Unpacking Negative Spillovers: When R&D Clusters Undermine Local Productivity

While most studies (e.g., Belderbos et al., 2025; Garcia et al., 2022) highlight positive effects of R&D spillovers, there’s a gap in the literature concerning negative or “crowding-out” spillovers—where intense clustering of R&D activity might lead to resource competition, talent poaching, or over-saturation, thereby reducing overall local productivity. Drawing on the “deviations from expectations” heuristic, this research would identify cases where agglomeration or excessive proximity (as Belderbos et al. discussed for Japanese industrial regions) leads to diminishing or even negative returns. By combining plant-level productivity data with qualitative interviews, the project could reveal hidden downside risks of R&D clustering, offering nuanced policy recommendations for innovation ecosystems.

References:

1. What do R&D spillovers from universities and firms contribute to productivity? Plant level productivity and technological and geographic proximity in Japan. René Belderbos, Kenta Ikeuchi, K. Fukao, Young Gak Kim, H. Kwon (2025). Industrial and Corporate Change.
2. How Industrial Diversity Shapes the Effects of Foreign Direct Investment Spillovers on Regional Innovation. R. Garcia, V. Araújo, S. Mascarini, Emerson Gomes Santos, A. Costa, Sarah Ferreira (2022). International regional science review.