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Journal Article
What we don't know about innovation: We know innovation is important - but do we know how to make it happen?
Related links: https://www.richmondfed.org/-/media/richmondfedorg/publications/research/econ_focus/2012/q1/cover_weblinks.cfm
Working Paper
The agglomeration of R&D labs
This paper has been superseded by WP 15-03. We study the location of more than 1,000 research and development (R&D) labs located in the Northeast corridor of the U.S. Using a variety of spatial econometric techniques, we find that these labs are substantially more concentrated in space than the underlying distribution of manufacturing activity. Ripley?s K-function tests over a variety of spatial scales reveal that the strongest evidence of concentration occurs at two discrete distances: one at about one-quarter of a mile and another at about 40 miles. We also find that R&D labs in some ...
Working Paper
Beggar thy neighbor? the in-state vs. out-of-state impact of state R&D tax credits
In this paper, I exploit the cross-sectional and time-series variation in R&D tax credits, and in turn the user cost of R&D, available from U.S. states between 1981-2002 to estimate the elasticity of private R&D with respect to both the within-state (internal) user cost and the out-of-state (external) user cost. To facilitate comparisons to previous studies of the R&D cost elasticity, I first estimate an R&D cost elasticity omitting external R&D costs; the estimated elasticity is negative, above unity (in absolute value), and statistically significant?a finding quite similar to that found by ...
Working Paper
Is embodied technology the result of upstream R&D? industry-level evidence
In this paper, I develop an industry-level index of capital-embodied R&D by capturing the extent of research and development directed at the capital goods in which a given industry invests. Compiling and adjusting data from the National Science Foundation and Commerce Department, I construct industry-level, time-series measures of this index and investigate its properties. The data allow me to identify the R&D directed at the development of specific types of capital rather than incorrectly assuming industry R&D spending is equivalent to R&D directed at the industry's product, an assumption ...
Working Paper
When do more patents reduce R&D?
This paper develops a simple duopoly model in which investments in R&D and patents are inputs in the production of firm rents. Patents are necessary to appropriate the returns to the firm?s own R&D, but patents also create potential claims against the rents of rival firms. Analysis of the model reveals a general necessary condition for the existence of a positive correlation between the firm?s R&D intensity and the number of patents it obtains. When that condition is violated, changes in exogenous parameters that induce an increase in firms? patenting can also induce a decline in R&D ...
Journal Article
Powering the assembly line
Long-term drivers behind manufacturing health may need some repair
Journal Article
The rise and fall of a policy rule: monetarism at the St. Louis Fed, 1968-1986
From the 1960s to the 1980s, the Federal Reserve Bank of St. Louis played an important and highly visible role in the development and advocacy of stabilization policy based on the targeting of monetary aggregates. Research conducted at the St. Louis Bank extended earlier monetarist analysis that had focused on the role of money in explaining economic activity in the long run. Their success in finding apparently robust, stable relationships in both long- and short-run data led monetarists to apply long-run propositions to short-run policy questions, effectively competing with alternative views ...
Working Paper
State Incentives for Innovation, Star Scientists and Jobs: Evidence from Biotech
We evaluate the effects of state-provided financial incentives for biotech companies, which are part of a growing trend of placed-based policies designed to spur innovation clusters. We estimate that the adoption of subsidies for biotech employers by a state raises the number of star biotech scientists in that state by about 15 percent over a three year period. A 10% decline in the user cost of capital induced by an increase in R&D tax incentives raises the number of stars by 22%. Most of the gains are due to the relocation of star scientist to adopting states, with limited effect on the ...
Report
Knowledge diffusion through employee mobility
In high-tech industries, one important method of diffusion is through employee mobility: many of the entering firms are started by employees from incumbent firms using some of their former employers? technological know-how. This paper explores the effect of incorporating this mechanism in a general industry framework by allowing employees to imitate their employers? know-how. The equilibrium is Pareto optimal since the employees ?pay? for the possibility of learning their employers? know-how. The model?s implications are consistent with data from the rigid disk drive industry. These ...