Conclusion

This research has contributed towards both theoretical and practical aspects. The growing attention of global value chain perspective and innovation systems perspective has been accounted. Their interaction with firm innovation capability within a cluster proves that effective utilization of external sources of innovation and knowledge spillover has strong interconnectedness to build innovation capability as well as provide competitive advantage. The outcome of research confirms dual role of knowledge spillover as a source of innovation for effective knowledge transfer and its influence on technological and manufacturing capability. Also, it highlights the positive interaction between regional innovation system and firm innovation system. Our empirical results have shown that external sources of innovation have positively related to enhance all innovation capabilities of firms within a cluster. Moreover, it demonstrates that technological capability (includes in-house R&D, learning and R&D resource allocation capability), manufacturing and organizational capability are most positively related to the innovative performance of firm’s within Pune automobile cluster. Thus, industry leaders can develop needed innovation ecosystem based on these insights to enhance the performance and become global players. The bigger sample size and cross-cluster data may produce more statistically accurate results in the model testing process. The future research direction may consider comparative study between various clusters from different geographic locations as well as different sectors.