Impact of financing access and corporate governance on firm productivity effect of R&D spillover: Is it stock of innovation or lack of local spill-over?

Sushanta Mallick

School of Business and Management

Queen Mary University of London, UK

Time:  Nov 12th, 4 to 5:30pm (Beijing Time)

Zoom Meeting ID: 963 0385 2924 Passcode: 731125

Abstract

       Global productivity growth has either stagnated or declined despite continued technological innovations. Understanding the root causes behind this paradox in the context of rapidly growing economies like India can help highlight whether local knowledge diffusion plays a role in explaining firm-level productivity differences along with their own innovation stock, or whether sources of financing or corporate diversity matter in this relationship. The rise of knowledge-intensive intangibles that arise from knowledge stock (R&D activities) has dramatically magnified the importance of innovation. Using financial data for over 9,500 firms during 1994-95 to 2014-15 and by clustering firms across industries, we assess the impact of R&D stock that is external to the firm through estimating both within (intra) and between (inter) industry spillovers, and find that R&D performing firms benefit from ‘within’ industry spillover rather than ‘between’ industry spillovers, which nevertheless benefit non-R&D performing firms. Besides, we find that more innovative firms tend to have better access to financing and therefore achieve higher productivity via both types of industry-level knowledge spillover. The paper concludes that financially unconstrained firms and firms with greater corporate diversity derive positive national industry-level spillover effects as they tend to be more productive/innovative, reflecting intra (inter-industry) spillover as a type of domestic spillover or local value-chain effect – rarely explored in the technological innovation literature.

Sushanta Mallick is a Professor at the School of Business and Management at Queen Mary, University of London. He joined Queen Mary in October 2006 as a Senior Lecturer and became a Reader in October 2008 and then got promoted as Professor in October 2011.  Prior to being at Queen Mary, Professor Mallick spent nearly three years as a Lecturer at the Department of Economics, Loughborough University. Before that, he worked as a Research Fellow for more than two years in the International Economics Programme at the Royal Institute of International Affairs, London.  Professor Mallick also has experience working as a Sovereign Research Analyst covering Asian emerging markets for nearly three years (1999-2001) at JPMorgan Chase (previously Chase Manhattan Bank), based in Hong Kong. Professor Mallick began his research career in the early nineties (1991-1995) at the Institute for Social and Economic Change (with a year at Indian Statistical Institute), Bangalore, India, followed by a Commonwealth Scholarship to study for a Ph.D. in economics (1995-1998) at the University of Warwick, under the supervision of Professor Kenneth F. Wallis. Professor Mallick has published articles in several international refereed journals as well as a book based on his Ph.D. dissertation, Modelling Macroeconomic Adjustment with Growth in Developing Economies (Ashgate Publishing, 1999). His main research interests include issues in international macroeconomics & finance, and development policy. Professor Mallick is mainly an applied economist with a longstanding interest in issues that concern macroeconomic policy, international finance and development.  He is particularly interested in understanding more about how best to identify different economy-wide shocks at the macro-level and how best to undertake impact evaluation of different policies or events at the micro-level.