Innovation by firms and industries requires that the individual firm can combine internal and external knowledge resources. This paper studies product innovations as they are reflected by product varieties and destination markets, combined into observations of firms’ destination-specific varieties(variety pairs). The number of varieties (identified in this way) measuresthe extensive margin of exportflows from industries in local economies, reflecting past product and market (destination) innovations made by industries in each local economy. The empirical analysis identifies for each industry and local economy (i) the intra-industry knowledge resources, (ii) the local access to the supply knowledge-intensive producer services, and (iii) the access to the supply of knowledge-intensive producer servicesoutside the local economy. Thepapercontributes to existing knowledgein several ways. First, it introduces a knowledge-supply accessibility measure to model the local innovation milieu. Second, it shows the joint contribution to product innovation from internal and external knowledge sources. The estimation results supports the hypothesis that innovations are generated in the conjunction of internal and external knowledge.

We examine whether low access to banks is perceived as problematic when obtaining financial capital for innovation activities. Data on innovation obstacles from the Swedish Community Innovation Survey are combined with geo-coded data at the firm level, which allows us to proxy access to external capital by the Euclidian distance from each firm to its nearest bank and the supply within a radius of five kilometres. The results indicate that both a longer distance to the nearest bank and fewer banks in the vicinity are related to experiencing greater difficulties in obtaining external financial capital for innovations.

We examine whether low access to financial intermediaries works as an obstacle acquiring financial capital for Swedish firms by using information from the Community Innovation Survey indicating whether firms perceive the acquisition of external capital to be difficult. This perception is explained by the distance to the firms’ nearest financial intermediaries and their total local supply. The results indicate that the distance to banks is related to a larger problem of obtaining external financial capital in rural areas.

Firms in local industries maintain their capability to generate innovations by simultaneously exploiting internal and external knowledge resources. The paper introduces the notion variety triplet to distinguish individual export varieties, where a triplet is a unique combination of a firm, a product code and a destination country. For each date the set of variety triplets in each local industry records all remaining past product innovations. In view of this the paper examines how internal and external knowledge of local industries influence the industry’s scope and value of export varieties. The paper contributes to existing knowledge firstly by introducing variables that measure a local industry’s access to external supply of knowledge, divided into local and extra-local supply. Secondly, the paper sheds light on how internal and external knowledge influence the scope of product innovations in local industries, with firm-level data from Sweden. Thirdly, the paper compares the influence of knowledge on the entire set of variety triplets and on a separate set of recently introduced varieties.

Firms in local industries maintain their capability to generate new export varieties by simultaneously exploiting internal and external knowledge resources. The paper introduces the notion ‘variety triplet’ to distinguish individual export varieties, where a triplet is a unique combination of a firm, a product code and a destination country. For each date, the set of variety triplets in each local industry records all remaining export varieties introduced in the past. In view of this, the paper examines how internal and external knowledge of local industries influence the industry's scope and value of export varieties. First, the paper contributes by considering a local industry's internal and external knowledge, as well as the conjunction of its internal and external knowledge sources. Second, the knowledge sources are shown to influence both the stock and the dynamics of a local industry's variety triplets, using firm-level data from Sweden.

As a consequence of globalization, news, ideas and knowledge are moving quickly across national borders and generating international spillovers. So too, however, are economic and financial crises. Combining a variety of methods, concepts and interdisciplinary approaches, this book provides an in-depth examination of these structural changes and their impact. Assessing the implications of globalization for businesses and sectors, chapters focus on the interdependencies between different economic and political layers, and explore topics such as human capital, creativity, innovation, networks and collaboration

As a consequence of globalization, news, ideas and knowledge are moving quickly across national borders and generating international spillovers. So too, however, are economic and financial crises. Combining a variety of methods, concepts and interdisciplinary approaches, this book provides an in-depth examination of these structural changes and their impact. Assessing the implications of globalization for businesses and sectors, chapters focus on the interdependencies between different economic and political layers, and explore topics such as human capital, creativity, innovation, networks and collaboration.

The purpose of this paper is to study the firms’ internal knowledge in combination with the external knowledge diversity in their region to examine their joint relation to export diversification. Using a data set of the full population of Swedish manufacturing exporters for the period 2003-2013, allows for identifying when firms introduce new products on the export market. The results indicate that firms in the medium-high tech and the medium-low tech manufacturing sectors only benefit from a larger external knowledge diversity if they themselves have some internal knowledge increasing their absorptive capacity. Changing spatial scale or increasing the time lag yields mostly the same results, but extending the external knowledge diversity to include all types of education subjects does not. This further supports the suggested importance of an absorptive capacity to facilitate the acquisition, assimilation and usage of related external knowledge in producing new products.

The purpose of this paper is to examine the joint relationship between firms’ internal and external knowledge and their introduction of new export products. This is accomplished using the full population of Swedish manufacturing exporters for the period 2003–2013. The results indicate that, in most cases, firms only benefit from external knowledge if they have high internal knowledge that decreases their cognitive proximity to the external knowledge. This supports the hypothesised importance of absorptive capacity in facilitating the acquisition, assimilation and usage of related external knowledge in producing new products.

This thesis consists four independent papers. In each paper the purpose is to analyse firm renewal, with special consideration to regional characteristics. Highlighted here are the knowledge available in the region where a firm is located as well as the local supply of financial intermediaries.

The first paper analyses how the interaction of firms’ internal and external knowledge, in terms of knowledge intensive business services (KIBS), is related to the intensive and extensive margins of export flows. The second paper can be considered a continuation of the first, as the focus is solely on the export of new products. Also here, the interaction of internal and external knowledge is the main focus, analysed through education types. The results of these papers suggest that the regional contexts are indeed relevant for firm renewal, as firms that benefit from being located in areas with high external knowledge already have high internal knowledge.

The third paper shifts focus to the innovation process itself by analysing how the access to the local supply of banks is related to firms’ perceived obstacles for innovation activities. The results indicate that lower access to banks increases the probability to experience problems obtaining external capital, which could be detrimental for firms’ renewal possibilities in the long run. The fourth paper focus on the creation of firms and analyses whether individuals are more or less likely to be self-employed after having children in a context where an extensive welfare system exists. The results show that individuals are less likely to be self-employed after having children than before, thus lowering the rate of firm renewal in the economy.

Studies from a multitude of countries suggest that women become self-employed after having children to facilitate the work-family balance. In Sweden, generous parental leave and heavily subsided childcare is available, facilitating for parents to hold salaried jobs. The purpose of this paper is to examine whether having children increases the likelihood of individuals being self-employed. One major contribution is that this study covers the whole population, including men, with a quantitative analysis, instead of a sample through interviews and/or surveys. The results suggest that most individuals are less likely to be self-employed after having children, thus contrasting most other studies.