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Identifying technology spillovers and product market rivalry

By Nick Bloom, Mark Schankerman and John Van Reenen

Abstract

Support for R&D subsidies relies on empirical evidence that R&D "spills over" between firms. But firm performance is affected by two countervailing R&D spillovers: positive effects from technology spillovers and negative business stealing effects from R&D by product market rivals. We develop a general framework showing that technology and product market spillovers have testable implications for a range of performance indicators, and then exploit these using distinct measures of a firm's position in technology space and product market space. Using panel data on U.S. firms between 1980 and 2001 we show that both technology and product market spillovers operate, but technology spillovers quantitatively dominate. The spillover effects are also present when we analyze three high tech sectors in finer detail. Using the model we evaluate the net spillovers from three alternative R&D subsidy policies

Topics: T Technology (General), HD Industries. Land use. Labor
Publisher: National Bureau of Economic Research
Year: 2007
OAI identifier: oai:eprints.lse.ac.uk:5091
Provided by: LSE Research Online

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