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Globalization of Software Research: Does the Us Have an Advantage in Applications?

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Document pages: 31 pages

Abstract: Does the US have a comparative advantage in research on applications software? We classify software patents into applied and upstream software based on a unique classification algorithm. We offer empirical evidence that research on applied software is less likely to be conducted outside the US than that on upstream applications. We hypothesize that this comparative advantage is due to the presence of lead users of software within the US, and offer some evidence in support of this hypothesis. We also find evidence that the propensity to self-cite offshore research is higher for applied software than for upstream, suggesting that US firms may use internal knowledge transfers to mediate the needs of lead users.

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