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Do R&D Spinoffs have Higher R&D Productivity? Evidence from Taiwanese Electronics Firms

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  • Chih-Hai Yang
  • Hui-Lin Lin
  • Hsiao-Yun Li

Abstract

The startup mode of spinoffs founded by R&D employees (R&D spinoffs) within the same industry is widespread in high-tech industries. The founders usually own specific human capital and key technological capability, enabling them to take the operational risk and to appropriate rewards of innovations under the industrial environment of rapid technological change. Whether high-tech R&D spinoffs, compared to their other spinoff counterparts, have better R&D productivity remains less well explored. According to the conceptual discussion of the advantages of intangible innovation assets embodied in company founders, this study argues that the founders' innovation cognition, knowledge externalities, absorptive capability and routine experience can help R&D spinoffs to have higher R&D productivity. We thus propose three hypotheses that are then empirically tested. Based on a sample of Taiwanese electronics firms, the empirical findings show that R&D spinoffs invest with a higher R&D intensity and on average have more patents issued. More importantly, the microeconometric estimates show that the patent and output elasticities of the R&D of R&D spinoffs are significantly higher than those of other firms, indicating that they actually have higher R&D productivity.

Suggested Citation

  • Chih-Hai Yang & Hui-Lin Lin & Hsiao-Yun Li, 2010. "Do R&D Spinoffs have Higher R&D Productivity? Evidence from Taiwanese Electronics Firms," Industry and Innovation, Taylor & Francis Journals, vol. 17(3), pages 285-307.
  • Handle: RePEc:taf:indinn:v:17:y:2010:i:3:p:285-307
    DOI: 10.1080/13662711003790635
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    References listed on IDEAS

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    1. Eriksson, Tor & Moritz Kuhn, Johan, 2006. "Firm spin-offs in Denmark 1981-2000 -- patterns of entry and exit," International Journal of Industrial Organization, Elsevier, vol. 24(5), pages 1021-1040, September.
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    Keywords

    Spinoffs; innovation; productivity;

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