Measuring Corporate R&D Spillovers in the Innovation Network
36 Pages Posted: 13 Nov 2019 Last revised: 17 Nov 2022
Date Written: January 10, 2022
Abstract
In this paper, we develop a measure of technological spillovers between firms using the citation-based innovation network, which incorporates knowledge spillovers from upstream technological fields to downstream technological fields. We then use this measure to estimate the impact of technology spillovers using panel data on U.S. firms. We find that knowledge spillovers from upstream fields increases downstream firms’ patenting, market value, and productivity. Quantitatively, spillovers from firms innovating in upstream fields are as important as spillovers from firms innovating in same fields. R&D in upstream fields also reduce the marginal product of R&D in downstream fields. We show that neglecting knowledge spillovers between technological fields would lead to an underestimation of the wedge between private returns and social returns to R&D by about 50%.
Keywords: Innovation spillovers, R&D, networks
JEL Classification: O32
Suggested Citation: Suggested Citation