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Endogenous Technological Spillovers: Causes and Consequences

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  • Hans Gersbach
  • Armin Schmutzler

Abstract

We develop a new approach to endogenizing technological spillovers. We analyze a game in which firms can first invest in cost-reducing R&D, then compete on the human-capital market for their knowledge-bearing employees, and finally enter the product market. If R&D employees change firms, spillovers arise. We show that technological spillovers are most likely when they increase total industry profits. We use this result to show that innovation incentives are usually stronger for endogenous than for exogenous spillovers and that endogenous spillovers may reverse the result that innovation incentives are stronger under quantity competition than under price competition. Finally, we explore the robustness of our results with respect to contractual incompleteness and the number of R&D workers. Copyright (c) 2003 Massachusetts Institute of Technology.

Suggested Citation

  • Hans Gersbach & Armin Schmutzler, 2003. "Endogenous Technological Spillovers: Causes and Consequences," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 12(2), pages 179-205, June.
  • Handle: RePEc:bla:jemstr:v:12:y:2003:i:2:p:179-205
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    References listed on IDEAS

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    Cited by:

    1. Neil Foster-McGregor & Johannes Pöschl, 2016. "Productivity effects of knowledge transfers through labour mobility," Journal of Productivity Analysis, Springer, vol. 46(2), pages 169-184, December.
    2. Eren Inci, 2009. "R&D tax incentives: a reappraisal," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 16(6), pages 797-821, December.
    3. Antonio Guarino & Piero Tedeschi, 2006. "Endogenous Knowledge Spillovers and Labor Mobility in Industrial Clusters," Working Papers 20060507, Università degli Studi di Milano-Bicocca, Dipartimento di Statistica.
    4. Cassiman, Bruno & Perez-Castrillo, David & Veugelers, Reinhilde, 2002. "Endogenizing know-how flows through the nature of R&D investments," International Journal of Industrial Organization, Elsevier, pages 775-799.
    5. Ricardo Pinheiro Alves, 2017. "Portugal: a Paradox in Productivity," GEE Papers 0070, Gabinete de Estratégia e Estudos, Ministério da Economia, revised Jun 2017.
    6. Hoisl, Karin, 2007. "Tracing mobile inventors--The causality between inventor mobility and inventor productivity," Research Policy, Elsevier, pages 619-636.
    7. Robert E.B. Lucas & Lyn Squire & T. N. Srinivasan (ed.), 2010. "Global Exchange and Poverty," Books, Edward Elgar Publishing, number 13102, April.
    8. Montserrat Vilalta-Bufi, Departament de Teoria Economica and CAEPS (Universitat de Barcelona) and & Departament d'Economia i Historia Economica (Universitat Autonoma de Barcelona), 2008. "Inter-firm labor mobility and knowledge diffusion: a theoretical approach," Working Papers in Economics 210, Universitat de Barcelona. Espai de Recerca en Economia.
    9. Chad Syverson, 2011. "What Determines Productivity?," Journal of Economic Literature, American Economic Association, vol. 49(2), pages 326-365, June.
    10. Luca Stanca & Herbert Dawid & Mariacristina Piva & Marco Vivarelli, 2015. "Are R&D investments by incumbents decreasing in the availability of complementary assets for start-ups?," LEM Papers Series 2015/12, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
    11. Colombo, Luca & Dawid, Herbert, 2016. "Complementary assets, start-ups and incentives to innovate," International Journal of Industrial Organization, Elsevier, vol. 44(C), pages 177-190.
    12. Vitaliy Oryshchenko, 2010. "Does Foreign Ownership Matter for Enterprise Training? Empirical Evidence from Transition Countries," Chapters,in: Global Exchange and Poverty, chapter 10 Edward Elgar Publishing.
    13. Cassiman, Bruno & Veugelers, Reinhilde, 2007. "Are external technology sourcing strategies substitutes or complements? The case of embodied versus disembodied technology acquisition," IESE Research Papers D/672, IESE Business School.
    14. repec:kap:sbusec:v:49:y:2017:i:3:d:10.1007_s11187-017-9900-8 is not listed on IDEAS
    15. Claire Bonnard, 2011. "Les incitations à l'innovation dans le secteur privé," Post-Print halshs-00599700, HAL.
    16. Colombo, Luca & Dawid, Herbert & Piva, Mariacristina & Vivarelli, Marco, 2013. "Does Easy Start-Up Formation Hamper Incumbents' R&D Investment? A Theoretical and Empirical Analysis," IZA Discussion Papers 7302, Institute for the Study of Labor (IZA).

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