Abstract
This research investigates the impact of knowledge spillovers on firm’s productivity and markup. The data we used from the TEJ database is based on the Taiwanese electronics manufacturing firms which have had the factories in Hsinchu Science Park (HSP) and Tainan Science Park (TSP) from 2002 to 2013 .Besides, we divide the knowledge spillovers into the horizontal knowledge spillovers among the firms from the same industry and the vertical knowledge spillovers among the firms from the different industry. We focus on researching the influence of vertical knowledge spillovers and horizontal knowledge spillovers come from HSP or TSP on firm’s productivity and markup. We adopt Olley and Pakes’(1996) method to estimate the production function and recover firm’s productivity. In addition, we adopt the De Loecker’s (2012) method to estimate the markup of each company. Empirical results of this study are summarized as follows. The vertical knowledge spillovers effects positively influence HSP firm’s productivity, and the horizontal knowledge spillovers effects positively influence TSP firm’s productivity. The vertical knowledge spillovers effects positively influence TSP firm’s markup, but negatively influence HSP firm’s markup.