IDEAS home Printed from https://ideas.repec.org/p/spo/wpmain/infohdl2441-7187.html
   My bibliography  Save this paper

Knowledge and Productivity in the World's Largest Manufacturing Corporations

Author

Listed:
  • Lionel Nesta

    (Observatoire français des conjonctures économiques)

Abstract

This paper examines the relationship between the characteristics of firm knowledge in terms of capital, diversity and relatedness, and productivity. Panel data regression models suggest that unlike knowledge diversity, knowledge capital and knowledge relatedness explain a substantial share of the variance of firm productivity. Activities based on a related set of technological knowledge are more productive than those based on unrelated knowledge because the cost of co-ordinating productive activities decreases as the knowledge used in these activities is being integrated efficiently. The impact of knowledge relatedness on productivity in hightechnology sectors is higher than in other sectors.

Suggested Citation

  • Lionel Nesta, 2005. "Knowledge and Productivity in the World's Largest Manufacturing Corporations," Sciences Po publications 2005-17, Sciences Po.
  • Handle: RePEc:spo:wpmain:info:hdl:2441/7187
    as

    Download full text from publisher

    File URL: https://spire.sciencespo.fr/hdl:/2441/7187/resources/wp2005-17.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Rebecca Henderson & Iain Cockburn, 1996. "Scale, Scope, and Spillovers: The Determinants of Research Productivity in Drug Discovery," RAND Journal of Economics, The RAND Corporation, vol. 27(1), pages 32-59, Spring.
    2. Adam B. Jaffe & Michael S. Fogarty & Bruce A. Banks, 1998. "Evidence from Patents and Patent Citations on the Impact of NASA and Other Federal Labs on Commercial Innovation," Journal of Industrial Economics, Wiley Blackwell, vol. 46(2), pages 183-205, June.
    3. Zvi Griliches, 1998. "Comparing Productivity Growth: An Exploration of French and U.S. Industrial and Firm Data," NBER Chapters, in: R&D and Productivity: The Econometric Evidence, pages 157-186, National Bureau of Economic Research, Inc.
    4. Gambardella, Alfonso & Torrisi, Salvatore, 1998. "Does technological convergence imply convergence in markets? Evidence from the electronics industry," Research Policy, Elsevier, vol. 27(5), pages 445-463, September.
    5. Jaffe, Adam B, 1986. "Technological Opportunity and Spillovers of R&D: Evidence from Firms' Patents, Profits, and Market Value," American Economic Review, American Economic Association, vol. 76(5), pages 984-1001, December.
    6. Owen A. Lamont & Christopher Polk, 2001. "The Diversification Discount: Cash Flows Versus Returns," Journal of Finance, American Finance Association, vol. 56(5), pages 1693-1721, October.
    7. Zvi Griliches, 1998. "Productivity Growth and R&D at the Business Level: Results from the PIMS Data Base," NBER Chapters, in: R&D and Productivity: The Econometric Evidence, pages 134-156, National Bureau of Economic Research, Inc.
    8. Scott, John T & Pascoe, George, 1987. "Purposive Diversification of R and D in Manufacturing," Journal of Industrial Economics, Wiley Blackwell, vol. 36(2), pages 193-205, December.
    9. Zvi Griliches, 1998. "Productivity, R&D, and Basic Research at the Firm Level in the 1970s," NBER Chapters, in: R&D and Productivity: The Econometric Evidence, pages 82-99, National Bureau of Economic Research, Inc.
    10. Hall, B. & Jaffe, A. & Trajtenberg, M., 2001. "The NBER Patent Citations Data File: Lessons, Insights and Methodological Tools," Papers 2001-29, Tel Aviv.
    11. repec:fth:harver:1473 is not listed on IDEAS
    12. Scott,John T., 2005. "Purposive Diversification and Economic Performance," Cambridge Books, Cambridge University Press, number 9780521022583.
