The effects of regional capacity in knowledge recombination on production efficiency

May 18, 2023 7:01 am Published by

Knowledge recombination activities, i.e., combining present knowledge domains (exploitation) or adding new capabilities (exploration), drives innovative outcomes. Nevertheless, little is known about how different knowledge recombination activities potentially influence production efficiency levels at a regional level. Thus, the objective is to explore the relationship between exploitative and explorative knowledge recombination processes in the context of production efficiencies. Utilizing EPO PATSTAT patent data and Eurostat regional indicators, the investigation follows three stages: Firstly, CPC co-occurrence network analysis and relative comparative advantage (RCA) measures are employed to construct knowledge spaces and to measure regional capacity levels. Then, via stochastic frontier analysis, the production efficiencies of European NUTS 2 regions are measured. Finally, and utilizing all previous measures, the effects of both explorative and exploitative knowledge recombination processes and their impact on regional production efficiencies are estimated. Results indicate a positive effect of exploration on regional production efficiency, which in turn highlights the how important it is for regional economies to continuously extend the range and variety of knowledge production capabilities to maintain or even growth their respective production efficiencies.

Categorised in:

This post was written by admin