Innovation Performance and Embeddedness in Networks: Evidence from the Ethiopian Footwear Cluster

This study focuses on innovation in a cluster of informal shoemaking firms in Ethiopia—namely the Mercato footwear cluster. It examines how differently those firms are embedded in networks and how heterogeneous they are in absorptive capacity, and how this heterogeneity affects their innovation perf...

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Bibliographic Details
Published in:World development 2013-01, Vol.41, p.302-316
Main Authors: Gebreeyesus, Mulu, Mohnen, Pierre
Format: Article
Language:English
Subjects:
Absorptive capacity
Africa
Agglomeration
Business networks
Cluster analysis
Econometrics
Ethiopia
Evidence
Footwear industry
industrial clusters
Informal sector
Innovation
innovation performance
Innovations
Knowledge management
Networks
Studies
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Summary:This study focuses on innovation in a cluster of informal shoemaking firms in Ethiopia—namely the Mercato footwear cluster. It examines how differently those firms are embedded in networks and how heterogeneous they are in absorptive capacity, and how this heterogeneity affects their innovation performance. Business networks are the major channels through which knowledge flows into the cluster. The study reveals that despite geographical proximity and homogeneity in social background the firms in the cluster behave and perform differently. Based on econometric analysis we document a positive and strong effect of local network position and absorptive capacity on innovation performance.
ISSN:0305-750X
1873-5991
DOI:10.1016/j.worlddev.2012.05.029