2015. "Determinants of innovation in energy intensive industry and implications for energy policy," Energy Policy, Elsevier, vol. 81(C), pages 122-130.
    9. Metaxas, Theodore & Economou, Athina, 2012. "Assessing the determinants of Firms’ Competitiveness in Greece: A Structural Equation Modeling Analysis," MPRA Paper 42794, University Library of Munich, Germany.

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    More about this item

    Keywords

    Innovation; New Zealand; SME; Economic Geography;
    All these keywords.

    JEL classification:

    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy

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