Moderator effect of industrial park on knowledge spillover from sectoral innovation to firm performance in Vietnam

Abstract

New economic geography in a wide range of industrial theories explains why certain activities agglomerate in a certain region through the benefits of innovation activities. However, positive external economies of innovation have been less investigated in empirical studies. This study investigates the knowledge spillover effects of sectoral innovation on firm performance through the mediating effects of industrial parks in the manufacturing industry in Vietnam. Using the Vietnam Enterprises Survey (VES) data from 2011 to 2014 with 7,236 enterprises in combination with other data from the General Statistics Office (GSO), this study applied panel data regression with mixed-effects models and presented novel findings on knowledge spillover from sectoral innovation to firm performance in Vietnam. Sectoral innovation may require two years to have a positive effect on a firm’s value added, which supports lags in innovation on the productivity nexus, as suggested by Griliches. Interestingly, this positive spillover effect may be greater for enterprises located in industrial parks. This finding approves the approach of innovation economy that economic activities based on new knowledge are likely to be grouped into geographical regions. This may imply policies that enhance the effectiveness of innovation through the development of industrial parks.