The Effect Of Global Competition On Innovation In The Semiconductor Industry
There has been a dramatic shift in the location of semiconductor production over the last 20 years, with an
increasing share of global production taking place in the Asia Pacific region. We investigate the impact that this shift has had
on the innovative behavior of semiconductor manufacturers in the rest of the world. Traditional North-South innovation
models indicate that North firms would increase their innovation as production increases in the South. We find that R&D
spending by North firms does indeed increase as semiconductor production shifts to Asia Pacific. However, we find no
evidence to indicate that the volume of patenting by North firms increases as a result.
Keywords- Semiconductors, Innovation, Patents.