Intellectual Capital and the Firm: The Technology of Geographically Localized Knowledge Spillovers

61 Pages Posted: 15 Sep 2000 Last revised: 22 Mar 2013

See all articles by Lynne G. Zucker

Lynne G. Zucker

University of California, Los Angeles (UCLA); National Bureau of Economic Research (NBER)

Michael R. Darby

University of California, Los Angeles (UCLA) - Global Economics and Management (GEM) Area; National Bureau of Economic Research (NBER)

Jeff S. Armstrong

Analysis Group, Inc.

Date Written: December 1994

Abstract

We examine the effects of university-based star scientists on three measures of performance for California biotechnology enterprises: the number of products in development, the number of products on the market, and changes in employment. The `star' concept which Zucker, Darby, and Brewer (1994) demonstrated was important for birth of U.S. biotechnology enterprises also predicts geographically localized knowledge spillovers at least for products in development. However, when we break down university stars into those who have collaborated on publications with scientists affiliated with the firm and all other university stars, there is a strong positive effect of the linked stars on all three firm-performance measures and little or no evidence of an effect from the other university stars. We develop a new hypothesis of geographically localized effects of university research which is consistent with market exchange: Geographically localized effects occur for scientific discoveries characterized by natural excludability, those which can be learned only by working with discoverers or others who have received the knowledge through working together in the laboratory. Natural excludability results in intellectual capital, a transitory form of human capital, embodied in particular scientists whose services must be employed in order to practice the discovery. Contractual and/or ownership relationships occur between firms and the university scientists with intellectual capital and importantly determine firm productivity and growth.

Suggested Citation

Zucker, Lynne G. and Darby, Michael R. and Armstrong, Jeff S., Intellectual Capital and the Firm: The Technology of Geographically Localized Knowledge Spillovers (December 1994). NBER Working Paper No. w4946. Available at SSRN: https://ssrn.com/abstract=226546

Lynne G. Zucker (Contact Author)

University of California, Los Angeles (UCLA) ( email )

405 Hilgard Avenue
Box 951361 Departments of Sociology and Policy Studies 2201 Hershey mc 155107
Los Angeles, CA 90095-1361
United States
310-825-3227 (Phone)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Michael R. Darby

University of California, Los Angeles (UCLA) - Global Economics and Management (GEM) Area ( email )

110 Westwood Plaza
Box 951481
Los Angeles, CA 90095-1481
United States
310-825-4180 (Phone)
310-454-2748 (Fax)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Jeff S. Armstrong

Analysis Group, Inc. ( email )

1747 Pennsylvania Ave., N.W.
Suite 250
Washington,, DC 20006
United States

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