Incremental versus Breakthrough Innovation: The Role of Technology Spillovers

55 Pages Posted: 2 Oct 2017 Last revised: 23 Sep 2019

See all articles by Seong K. Byun

Seong K. Byun

Virginia Commonwealth University (VCU) - Department of Finance, Insurance & Real Estate

Jong-Min Oh

SungKyunKwan University (SKKU) - SKK Business School

Han Xia

University of Texas at Dallas - Naveen Jindal School of Management

Date Written: September 16, 2019

Abstract

We show that technology spillovers shift the composition of corporate research and development (R&D) by promoting innovation based on the exploitation of existing knowledge, while disincentivizing innovation that explores new areas and breaks new ground. Accordingly, firms facing large technology spillovers attain fewer superstar inventors among their human capital – who are important drivers of breakthrough technology advancement. These findings complement the existing studies documenting the positive effect of technology spillovers in increasing firms’ overall innovation outputs; they highlight potential downsides of technology spillovers in reducing firm investment in technology breakthrough and valuable human capital.

Keywords: technology spillovers, innovation strategies, research direction, human capital accumulation

JEL Classification: G30, L25, M21

Suggested Citation

Byun, Seong K. and Oh, Jong-Min and Xia, Han, Incremental versus Breakthrough Innovation: The Role of Technology Spillovers (September 16, 2019). Management Science, Forthcoming. Available at SSRN: https://ssrn.com/abstract=3045464 or http://dx.doi.org/10.2139/ssrn.3045464

Seong K. Byun

Virginia Commonwealth University (VCU) - Department of Finance, Insurance & Real Estate ( email )

Richmond, VA 23284
United States

Jong-Min Oh

SungKyunKwan University (SKKU) - SKK Business School ( email )

25-2, Sungkyunkwan-ro, Jongno-gu
Seoul, 03063
Korea, Republic of (South Korea)

Han Xia (Contact Author)

University of Texas at Dallas - Naveen Jindal School of Management ( email )

P.O. Box 830688
Richardson, TX 75083-0688
United States

Register to save articles to
your library

Register

Paper statistics

Downloads
125
Abstract Views
711
rank
232,884
PlumX Metrics