DP4894 Firms' Productivity Growth and R&D Spillovers: An Analysis of Alternative Technological Proximity Measures

Author(s): Michele Cincera

Publication Date: February 2005

Keyword(s): R&D Spillovers , productivity growth , panel data , clustering

JEL(s): O12 , O33 , O47

Programme Areas: Industrial Organization

Link to this Page: www.cepr.org/pubs/dps/DP4894.asp

This paper aims at assessing the impact of R&D spillovers on firms’ economic performance as measured by productivity growth. The construction of R&D spillovers is based on Jaffe’s methodology (1986, 1988), which associates econometrics and data analysis. The main objective of the paper is to extend Jaffe’s methodology by examining alternative methods for measuring R&D spillovers and to test their impacts in terms of the robustness of results. In particular, the method used to classify firms into technological clusters as well as the metrics implemented to appreciate firms’ technological proximities which enter the construction of spillovers are further investigated. In addition to R&D spillovers, firms’ own R&D capital, labour and physical capital are estimated by means of a Cobb-Douglas production function. The data set consists of a representative sample of 625 worldwide R&D-intensive firms over the period 1987-1994.