Juan Alcacer

Knowledge Seeking and Location Choice of Foreign Direct Investment in the United States

To what extent do firms go abroad to access technology available in other locations? This paper examines whether and when state technical capabilities attract foreign investment in manufacturing from 1987-1993. We find that on average state R--D intensity does not attract foreign direct investment. Most investing firms are in lower-tech industries and locate in low R--D intensity states, suggesting little interest in state technical capabilities. In contrast, we find that firms in research-intensive industries are more likely to locate in states with high R--D intensity. Foreign firms in the pharmaceutical industry value state R--D intensity the most, at a level twice that of firms in the semiconductor industry, and four times that of electronics firms. Interestingly, not only firms from technically lagging nations, but also some firms from technically leading nations are attracted to R--D intensive states. This suggests that beyond catching up, firms use knowledge-seeking investments also to source technical diversity.

Patent Citations as a Measure of Knowledge Flows: The Influence of Examiner Citations

Analysis of patent citations is a core methodology in the study of knowledge diffusion. However, citations made by patent examiners have not been separately reported, adding unknown noise to the data. We leverage a recent change in the reporting of patent data showing citations added by examiners. The magnitude is high: two-thirds of citations on the average patent are inserted by examiners. Furthermore, 40% of all patents have all citations added by examiners. We analyze the distribution of examiner and inventor citations with respect to self-citation, distance, technology overlap, and vintage. Results indicate that inferences about inventor knowledge using pooled citations may suffer from bias or overinflated significance levels.

Applicant and examiner citations in U.S. patents: An overview and analysis

Prior art patent citations have become a popular measure of patent quality and knowledge flow between firms. Interpreting these measurements is complicated, in some cases, because prior art citations are added by patent examiners as well as by patent applicants. The U.S. Patent and Trademark Office (USPTO) adopted new reporting procedures in 2001, making it possible to measure examiner and applicant citations separately for the first time. We analyzed prior art citations listed in all U.S. patents granted in 2001-2003, and found that examiners played a significant role in identifying prior art, adding 63% of citations on the average patent, and all citations on 40% of patents granted. An analysis of variance found that firm-specific variables explain most of the variation in examiner-citation shares. Using multivariate regression, we found that foreign applicants to the USPTO had the highest proportion of citations added by examiners. High-volume patent applicants had a greater proportion of examiner citations, and a substantial number of firms won patents without listing a single applicant citation. In terms of technology, we found higher examiner shares among patents in electronics, communications, and computer-related fields. Taken together, our findings suggest that firm-level patenting practices, particularly among high-volume applicants, have a strong influence on citation data and merit additional research.

Location Choices Across the Value Chain: How Activity and Capability Influence Collocation

There has been a recent revival of interest in the geographic component of firm strategy. Recent research suggests that two opposing forces---competition costs and agglomeration benefits---determine whether firms collocate in a given geographic market. Unexplored is (1) whether these forces have different impacts on R&D, production, and sales subsidiaries, leading to diverse collocation levels, and (2) how firm capabilities impact collocation by increasing or decreasing competition costs and agglomeration benefits. I explore these questions using the worldwide location decisions of firms in the cellular handset industry. I find that production and sales subsidiaries are more geographically dispersed, and R&D subsidiaries are more concentrated, than a random distribution would predict. When distinguishing firms by their capabilities, I find that more-capable firms collocate less than less-capable firms, regardless of the activity performed.

How do I Know what you Know? Patent Examiners and the Generation of Patent Citations

Analysis of patent citations is a core methodology in the study of knowledge diffusion, and forward citations are used as a measure of impact of innovations. However, citations made by patent examiners have not been separately reported, adding unknown noise to the data. We leverage a recent change in the reporting of patent data showing citations added by examiners. The magnitude is high: examiners add 40 per cent of all citations and two-thirds of citations on the average patent are inserted by examiners. Furthermore, 40 per cent of all patents have all citations added by examiners. We analyse the distribution of examiner and inventor citations with respect to self-citation, distance, technology overlap, and vintage. Results indicate that inferences about inventor knowledge may suffer from bias or overinflated significance levels. For a cohort of very highly-cited patents, examiners and inventors select different patents for citation, with the majority of the cohort cited by inventors. Over time, inventor and examiner forward citation streams converge, suggestive of a learning process that has not been previously considered in the literature.

