Exploring the relationship between KIBS co-location and the innovativeness of the manufacturing firms in Latin America

Abstract

Literature has provided empirical evidence showing the importance of location for understanding KIBS effective service provision. According to territorial servitization postulates KIBS are also fundamental for the development of the manufacturing firms. Despite KIBS can be an important source of innovation, limited attention is paid of KIBS in Latin America region. The purpose of this research is analysing the relationship between KIBS co-location and innovativeness of the manufacturing firms. Drawing on the World Bank Enterprise Survey 2017 for Latin-American countries, authors analyse 3,029 manufacturing firms using OLS method. Findings indicate that manufacturing firms’ location based on KIBS proximity is a critical determinant of innovativeness. This relationship is considerably stronger in Central American countries, where according to our data there is KIBS scarcity.