Discussion Papers

The Impacts of Face-to-face and Frequent Interactions on Innovation: Upstream-Downstream Relations

By Tomohiro MACHIKITA, Yasushi UEKI

ERIA Discussion Paper 2010-04

Posted: February 2010

Abstract



This paper proposes a new mechanism linking innovation and networks in developing economies to identify explicit production and information linkages and investigates the testable hypotheses of these linkages using survey data gathered from manufacturing firms in East Asia: Indonesia, Thailand, the Philippines, and Vietnam. We found that firms that dispatched engineers to customers achieved more innovations than firms that did not. Just-in-time relationship is effective for dealing with process innovation. We found that such strong complementarities are not effective for product innovation. These findings support the hypothesis that face-to-face communication and strong complementarities among buyer-seller networks have different roles in product and process innovation.

ERIA-DP-2010-04 MU_FacetoFace.pdf

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