Identifying technology spillovers and product market rivalry

Support for many R&D and technology policies relies on empirical evidence that R&D "spills over" between firms. But there are two countervailing R&D spillovers: positive effects from technology spillovers and negative effects from business stealing 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 exploits these using distinct measures of a firm's position in technology space and product market space. We show using panel data on U.S. firms between 1981 and 2001 that both technology and product market spillovers operate, but that net social returns are several times larger than private returns. The spillover effects are also revealed when we analyze three hightech sectors in detail - pharmaceuticals, computer hardware andtelecommunication equipment. Using the model we evaluate three R&Dsubsidy policies and show that the typical focus of support for small and medium firms may be misplaced.Spillovers, R&D, market value, patents.

Identifying Technology Spillovers and Product Market Rivalry

The impact of R&D on growth through spillovers has been a major topic of economic research over the last thirty years. A central problem in the literature is that firm performance is affected by two countervailing "spillovers": a positive effect from technology (knowledge) spillovers and negative business stealing effects from product market rivals. We develop a general framework incorporating these two types of spillovers and implement this model using measures of a firm's position in technology space and product market space. Using panel data on U.S. firms we show that technology spillovers quantitatively dominate, so that the gross social returns to R&D are at least twice as high as the private returns. We identify the causal effect of R&D spillovers by using changes in Federal and state tax incentives for R&D. We also find that smaller firms generate lower social returns to R&D because they operate more in technological niches. Finally, we detail the desirable properties of an ideal spillover measure and how existing approaches, including our new Mahalanobis measure, compare to these criteria.Spillovers, R&D, market value, patents, productivity

Book Review

Review of the following book: WARREN FREEDMAN, LEGAL ISSUES IN BIOTECHNOLOGY AND HUMAN REPRODUCTION. (Quorum Books 1991) [240 pp.] Appendices, bibliography, index to cases, index to subjects. LC: 90-20709; ISBN: 0-89930-635-7. [Cloth $55.00. 88 Post Road West, Westport, CT 06881

The Generation-Skipping Loophole: Narrowed, But Not Closed, by the Tax Reform Act of 1976

It is the purpose of this article to analyze the operation and effect of this important and complex system of taxation, highlighting the areas in which future reform may be advisable

Perpetuities Refinement: There Is an Alternative

A new uniform law is in the offing: a Uniform Statutory Rule Against Perpetuities (USRAP). The law is based on the wait-and-see approach to the common law Rule Against Perpetuities. Under this approach, a waiting period is prescribed to see whether the contingency which renders a nonvested interest void under the common law Rule actually occurs. The purpose of this article is twofold: first, to demonstrate why, in response to Professor Leach\u27s basic question, we should not wait-and-see ; second, to offer constructive alternatives to the wait-and-see approach. Part I of this article identifies those areas of agreement between wait-and-see advocates and opponents, including the acknowledged desirability for some rule against perpetuities. In part II, the case for wait-and-see is summarized and the three major wait-and-see methods are described. These methods include: (1) the causal relationship method, (2) a measuring lives version under the Restatement (Second) of Property, and (3) the newly-unveiled proxy method under the USRAP. A recent debate between Professors Dukeminier and Waggoner highlights the controversy among scholars regarding the appropriate methodology under a wait-and-see approach. Part III presents the case against the wait-and-see approach by addressing several underlying, but unfounded, assumptions. The most crucial assumption under wait-and-see is that a severe enough problem exists to warrant its adoption. Research, however, reveals a perpetuities violation averaging only one relevant case per year during the eight-year period, 1978-1985. Part IV makes the case for refining the common law Rule, based in part on a critique of an erroneous decision by the Indiana Supreme Court in 1985. In addition, a statutory scheme for refinement is offered. Although the statutory package partially relies on existing or proposed solutions, the overall package has never been detailed. In the end, rejection of wait-and-see legislation generally, and the USRAP specifically, is urged. Adopting the wait-and-see approach to the common law Rule Against Perpetuities would be tantamount to buying and using an atomic cannon to kill a gnat

How Federal Transfer Taxes Affect the Development of Property Law

This topic, How Federal Transfer Taxes Affect the Development of Property Law, makes the basic assumption that, to some extent, property law exists because of the federal wealth transfer tax system. As will be seen, this assumption is correct. In some instances, however, property laws exist because of the federal transfer tax system. I classify such property laws into three categories: the necessary, the appropriate and the unfortunate. In the remainder of this article, I will give examples of federal transfer tax-based property laws in these three categories. By way of illustration, I will primarily rely on statutory laws of Alaska, California and New York, as well as provisions under the Restatement of Property and Trusts and various Uniform Acts

Differential effects of Alzheimer\u27s disease and Huntington\u27s disease on the performance of mental rotation

he ability to spatially rotate a mental image was compared in patients with Alzheimer\u27s disease (AD; n = 18) and patients with Huntington\u27s disease (HD; n = 18). Compared to their respective age-matched normal control (NC) group, the speed, but not the accuracy, of mental rotation abnormally decreased with increasing angle of orientation for patients with HD. In contrast, the accuracy, but not the speed, of rotation abnormally decreased with increasing angle of orientation for patients with AD. Additional analyses showed that these unique patterns of performance were not attributable to different speed/accuracy trade-off sensitivities. This double dissociation suggests that the distinct brain regions affected in the two diseases differentially contribute to speed and accuracy of mental rotation. Specifically, the slowing exhibited by HD patients may be mediated by damage to the basal ganglia, whereas the spatial manipulation deficit of AD patients may reflect pathology in parietal and temporal lobe association cortices important for visuospatial processing. (JINS, 2005, 11, 30–39.

RE-THINKING PATHS TO 150 CREDIT HOURS: CAREER BUILDING OPPORTUNITIES

For many years now, the accounting profession has required the completion of 150 college credit hours to become a CPA. Since the enactment of this state-specific requirement became widespread, there have been many alternative paths prospective CPAs have followed to obtain the necessary college credit. In this article, we briefly review the history of the 150-hour requirement, followed by descriptions of alternatives available to fulfill this requirement. Each of these alternatives offers unique advantages, which we highlight. These overviews are also useful to practicing CPAs who are considering going back to school to gain knowledge to advance their careers. In addition, we discuss career transitions for people who do not have an accounting undergraduate degree