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The Growth Lab Research Seminar series is a weekly seminar that brings together researchers from across the academic spectrum who share an interest in growth and development.
Speaker: Evgenii Fadeev, Ph.D. Candidate in Economics, Harvard
Paper: Creative Construction: Knowledge Sharing in Production Networks
Abstract: Knowledge flows between firms are often measured using patent citations. I show that even the most cited patents on average receive the majority of citations from one firm only, and this concentration has significantly increased since 2000. Using the movement of inventors across companies, I show that the concentration is primarily driven by firms rather than inventors. I develop a theory of knowledge sharing between firms that accounts for these citation patterns. Citations are correlated with the sharing of trade secrets that are complementary to patented technologies. They are concentrated because only a limited set of firms gets access to private knowledge of a patent owner. Firms have incentives to share their secrets with producers of complementary products such as suppliers and customers but to conceal them from competitors. In turn, competitors can obtain private knowledge from each other through their common suppliers and customers if the latter did not sign confidentiality agreements. The model predicts contractual arrangements and patterns of knowledge sharing (citations) in a production network based on the degree of industry competition and firms' bargaining positions vis-a-vis their suppliers/customers. Using the network data for the U.S. publicly traded firms and the variation across industries in the exposure to import competition from China, I provide empirical evidence supporting the predictions of the theory.
Please register in advance, and contact Chuck McKenney with any questions.