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Bounding the Effects of R&D: An Investigation Using Matched Establishment-Firm Data

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  • James D. Adams
  • Adam B. Jaffe

Abstract

We find that the effects of parent firm R&D on plant-level productivity are diminished by both the geographic and technological distance between the research lab and the plants; that productivity appears to depend on R&D per plant rather than on the total amount; and that spillovers from technologically related firms are significant but also depend on R&D intensity rather than on total industry R&D. These results suggest that the "dilution" of R&D across multiple target plants reduces its potency sufficiently that spillovers may not be a source of industrywide or economywide increasing returns.

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  • James D. Adams & Adam B. Jaffe, 1996. "Bounding the Effects of R&D: An Investigation Using Matched Establishment-Firm Data," RAND Journal of Economics, The RAND Corporation, vol. 27(4), pages 700-721, Winter.
    • Handle: RePEc:rje:randje:v:27:y:1996:i:winter:p:700-721
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    1. Jaffe, Adam B, 1989. "Real Effects of Academic Research," American Economic Review, American Economic Association, vol. 79(5), pages 957-970, December.
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