Technology Flows between Sectors and its Impact on Large-Scale Firms

In this paper we highlight the importance of technology flows between sectors and their impact on the labor productivity of large-scale corporations. Based on theoretical considerations, we explore technological spillovers between the sectors of an economy. Large-scale corporations usually focus on certain sectors but make use of a wide range of technological knowledge from other sectors. Thereby, technological knowledge built up in sectors by continuous R+D activities does not spill over without bounds but is directed by ?rms' absorptive capacities. We use ?rms' patent portfolio to empirically calculate the sector affiliation and therewith the ?rms' absorptive capacities in order to estimate the impact of technology diffusion on labor productivity. Fortune 500 ?rms serve as data base.