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on Technology and Industrial Dynamics |
| By: | Bronwyn H. Hall (University of California at Berkeley, University of Maastricht, NBER, and IFS London.); Grid Thoma (University of Camerino and CESPRI Bocconi University, Milano, Italy.); Salvatore Torrisi (Bologna University and CESPRI Bocconi University, Milan, Italy.) |
| Abstract: | This paper provides novel empirical evidence on the private value of patents and R&D. We analyze an unbalanced sample of firms from five EU countries - France, Germany, Switzerland, Sweden and the UK in the period 1985-2005. We explore the relationship between firm’s stock market value and patents, accounting for the ‘quality’ of EPO patents. We find that Tobin’s q is positively and significantly associated with R&D and patent stocks. In contrast to results for the U.S., forward citations do not add information beyond that in patents. However, the composite quality indicator based on backward citations, forward citations and the number of technical fields covered by the patent is informative for value. Software patents account for a rising share of total patents in the EPO. Moreover, some scholars of innovation and intellectual property rights argue that software and business methods patents on average are of poor quality and that these patents are applied for merely to build portfolios rather than for protection of real inventions. We therefore tested for the impact of software patents on the market value of the firm and did not find any significant effect, in contrast to results for the United States. However, in Europe, such patents are highly concentrated, with 90 per cent of the software patents in our sample held by just 15 of the firms. |
| Keywords: | Market Valuation, Intangible Assets, Patents, Software. |
| JEL: | D24 O31 O34 L86 |
| Date: | 2006–11 |
| URL: | http://d.repec.org/n?u=RePEc:cri:cespri:wp186&r=tid |
| By: | Alex Coad (CES - Centre d'économie de la Sorbonne - [CNRS : UMR8174] - [Université Panthéon-Sorbonne - Paris I], LEM - Laboratory of Economics and Management - [Sant'Anna School of Advanced Studies]); Rekha Rao (LEM - Laboratory of Economics and Management - [Sant'Anna School of Advanced Studies]) |
| Abstract: | How do financial markets respond to firms' efforts at innovation ? To answer this question, we measure innovation by creating a synthetic indicator based on a firm's recent history of R&D expenditure and patent applications. We focus on four 2-digit «complex technology» manufacturing sectors that have been hand-picked according to their high propensities to innovate. Whilst standard regression techniques find a positive relationship between innovation and growth, quantile regression analysis adds a new dimension to the literature. We identify those «superstar» firms with the highest stock market valuations and show that these firms owe a lot of their success to their previous efforts at innovation. However, there are also other firms whose attempts to innovate are virtually ignored by financial markets. Our results emphasize the fundamental uncertainty of R&D. |
| Keywords: | Innovation, market value, quantile regression, patents, Tobin's q. |
| Date: | 2006–12–07 |
| URL: | http://d.repec.org/n?u=RePEc:hal:papers:halshs-00119062_v1&r=tid |
| By: | Jinyoung Kim; Sangjoon John Lee; Gerald Marschke |
| Abstract: | We describe the construction of a panel data set from the U.S. patent data that contains measures of inventors' life-cycle R&D productivity--patents and patent citations. We match the data set to information on the U.S. pharmaceutical and semiconductor firms for whom they work. In this paper we use these data to examine the role of research personnel as a pathway for the diffusion of ideas from foreign countries to U.S. innovators. In particular, we find in recent years an increase in the extent that U.S. innovating firms collaborate with or employ researchers with foreign experience. This increase appears to work primarily through an increase in U.S. firms' employment of foreign-residing researchers; the fraction of research-active U.S. residents with foreign research experience appears to be falling, suggesting that U.S. pharmaceutical and semiconductor firms are increasingly locating operations in foreign countries to employ such researchers, as opposed to such researchers immigrating to the U.S. to work. In addition, we investigate which U.S. firms conducting R&D build upon innovations originating abroad. We find that employing or collaborating with researchers who have research experience abroad seems to facilitate the use of output of non-U.S. R&D. We also find that in the semiconductor industry smaller and older firms, and in the pharmaceutical industry, younger firms are more likely to access foreign R&D output. |
| JEL: | J62 O31 O33 |
| Date: | 2006–11 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:12692&r=tid |
| By: | Christine MacLeod; Alessandro Nuvolari |
| Abstract: | The aim of this paper is to provide an overview of recent research on the role of patent systems in the early phases of industrialization. Perhaps surprisingly, no consensus has been reached yet as to whether the emergence of modern patent systems exerted a favourable impact on inventive activities. However, the recent literature has shed light on a number of fundamental factors which affect the links between inventive activities and the patent system. The concluding section of the paper outlines some "history lessons" for the current debate on the role of Intellectual Property Rights in economic development. |
| Date: | 2006 |
| URL: | http://d.repec.org/n?u=RePEc:aal:abbswp:06-28&r=tid |
| By: | Alex Coad (CES - Centre d'économie de la Sorbonne - [CNRS : UMR8174] - [Université Panthéon-Sorbonne - Paris I], LEM - Laboratory of Economics and Management - [Sant'Anna School of Advanced Studies]); Rekha Rao (LEM - Laboratory of Economics and Management - [Sant'Anna School of Advanced Studies]) |
| Abstract: | Innovation is commonly seen as the principal engine of economic development. In this paper, we investigate the microfoundations of economic growth by relating innovation to sales growth at the firm-level, for incumbent firms in four «complex technology» sectors. The average firm, which experiences only modest growth, may grow for a number of reasons that may or may not be related to «innovativeness». However, given that firms are heterogeneous and that growth rates distributions are typically heavy-tailed, it may be misleading to use regression techniques that focus on the average firm. Using a quantile regression approach, we observe that innovativeness is of crucial importance for a handful of «superstar» fast-growth firms. |
| Keywords: | Innovation, firm growth, quantile regression. |
| Date: | 2006–12–06 |
| URL: | http://d.repec.org/n?u=RePEc:hal:papers:halshs-00118797_v1&r=tid |
| By: | Esteban Rossi-Hansberg; Mark L. J. Wright |
| Abstract: | Why do growth and net exit rates of establishments decline with size? What determines the size distribution of establishments? This paper presents a theory of establishment dynamics that simultaneously rationalizes the basic facts on economy-wide establishment growth, net exit, and size distributions. The theory emphasizes the accumulation of industry-specific human capital in response to industry-specific productivity shocks. It predicts that establishment growth and net exit rates should decline faster with size and that the establishment size distribution should have thinner tails in sectors that use human capital less intensively or physical capital more intensively. In line with the theory, the data show substantial sectoral heterogeneity in U.S. establishment size dynamics and distributions, which is well explained by variation in physical capital intensity. |
| Date: | 2006 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedmsr:382&r=tid |