Reverse Knowledge Flow and The Rise of Superstar Firms : Longitudinal Analysis of Patent Citation Data

Recent empirical studies have reported a widening gap between firms regarding sales and profits and the emergence of superstar firms with very high productivity. Our study focuses on knowledge flow to explain the rise of them. Previous research frameworks assumed that knowledge is transferred from follower firms to leader firms, narrowing the gap between firms and growing the economy. In contrast, we assume that in recent years, the opposite trend of knowledge flow (reverse knowledge flow) has become crucial. Then, we analyzed the connected database of patent citation relationships and financial statements of Japanese companies from 1990 to 2015. These results indicate that, in contrast to existing economic models, the reverse knowledge flow may also play an essential role in the recent economic growth. The fact that the leader firms are actively acquiring knowledge from the follower firms shows new directions of knowledge flow research