Globalization of Software Innovation: Does the U.S. Have an Advantage in Downstream Software Research?

Citation:

Does the United States have a comparative advantage in applications-related software research? We classify software patents into downstream and upstream software inventions based on a novel classification algorithm. We offer empirical evidence that downstream software research is disproportionally concentrated in the United States, and that U.S. firms are significantly less likely to locate downstream software research projects offshore than upstream research projects. We explore self-citation and co-invention patterns of software patents and provide suggestive evidence that U.S. firms may use intra-firm knowledge flows to mitigate challenges of conducting downstream software research remotely. Finally, we explore the sources for the observed U.S. advantage in downstream software research and provide initial empirical evidence supporting the hypothesis that it is at least partially due to the relative abundance of lead users of software within the United States.

• View Full Text (.pdf)

Adobe .pdf files require the Adobe Acrobat Reader.
Download and install the Adobe Acrobat Reader.