“Knowledge spillovers as a base for economic upgrading in Global Production Networks (GPNs)”: A case study for innovative Colombian manufacturing firms

Abstract

Globalization caused economies to become interconnected at a global scale in the end of the 20th century. More recently, economies have become knowledge-based as knowledge encourages innovation which may lead to increased economic performance of firms. In 2001, scientists came up with the organizational term Global Production Networks (GPNs) to position firms and locations within this internationalized knowledge-based economy. Since economies are subject to change through innovation, so are their positionings in GPNs. The purpose of the paper is to combine sources of knowledge spillovers and firm performance with theory on economic upgrading in GPNs. The focus is specifically on firms that do or do not participate in GPNs. The study is based on an empirical dataset for innovative manufacturing firms in Colombia, a country that showed tremendous economic growth over the past decades. The article concludes that national knowledge sources contribute to improved firm performance, while firms who are embedded in GPNs benefit more from innovation compared to firms that are not embedded in GPNs. Besides, we provide a detailed overview of the characteristics of firms that acquire relatively more sources of knowledge spillovers, while we link these spillovers to multiple types of improved firm performances as a result of innovation.