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The Economics of Knowledge Regulation: An Empirical Analysis of Knowledge Flows

Successful innovation depends on the management of a firm’s knowledge base. This paper empirically investigates the determinants of knowledge regulation. Using a unique survey dataset, the analysis suggests that RD concerning collaborative relationships, firms regulate knowledge outflow less regardless of whether they are using formal or informal private channels compared to using public channels. Presumably firms that acquire knowledge from competing firms through formal private channels compared to public channels, try to establish opaque and soundproof fences to surround them, whereas firms that acquire knowledge from collaborating firms through formal or informal private channels do not want to restrict circulation, but rather facilitate inter-firm knowledge exchange. Our results have important implications for academics and R&D managers alike.