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Hilliard, R., Jacobson, D., 'Systems of Innovation and their limits: The Case of Environmental Regulation of the Irish Pharmaceutical Industry', CISC Working Paper No. 2.

We examine aspects of the impact of a new regime of environmental regulation in Ireland on pharmaceutical companies. We argue that differences prior to the introduction of the new regime between companies concentrated in one specific region and those in the rest of Ireland can in part be explained by the emergence of a regional system of innovation. However, we show that appropriate response to the new, technology-forcing regime is not closely associated with location in that region. We conclude that there are limits to external institutions´┐Ż ability to influence the innovation process and technological development of firms. We identify these limits as the central mediating role of firm-specific dynamic capability.

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