Identifying Technology Spillovers and Product Market Rivalry

Mark Schankerman, The London School of Economics and Political Science

The impact of R&D on growth through spillovers has been a major topic of economic research over the last thirty years. A major problem in the literature is that firm performance is affected by two countervailing spillovers: a positive effect from technological knowledge spillovers and negative business stealing effects from product market rivals. We develop a general framework to distinguish these two effects, showing that technology and product market spillovers have testable implications for a range of performance indicators. We exploit these implications empirically with distinct measures of a firm’s position in technology space and product market space. Using panel data on U.S. firms over two decades we show that both technology and product market spillovers operate, but technology spillovers quantitatively dominate. The spillover effects are also present when we analyze three high tech sectors in finer detail and use R&D tax prices as instrumental variables for R&D. Finally, using the model we evaluate the net spillovers from three alternative R&D subsidy policies.

About the speaker
Mark Schankerman is Professor of Economics at the London School of Economics and Political Science, where he has taught since 1987. Prior to the LSE, he taught at New York University. He received a B.A. degree in Economics from Brandeis University and M.A. and Ph.D. in Economics from Harvard University. He is a Research Fellow at the Centre for Economic Policy Research (CEPR, London) in two ndustrial Organisation and Development Economics. He was Director of the Programme on Productivity and Innovation at the Centre for Economic Performance at the LSE for 2006-07. From 1980-90 he was a Research Associate at the National Bureau of Economic Research (USA). He is currently an editor of the Economics of Transition, Associate Editor of the RAND Journal of Economics, and on the Board of Editors of the Journal of Industrial Economics. He served as Director of Policy Studies and Advisor to the Chief Economist at the European Bank for Reconstruction and Development from 1995-2000. He worked at the World Bank, specialising on economic liberalisation and regulatory reform in Africa. He has extensive consultancy experience with international institutions, including the World Bank, OECD, and many private corporations. He is also a Director at the international consultancy firm, Law and Economics Consulting Group. His main area of research is industrial economics, with emphasis on intellectual property rights, innovation and productivity. He has published many scientific papers in these areas, as well as in the economics of transition and public utility regulation.

Venue: UNU-MERIT conference room, Keizer Karlplein 19, Maastricht

Date: 20 November 2009

Time: 15:30 - 16:30  CEST