International R&D Spillovers,Absorptive Capacity and Relative Backwardness: A Panel Smooth Transition Regression Model

We investigate how a country's absorptive capacity and relative backwardness affect the impact of international R&D spillovers on domestic Total Factor Productivity (TFP). To account for nonlinearities, we adopt a Panel Smooth Transition Regression approach, where a country's TFP elasticity to the foreign R&D stock is allowed to change smoothly across various identified extreme values, and the change is related to observable transition variables: human capital (capturing the country's absorptive capacity) and relative backwardness. The results suggest that absorptive capacity is positively associated with international R&D spillovers. In contrast with previous results, relative backwardness is instead found to have a negative and significant impact on international knowledge spillovers.     

Multinational Enterprises,Absorptive Capacity and Export Spillovers: Evidence from Polish Firm‐level Data

An important benefit attributed to the activity of multinational enterprises (MNEs) in developing and transition countries is its effect on international market access. Through a variety of channels the presence of MNEs is expected to reduce the costs faced by indigenous firms in breaking into international markets and in turn boost their export prospects. In this paper we use an extensive Polish firm‐level dataset for the period 2000–2008 to verify whether MNEs have positively contributed to the export performance of indigenous firms. We track not only sectoral and geographical spillovers stemming from the activity of MNEs but also control for firm‐specific characteristics that affect indigenous firms' decisions to export including their absorptive capacity. Our empirical results support the existence of positive spillovers (related to MNE export activity) at the sectoral level but not at the regional level. Finally, we find that individual absorptive capacity determines the size of export spillovers.     

Multinationals,R&D and Endogenous Productivity Asymmetries

We analyze the influence of endogenous productivity asymmetries between firms, in terms of competitiveness and size, on multinational activity. In the model, productivity depends on cost-reducing R&D (research and development). We show that when firms differ on commitment power in R&D, the R&D leader, independently of being a multinational or a domestic firm, tends to invest more in R&D than the R&D follower. Because of these productivity advantages, the R&D leader can more easily become multinational. Therefore, in addition to the proximity-concentration trade-off, we identify another FDI (foreign direct investment) determinant: technological competition.     

Trade-related R&D Spillovers in Vietnamese Manufacturing

ABSTRACT

This study aims to examine how Vietnamese manufacturing could benefit from R&D investment locally and from OECD countries through trade during a period marked with major trade liberalisations. Using the industry-level data during 2000–2009, it finds that the foreign R&D has accounted for the most part of the R&D spillovers in the sector, with a larger proportion earning from the other foreign industries’ R&D. The domestic industries’ own R&D has improved the sector’s total factor productivity, but in a relatively smaller magnitude compared to the foreign sources. In examining the localised effects of R&D spillovers in Vietnamese manufacturing, the results reiterate the important roles of trade-embedded foreign R&D spillovers from Japan, the US, South Korea, and Germany in the sector’s total factor productivity growth. These findings altogether give support to foreign technology diffusion as a major conduit for growth prospects in Vietnamese manufactures.     

Vertical R&D Spillovers,Cooperation, Market Structure,and Innovation

This paper studies vertical R&D spillovers between upstream and downstream firms. The model incorporates two vertically related industries, with horizontal spillovers within each industry and vertical spillovers between the two industries. Four types of R&D cooperation are studied: no cooperation, horizontal cooperation, vertical cooperation, and simultaneous horizontal and vertical cooperation. Vertical spillovers always increase R&D and welfare, while horizontal spillovers may increase or decrease them. The comparison of cooperative settings in terms of R&D shows that no setting uniformly dominates the others. Which type of cooperation yields more R&D depends on horizontal and vertical spillovers, and market structure. The ranking of cooperative structures hinges on the signs and magnitudes of three "competitive externalities" (vertical, horizontal, and diagonal) which capture the effect of the R&D of a firm on the profits of other firms. One of the basic results of the strategic investment literature is that cooperation between competitors decreases R&D when horizontal spillovers are low; the model shows that this result does not necessarily hold when vertical spillovers are sufficiently high, and/or when horizontal cooperation is combined with vertical cooperation.     

R&D Spillovers and Growth: Specialization Matters

We explore the relationship between openness and growth by taking a closer look at trade‐related knowledge spillovers at the industry level. First, we estimate the relation between sectoral R&D expenditures, trade‐related spillovers, and growth. Next, we incorporate these R&D linkages in a computable general‐equilibrium model for the world economy. We simulate trade liberalization in the model with R&D spillovers and compare the effects on GDP in different regions with a non‐R&D‐based model simulation. We find that the GDP effects of trade liberalization are magnified considerably by R&D spillovers for some regions—notably Japan and Southeast Asia. In other regions, such as China, the additional GDP effects are modest. These findings can be traced back to changing specialization and import patterns.     

