The combined impact of managerial and relational capabilities on innovation in firms

Abstract

In this paper, a survey of more than 1600 firms in the five largest city regions of Norway is described in order to examine how a firm's innovative capacity is affected by three types of factors: factors related to the manager, the structure of the firm and the broader geographical location. By combining perspectives from the fields of management and economic geography in a logistic regression analysis, we find that the two key drivers of firm-level innovation in Norway are the presence of open-minded managers and evidence of collaboration with international partners. Moreover, these two factors are mutually reinforcing, as firms with open-minded managers also tend to engage more with international partners and vice versa.

Keywords:

• innovation
• resource-based view
• managerial capabilities
• relational capabilities
• managers' attitudes
• trust

Acknowledgements

This research has been enabled by the generous financial support from the Research Council of Norway under the Demosreg programme, the Regional Research Fund for Western Norway and the Stavanger Centre for Innovation Research. It has also been made possible by the support of the European Research Council under the European Union's Seventh Framework Programme (FP7/2007-2013)/ERC grant agreement No. 269868.

Notes

^1. The production of innovation has tended to become increasingly centralized in large agglomerations in the core of the world economy (Puga 2010; Rodríguez-Pose and Fitjar 2013), raising the pressure on smaller and more peripheral regions – even if several of the latter remain highly competitive.

^2. We use the natural log of the number of employees. This is done for two reasons: firstly, because the effect of an additional employee is expected to decline with increasing company size, and secondly, because the distribution of employees across firms is highly skewed (skewness = 10).