R&D Spillover Effects on the Strategic Behavior of Large International Firms during the World Financial Crisis

Abstract

The aim of this study is to investigate the relationship between competition and innovation through the knowledge spillover effect. In particular, we investigate whether R&D competition is sensitive to economic shock. To this end, we consider a period of time related also to the 2008 financial crisis. We implement an empirical analysis of 879 worldwide R&D-intensive firms. In order to measure technological proximity, we use two approaches: one based on Jaffe industry weight matrix, relative to patents distributed across technology classes; one based on trade intensity between sectors using input-output matrix data. The empirical results show a positive effect of R&D externalities on competitive interactions before the beginning of crisis and a negative one after it. These findings are robust with respect to the procedure employed in the estimation method.