Intellectual Capital and the Firm: The Technology of Geographically Localized Knowledge Spillovers.

NBER Working Paper No. 4946 December 1994 Productivity

We examine the effects of university-based "star" scientists on three measures of performance for biotechnology enterprises in California: the number of products in development; the number of products on the market; and changes in employment. The star concept that Zucker, Darby, and Brewer (1994) demonstrated was important for the birth of U.S. biotechnology enterprises also predicts geographically localized knowledge spill-overs, at least for products in development. However, when we break down university stars into those who have collaborated on publications with scientists affiliated with the firm, and all other university stars, there is a strong positive effect of the linked stars on all three firm-performance measures, and little or no evidence of an effect from the other university stars.

We develop a new hypothesis of geographically...