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Bi-directional R&D spillovers and operating performance: A two-tier stochastic frontier model

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  • Hu, Zhiqiang
  • Pei, Kaibing

Abstract

This paper quantitatively measures the incoming effect and outgoing effect of R&D spillovers using a two-tier stochastic frontier model and then empirically analyzes their separate and net roles in operating performance with a cross-section data of Chinese GEM listed enterprises over the period 2009–2017. We find that on average the incoming effect is larger than the outgoing effect at the observation level. However, the incoming effect and outgoing effect of R&D spillovers show heterogeneous characteristics in individual enterprises, and the incoming (outgoing, net) effect has a significant and positive (negative, positive) impact on operating performance.

Suggested Citation

  • Hu, Zhiqiang & Pei, Kaibing, 2020. "Bi-directional R&D spillovers and operating performance: A two-tier stochastic frontier model," Economics Letters, Elsevier, vol. 195(C).
    • Handle: RePEc:eee:ecolet:v:195:y:2020:i:c:s0165176520302998
    DOI: 10.1016/j.econlet.2020.109485
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    References listed on IDEAS

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    1. Jaffe, Adam B, 1986. "Technological Opportunity and Spillovers of R&D: Evidence from Firms' Patents, Profits, and Market Value," American Economic Review, American Economic Association, vol. 76(5), pages 984-1001, December.
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    4. Hunt-McCool, Janet & Koh, Samuel C & Francis, Bill B, 1996. "Testing for Deliberate Underpricing in the IPO Premarket: A Stochastic Frontier Approach," The Review of Financial Studies, Society for Financial Studies, vol. 9(4), pages 1251-1269.
    5. Christopher F. Parmeter, 2018. "Estimation of the two-tiered stochastic frontier model with the scaling property," Journal of Productivity Analysis, Springer, vol. 49(1), pages 37-47, February.
    6. Chen, Sheng-Syan & Chen, Yan-Shing & Liang, Woan-lih & Wang, Yanzhi, 2013. "R&D Spillover Effects and Firm Performance Following R&D Increases," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 48(5), pages 1607-1634, October.
    7. Aigner, Dennis & Lovell, C. A. Knox & Schmidt, Peter, 1977. "Formulation and estimation of stochastic frontier production function models," Journal of Econometrics, Elsevier, vol. 6(1), pages 21-37, July.
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    Cited by:

    1. Alecos Papadopoulos & Christopher F. Parmeter & Subal C. Kumbhakar, 2021. "Modeling dependence in two-tier stochastic frontier models," Journal of Productivity Analysis, Springer, vol. 56(2), pages 85-101, December.

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    More about this item

    Keywords

    R&D spillovers; Incoming effect; Outgoing effect; Operating performance; Two-tier stochastic frontier model;
    All these keywords.

    JEL classification:

    • C31 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions; Social Interaction Models
    • C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
    • M11 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Production Management

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