Do Spillovers Stimulate Incremental or Drastic Product Innovations? Evidence from German Establishment Data

30 Pages Posted: 22 Jun 2011

See all articles by Uwe Jirjahn

Uwe Jirjahn

University of Trier - Faculty of Economics

Kornelius Kraft

University of Dortmund - Department of Economics; IZA Institute of Labor Economics

Date Written: August 2011

Abstract

Despite the generally recognized importance of knowledge spillovers, the empirical literature is essentially silent on the type of innovation stimulated by spillovers. We estimate the determinants of product innovations differing in their degree of newness to the adopting firm. Knowledge spillovers from rivals have a positive impact on incremental innovations. This impact is largely independent of participation in R&D cooperation. Spillovers exert no such independent influence on drastic innovation activities. The results support the hypothesis that establishments face difficulties in using knowledge that comes from areas they are not familiar with. Establishments exploit spillovers for incremental innovations rather than for drastic innovations. To some degree R&D cooperation can help to overcome the difficulties in using spillovers for drastic innovations. Furthermore, our estimates provide evidence that the firm's own R&D effort and the use of outside information are substitutes.

Keywords: L10, L20, L60, O31, O32

Suggested Citation

Jirjahn, Uwe and Kraft, Kornelius, Do Spillovers Stimulate Incremental or Drastic Product Innovations? Evidence from German Establishment Data (August 2011). Oxford Bulletin of Economics and Statistics, Vol. 73, Issue 4, pp. 509-538, 2011, Available at SSRN: https://ssrn.com/abstract=1869540 or http://dx.doi.org/10.1111/j.1468-0084.2010.00618.x

Uwe Jirjahn

University of Trier - Faculty of Economics ( email )

Trier, 54286
Germany

Kornelius Kraft

University of Dortmund - Department of Economics ( email )

D-44221 Dortmund
Germany
+49 231 755-3152 (Phone)
+49 231 755-3155 (Fax)

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
2
Abstract Views
387
PlumX Metrics