Seeking Technology from Different Sources: Evidence from Firm Location Decisions

33 Pages Posted: 10 Nov 2003  

Wilbur Chung

University of Maryland - Robert H. Smith School of Business

Juan Alcacer

Harvard University - Strategy Unit

Date Written: September 2003

Abstract

Do firms take advantage of differences in innovation across locations? Recent research establishes that firms, motivated by geographic differences in technological capabilities, locate close to innovation sources to seek technology. We explore which technology sources attract firms and how firm-specific technical capabilities affect preferences for technological sources. Using foreign firms entering the US from 1985-1994, we find that firms are more attracted to locations with high levels of industrial and academic activity measured as patent stocks. Governmental activity does not have any effect in location decisions. Interestingly, while technologically lagging firms favor locations with any level of academic or industrial activity, technologically advanced firms avoid locations with low levels of industrial and academic activity and are indifferent to locations with high levels of both.

Keywords: knowledge exploration, technology spillovers, FDI, location choice

JEL Classification: F23, R30, L21

Suggested Citation

Chung, Wilbur and Alcacer, Juan, Seeking Technology from Different Sources: Evidence from Firm Location Decisions (September 2003). Available at SSRN: https://ssrn.com/abstract=460640 or http://dx.doi.org/10.2139/ssrn.460640

Wilbur C. Chung (Contact Author)

University of Maryland - Robert H. Smith School of Business ( email )

College Park, MD 20742-1815
United States

HOME PAGE: http://www.rhsmith.umd.edu/faculty/wchung/

Juan Alcacer

Harvard University - Strategy Unit ( email )

Harvard Business School
Soldiers Field Road
Boston, MA 02163
United States
617 495-6338 (Phone)
617 495-0355 (Fax)

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