Multi-dimension Measurements of Regional Absorptive Capacity and Spatial spillover of Innovations: A Micro-scale Investigation on Electronics Industry in the Pearl River Delta

Capitalizing on external knowledge for innovation is an important sign of spaitla spillover of innovations, and absorptive capacity is the requisite of innovation spillovers. This paper takes regional absorptive capacity as a multi-level variable in the micro firm level, and sets out to explore how specific components of absorptive capacity support the use of different proximities in order to sustain trustful and effective interactive learning activities. Firm absorptive capacity is divided it into three components, i.e. human capital, R&D activities and product technology. The empirical analysis of the electronics firms in the Pearl River Delta further reveals the impact of each elements of firm absorptive capacity on the interactive learning behavior in the innovation process. The result shows that current practice and past experience in high-tech fields have been identified for the electronics firms in the Pearl River Delta as the important elements in shaping the absorptive capacity to enable the effective communication with external partners. Meanwhile, higher level of human capital such as highly educated and trained managerial staff and overseas background CEO is able to facilitate the interactive learning embedded within organizational proximity than surpasses geographical boundary.