Market Demand, Technological Opportunity and Research Spillovers on R&D Intensity and Productivity Growth

Adam B. Jaffe

NBER Working Paper No. 1432
Issued in August 1984
NBER Program(s):The Productivity, Innovation, and Entrepreneurship Program

This paper uses sales and patent distribution data to establish the market and technological "positions" of firms. A notion of technological proximity of firms is developed in order to quantify potential R&D spillovers. The importance of the position variables and the potential spilover pool in explaining R&D intensity, patent productivity and TFP growth is explored.I find that both technological and market positions are signifi-cant in explaining R&D intensity, and that the technological effects are significant in explaining patent productivity. I cannot distinguish between the two effects in explaining TFP growth. Spillovers are important in all three contexts. Firms in an area where there is a high level of research by other firms do more R&D themselves, they produce more patents per R&D dollar, and their productivity grows faster, even controlling for the increased R&D and patents. These effects are present controlling for both industry and technological position effects.

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Document Object Identifier (DOI): 10.3386/w1432

Published: "Demand and Supply Influences in R&D Intensity and Productivity Growth" Review of Economics and Statistics, vol LXX, no. 3, pp. 431-437, August 1988.

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