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Recombinant innovation and the boundaries of the firm

Author

Listed:
  • Rachel Griffith

    (Institute for Fiscal Studies and University of Manchester)

  • Sokbae (Simon) Lee

    (Institute for Fiscal Studies and Columbia University)

  • Bas Straathof

    (Institute for Fiscal Studies)

Abstract
There is considerable interest in understanding how important market frictions are in stiffing the transmission of ideas from one firm to another. Although the theoretical literature emphasizes the importance of these frictions, direct empirical evidence on them is limited. We use comprehensive patent data from the European Patent Office and a multiple spells duration model to provide estimates that suggest that they are substantial. It is around 30% more costly to successfully discover and utilize new ideas created in another fi rm than in your own. This compares to the increased costs of accessing new ideas across national borders of around 5%, and across technologies of around 20%. These result point towards substantial imperfections in the market for technology.

Suggested Citation

  • Rachel Griffith & Sokbae (Simon) Lee & Bas Straathof, 2014. "Recombinant innovation and the boundaries of the firm," CeMMAP working papers CWP40/14, Centre for Microdata Methods and Practice, Institute for Fiscal Studies.
    • Handle: RePEc:ifs:cemmap:40/14
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    References listed on IDEAS

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    Cited by:

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    3. Francesco Cappellano & Christophe Sohn & Teemu Makkonen & Virpi Kaisto, 2022. "Bringing borders back into cross-border regional innovation systems: Functions and dynamics," Environment and Planning A, , vol. 54(5), pages 1005-1021, August.
    4. Hilda Bø Lyng & Eric Christian Brun, 2020. "Innovating with Strangers; Managing Knowledge Barriers Across Distances in Cross-Industry Innovation," International Journal of Innovation and Technology Management (IJITM), World Scientific Publishing Co. Pte. Ltd., vol. 17(01), pages 1-33, February.

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    More about this item

    JEL classification:

    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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