Corporate science, firm value, and vertical specialization: evidence from the semiconductor industry

We examine the involvement of firms in scientific research and its implications for valuation in the context of the US semiconductor industry. We specifically compare design-oriented fabless firms to manufacturers. Whereas fabless firms produce more scientific publications over time, manufacturing firms are producing more science-based patents. Fabless firms enjoy a value premium when contributing to science, whereas manufacturing firms do not. We consider the different strategies pursued by fabless and manufacturing firms as potential explanation of these differences.