    13. Raghuram Rajan & Henri Servaes & Luigi Zingales, 2000. "The Cost of Diversity: The Diversification Discount and Inefficient Investment," Journal of Finance, American Finance Association, vol. 55(1), pages 35-80, February.
    14. Zvi Griliches, 1998. "Patent Statistics as Economic Indicators: A Survey," NBER Chapters, in: R&D and Productivity: The Econometric Evidence, pages 287-343, National Bureau of Economic Research, Inc.
    15. Owen Lamont & Christopher Polk, "undated". "The Diversification Discount: Cash Flows vs. Returns."," CRSP working papers 504, Center for Research in Security Prices, Graduate School of Business, University of Chicago.
    16. Patel, Pari & Pavitt, Keith, 1997. "The technological competencies of the world's largest firms: Complex and path-dependent, but not much variety," Research Policy, Elsevier, vol. 26(2), pages 141-156, May.
    17. Teece, David J. & Rumelt, Richard & Dosi, Giovanni & Winter, Sidney, 1994. "Understanding corporate coherence : Theory and evidence," Journal of Economic Behavior & Organization, Elsevier, vol. 23(1), pages 1-30, January.
    18. John R. Graham & Michael L. Lemmon & Jack G. Wolf, 2002. "Does Corporate Diversification Destroy Value?," Journal of Finance, American Finance Association, vol. 57(2), pages 695-720, April.
    19. Zvi Griliches & Jacques Mairesse, 1981. "Productivity and R and D at the Firm Level," NBER Working Papers 0826, National Bureau of Economic Research, Inc.
    20. Breschi, Stefano & Lissoni, Francesco & Malerba, Franco, 2003. "Knowledge-relatedness in firm technological diversification," Research Policy, Elsevier, vol. 32(1), pages 69-87, January.
    21. Zvi Griliches, 1998. "Issues in Assessing the Contribution of Research and Development to Productivity Growth," NBER Chapters, in: R&D and Productivity: The Econometric Evidence, pages 17-45, National Bureau of Economic Research, Inc.
    22. Antoinette Schoar, 2002. "Effects of Corporate Diversification on Productivity," Journal of Finance, American Finance Association, vol. 57(6), pages 2379-2403, December.
    23. Montgomery, Cynthia A. & Hariharan, S., 1991. "Diversified expansion by large established firms," Journal of Economic Behavior & Organization, Elsevier, vol. 15(1), pages 71-89, January.
    24. Manuel Arellano & Stephen Bond, 1991. "Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations," Review of Economic Studies, Oxford University Press, vol. 58(2), pages 277-297.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Lionel Nesta, 2005. "Knowledge and Productivity in the World's Largest Manufacturing Corporations Level:Panel Data analysis on Compustat and Patent data," Documents de Travail de l'OFCE 2005-17, Observatoire Francais des Conjonctures Economiques (OFCE).
    2. repec:spo:wpecon:info:hdl:2441/7187 is not listed on IDEAS
    3. Dibiaggio, Ludovic & Nasiriyar, Maryam & Nesta, Lionel, 2014. "Substitutability and complementarity of technological knowledge and the inventive performance of semiconductor companies," Research Policy, Elsevier, vol. 43(9), pages 1582-1593.
    4. Lorenz, Steffi, 2015. "Diversität und Verbundenheit der unternehmerischen Wissensbasis: Ein neuartiger Messansatz mit Indikatoren aus Innovationsprojekten," Discussion Papers on Strategy and Innovation 15-01, Philipps-University Marburg, Department of Technology and Innovation Management (TIM).
    5. Burak Dindaroğlu, 2018. "Determinants of patent quality in U.S. manufacturing: technological diversity, appropriability, and firm size," The Journal of Technology Transfer, Springer, vol. 43(4), pages 1083-1106, August.
    6. Antonelli, Cristiano & Krafft, Jackie & Quatraro, Francesco, 2010. "Recombinant knowledge and growth: The case of ICTs," Structural Change and Economic Dynamics, Elsevier, vol. 21(1), pages 50-69, March.
