Entrepreneurial Spillovers from Corporate R&D

72 Pages Posted: 26 Dec 2018

See all articles by Tania Babina

Tania Babina

Columbia Business School - Finance and Economics

Sabrina Howell

New York University (NYU) - Leonard N. Stern School of Business

Date Written: December 4, 2018

Abstract

This paper documents that corporate R&D investment increases employee departures to entrepreneurship. We use U.S. Census data, and instrument for R&D with its tax credit-induced cost. The ideas or skills that spill into startups seem to benefit from focused, high-powered incentives; for example, R&D-induced startups are much more likely to receive venture capital. The effect also seems to reflect ideas or skills that are poor complements to the firm’s assets. As human capital is inalienable and portable, and startups are crucial to economic growth, R&D-induced labor reallocation to startups appears to be a novel channel of R&D spillovers.

Keywords: Innovation, R&D, Entrepreneurship, Investment

Suggested Citation

Babina, Tania and Howell, Sabrina, Entrepreneurial Spillovers from Corporate R&D (December 4, 2018). Available at SSRN: https://ssrn.com/abstract=3295995 or http://dx.doi.org/10.2139/ssrn.3295995

Tania Babina

Columbia Business School - Finance and Economics ( email )

3022 Broadway
New York, NY 10027
United States

Sabrina Howell (Contact Author)

New York University (NYU) - Leonard N. Stern School of Business ( email )

44 West 4th Street
Suite 9-160
New York, NY NY 10012
United States
212-998-0913 (Phone)

HOME PAGE: http://www.sabrina-howell.com

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