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The Local Innovation Spillovers of Listed Firms

Author

Listed:
  • Adrien Matray

    (Princeton University)

Abstract

This paper provides evidence of local innovation spillovers, i.e. innovation by one firm fostering innovation by neighboring firms. First, I document that exogenous shocks to innovation by listed firms affect innovation by private firms in the same geographical area. I also find that such local innovation spillovers decline rapidly with distance. Second, I find that local innovation spillovers stem at least in part from knowledge diffusing locally through two channels: learning across local firms and inventors moving from their employer to both existing firms and newly started spin-outs. Finally, I study the two-way relationship between innovation spillovers and the availability of capital. I find that local innovation spillovers lead venture capital funds from outside the area to invest more in the local area, and that conversely capital availability amplifies local innovation spillovers.

Suggested Citation

  • Adrien Matray, 2017. "The Local Innovation Spillovers of Listed Firms," Working Papers 2017-7, Princeton University. Economics Department..
    • Handle: RePEc:pri:econom:2017-7
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    More about this item

    Keywords

    Capital; Firm; Firms; Innovation; Venture Capital;
    All these keywords.

    JEL classification:

    • K41 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Litigation Process
    • L24 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Contracting Out; Joint Ventures
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O34 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Intellectual Property and Intellectual Capital

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