is firm specific innovation associated with greater value appropriation the roles of environmental dynamism and technological diversity abstract this paper extends the resource based theory of the firm to examine the contingencies that either intensify or reduce the relationship between firm specific innovation and value appropriation based on a large scale analysis of a sample of us manufacturing firms we found that greater innovation rents appropriation is associated with an increase in firm specificity of its innovative knowledge but the positive relationship between firm specific innovations and firm value appropriation tends to decrease when the product or technology market is highly dynamic further under high environmental dynamism firms should increase the diversity in their knowledge composition in order to mitigate the risk of value erosion associated with firm specific innovations

information technology effects on firm performance as measured by tobin s q despite increasing anecdotal evidence that information technology it assets contribute to firm performance and future growth potential of firms the empirical results relating it investments to firm performance measures have been equivocal however the bulk of the studies have relied exclusively on accounting based measures of firm performance which largely tend to ignore it s contribution to performance dimensions such as strategic flexibility and intangible value in this paper we use tobin s q a financial market based measure of firm performance and examine the association between it investments and firm q values after controlling for a variety of industry factors and firm specific variables the results based on data from 1988 1993 indicate that in all of the five years the inclusion of the it expenditure variable in the model increased the variance explained in q significantly the results also showed that for all five years it investments had a significantly positive association with tobin s q value our results are consistent with the notion that it contributes to a firm s future performance potential which a forward looking measure such as the q is better able to capture

how do policies for efficient energy use in the household sector induce energy efficiency innovation an evaluation of european countries abstract research on innovation induced by climate mitigation policy has been focused predominantly on the supply side of the energy system despite considerable climate mitigation potential on the demand side less attention is given to the innovation effect of policies addressing the household sector based on a comprehensive data set including 550 policy measures over 30 years 1980 2009 and covering 21 european countries we find based on econometric estimations that policies targeting efficient energy use in the household sector significantly increase the number of patented energy efficiency inventions a comparison of the different policy types reveals a particularly strong influence from financial subsidies and energy labels the results indicate that policies supporting early market adoption of energy efficient technologies are effective in fostering innovation

family firms and r d behavior new evidence from a large scale survey abstract this paper analyzes how founders and their families influence r d intensity information on r d comes from a large scale bi annual survey among listed german firms we find that r d intensity is higher in firms that are actively managed by the family the impact of family control via voting rights is negative but mostly not significant while this negative family control effect is in line with hitherto existing literature the positive impact of family management is surprising indeed this positive effect disappears if we follow previous research and use r d information from financial statements we show that this puzzling result is related to corporate opacity opaque family managed firms report too conservative r d expenditures especially if they face financial constraints this leads to an under estimation of r d intensity in these firms if accounting figures are used

new evidence on sex segregation and sex differences in wages from matched employee employer data we use new matched employer employee data to estimate the contributions of sex segregation and wage differences by sex within occupation industry establishment and occupation establishment cells to the overall sex gap in wages in contrast to earlier data used to study this question our data cover all industries and occupations across all regions of the united states we find that segregation of women into lower paying occupations industries establishments and occupations within establishments accounts for a sizable fraction of the sex gap in wages nonetheless approximately one half of the sex gap in wages remains attributable to the individual s sex

on the trade off between the future benefits and riskiness of r d a bondholders perspective abstract existing studies on the value relevance of r d tend to overstate the r d benefits and shed little light on the trade off between the r d benefits mean effect and their riskiness variance effect this study shows that the variance effect of r d is on average more significant than their mean effect in bond valuation hence for creditors the r d risk dominates their benefits furthermore this study documents that r d measures alone explain approximately 80 of cross sectional variations in bond ratings and risk premium these findings contribute to the debate over r d accounting and the bond pricing literature

determinants of cross national knowledge transfer and its effect on firm innovation this study examines the determinants of international knowledge flow from a resource based perspective it evaluates the impact of cross national knowledge transfer on firm innovative performance based on 56 027 us patents owned by 53 selected firms in the us based pharmaceutical industry the results suggest that innovative performance is a curvilinear function of the international knowledge content used by a firm to innovate as hypothesized it was found that at 1 low and moderate levels of international knowledge content a firm s strategy to transfer international knowledge improves its innovative performance and at 2 higher levels of international knowledge content there are diminishing marginal returns to transferring knowledge from overseas

