Knowledge Spillovers & its Relation with Innovation at Firm Level Within a Knowledge-Intensive Cluster in Developing Countries: A Case Study of QTSC, Vietnam

This thesis has been motivated by existing theoretical and empirical gaps about the relationship between local knowledge spillovers (LKS) and innovation in the context of knowledge-intensive clusters in developing countries. So far, few efforts have been devoted toward synthesizing factors moderating the effects of LKS to innovation according to its channels. Previous studies present mixed evidence on the effects of LKS on innovation of clustered firms. In addition, contextual differences between low-cost manufacturing clusters and knowledge-intensive clusters in developing countries raise concerns about the significance of LKS to innovation of co-located firms, since these clusters often rely on knowledge rooted from abroad for their production. Likewise, while the consensus from past studies holds that global linkages play a major role for firms in developing countries to innovate, how the global connections could further diffuse knowledge, especially tacit knowledge in the form of LKS, to local communities remains unknown.

The purpose of this study is to yield a comprehensive picture of the LKS phenomenon, by addressing factors influencing the channels of LKS on the one hand, and explore how LKS via these channels may influence innovation at firm level on the other hand. This research aims to unravel the complex interactions amongst determining factors of LKS at different levels, namely intra-organisation (inside firm), intra cluster (amongst firms, and between firms and other institutions within the same cluster), and external linkages outside clusters, typically global linkages.

A case study research design with mixed-method methodology under the guidance of critical realism was conducted. Due to the scarcity of secondary data, the researcher has collected primary data, including 46 network surveys, 42 innovation surveys and 28 semi-structured interviews, from a total cluster population of 97 firms inside the largest software cluster in Vietnam named Quang Trung Software City (QTSC), during a fieldwork trip in 2018. Each type of data is analysed separately at first, then their findings are complementarily integrated to generate meta-inferences for the whole population of firms inside the cluster.

In the findings, not all channels of LKS exert equal effect on innovation at firm level. Only LKS via social interaction is beneficial for innovation, while LKS via labour mobility and spin-off do not obtain statistically significant results. The social network of firms inside the cluster is evidently sparser than that of other software clusters in developing countries. The current localised institutional setting, i.e. the presence and efficiency of available actors and institutions within the cluster, has not supported the dissemination of LKS useful for innovation.

The contributions of this study are three-fold. First, it demonstrates hierarchical levels of influences on the LKS phenomenon within a cluster from macro, industry to cluster and individual firm levels. Second, empirical findings from this research deepen and extend our understanding about factors moderating the relationship between the LKS channels and innovation of co-located firms in a knowledge-intensive cluster in developing countries. Third, the present study presents two novel points to the existing empirical literature of local-global dynamism. On the one hand, it elaborates the benefits of global linkages according to business activities of firms. On the other hand, it traces how knowledge flows from global connections could transfer to LKS via local connections.