Spillover Effects

Student: Shlyapin Alexander

Educational Programme: Economics (Bachelor)

Year of Graduation: 2018

The paper is focused on the empirical research of knowledge spillover effects. We are analyzing the impact the entrance of new efficient firms to the market has on the productivity dynamics of the existing “old” firms in the same market. The main research hypothesis is that new firms may have additional knowledge advantages the old firms do not have. So, the entrance of new competitors press old firms to increase their efforts to lower the gap and this is reflected in the labor productivity changes of the old firms. The dataset consists of basic performance indicators of Russian software development firms in the 2015-2016 period. The hypothesis is verified using OLS regression. The regressand is the labor productivity change. The key regressor is the quantity of new highly productive software development firms in a region divided by the quantity of all software development firms in the region. No evidence of the new firms' entrance being the driver of the old firms’ productivity has been found.

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