The effect of cluster and firm heterogeneity on knowledge sourcing in an overseas R&D lab

Abstract

We discuss the effect of cluster and firm heterogeneity on knowledge sourcing in an overseas research and development (R & D) lab. Building on agglomeration economies, absorptive capacity view, and social capital theory, this paper proposes theories that explain certain conditions under which the enjoyment of benefits from the knowledge source can be maximised. This paper suggests that 1) the level of knowledge absorption from a region by an overseas R & D lab is likely to increase as the region contains more diverse technological profiles with a similar science base; 2) the level of knowledge absorption from a region by an overseas R & D lab is likely to increase as the lab enhances its technological capabilities; and 3) the level of knowledge absorption from a region by an overseas R & D lab is likely to increase as the lab becomes older in the cluster. We simultaneously suggest that cluster traits and firm heterogeneity influence the learning of overseas R & D labs. The consideration of both factors will provide a better understanding of knowledge spillover and its contribution to firms in the cluster.