International R&D Rivalry with Spillovers and Policy Cooperation in R&D Subsidies and Taxes

Abstract

We have investigated non-cooperative and jointly optimal R&D policies in the framework of Spencer & Brander (1983) in the presence of R&D spillovers. When R&D activities are strategic substitutes and the R&D game exhibits a positive externality, the result of Spencer & Brander (1983) reverses: the non-cooperative policy is a tax while the jointly optimal policy is a subsidy. Moreover, when R&D activities are strategic complements, the usual result of the prisoners' dilemma in the strategic subsidy game does not hold, implying that a welfare intervention is preferable over laissez-faire. When spillovers are sufficiently large, the joint welfare increases with subsidies being higher than those under non-cooperation.     

R&D Spillovers and Location Choice under Cournot Rivalry

A model of location choice by Cournot oligopolists is presented, under the assumption that R&D spillovers depend on the distance between firms. It is shown that a variety of patterns emerge. Agglomeration is optimal under certain assumptions. Geographical dispersion in a two-dimensional plane is another possible outcome.     

Endogenous protection of R&D investments

Abstract .  We examine firms' incentives to protect their non-cooperative R&D investments from spilling over to competitors. We show that, contrary to findings in most of the literature, the lack of full appropriability can lead to an increase in R&D investments. Consequently, as long as the R&D spillovers are not too strong, firms decide to let their R&D knowledge flow. Since, as we show, welfare is higher when R&D spillovers are present, it follows that public policies that promote the dissemination of technological knowledge could be welfare-enhancing.     

Endogenous fluctuations with procyclical R&D

The literature on endogenous growth cycles predicts the countercyclical allocation of resources to R&D. However, this prediction is not supported by empirical studies. This study considers the R&D-based growth model with endogenous fluctuations introducing population growth and a negative externality that affects the productivity of R&D. We show that this simple modification makes R&D investment procyclical along sustained business cycles using both an overlapping generation framework and an infinitely-lived agent framework.     

Spillovers,product innovation and R&D cooperation: a theoretical model

ABSTRACT

We analyze the impact of post-innovation knowledge spillovers on firms’ decisions to invest and cooperate in R&D, forming a research joint venture (RJV). We study the case of two potential investors involved in a non-tournament stochastic competition for developing a new but imitable product. We propose a theoretical model where cooperation may emerge as a subgame perfect Nash equilibrium of a three-stage game. In the first stage, firms decide whether to cooperate; in the second, they decide whether to invest; and in the third, they compete. We show that firms cooperate in R&D when the spillovers are high enough and the fixed costs associated with R&D activities are low enough; however, our analysis suggests that forming an RJV may not always be socially optimal, and subsidizing R&D cooperation may not be efficient. We propose an optimal scheme of subsidies, which should be designed according to the intensity of the spillovers, the level of the R&D costs, and the probability of innovation success. Finally, we show that in the case of mergers the private incentive to invest is maximized, and firms may not need public subsidies to cooperate. When subsidies are costly, not hindering mergers may be the second-best solution.     

R&D Returns,Spillovers and Firm Incentives: Evidence from China

Using a new data set of 12,000 firms in China, this paper estimates the returns to R&D investment and its spillover effects, and investigates how the returns to R&D depend on firm incentives. For the firms in the sample, the results show that on average firm output increases around 0.4 yuan for each additional 1 yuan spent on R&D in the previous year, and there is high R&D return regardless of whether the endogeneity of R&D intensity is dealt with or not. Interestingly, the marginal return to R&D is significantly higher in firms whose CEOs were not appointed by the government, and lower when CEO pay is directly related to annual performance. The return to R&D is higher in relatively poor regions and for firms with worse access to finance. There are also non-trivial R&D spillover effects.     

Absorptive capacity,knowledge sharing,and innovative behaviour of R&D employees

This study explores the interrelationship between absorptive capacity and knowledge sharing, which are innovation-specific antecedents of innovative behaviour. By differentiating the two sub-dimensions of absorptive capacity, potential and realised absorptive capacity, previous contradictory findings on the relationship between absorptive capacity and knowledge sharing are reconciled. To verify the research hypotheses, the survey responses from 138 R&D employees of a multinational electronics company are analysed through structural equation modelling. The results show that both sub-dimensions of absorptive capacity directly influence innovative behaviour. However, knowledge sharing’s effect on innovative behaviour is indirect through realised absorptive capacity. The research findings imply employees’ absorptive capacity and knowledge sharing among them should be nurtured simultaneously to facilitate innovative behaviour. In addition to providing employees with many opportunities to be exposed to external knowledge, internal communications among employees and exploratory trials exploiting external knowledge along with internal knowledge should be encouraged.     

