Essays on knowledge spillovers and firm R&D

Abstract

This dissertation has a topic about knowledge spillovers and relevant firm behaviors and performance. Throughout three essays, I particularly concern about technological knowledge spilled over and firm-specific technological capability which jointly play an important role in firm R&D behavior and performance. The first essay of Chapter 2 presents that a firm’s ability to produce and absorb technological knowledge, or technological capability, influences its choice of location among regions characterized by different types of agglomeration. The empirical study found that geographically-bounded knowledge externalities, one of the forces that attract firms into a particular location, have a differential effect on firm location choice across firms depending on the level of their technological capability: for firms with low technological capability knowledge externalities from co-located competitors, or competitive specialization, have a stronger positive effect on their location choice, while for firms with high technological capability knowledge externalities from co-located firms from related and complementary industries, or complementary specialization, more strongly influence their location choice. Furthermore, the differential effect of agglomeration economies between low- and high-capability firms is more pronounced in industries with strong non-legal appropriability, implying that firms can use their location choice as a strategic tool for dealing with the spillovers of tacit knowledge. The second essay of Chapter 3 examines how firms’ R&D location affects their R&D performance. Using data on Korean manufacturing firms, the study found that, with regional factors controlled, firms exhibit greater R&D performance by locating R&D departments in a farther place from non-R&D functions, such as headquarters and plants. The positive effect of physical R&D separation is stronger on R&D performance when firms face early growing stages of industry life cycle or ra...