Click here for a list by category

Research and Development Laboratories in the Production Process

Abstract A large body of evidence points to relationships between investment in research and development (R&D), productivity, and economic growth. This study aims to advance the understanding of precisely how R&D investments contribute to the productivity of firms: both the firms that undertake the investments directly as well as neighboring firms that benefit from spillover effects. Combining a unique data set of R&D labs with firm-level data from Compustat and restricted-use Census data at the firm- and establishment-level, this project will first answer a series of descriptive questions about how R&D labs in the U.S. are embedded in the production structure of firms. Are locations devoted to innovation dispersed or concentrated relative to other establishments that perform other functions? Does this vary by industry or domestic ownership status? In which industries do firms tend to locate labs near their own headquarters versus their production facilities or the labs of other firms? This project will extend previous work that identifies the size and location of agglomerations of R&D labs and measures the strength of knowledge spillovers within each agglomeration. Firm-level panel regressions will be used to elucidate the impact on firm productivity of R&D labs, the characteristics of the agglomeration in which labs are located, and the position of labs within the production structure of the firm.

The U.S. -- Tax Incentives Dispute: Subsidies and Investment Promotion Reaching New Heights in the Aviation Sector: The US--Tax Incentives Dispute

Abstract This paper analyzes the most recent WTO Appellate Body (AB) report in a series of disputes between the US and the EU over government support to aircraft manufacturers Boeing and Airbus. The measures under dispute in US–Tax Incentives were investment promotion subsidies provided to Boeing by the State of Washington. The EU contended that the Washington State subsidies, which were conditioned on Boeing locating production of specific parts of its new 777X program within the state, were prohibited import substitution subsidies. The AB took this case as an opportunity to consolidate WTO case-law on import substitution subsidies. It confirmed a single legal standard for export promotion and import substitution subsidies but with a stricter requirement for a finding of a violation in the case of import substitution subsidies. We argue that the AB, in allowing the subsidies to Boeing, unnecessarily blurred the distinction between contingency in law and contingency in fact by ruling that identifying a condition requiring the use of domestic inputs would be a necessary element for a determination of a de facto contingency. This appears to be an unduly formalistic view that leaves little legal space for any de facto contingency claim in the future.

The Geography of Research and Development Activity in the U.S.

Abstract This study details the location patterns of R&D labs in the U.S., but it differs from past studies in a number of ways. First, rather than looking at the geographic concentration of manufacturing firms (e.g., Ellison and Glaeser, 1997; Rosenthal and Strange, 2001; and Duranton and Overman, 2005), we consider the spatial concentration of private R&D activity. Second, rather than focusing on the concentration of employment in a given industry, we look at the clustering of individual R&D labs by industry. Third, following Duranton and Overman (2005), we look for geographic clusters of labs that represent statistically significant departures from spatial randomness using simulation techniques. We find that R&D activity for most industries tends to be concentrated in the Northeast corridor, around the Great Lakes, in California’s Bay Area, and in southern California. We argue that the high spatial concentration of R&D activity facilitates the exchange of ideas among firms and aids in the creation of new goods and new ways of producing existing goods. We run a regression of an Ellison and Glaeser (1997) style index measuring the spatial concentration of R&D labs on geographic proxies for knowledge spillovers and other characteristics and find evidence that localized knowledge spillovers are important for innovative activity.