Gains from Others’ Losses: Technology Trajectories and the Global Division of Firms

Posted: 10 Jun 2012 Last revised: 3 Feb 2016

Chia-Hsuan Yang

Carnegie Mellon University - Department of Engineering and Public Policy

Rebecca Nugent

Carnegie Mellon University - Department of Statistics

Erica R.H. Fuchs

Department of Engineering and Public Policy, Carnegie Mellon University

Date Written: 2016

Abstract

This paper offers new insights into the role of firms versus individuals in driving technology directions, and the extent to which human capital may be lost during industrial shifts. We explore in particular whether (1) firms who move manufacturing offshore slow U.S.-based R&D activities in an emerging technology and (2) the inventors originally within these offshoring firms, leave, and continue innovating in the emerging technology at different institutions. We focus on the 28 leading U.S. optoelectronic component manufactures for telecommunications and the inventors who patent at these firms. In the case of U.S. optoelectronic component manufacturers for telecommunications, offshoring is associated with a decrease in innovation in the emerging technology, but an increase in all other types of patenting. The majority of inventors depart to firms outside the industry and stop work in the emerging technology. However, an important minority of emerging technology inventors at the offshoring firms go to a single onshore firm in the same industry (which gains from others’ losses and subsequently dominates this space). Our results suggest a strong role for firms and firm strategy in driving innovation directions, and the corresponding opportunities faced by individuals.

Keywords: Offshoring; Innovation; Human capital; Product life cycle; Manufacturing; Location of knowledge

Suggested Citation

Yang, Chia-Hsuan and Nugent, Rebecca and Fuchs, Erica R.H., Gains from Others’ Losses: Technology Trajectories and the Global Division of Firms (2016). Research Policy, Vol. 45, No. 3, 2016. Available at SSRN: https://ssrn.com/abstract=2080595 or http://dx.doi.org/10.2139/ssrn.2080595

Chia-Hsuan Yang (Contact Author)

Carnegie Mellon University - Department of Engineering and Public Policy ( email )

Baker Hall 129
5000 Forbes Ave,
Pittsburgh, PA 15213
United States

Rebecca Nugent

Carnegie Mellon University - Department of Statistics ( email )

Baker Hall
Pittsburgh, PA 15213
United States

Erica Renee Fuchs

Department of Engineering and Public Policy, Carnegie Mellon University ( email )

Pittsburgh, PA 15213-3890
United States

Paper statistics

Abstract Views
2,027