Identifying Technology Spillovers and Product Market Rivalry

Nicholas Bloom (), Mark Schankerman and John van Reenen ()

CEP Discussion Papers from Centre for Economic Performance, LSE

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 effectsfrom technology spillovers and negative effects from business stealing by product marketrivals. We develop a general framework showing that technology and product marketspillovers have testable implications for a range of performance indicators, and exploit theseusing 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 andproduct market spillovers operate, but that net social returns are several times larger thanprivate returns. The spillover effects are also revealed when we analyze three high-techsectors in detail - pharmaceuticals, computer hardware and telecommunication equipment.Using the model we evaluate three R&D subsidy policies and show that the typical focus ofsupport for small and medium firms may be misplaced.

Keywords: Spillovers; R&D; market value; patents (search for similar items in EconPapers)
JEL-codes: O31 O32 O33 F23 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-com, nep-ino, nep-sea and nep-tid
Date: Written
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Related works:
Working Paper: Identifying Technology Spillovers and Product Market Rivalry (2005)
Working Paper: Identifying technology spillovers and product market rivalry (2005)
Working Paper: Identifying Technology Spillovers and Product Market Rivalry (2007)
Journal Article: Identifying technology spillovers and product market rivalry (2005)
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Persistent link: http://EconPapers.repec.org/RePEc:cep:cepdps:dp0675

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