Local R&D Strategies and Multilocation Firms: The Role of Internal Linkages

This study looks at the role of internal linkages in highly competitive clusters. We argue that, in addition to serving as a mechanism for sourcing knowledge, strong internal linkages help firms increase internalization and create higher levels of technological interdependence across firm locations. Firms with strong networks of internal linkages are able to maintain tighter control over local innovation and reduce the risk that knowledge outflows will advantage competitors in clusters. Our empirical analysis of the global semiconductor industry shows that industry leaders intensify internal linkages across locations when they collocate with direct market competitors, but not when they collocate with innovators in the same technological field. We also find that internal linkages are associated with more knowledge flow within firms and less knowledge expropriation by collocated competitors. Our results suggest that future research in cluster innovation should consider the critical role of multilocation firms, their internal organization across clusters, and their responses to technological and market competition in clusters. This paper was accepted by Bruno Cassiman, business strategy.

Learning by Supplying

Learning processes lie at the heart of our understanding of how firms build capabilities to generate and sustain competitive advantage: learning by doing, learning by exporting, learning from competitors, users, and alliance partners. In this paper we focus attention on another locus of learning that has received less attention from academics despite popular interest: learning by supplying. Using a detailed panel dataset on supply relationships in the mobile telecommunications industry, we address the following questions: What factors contribute to a firm’s ability to learn by supplying and build technological and market capabilities? Does it matter to whom the firm supplies? Is involvement in product design important, or is manufacturing the key locus of learning? How does a supplier’s initial resource endowment play into the dynamic? Our empirical analysis yields interesting findings that have implications for theory and practice, and that suggest new directions for future research.

Spatial Organization of Firms and Location Choices Through the Value Chain

We explore the impact of geographically bounded, intrafirm linkages (internal agglomerations) and geographically bounded, interfirm linkages (external agglomerations) on firms’ location strategies. Using data from the Census Bureau’s Longitudinal Business Database, we analyze the locations of new establishments of biopharmaceutical firms in the United States from 1993 to 2005. We consider all activities in the value chain and allow location choices to vary by research and development, manufacturing, and sales. Our findings suggest that internal agglomerations have a positive impact on location. The effects of internal agglomerations vary by activity, and they arise both within an activity (e.g., among plants) and across activities (e.g., between sales and manufacturing). Our results also suggest that previous estimates of the effect of external agglomerations may be overestimated because the existing literature abstracted from internal agglomerations. This paper was accepted by Bruno Cassiman, business strategy .

Spanning the Institutional Abyss: The Intergovernmental Network and the Governance of Foreign Direct Investment

Global economic transactions such as foreign direct investment (FDI) must extend over an institutional abyss between the jurisdiction, and therefore protection, of the states involved. Intergovernmental organizations (IGOs) represent an important attempt to span this abyss. The authors use a network approach to demonstrate that the connections between two countries, through joint membership in the same IGOs, are associated with a large positive influence on the FDI that flows between them. Moreover, they show that this effect occurs not only in the case of connections through economic IGOs but also through those with social and cultural mandates. This demonstrates that relational governance is important and feasible in the global context, even for the most risky transactions. The authors also examine the interdependence between the IGO network and the domestic institutions of states. Social and cultural IGO connections do more and economic IGO connections less to increase FDI when the target country is more democratic.

Applying Random Coefficient Models to Strategy Research: Testing for Firm Heterogeneity, Predicting Firm-Specific Coefficients, and Estimating Strategy Trade-Offs

Although Strategy research aims to understand how firm actions have differential effects on performance, most empirical research estimates the average effects of these actions across firms. This paper promotes Random Coefficients Models (RCMs) as an ideal empirical methodology to study firm heterogeneity in Strategy research. Specifically, we highlight and illustrate three main benefits that RCMs offer to Strategy researchers — testing firm heterogeneity, predicting firm-specific effects, and estimating trade-offs in strategy — using both synthetic and actual data-sets. These examples showcase the potential uses of RCMs to test and build theory in Strategy, as well as to perform exploratory and definitive analyses of firm heterogeneity.