| Innovation propagated through improvements to physical capital, human capital, and production processes, is vital to the long-run competitiveness of the firm and the country. Few studies in the economics literature have attempted to understand mechanisms of innovation in an industry context, and this dissertation fills this void by dissecting the process of innovation in a technology-intensive industry. This research examines the tensions and challenges surrounding the creation and diffusion of knowledge in the semiconductor industry. What emerges is an intricate system of technological change that links innovators both within companies and between companies.;Firms in the semiconductor industry face a tremendous amount of technological uncertainty, which requires them to hone their ability to transfer knowledge both within their boundaries and with the outside world. This dissertation presents a framework for modeling the willingness of an innovating firm to share its knowledge. Using this framework as a departure point, this research analyzes how firms coordinate their internal resources during new process introduction and cooperate with other firms to determine the evolution of process and equipment technologies. Long-term success in this industry requires that firms rapidly and efficiently introduce new production processes dictated by a technology roadmap and implemented through a well-orchestrated system that coordinates resources across development and manufacturing operations. Complementing their internal systems, semiconductor firms also create interfirm systems of knowledge sharing. Horizontal ties to other semiconductor producers allow them to reinforce their understanding of process technology. Survey data presented in this dissertation provide empirical evidence that frequent exchange of technical knowledge occurs between semiconductor firms in both the United States and Japan. In addition, vertical ties linking semiconductor producers with their equipment suppliers help advance the processing capabilities of capital equipment. As modeled in this dissertation, co-development projects between semiconductor producers and their equipment suppliers contribute to knowledge accumulation at suppliers, which bolsters the technological capabilities of the industry. An understanding of these internal and external knowledge sharing mechanisms afforded by this dissertation permits innovators to heighten their rate of technology development and guides public policy makers in the construction of institutional environments that facilitate economic growth. |
