Innovation and knowledge accumulation in supply networks

In this study, we focus on a firm’s direct buyers in the supply network as a source of external technological knowledge spillovers. We examine factors that can influence the extent of a supplier’s knowledge accumulation from a buyer. These factors include the amount of technological knowledge available from buyers, the relative technological expertise of the buyer and the supplier, the financial dependence of the supplier and the buyer, and the asymmetry in size between the buyer and the supplier. To test the hypotheses, we use data on buyer-supplier relationships, patenting activities of the firms, and their accounting information.