Under what conditions do firms benefit from the research efforts of other organizations?
Although R&D spillovers play a key role in the battle for technological leadership, it is unclear under what conditions firms build on and benefit from the discoveries of others. The study described here empirically examines this issue. The findings indicate that, depending on technological opportunities, firm size and competitive pressure, the net impact of R&D spillovers on productivity can be either positive or negative. Specifically, we find that although spillover effects are positively associated with the technological opportunities that a firm faces, this relationship is reversed when firm size is considered. Whilst external R&D affects large self-reliant firms negatively, its impact on the productivity of smaller firms (who usually introduce incremental innovations that are characterized by a strong reliance on external technologies) is positive, and even higher than that of their own R&D. We also demonstrate that the economic payoff for firms' own R&D is lower when they face intense competition. In cases of low-appropriability, however, spillover effects are more positive, allowing firms to increase their performance using the inventions of others.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Erik Brynjolfsson & Lorin M. Hitt, 2003.
"Computing Productivity: Firm-Level Evidence,"
The Review of Economics and Statistics,
MIT Press, vol. 85(4), pages 793-808, November.
- 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.
- James D. Adams & Adam B. Jaffe, 1996. "Bounding the Effects of R&D: An Investigation Using Matched Establishment-Firm Data," NBER Working Papers 5544, National Bureau of Economic Research, Inc.
- Paul Stoneman & Otto Toivanen, 2001. "The Impact of Revised Recommended Accounting Practices on R&D Reporting by UK Firms," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 8(1), pages 123-136.
- Jürgen Bitzer & Ingo Geishecker, 2005.
"What Drives Trade-related R&D Spillovers? Decomposing Knowledge- diffusing Trade Flows,"
- Bitzer, Jurgen & Geishecker, Ingo, 2006. "What drives trade-related R&D spillovers? Decomposing knowledge-diffusing trade flows," Economics Letters, Elsevier, vol. 93(1), pages 52-57, October.
- Bitzer, Jürgen & Geishecker, Ingo, 2005. "What drives trade-related R&D Spillovers? Decomposing knowlege-diffusing trade flows," Discussion Papers 2005/26, Free University Berlin, School of Business & Economics.
- Hall, Bronwyn H. & Mairesse, Jacques, 1995.
"Exploring the relationship between R&D and productivity in French manufacturing firms,"
Journal of Econometrics,
Elsevier, vol. 65(1), pages 263-293, January.
- Bronwyn H. Hall & Jacques Mairesse, 1992. "Exploring the Relationship Between R&D and Productivity in French Manufacturing Firms," NBER Working Papers 3956, National Bureau of Economic Research, Inc.
- Kamien,Morton I. & Schwartz,Nancy L., 1982. "Market Structure and Innovation," Cambridge Books, Cambridge University Press, number 9780521293853, June.
- McGahan, Anita M. & Silverman, Brian S., 2006. "Profiting from technological innovation by others: The effect of competitor patenting on firm value," Research Policy, Elsevier, vol. 35(8), pages 1222-1242, October.
- Greenhalgh, Christine & Rogers, Mark, 2006.
"The value of innovation: The interaction of competition, R&D and IP,"
Elsevier, vol. 35(4), pages 562-580, May.
- Christine Greenhalgh & Mark Rogers, 2004. "The Value of Innovation: The Interaction of Competition, R&D and IP," Economics Series Working Papers 192, University of Oxford, Department of Economics.
- Liu, Xiaohui & Buck, Trevor, 2007. "Innovation performance and channels for international technology spillovers: Evidence from Chinese high-tech industries," Research Policy, Elsevier, vol. 36(3), pages 355-366, April.
- Scherer, F M, 1982. "Inter-Industry Technology Flows and Productivity Growth," The Review of Economics and Statistics, MIT Press, vol. 64(4), pages 627-34, November.
- Raut, Lakshmi K., 1995. "R & D spillover and productivity growth: Evidence from Indian private firms," Journal of Development Economics, Elsevier, vol. 48(1), pages 1-23, October.
- Zvi Griliches, 1998.
"Returns to Research and Development Expenditures in the Private Sector,"
in: R&D and Productivity: The Econometric Evidence, pages 49-81
National Bureau of Economic Research, Inc.
- Zvi Griliches, 1980. "Returns to Research and Development Expenditures in the Private Sector," NBER Chapters, in: New Developments in Productivity Measurement, pages 419-462 National Bureau of Economic Research, Inc.
- Zvi Griliches, 1998.
"Issues in Assessing the Contribution of Research and Development to Productivity Growth,"
in: R&D and Productivity: The Econometric Evidence, pages 17-45
National Bureau of Economic Research, Inc.
- Zvi Griliches, 1979. "Issues in Assessing the Contribution of Research and Development to Productivity Growth," Bell Journal of Economics, The RAND Corporation, vol. 10(1), pages 92-116, Spring.
- Kenneth Arrow, 1962. "Economic Welfare and the Allocation of Resources for Invention," NBER Chapters, in: The Rate and Direction of Inventive Activity: Economic and Social Factors, pages 609-626 National Bureau of Economic Research, Inc.
- Jeffrey I. Bernstein, 1988. "Costs of Production, Intra- and Interindustry R&D Spillovers: Canadian Evidence," Canadian Journal of Economics, Canadian Economics Association, vol. 21(2), pages 324-47, May.
- Michele Cincera & Henri Capron, 2000. "Technological Performance," ULB Institutional Repository 2013/147109, ULB -- Universite Libre de Bruxelles.
- Ariel Pakes & Mark Schankerman, 1984. "The Rate of Obsolescence of Patents, Research Gestation Lags, and the Private Rate of Return to Research Resources," NBER Chapters, in: R&D, Patents, and Productivity, pages 73-88 National Bureau of Economic Research, Inc.
- Philippe Aghion & Christopher Harris & Peter Howitt & John Vickers, 2001.
"Competition, Imitation and Growth with Step-by-Step Innovation,"
Review of Economic Studies,
Oxford University Press, vol. 68(3), pages 467-492.
- Harris, Christopher & Howitt, Peter & Vickers, John & Aghion, Philippe, 2001. "Competition, Imitation and Growth with Step-by-Step Innovation," Scholarly Articles 12375013, Harvard University Department of Economics.
- 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), pages 783-832.
When requesting a correction, please mention this item's handle: RePEc:eee:respol:v:37:y:2008:i:2:p:225-239. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei)
If references are entirely missing, you can add them using this form.