Digital technology adoption and knowledge flows within firms: Can the Internet overcome geographic and technological distance?

Chris Forman and Nicolas van Zeebroeck

Research Policy, 2019, vol. 48, issue 8, -

Abstract: Under what conditions does digital technology adoption increase cross location knowledge flows within firms? We investigate this question by studying the impact of adopting basic Internet access on cross-location knowledge flows within the same firm. We construct a large data set of Internet adoption and patent citations among dyadic pairs of firm-locations between 1992–1998. We find that when both locations in the pair adopt basic Internet there is an increase in the likelihood of a citation between the citing and (potential) cited location. In contrast, we find no significant effect of Internet adoption at only the citing location. We further study how this effect varies according to the proximity of the research activities between the source and recipient of knowledge and specialization of the research activities within the recipient. We find that the likelihood of a citation increases more after dyadic Internet adoption when the pair is working in similar research areas and when the research areas in the citing location are less specialized. These results, which are robust to a range of robustness analyses, suggest that digital technologies such as Internet connectivity are able to facilitate knowledge flows between locations only when they share a common knowledge base.

Keywords: Geography of innovation; Internet adoption; IT investments; Knowledge spillovers; Patent citations; Technological proximity; Technological specialization (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (33)

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Working Paper: Digital technology adoption and knowledge flows within firms: Can the Internet overcome geographic and technological distance? (2019)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:respol:v:48:y:2019:i:8:9

DOI: 10.1016/j.respol.2018.10.021

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