Bounding the Effects of R&D: An Investigation Using Matched Establishment-Firm Data
AbstractStudies of firm-level data have shown that a firm's R&D and the R&D of other firms increase conventional factor productivity. We investigate these phenomena further by examining the relationship between plant-level productivity and firm-level R&D. We find that (1) the productivity-enhancing effects of parent firm R&D are diminished by geographic distance from the research lab and `technological' distance between the product-field focus of the R&D and the plants; (2) productivity appears to depend on the intensity of parent firm R&D (R&D per plant), not on the total amount; and (3) spillovers of research effects from technologically related firms are significant but also depend on R&D intensity rather than total industry R&D. These results suggest that, despite the externalities created by spillovers of R&D, the `dilution' of R&D across multiple target plants reduces its potency sufficiently that spillovers may not be a source of industry-wide or economy-wide increasing returns.
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Bibliographic InfoPaper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 5544.
Date of creation: Apr 1996
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Publication status: published as in the Rand Journal of Economics vol.27,no.4, (winter,1996), pp.700-721.
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- James D. Adams & Adam B. Jaffe, 1996. "Bounding the Effects of R&D: An Investigation Using Matched Establishment-Firm Data," RAND Journal of Economics, The RAND Corporation, vol. 27(4), pages 700-721, Winter.
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- Hsiao,Cheng, 2003.
"Analysis of Panel Data,"
Cambridge University Press, number 9780521818551, October.
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