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ABSTRACT
This paper advances a measure of knowledge complexity to analyse for Ireland whether more complex knowledge is generated by local or foreign firms. Information on assignees, technological structure and global ownership contained within a recently developed Irish patent database forms the basis for distinguishing between technologies developed by local and nonlocal firms. Thereafter, our knowledge complexity index uses a modified bipartite network to link these technologies to their country of origin, i.e. local or nonlocal. Our results indicate that the most complex technologies tend to be produced in a few diverse regions. Furthermore, the majority of complex knowledge is generated in technology classes where the share of foreign activity is greater than local firms.
Disclosure statement
No potential conflict of interest was reported by the author.
Notes
1 It should be noted that these types of knowledge are not mutually exclusive whereby firms will employ a mixture of both codified and tacit knowledge in their day-to-day operations.
2 As it directly relates to the current investigation, Kogler and Whittle (Citation2018) have demonstrated that patent data is among the most suitable methodological sources for analysing technological knowledge in Ireland chiefly because Ireland has three pronounced clusters in information communication technologies, pharmaceuticals and medical technologies all of which have a necessity to patent.
3 The author would like to thank one of the reviewers for pointing out the fact that under these circumstances a technology would be listed as ‘foreign’ even if all the inventors on the patent are Irish. Moreover, because the research question is primarily focused at the firm level, we overlook the fact that it may just be Irish inventors working for a foreign firm. Such questions are beyond the scope of the current investigation but should form the basis of future research in this area.
4 It is important to mention that the overall limitations of RCAs as an indicator of industrial concentration are becoming increasingly well known throughout economic geography. In their recent contribution, Van Egeraat, Morgenroth, Kroes, Curran, and Gleeson (Citation2018) highlight a number of these shortcomings and propose an alternative measure of specialisation based on a Concentration Index (CI). This index takes into consideration a number of features including share of activity, employment, number of firms and the size distribution of concentrations to name but a few and is therefore better able to identify areas of substantial industrial concentrations.
5 As a robustness check, we also calculated the change in technological complexity but categorized it using the share of foreign activity for the periods 1981–1990 and 1981–2010. The results remain constant confirming the intuition that foreign firms operating in Ireland are (and continually have been) technologically superior compared to their local counterparts. These findings are in line with other contributions to the literature which have also examined the role of foreign direct investment in Ireland (Van Egeraat & Barry, Citation2009; Kogler & Whittle, Citation2018).