Knowledge Spillovers in the Supply Chain: Evidence from the High Tech Sectors

In addition to internal R&D, external knowledge is widely considered as an essential lever for innovative performance. This paper analyzes knowledge spillovers in supply chain networks. Specifically, we investigate how supplier innovation is impacted by buyer innovation. Financial accounting data is combined with supply chain relationship data and patent data for U.S. firms in high tech industries. Our econometric analysis shows that buyer innovation has a positive and significant impact on supplier innovation. We find that the duration of the buyer-supplier relationship positively moderates this effect, but that the technological proximity between the two firms does not have a significant effect on spillovers.