In this article I present an alternative specification of knowledge production and derive a structural econometric model with some desirable properties. I provide a simple and less data-intensive framework for empirical studies of the relationship between firm performance and R&D. The main empirical findings are as follows: (i) R&D has a positive effect on performance, (ii) the appropriable part of knowledge capital depreciates at a rate of .2, (iii) there are significant spillover effects of R&D across lines of business within a firm, and (iv) there are significant spillovers in R&D across firms that belong to the same interlocking group of firms.
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Volume (Year): 27 (1996) Issue (Month): 3 (Autumn) Pages: 502-522 Download reference. The following formats are available: HTML
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