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The value of knowledge spillovers in the U.S. semiconductor industry

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  • Deng, Yi

Abstract

This paper aims at quantifying the economic value of knowledge spillovers by exploring information contained in patent citations. We estimate a market valuation equation of the U.S. semiconductor firms during the 1980s and 1990s, and find an average value of $0.6 to 1.2 million "R&D-equivalent" dollars for knowledge spillovers embodied in one patent citation. For an average semiconductor firm, such an estimate implies that the total value of knowledge spillovers the firm received during the sample period can be as high as half of its actual total R&D expenditures in the same period. This provides a direct measure of the economic value of social returns or externalities of relevant technological innovations. We also find that the value of knowledge spillovers declines as the size of firm's patent portfolio increases, and that self citations are more valuable than external citations, indicating a significant amount of tacit knowledge or know-how spillovers that occur within the firm.

Suggested Citation

  • Deng, Yi, 2008. "The value of knowledge spillovers in the U.S. semiconductor industry," International Journal of Industrial Organization, Elsevier, vol. 26(4), pages 1044-1058, July.
  • Handle: RePEc:eee:indorg:v:26:y:2008:i:4:p:1044-1058
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    9. Richard C. Levin & Alvin K. Klevorick & Richard R. Nelson & Sidney G. Winter, 1987. "Appropriating the Returns from Industrial Research and Development," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 18(3, Specia), pages 783-832.
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    Cited by:

    1. repec:spr:scient:v:89:y:2011:i:3:d:10.1007_s11192-011-0473-z is not listed on IDEAS
    2. Chun-chieh Wang & Mu-hsuan Huang & Dar-zen Chen, 2012. "The Evolution of Knowledge Spillover and Company cluster in Semiconductor Industry," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 3(2), pages 109-124, June.
    3. Chen, Jong-Rong & Kan, Kamhon & Tung, I-Hsuan, 2016. "Scientific linkages and firm productivity: Panel data evidence from Taiwanese electronics firms," Research Policy, Elsevier, vol. 45(7), pages 1449-1459.
    4. Watzinger, Martin & Schnitzer, Monika, 2014. "Measuring Spillovers of Venture Capital," Annual Conference 2014 (Hamburg): Evidence-based Economic Policy 100318, Verein f├╝r Socialpolitik / German Economic Association.
    5. Antoine Dechezleprêtre & Ralf Martin & Myra Mohnen, 2014. "Knowledge Spillovers from Clean and Dirty Technologies," CEP Discussion Papers dp1300, Centre for Economic Performance, LSE.
    6. Dibiaggio, Ludovic & Nasiriyar, Maryam & Nesta, Lionel, 2014. "Substitutability and complementarity of technological knowledge and the inventive performance of semiconductor companies," Research Policy, Elsevier, vol. 43(9), pages 1582-1593.
    7. Christiaan Hogendorn, 2012. "Spillovers and Network Neutrality," Chapters,in: Regulation and the Performance of Communication and Information Networks, chapter 8 Edward Elgar Publishing.
    8. Femminis, Gianluca & Martini, Gianmaria, 2011. "Irreversible investment and R&D spillovers in a dynamic duopoly," Journal of Economic Dynamics and Control, Elsevier, vol. 35(7), pages 1061-1090, July.
    9. Yi Deng & Gabriel Picone, 2013. "Strategic Clustering and Competition by Alcohol Retailers: An Emperical Anlysis of Entry and Location Decisions," Working Papers 1013, University of South Florida, Department of Economics.

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