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Intra-industry spillovers and innovation: An econometric analysis at the firm level

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  • Vincent Wenxiong Yao

Abstract

This paper studies spillover effects of innovation at the firm level and the comparability of generalized method of moments (GMM) estimators with maximum likelihood estimators of the earlier studies. Two sources of spillovers are identified, i.e. intra-industry R&D expenditure and intra-industry innovation output. This paper estimates a negative R&D spillover effect and a positive output spillover effect. Because of the substitution effect of intra-industry R&D spillovers, the elasticity of patent with respect to firm's own R&D expenditure is greater than those estimated in the earlier studies. With GMM, individual effects are incorporated into the models either by developing proxies for them or attempting to eliminate them.

Suggested Citation

  • Vincent Wenxiong Yao, 2006. "Intra-industry spillovers and innovation: An econometric analysis at the firm level," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 15(2), pages 119-135.
    • Handle: RePEc:taf:ecinnt:v:15:y:2006:i:2:p:119-135
    DOI: 10.1080/10438590500131108
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    References listed on IDEAS

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