    7. Giuseppe Medda & Claudio Piga, 2014. "Technological spillovers and productivity in Italian manufacturing firms," Journal of Productivity Analysis, Springer, vol. 41(3), pages 419-434, June.
    8. Krafft Jackie & Quatraro Francesco & Colombelli Alessandra, 2011. "High Growth Firms and Technological Knowledge: Do gazelles follow exploration or exploitation strategies?," Department of Economics and Statistics Cognetti de Martiis LEI & BRICK - Laboratory of Economics of Innovation "Franco Momigliano", Bureau of Research in Innovation, Complexity and Knowledge, Collegio 201114, University of Turin.
    9. David Rigby, 2012. "The Geography of Knowledge Relatedness and Technological Diversification in U.S. Cities," Papers in Evolutionary Economic Geography (PEEG) 1218, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Oct 2012.
    10. Bart Leten & Rene Belderbos & Bart Van Looy, 2016. "Entry and Technological Performance in New Technology Domains: Technological Opportunities, Technology Competition and Technological Relatedness," Journal of Management Studies, Wiley Blackwell, vol. 53(8), pages 1257-1291, December.
    11. Marinelli, Federico, 2008. "Persistence of outstanding performance and shareholder value among diversified firms: The impact of past performance, efficient internal capital market, and relatedness of business segments," IESE Research Papers D/758, IESE Business School.
    12. Yang, Hongyan & Steensma, H. Kevin, 2014. "When do firms rely on their knowledge spillover recipients for guidance in exploring unfamiliar knowledge?," Research Policy, Elsevier, vol. 43(9), pages 1496-1507.
    13. Kim, Jungho & Lee, Chang-Yang & Cho, Yunok, 2016. "Technological diversification, core-technology competence, and firm growth," Research Policy, Elsevier, vol. 45(1), pages 113-124.
    14. David Popp, 2005. "They Don't Invent Them Like They Used To: An Examination of Energy Patent Citations Over Time," NBER Working Papers 11415, National Bureau of Economic Research, Inc.
    15. David Hyland, 2008. "The long-run performance of diversifying firms," Journal of Economics and Finance, Springer;Academy of Economics and Finance, vol. 32(3), pages 294-310, July.
    16. Laeven, Luc & Levine, Ross, 2007. "Is there a diversification discount in financial conglomerates?," Journal of Financial Economics, Elsevier, vol. 85(2), pages 331-367, August.
    17. Breschi, Stefano & Lissoni, Francesco & Malerba, Franco, 2003. "Knowledge-relatedness in firm technological diversification," Research Policy, Elsevier, vol. 32(1), pages 69-87, January.
    18. Caviggioli, Federico, 2016. "Technology fusion: Identification and analysis of the drivers of technology convergence using patent data," Technovation, Elsevier, vol. 55, pages 22-32.
    19. Lionel Nesta & Pier-Paolo Saviotti, 2003. "Intangible Assests and Market Value: Evidence from Biotechnology Firms," SPRU Working Paper Series 87, SPRU - Science Policy Research Unit, University of Sussex Business School.
    20. Quintana-Garci­a, Cristina & Benavides-Velasco, Carlos A., 2008. "Innovative competence, exploration and exploitation: The influence of technological diversification," Research Policy, Elsevier, vol. 37(3), pages 492-507, April.
    21. Maria Chiara Di Guardo & Kathryn Rudie Harrigan & Elona Marku, 2019. "M&A and diversification strategies: what effect on quality of inventive activity?," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 23(3), pages 669-692, September.

    More about this item

    JEL classification:

    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spo:wpmain:info:hdl:2441/7187. 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: (Spire @ Sciences Po Library). General contact details of provider: https://edirc.repec.org/data/ecspofr.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.