Learning from What Others Have Learned from You : The Effects of Knowledge Spillovers on Originating Firms

Although research suggests knowledge spillovers benefit imitators often at the expense of originators, we investigate how originating firms may also benefit from their own spillovers. When an originating firm’s spillovers are recombined with complementary knowledge by recipient firms, a pool of external knowledge is formed that is inherently related to the originating firm’s knowledge base. This spillover knowledge pool contains valuable opportunities for the originator to learn vicariously from recipients’ recombinatorial activities. In a longitudinal study of 87 telecommunications equipment manufacturers, we find that a firm’s rate of innovation and the extent to which these innovations build on and integrate knowledge from the spillover knowledge pool is greater when its spillover knowledge pool is larger in size and similar to the firm’s existing knowledge base