Location and collaboration: Manufacturing firms' use of knowledge intensive services in product innovation

Abstract

The paper addresses the relation between geographical location of firms and collaboration with knowledge intensive service providers on product innovation in a small country setting. The analysis shows that even in a small country with limited geographical distances firms located in peripheral areas are less likely to be broad users of collaboration with knowledge intensive service providers in the process of product innovation than firms located in major urban areas. However, it is only amongst firms located in the periphery that collaboration strategy seems to matter in the sense that differences in development in employment can be detected between broad and rare users of collaboration.