Journal of Financial and Quantitative Analysis Vol. 48 No. 5 2013
R&D Spillover Effects and Firm Performance Following R&D Increases
Abstract
We examine how research and development (R&D) incoming spillovers affect long-run firm performance following firms’ R&D increases. We use a stochastic frontier production method to capture R&D incoming spillover effects. Firms reaping more benefits from R&D investment made by other firms experience more improvement in profitability and more favorable long-run stock performance in the post-R&D-increase period. Firms with higher levels of R&D incoming spillovers recruit more key employees from other firms, suggesting that obtaining know-how through hiring is an important source of incoming spillovers. The evidence also shows that firms experiencing more R&D outgoing spillover effects tend to underinvest in R&D.
- DOI
- 10.1017/s0022109013000574
- Volume
- 48
- Issue
- 5
- Pages
- 1607-1634
- Language
- en
- Sources
- bibtex:phds-export.bib openalex crossref