Entry Solicitation and Deterrence in R&D Competition with Spillovers

The purpose of this note is to examine incumbent behaviour and patterns of entry under R&D competition with spillovers. We find that, in addition to blockading, deterring and accommodating entry, the incumbent may also solicit entry. Entry solicitation occurs when the incumbent strategically alters its R&D commitment in order to take advantage of the spillover generated by the entrant's subsequent R&D investment. Although our results are placed in the context of R&D with spillovers, they are applicable to a wider class of models involving positive externalities, particularly network externalities.
JEL Classification Numbers: L12, O31.     

R&D, Human Capital and International Technology Spillovers: A Cross-country Analysis

This paper is based on recent developments in the theory of innovation-driven growth that emphasize both the importance of R&D efforts — domestic as well as foreign — for explaining national productivity, and the complementarity between R&D and human capital investments. Estimates of specifications, in growth terms and in level terms, on a cross-section of OECD countries from the early 1960s to the early 1990s lend strong support to this thesis. The data show a significant influence of both domestic and foreign R&D. Moreover, there is clearly a net positive impact of human capital. The level and growth rate of human capital are shown to affect productivity growth and there is evidence of interaction with the catch-up process.
JEL classification: O 33; O 47     

Intersectoral and International R&D Knowledge Spillovers and Total Factor Productivity

Disaggregate panel data estimates are presented of equations that relate a set of OECD countries' sectoral total factor productivity to domestic and to foreign R&D capital. The estimates indicate that there are both important international and national R&D knowledge spillovers and that these spillovers are intersectoral and intrasectoral in nature. They show that the influence of domestic R&D is stronger in the large economies and that this is caused by more important domestic intersectoral R&D spillovers. There is also evidence of a greater influence of domestic and of foreign R&D in research intensive industries and of an interaction between the domestic economy scale and the research intensity effects.     

Subsidizing Technological Innovations in the Presence of R&D Spillovers

Abstract. We analyze a situation where a principal wants to induce two firms to produce an output, for example electricity from renewable energy sources. Firms can undertake non-contractible investments to reduce production cost of the output. Part of these investments spills over and also reduces production cost of the other firm. Comparing a general price subsidy and an innovation tournament, we find that the principal's expected cost of implementing a given expected output is always higher under the tournament, even though this scheme may lead to more innovation.     

R＆D、R＆D溢出、内生增长和内生收敛

根据强调知识与技术创新、知识与技术溢出重要性的当代内生增长理论，本文建立了一个将R＆D和R＆D溢出与资本积累之间、R＆D和R＆D溢出与总产出增长之间直接关联起来的动态模型。面板数据协整检验实证分析结果表明R＆D和R＆D溢出与资本积累之间、R＆D和R＆D溢出与总产出增长之间分别存在显著的正面长期协整关联。进一步的分析表明，R＆D与资本积累之间、R＆D与总产出增长之间分别存在显著的长期双向格兰杰因果关系。由此观知，R＆D乃长期经济增长源泉之所在。另一方面，尽管资本积累或总产出增长并不格兰杰导致R＆D溢出，证据表明R＆D溢出格兰杰导致资本积累和总产出增长。这种由R＆D溢出到资本积累和总产出增长的单向格兰杰因果关系意味着尽管知识与技术的跨国传播并非必然发生。其实为世界经济增长的重要动力。     

R&D、R&D溢出、内生增长和内生收敛

根据强调知识与技术创新、知识与技术溢出重要性的当代内生增长理论,本文建立了一个将R&D和R&D溢出与资本积累之间、R&D和R&D溢出与总产出增长之间直接关联起来的动态模型.面板数据协整检验实证分析结果表明R&D和R&D溢出与资本积累之间、R&D和R&D溢出与总产出增长之间分别存在显著的正面长期协整关联.进一步的分析表明,R&D与资本积累之间、R&D与总产出增长之间分别存在显著的长期双向格兰杰因果关系.由此观知,R&D乃长期经济增长源泉之所在.另一方面,尽管资本积累或总产出增长并不格兰杰导致R&D溢出,证据表明R&D溢出格兰杰导致资本积累和总产出增长.这种由R&D溢出到资本积累和总产出增长的单向格兰杰因果关系意味着尽管知识与技术的跨国传播并非必然发生,其实为世界经济增长的重要动力.     

High Technology Employment,Wages And University R&D Spillovers: Evidence From Us Cities

Using 4 years of data from 36 American cities and 6 high technology groupings we present thc first estimates of University R&D spillover effects on ctnployrnent at this level of disag-gregation, while controlling for wages, prior innovations, state fixed efrccts, and saniple selectivity hias. We find robust evidence that lagged and disaggrcgated university R&D is a significant determinant of city high technology employment and some evidence for employment effects of innovation.