DP13467 | Networks and Spillovers in Software in Israeli Hi-Tech

Publication Date

01/20/2019

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Abstract

A large literature has used patent data to measure knowledge spillovers across inventions but has not explicitly considered the collaboration networks formed by inventors as a mechanism for shaping these knowledge flows. Using a recently developed methodology, we examine the incidence and nature of knowledge flows mediated by the collaboration networks of inventors. We apply this methodology to three sectors in which programming skills are vital: (i) Information and Communication Technology/Information Security (ICT/IS) (ii) Financial Technology (Fin-Tech,) and (iii) Medical Technology (Med-Tech.) These are all areas of innovation in which Israel should have a comparative advantage. We find the following: (I) the quality of the Israeli ICT/information security inventions is systematically linked to the structure of the collaborative network. In particular, we find positive and significant direct and indirect knowledge spillovers. (II) We find no evidence of such spillovers in either Fin-Tech or Med-Tech.