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Are ivory towers truly ivory? Knowledge spillovers and firm innovation

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  • Lin, Shannon

Abstract

Using a sample from 1980 to 2009, we find that firms headquartered near a knowledge center, as defined by 196 leading American research universities experience higher market-to-book ratios and higher stock volatility. The overall evidence is consistent with knowledge spillovers fostering firm innovation and growth in an increasingly knowledge-based economy and bringing good volatility and higher market valuation to the firm. Surprisingly, this effect comes only marginally through firm R&D and further investigation into other possible channels for the documented links is required. Robustness checks include controls for metropolis effects and utility patents filed.

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  • Lin, Shannon, 2015. "Are ivory towers truly ivory? Knowledge spillovers and firm innovation," Journal of Economics and Business, Elsevier, vol. 80(C), pages 21-36.
  • Handle: RePEc:eee:jebusi:v:80:y:2015:i:c:p:21-36
    DOI: 10.1016/j.jeconbus.2015.03.001
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    More about this item

    Keywords

    Innovation; Knowledge spillover; Firm geography;
    All these keywords.

    JEL classification:

    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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