Identifying technology spillovers and product market rivalry

Bloom, Nick, Schankerman, Mark ORCID: 0009-0006-1071-7672 and Van Reenen, John ORCID: 0000-0001-9153-2907 (2005) Identifying technology spillovers and product market rivalry. CEP discussion paper (675). London School of Economics and Political Science. Centre for Economic Performance, London, UK.

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Abstract

Government policies to support R&D are predicated on empirical evidence of R&D "spillovers" 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 exploit 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 high-tech sectors in detail - pharmaceuticals, computer hardware and telecommunication equipment. Using the model we evaluate three R&D subsidy policies and show that the typical focus of support for small and medium firms may be misplaced.

Item Type:	Monograph (Discussion Paper)
Official URL:	http://cep.lse.ac.uk
Additional Information:	© 2005 N. Bloom, M. Schankerman and J. Van Reenen
Divisions:	Centre for Economic Performance STICERD Economics
Subjects:	T Technology > T Technology (General) H Social Sciences > H Social Sciences (General)
JEL classification:	O - Economic Development, Technological Change, and Growth > O3 - Technological Change; Research and Development > O31 - Innovation and Invention: Processes and Incentives O - Economic Development, Technological Change, and Growth > O3 - Technological Change; Research and Development > O33 - Technological Change: Choices and Consequences; Diffusion Processes O - Economic Development, Technological Change, and Growth > O3 - Technological Change; Research and Development > O32 - Management of Technological Innovation and R&D F - International Economics > F2 - International Factor Movements and International Business > F23 - Multinational Firms; International Business
Date Deposited:	15 Feb 2008
Last Modified:	11 Dec 2024 18:43
Funders:	ESRC
URI:	http://eprints.lse.ac.uk/id/eprint/780

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