Source of Capital Goods Innovation

The results of the empirical investigation of Japan and Korea show that the user firms in both countries, represented by car makers, have involved themselves in the technical and entrepreneurial entry into machine tools along with making active investments. As a consequence, they made a considerable contribution to the innovation of machine tools, increasing their competitive advantage as well as the competence of their specialized suppliers. 1. The Source of Technological Innovation 2. The Role of User Firms in Capital Goods Innovation - the Case of Machine Tools 3. Empirical Evidence from the Japanese Case 4. Empirical Evidence from the Korean Case 5. Cross-Country Comparisons: a Panel Data Analysis 6. Conclusions and Policy Implications