Bounding the effects of R&D: An investigation using matched establishment-firm data

We find that the effects of parent firm R&D on plant-level productivity are diminished by both the geographic and technological distance between the research lab and the plants; that productivity appears to depend on R&D per plant rather than the total amount; and that spillovers from technologically related firms are significant but also depend on R&D intensity rather than total industry R&D. These results suggest that the ''dilution'' of R&D across multiple target plants reduces its potency sufficiently that spillovers may not be a source of industrywide or economywide increasing returns.