TY - JOUR AU - Furman,Jeffrey L. AU - Kyle,Margaret K. AU - Cockburn,Iain M. AU - Henderson,Rebecca TI - Public & Private Spillovers, Location and the Productivity of Pharmaceutical Research JF - National Bureau of Economic Research Working Paper Series VL - No. 12509 PY - 2006 Y2 - September 2006 UR - http://www.nber.org/papers/w12509 L1 - http://www.nber.org/papers/w12509.pdf N1 - Author contact info: Jeffrey L. Furman Boston University - SMG 595 Commonwealth Ave - #653a Boston, MA 02215 Tel: 617/353-4656 Fax: 617/353-5003 E-Mail: furman@bu.edu Margaret Kyle Toulouse School of Economics 21 allèe de Brienne 31000 Toulouse FRANCE E-Mail: margaret.kyle@tse-fr.eu Iain M. Cockburn School of Management Boston University 595 Commonwealth Ave Boston, MA 02215 Tel: 617/588-1486 Fax: 815/550-2353 E-Mail: cockburn@bu.edu Rebecca Henderson Heinz Professor of Environmental Management Harvard Business School Morgan 445 Soldiers Field Boston, MA 02163 Tel: 617/495-8014 Fax: 617/496-4072 E-Mail: rhenderson@hbs.edu M3 - presented at "NBER, CRIW, and CREST Conference", August 25-27, 2003 AB - While there is widespread agreement among economists and management scholars that knowledge spillovers exist and have important economic consequences, researchers know substantially less about the "micro mechanisms" of spillovers -- about the degree to which they are geographically localized, for example, or about the degree to which spillovers from public institutions are qualitatively different from those from privately owned firms (Jaffe, 1986; Krugman, 1991; Jaffe et al., 1993; Porter, 1990). In this paper we make use of the geographic distribution of the research activities of major global pharmaceutical firms to explore the extent to which knowledge spills over from proximate private and public institutions. Our data and empirical approach allow us to make advances on two dimensions. First, by focusing on spillovers in research productivity (as opposed to manufacturing productivity), we build closely on the theoretical literature on spillovers that suggests that knowledge externalities are likely to have the most immediate impact on the production of ideas (Romer, 1986; Aghion & Howitt, 1997). Second, our data allow us to distinguish spillovers from public research from spillovers from private, or competitively funded research, and to more deeply explore the role that institutions and geographic proximity play in driving knowledge spillovers. ER -