Knowledge Spillovers and Corporate Investment in Scientific Research

Ashish Arora (), Sharon Belenzon and Lia Sheer

American Economic Review, 2021, vol. 111, issue 3, 871-98

Abstract: Using data on 800,000 corporate publications and patent citations to these publications between 1980 and 2015, we study how corporate investment in research is linked to its use in the firm's inventions, and to spillovers to rivals. We find that private returns to corporate research depend on the balance between two opposing forces: the benefits from the use of science in own downstream inventions, and the costs of spillovers to rivals. Consistent with this, firms produce more research when it is used internally, but less research when it is used by rivals. As firms become more sensitive to rivals using their science, they are likely to reduce the share of research in R&D.

JEL-codes: D22 D25 G31 I23 O31 O33 O34 (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (64)

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DOI: 10.1257/aer.20171742

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