The Impact of Local Demand on Innovation in a Global Industry
Article first published online: 28 JUN 2011
Copyright © 2011 John Wiley & Sons, Ltd.
Strategic Management Journal
Volume 33, Issue 1, pages 42–64, January 2012
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
- Issue published online: 9 NOV 2011
- Article first published online: 28 JUN 2011
- Accepted manuscript online: 8 JUN 2011 08:31AM EST
- Manuscript Revised: 18 MAY 2011
- Manuscript Received: 3 SEP 2009
- demand knowledge;
- multinational firms;
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.