Innovation and Knowledge Accumulation in Buyer-Supplier Networks

In this study, we focus on a buyer as a source of technological knowledge for a supplier, and examine factors that make a supplier accumulate technological knowledge from the buyer. Specifically, we study buyer innovation, technological similarity between a supplier and a buyer, a supplier’s dependence on a buyer, and buyer-supplier size asymmetry, and how these factors interrelate in influencing the extent of supplier’s knowledge accumulation from the buyer. We use panel data on supplier-buyer relationships from Bloomberg SPLC, patent data from USPTO, and accounting information from Compustat to test the hypotheses.