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Spillovers of innovation activities and their profitability

Author

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  • Dirk Czarnitzki
  • Kornelius Kraft

Abstract

Knowledge spillovers to competitors are regarded as an important aspect of the innovation process. While a company possibly benefits from incoming information on successful R&D conducted by other companies, a generally high probability of leakage of knowledge in an industry will negatively affect profitability. This paper presents the results of an empirical study on the effects of outgoing and incoming spillovers on firms' profitability. It turns out that the expected asymmetry is actually at work. In contrast to spillovers from competitors, spillovers from suppliers, customers, and research institutions exert no effect. Copyright 2012 Oxford University Press 2011 All rights reserved, Oxford University Press.

Suggested Citation

  • Dirk Czarnitzki & Kornelius Kraft, 2012. "Spillovers of innovation activities and their profitability," Oxford Economic Papers, Oxford University Press, vol. 64(2), pages 302-322, April.
  • Handle: RePEc:oup:oxecpp:v:64:y:2012:i:2:p:302-322
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    File URL: http://hdl.handle.net/10.1093/oep/gpr020
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    Citations

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    Cited by:

    1. Hasnas, Irina & Lambertini, Luca & Palestini, Arsen, 2014. "Open Innovation in a dynamic Cournot duopoly," Economic Modelling, Elsevier, vol. 36(C), pages 79-87.
    2. repec:eee:jbfina:v:86:y:2018:i:c:p:101-112 is not listed on IDEAS
    3. Liliana Araújo & Sandra T. Silva & Aurora A.C. Teixeira, 2013. "Knowledge spillovers and economic performance of firms located in depressed areas: does geographical proximity matter?," FEP Working Papers 488, Universidade do Porto, Faculdade de Economia do Porto.
    4. Patrick Herbst & Uwe Walz, 2017. "The Design of Vertical R&D Collaborations," Economica, London School of Economics and Political Science, vol. 84(333), pages 54-77, January.
    5. Klaus Kultti & Tuomas Takalo & Tanja Tanayama, 2015. "R&D spillovers and information exchange: a case study," Eurasian Economic Review, Springer;Eurasia Business and Economics Society, vol. 5(1), pages 63-76, June.
    6. Veldman, Jasper & Gaalman, Gerard J.C., 2015. "Competitive investments in cost reducing process improvement: The role of managerial incentives and spillover learning," International Journal of Production Economics, Elsevier, vol. 170(PB), pages 701-709.
    7. repec:spr:scient:v:102:y:2015:i:1:d:10.1007_s11192-014-1427-z is not listed on IDEAS
    8. Cappelli, Riccardo & Czarnitzki, Dirk & Kraft, Kornelius, 2014. "Sources of spillovers for imitation and innovation," Research Policy, Elsevier, vol. 43(1), pages 115-120.
    9. Olga Slivko & Bernd Theilen, 2014. "Innovation or imitation? The effect of spillovers and competitive pressure on firms’ R&D strategy choice," Journal of Economics, Springer, vol. 112(3), pages 253-282, July.
    10. Bettina Peters & Christian Rammer, 2013. "Innovation panel surveys in Germany," Chapters,in: Handbook of Innovation Indicators and Measurement, chapter 6, pages 135-177 Edward Elgar Publishing.
    11. Slivko, Olga, 2012. "Innovation strategies of German firms: The effect of competition and intellectual property protection," ZEW Discussion Papers 12-089, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    12. Köhler, Christian, 2014. "Bargaining in vertical relationships and suppliers' R&D profitability," ZEW Discussion Papers 14-087, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    13. Roper, Stephen & Vahter, Priit & Love, James H., 2013. "Externalities of openness in innovation," Research Policy, Elsevier, vol. 42(9), pages 1544-1554.

    More about this item

    JEL classification:

    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • L12 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Monopoly; Monopolization Strategies

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