Buyers, suppliers, and R&D spillovers

Rene Belderbos, Kyoji Fukao, Kenta Ikeuchi, Young Gak Kim and Hyeog Ug Kwon

No 502593, Working Papers of Department of Management, Strategy and Innovation, Leuven from KU Leuven, Faculty of Economics and Business (FEB), Department of Management, Strategy and Innovation, Leuven

Abstract: The role of buyers and suppliers has received little attention in the literature on research and development (R&D) spillovers and productivity, which has focused primarily on the moderating roles of technological and geographic proximity. In this study, we examine R&D spillovers that result from buyer and supplier relationships at the transaction level, utilizing a unique dataset identifying individual buyers and suppliers of Japanese manufacturing firms, matched with data from R&D surveys and the Census of Manufactures. In an analysis of more than 20,000 Japanese manufacturing plants, we find that R&D stocks of buyers and suppliers provide a substantial productivity performance premium over and above the effect of technologically and geographically proximate R&D stocks. These effects are magnified if the supplier and buyer have business group ties based on capital ownership relationships. While the effects of technologically proximate R&D decay with distance, this is not the case for spillovers from buyers and suppliers. Our results identify transaction-based spillovers as a key influence on productivity and social returns to R&D.

Keywords: Productivity; Location; R&D; Spillovers (search for similar items in EconPapers)
Date: 2015
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Published in RIETI Discussion Paper Series , volume 15

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Working Paper: Buyers, Suppliers, and R&D Spillovers (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:ete:msiper:502593

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