Research Article

The Impact of Local Demand on Innovation in a Global Industry

  1. Kira R. Fabrizio1,*,
  2. L. G. Thomas2

Article first published online: 28 JUN 2011

DOI: 10.1002/smj.942

Issue

Strategic Management Journal

Strategic Management Journal

Volume 33, Issue 1, pages 42–64, January 2012

Additional Information

How to Cite

Fabrizio, K. R. and Thomas, L. G. (2012), The Impact of Local Demand on Innovation in a Global Industry. Strat. Mgmt. J., 33: 42–64. doi: 10.1002/smj.942

Author Information

  1. 1

    Fuqua School of Business, Duke University, Durham, North Carolina, U.S.A.

  2. 2

    Goizueta Business School, Emory University, Atlanta, Georgia, U.S.A.

*Fuqua School of Business, One Towerview Drive, Duke University, Durham, NC 27708, U.S.A.

Publication History

  1. Issue published online: 9 NOV 2011
  2. Article first published online: 28 JUN 2011
  3. Accepted manuscript online: 8 JUN 2011 08:31AM EST
  4. Manuscript Revised: 18 MAY 2011
  5. Manuscript Received: 3 SEP 2009

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Keywords:

  • localization;
  • innovation;
  • demand knowledge;
  • multinational firms;
  • pharmaceuticals

Abstract

Localization of knowledge flows has been extensively examined in the literature on innovation. However, almost all previous research has focused on technological knowledge. This study examines why knowledge of demand can also be tacit and localized. We provide a detailed empirical study of the global pharmaceutical industry and find not only that demand is as important as technological knowledge in determining the pattern of innovation in this industry but also that innovation is a locally determined phenomenon. These findings contribute to research regarding determinants of innovations and provide an explanation for geographic patterns of innovation that is distinct from technological knowledge spillovers. Copyright © 2011 John Wiley & Sons, Ltd.

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