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.