The local innovation spillovers of listed firms

Adrien Matray

Journal of Financial Economics, 2021, vol. 141, issue 2, 395-412

Abstract: This paper provides evidence of local innovation spillovers (i.e., innovation by one firm fostering innovation by neighboring firms). First, I document that exogenous shocks to innovation by listed firms affect innovation by private firms in the same geographical area and that such local innovation spillovers decline rapidly with distance. Second, these local innovation spillovers stem from knowledge diffusing locally through two channels: learning across local firms and inventors moving from their employer to both existing firms and newly started spin-outs. Finally, I study the two-way relations between innovation spillovers and the availability of capital. I find that local innovation spillovers cause venture capital funds from outside the area to invest more in the local area, and that capital availability amplifies local innovation spillovers.

Keywords: Innovation spillovers; Knowledge diffusion; Patents; Financing of innovation (search for similar items in EconPapers)
JEL-codes: K41 L24 O31 O34 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (40)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jfinec:v:141:y:2021:i:2:p:395-412

DOI: 10.1016/j.jfineco.2021.04.009

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