| Abstract: |
We investigate innovation dynamics in Japanese listed firms by calculating an
indicator for the accumulation of innovation based on patent citations, the
gcitation stock. h The calculated citation stock has decreased since the
mid-2000s, which implies that the pace of innovation accumulation at Japanese
listed firms has slowed. Using the citation stock, we show that an increase in
a firm fs citation stock contributes to its productivity growth and that the
citation stock provides information on whether research and development (R&D)
leads to innovation that cannot be captured by focusing on the amount of R&D
investment alone. In addition, we find that while higher R&D investment is
associated with new innovation, the efficiency of R&D investment in Japan has
decreased in recent years. Such a decrease in the efficiency of R&D investment
has been reported not only for Japanese firms but also for a wide range of
fields around the world, so that firms and research institutions are
attempting to maintain the pace of innovation by increasing the number of
researchers and research spending. For Japan, where it is difficult to
increase the number of researchers due to the declining population, it is
important to improve the quality of research through various efforts such as
increasing the diversity of researchers. |