Abstract: Knowledge Diffusion and Crossover Inventions: Evidence from the Electric Industries, 1890–1910

Dhanoos Sutthiphisal

Abstract

Scholars have long noted the importance of general purpose technologies (GPTs) on the overall economic activity of an economy, and have investigated how such technologies were adopted and what their effects were. However, limited attention has been paid to exploring how a GPT diffuses to other industries, and what mechanisms may help facilitate such diffusion. More generally, we do not fully understand how inventive activity in various industries responds to the arrival of the GPT. This paper studies these issues by investigating the arrival of electric technology in the late nineteenth-century United States. The results on both the location of invention and the characteristics of inventors suggest that inter-industry knowledge spillovers were less than crucial in the application of electric technology to inventive activity in various industries. Instead, the evidence highlights the importance of higher learning institutions, technical training, and environments that promoted inventive activity in general.