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<p>We examine how firm capabilities and regional knowledge bases co-evolve by studying Nortel, a major telecommunications manufacturer, in its home region of Ottawa–Gatineau and in the regions it rapidly entered during the late-1990s dot-com boom. We introduce a patent-based measure of technological similarity between firms and regions to operationalize their potential compatibility and embed it in a “knowledge-space” mapping approach. Across locations, inventive productivity, proxied by patent output, is higher where Nortel’s technological profile is most similar to the host region’s specialization. Technological similarity is a strong predictor of Nortel’s local patenting rates and, during corporate decline, greater technological embeddedness is associated with slower local exit. These results demonstrate that aligning firm capabilities with regional strengths materially influences innovative performance and location dynamics. The proposed knowledge-space tool offers a replicable method for business location decisions and for regional policy seeking to attract, retain, and upgrade technology-intensive activity.</p>

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The firm-location nexus: examining inventive footprint and technological evolution of Nortel over the course of its “boom and bust”

  • 期刊论文

  • 发表日期：

    2025年9月1日

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  • Dieter F. Kogler,
  • Peter Kedron,
  • Keungoui Kim

摘要

We examine how firm capabilities and regional knowledge bases co-evolve by studying Nortel, a major telecommunications manufacturer, in its home region of Ottawa–Gatineau and in the regions it rapidly entered during the late-1990s dot-com boom. We introduce a patent-based measure of technological similarity between firms and regions to operationalize their potential compatibility and embed it in a “knowledge-space” mapping approach. Across locations, inventive productivity, proxied by patent output, is higher where Nortel’s technological profile is most similar to the host region’s specialization. Technological similarity is a strong predictor of Nortel’s local patenting rates and, during corporate decline, greater technological embeddedness is associated with slower local exit. These results demonstrate that aligning firm capabilities with regional strengths materially influences innovative performance and location dynamics. The proposed knowledge-space tool offers a replicable method for business location decisions and for regional policy seeking to attract, retain, and upgrade technology-intensive activity.