Spillovers of Innovation Activities and Their Profitability

23 Pages Posted: 4 Jan 2008 Last revised: 22 Feb 2015

See all articles by Dirk Czarnitzki

Dirk Czarnitzki

Catholic University of Leuven (KUL); Centre for European Economic Research (ZEW)

Kornelius Kraft

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

Date Written: 2007

Abstract

Knowledge spillovers to competitors are regarded as an important aspect of the innovation process. While a company possibly benefits from incoming information on successful R&D conducted by other companies, a generally high probability of leakage of knowledge in an industry will negatively affect profitability. This paper presents the results of an empirical study on the effects of outgoing and incoming spillovers on firms' profitability. It turns out that the expected asymmetry is actually at work. In contrast to spillovers from competitors, spillovers from suppliers, customers and research institutions exert no effect.

Keywords: Innovation, Spillover, Profitability.

JEL Classification: L12, O31, O32

Suggested Citation

Czarnitzki, Dirk and Czarnitzki, Dirk and Kraft, Kornelius, Spillovers of Innovation Activities and Their Profitability (2007). ZEW - Centre for European Economic Research Discussion Paper No. 07-073, Available at SSRN: https://ssrn.com/abstract=1080531 or http://dx.doi.org/10.2139/ssrn.1080531

Dirk Czarnitzki (Contact Author)

Catholic University of Leuven (KUL) ( email )

Faculty of Economics and Business
Naamsestraat 69
Leuven, 3000
Belgium
+32 16 326906 (Phone)
+32 16 325799 (Fax)

HOME PAGE: http://www.econ.kuleuven.be/msi/faculty_members.htm

Centre for European Economic Research (ZEW) ( email )

P.O. Box 10 34 43
Mannheim, 68034
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

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