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SUMMARY:Seminar by Prof. Mirko Draca\, University of Warwick
DTSTART:20171201T120000
DTEND:20171201T133000
DTSTAMP:20260427T200833Z
UID:a2aa7aef11f72f2e76d4d86ae0f8c7e871390492eaa4e98a7a40d402
CATEGORIES:Conferences - Seminars
DESCRIPTION:Prof. Mirko Draca\, University of Warwick\n"Cascading Innovati
 on"\n\nUS government spending since World War II has been characterized by
  large investments in defense-related high-tech goods and services and R&D
 . In turn\, this means that the Department of Defense (DoD) has had a larg
 e role in funding corporate innovation in the US. This paper (i) quantifie
 s the impact of military procurement spending on corporate innovation by p
 ublicly listed firms and (ii) shows that DoD impact on innovation was not 
 limited to the winners of defense contracts but instead cascaded through t
 he supply chain of DoD contractors via indirect market size effects\, work
 ing through firm-to-firm input linkages. We use a database of detailed\, h
 istorical procurement contracts for all Department of Defense (DoD) prime 
 contracts since 1966. Product-level spending shifts are used as a source o
 f exogenous variation in firm level procurement receipts. We combine this 
 data with information on the supply chain linkages of publicly listed firm
 s. Our estimates indicate that defense procurement has a positive direct i
 mpact on patenting and R&D investment\, with an elasticity of approximatel
 y 0.07 across both measures of innovation for DoD contractors. Further\, o
 ur estimates imply that the derived demand for inputs following the award 
 of a DoD contract constitutes a large indirect market size effect for the 
 suppliers of DoD contractors. These indirect market size effects in turn i
 nduce innovation cascades working up the supply chain. We find that the el
 asticity of innovation outcomes to indirect DoD market size shocks is abou
 t half of that estimated for direct contractors but affects a much larger 
 number of firms\, increasing the effect of defense spending on aggregate i
 nnovation by at least 20%.\n\n \n 
LOCATION:ODY 4 03 https://plan.epfl.ch/?room==ODY%204%2003
STATUS:CONFIRMED
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