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Analyzing the Spillover Mechanism on the Semiconductor Industry in the Silicon Valley and Route 128

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  • Maximo Torero

    (Grupo de Analisis Para el Desarrollo)

Abstract

To understand the impact of science and engineering innovations on economic growth requires relating discoveries to products, and identifying the scientists and engineers who are responsible for the knowledge transfer. Studies reliant on geographic proximity alone can show only that economic activity varies positively with the amount of research being done at a university [David (1992), Nelson and Romer (1996), Jaffe (1989,93)]. These "geographically localized knowledge spillovers" have proved unable to explain what it is about research universities that is crucial for their local economic impact (training, the research findings?) and, therefore, are unconvincing both to policy makers and the public. This paper analyses the spillover mechanism identifying its main components by analyzing the effect of university-based star scientists through explicit and implicit ties, and the effect of other neighbor firms, on the performance of semiconductor enterprises measured with patents. Explicit ties are modeled by the full and part-time job mobility of scientists located in universities; and implicit ties, by the presence of positive externalities or spillover effects to the firms of untied scientists at Universities in the same economic area. Specifically, this study examines the Silicon Valley and Route 128 cases in detail identifying the differences and similarities between these two major semiconductor regions in their spillover mechanisms. Previous research on high-technology industries has demonstrated the importance of geographically localized "knowledge spillovers" by building specific links between university scientists and firms and estimating the local effects of different types of links. This research goes an step forward, by not only measuring the effect of University research through the direct ties to firms (Zucker, Darby, Armstrong; 1998); but also measuring the importance of the inside industry R&D spillovers in the growth of the region.

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Bibliographic Info

Paper provided by Econometric Society in its series Econometric Society World Congress 2000 Contributed Papers with number 0090.

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Date of creation: 01 Aug 2000
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Handle: RePEc:ecm:wc2000:0090

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  1. Bernstein, Jeffrey I & Nadiri, M Ishaq, 1988. "Interindustry R&D Spillovers, Rates of Return, and Production in High-Tech Industries," American Economic Review, American Economic Association, vol. 78(2), pages 429-34, May.
  2. Romer, Paul M, 1986. "Increasing Returns and Long-run Growth," Journal of Political Economy, University of Chicago Press, vol. 94(5), pages 1002-37, October.
  3. Jaffe, Adam B, 1989. "Real Effects of Academic Research," American Economic Review, American Economic Association, vol. 79(5), pages 957-70, December.
  4. Choi, Jay Pil, 1993. "Cooperative R&D with product market competition," International Journal of Industrial Organization, Elsevier, vol. 11(4), pages 553-571.
  5. Aghion, Philippe & Howitt, Peter, 1992. "A Model of Growth through Creative Destruction," Econometrica, Econometric Society, vol. 60(2), pages 323-51, March.
  6. Anselin, Luc & Varga, Attila & Acs, Zoltan, 1997. "Local Geographic Spillovers between University Research and High Technology Innovations," Journal of Urban Economics, Elsevier, vol. 42(3), pages 422-448, November.
  7. Kamien, Morton I & Muller, Eitan & Zang, Israel, 1992. "Research Joint Ventures and R&D Cartels," American Economic Review, American Economic Association, vol. 82(5), pages 1293-306, December.
  8. Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, vol. 22(1), pages 3-42, July.
  9. Gandal, Neil & Scotchmer, Suzanne, 1993. "Coordinating research through research joint ventures," Journal of Public Economics, Elsevier, vol. 51(2), pages 173-193, June.
  10. Combs, K. L., 1993. "The role of information sharing in cooperative research and development," International Journal of Industrial Organization, Elsevier, vol. 11(4), pages 535-551.
  11. Aghion, Philippe & Howitt, Peter, 1992. "A Model of Growth Through Creative Destruction," Scholarly Articles 12490578, Harvard University Department of Economics.
  12. Anselin, Luc, 1990. "Some robust approaches to testing and estimation in spatial econometrics," Regional Science and Urban Economics, Elsevier, vol. 20(2), pages 141-163, September.
  13. Neil Bania & Randall W. Eberts & Michael S. Fogarty, . "Universities and the Startup of New Companies: Can We Generalize from Route 128 and Silicon Valley?," Upjohn Working Papers and Journal Articles rwe1993, W.E. Upjohn Institute for Employment Research.
  14. Zucker, Lynne G & Darby, Michael R & Brewer, Marilynn B, 1998. "Intellectual Human Capital and the Birth of U.S. Biotechnology Enterprises," American Economic Review, American Economic Association, vol. 88(1), pages 290-306, March.
  15. Zucker, Lynne G & Darby, Michael R & Armstrong, Jeff, 1998. "Geographically Localized Knowledge: Spillovers or Markets?," Economic Inquiry, Western Economic Association International, vol. 36(1), pages 65-86, January.
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Cited by:
  1. Henry G. Grabowski, 2003. "Patents and new product development in the pharmaceutical and biotechnology industries," Proceedings, Federal Reserve Bank of Dallas, issue Sep, pages 87-104.
  2. Lynne G. Zucker & Michael R. Darby & Jeff S. Armstrong, 2003. "Commercializing knowledge: university science, knowledge capture and firm performance in biotechnology," Proceedings, Federal Reserve Bank of Dallas, issue Sep, pages 149-170.
  3. Michael S. Lawlor, 2003. "Biotechnology and government funding: economic motivation and policy models," Proceedings, Federal Reserve Bank of Dallas, issue Sep, pages 131-146.
  4. Toole, Andrew A. & Czarnitzki, Dirk, 2007. "Biomedical academic entrepreneurship through the SBIR program," Journal of Economic Behavior & Organization, Elsevier, vol. 63(4), pages 716-738, August.
  5. Michael R. Darby & Lynne G. Zucker, 2003. "Growing by leaps and inches: creative destruction, real cost reduction, and inching up," Proceedings, Federal Reserve Bank of Dallas, issue Sep, pages 13-42.
  6. Monjon, Stephanie & Waelbroeck, Patrick, 2003. "Assessing spillovers from universities to firms: evidence from French firm-level data," International Journal of Industrial Organization, Elsevier, vol. 21(9), pages 1255-1270, November.
  7. Frank R. Lichtenberg, 2003. "The benefits to society of new drugs: a survey of the econometric evidence," Proceedings, Federal Reserve Bank of Dallas, issue Sep, pages 43-59.
  8. Rebecca S. Eisenberg, 2003. "Reaching through the genome," Proceedings, Federal Reserve Bank of Dallas, issue Sep, pages 105-115.
  9. Timothy F. Howe, 2003. "Financing biotechnology research: a firsthand perspective," Proceedings, Federal Reserve Bank of Dallas, issue Sep, pages 119-130.
  10. Malcolm Gillis, 2003. "Harnessing new technologies for the 21st century," Proceedings, Federal Reserve Bank of Dallas, issue Sep, pages 63-75.
  11. John V. Duca & Mine K. Yücel, 2003. "Science and Cents: Exploring the economics of biotechnology: an overview," Proceedings, Federal Reserve Bank of Dallas, issue Sep, pages 3-10.
  12. C. Thomas Caskey, 2003. "The convergence of disruptive technologies enabling a new industrial approach to health products," Proceedings, Federal Reserve Bank of Dallas, issue Sep, pages 77-84.

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