Technology Spillovers, Diffusion and Rivalry in Firm Networks

Nuriye Melisa Bilgin, Ester Faia and Gianmarco Ottaviano

No 19804, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: We examine how upstream firms’ technology adoption affects the performance and adoption decisions of downstream partners. Using business-to-business data with administrative records on advanced technology adoption, we find gains in productivity, performance, adoption probabilities of firms connected to the adopter, relatively to those that are not. Identification combines staggered event studies, balanced panels of pre-existing relationships, and recentering methods to address expected exposure within the network. Gains vary along firm size, centrality, technology quality, but do not systematically increase with input exposure, suggesting that knowledge spillovers may induce organizational adjustments. Adoption by competitors is associated with short-run negative effects.

Date: 2024-12
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