Appropriability, R&D Spending, and Technological Performance

Additional evidence is presented on the nature and extent of research and development (R&D) spillovers and on the connection between spillovers, R&D spending, and technological spillovers. Data are used from a survey of 650 R&D executives on the nature of appropriability and technological opportunity in 130 industries defined at the Federal Trade Commission (FTC) Line of Business level. The responses reveal a pattern of correlation among spillover channels that rely on interpersonal communication. The effectiveness of these channels and of reverse engineering as well is negatively correlated with the time required to imitate an innovation. The effectiveness of licensing is positively correlated with the reported time required for imitation and with the reported effectiveness of patents in preventing duplication. The analysis gives some support to the hypothesis that spillovers may be conducive to rapid technical progress but no support for the hypothesis that spillovers discourage R&D.