Highly innovative small technology firms, industrial clusters and firm internationalization

This study examines the role and differential impact of industrial clustering in the internationalization of small technology-based firms. Serial innovator firms are a set of small, long-lived technology-based firms with a stellar record of inventive success. In contrast, non-serial innovators are small technology-based firms with much weaker inventive capabilities. Using theoretical insights from the resource-based view and density dependence theory, we demonstrate that both serial and non-serial innovator firms benefit from rising levels of industrial clustering in their efforts to internationalize; however, non-serial innovators experience decreasing returns with increasing levels of clustering. In addition, our analysis indicates that overall serial innovator firms benefit more from industrial clustering in terms of internationalization than non-serial innovator firms. The underlying premise and contribution of this study is that all small technology-based firms are not the same and that serial innovators are more effective at leveraging cluster-based resources than non-serial innovators, even when they operate in the same industry. Policy implications for research and economic development are discussed.

• In this study we argue that not all small technology firms behave similarly when examining agglomeration effects.
• We show that some firms may better leverage resources in industrial clusters to initiate or intensify their internationalization than others.
• We analyze a matched dataset of serial innovators (firms with high levels of inventive prowess) and non-serial innovators (low inventive prowess).
• Serial innovators benefit consistently more from industrial clustering in their efforts to internationalize their operations than non-serial innovators.
• Non-serial innovators benefit from clustering to a lesser extent and experience decreasing returns, relative to serial innovators.