Sectorial spillovers of knowledge and innovation in the manufacturing industry: A multilevel analysis

The purpose of this research is to analyze the relationship between sectorial spillovers of knowledge and innovative performance in Colombian manufacturing firms. A Poisson multilevel regression model is developed to analyze these effects, taking into account the nested and hierarchical structure of the data. A database of 4,780 small and medium-sized Colombian companies operating in 66 sectors is used for the analysis. The simultaneous analysis of variables of level of firm and sectorial level show a positive relationship between the firms' innovative performance and sectorial spillovers of knowledge, so that innovation at these firms depends on their own efforts and on innovation achieved by their competitors, suppliers and customers. These results suggest that firms in developing countries, faced with internal and external limitations on innovation, can benefit from knowledge generated by firms with whom they compete and by firms from sectors with which they establish relationships for exchange.