entry and patenting in the software industry to what extent are firms kept out of a market by patents covering related technologies do patents held by potential entrants make it easier to enter markets we estimate the empirical relationship between market entry and patents for 27 narrowly defined categories of software products during the period 1990 2004 controlling for demand market structure average patent quality and other factors we find that a 10 increase in the number of patents relevant to market reduces the rate of entry by 3 8 and this relationship intensified following expansions in the patentability of software in the mid 1990s however potential entrants with patent applications relevant to a market are more likely to enter it finally patents appear to substitute for complementary assets in the entry process because patents have both greater entry deterring and entry promoting effects for firms without prior experience in other markets this paper was accepted by bruno cassiman business strategy

how do patent laws influence innovation evidence from nineteenth century world fairs studies of innovation have focused on the effects of patent laws on the number of innovations but have ignored effects on the direction of technological change this paper introduces a new dataset of close to fifteen thousand innovations at the crystal palace world s fair in 1851 and at the centennial exhibition in 1876 to examine the effects of patent laws on the direction of innovation the paper tests the following argument if innovative activity is motivated by expected profits and if the effectiveness of patent protection varies across industries then innovation in countries without patent laws should focus on industries where alternative mechanisms to protect intellectual property are effective analyses of exhibition data for 12 countries in 1851 and 10 countries in 1876 indicate that inventors in countries without patent laws focused on a small set of industries where patents were less important while innovation in countries with patent laws appears to be much more diversified these findings suggest that patents help to determine the direction of technical change and that the adoption of patent laws in countries without such laws may alter existing patterns of comparative advantage across countries jel d2 k11 l51 no 014

improving patent valuations for management purposes validating new indicators by analyzing application rationales abstract this paper analyzes the validity of so far untested indicators of patent value to enhance the quality of patent assessments using indicators at the corporate level the article expands the theory by eliciting patent attorneys filing rationales to maximize profits from protecting intellectual property to inspire the computation of new value indicators including patent full texts then based on a newly compiled data set consisting of 813 ep patents the probability of an opposition against a patent is modeled by established and new value indicators the results show that accelerated examination requests and qualified word counts enhance the quality of existing valuation methods

value implications of investments in information technology the year 2000 y2k countdown provided a uniquely visible instance of spending on information technology it by u s companies with public attention riveted on potential y2k malfunctions managers were forced to evaluate their it and make decisions about whether to modify or replace existing systems in the aftermath of y2k critics charged that the problem was overblown and that companies overspent on it in contrast we posit in this paper that efforts companies made to renew and upgrade their it may have positioned them to take advantage of new e business applications as y2k approached managers could invest opportunistically in it which would enable them to connect with customers and suppliers in new ways contrary to the alleged overspending we find that firm value increased on average with y2k spending by fortune 1000 companies in particular higher firm value and subsequent earnings were associated with y2k spending for firms in industries where it was considered to have a transforming influence altering traditional ways of doing business by redefining business processes and relationships we also test whether the positive association between firm value and y2k spending diminished with y2k spending by industry peer firms but we do not find support for this relative investment hypothesis

industry effects and appropriability measures in the stock market s valuation of r d and patents this paper examines the stock market s valuation of a firm s innovative activity we estimate the market s relative valuation of firms tangible and intangible assets focusing on knowledge capital in the form of accumulated stocks of r d and patents we tried to improve upon our estimates of the stock market s valuation of knowledge capital embodied in such stocks by bringing in measures of the appropriability environment facing a firm from the yale survey on industrial research and development the responses to survey questions about the effectiveness of patents as a mechanism for protecting the returns from innovation turn out to be of some use there is evidence of an interaction between industry level measures of the effectiveness of patents and the market s valuation of a firm s past r d and patenting performance as well as its current r d moves we find no evidence however that other appropriability mechanisms differ enough across industries to leave measurable traces in our data the structure of the yale survey makes it possible to estimate the sampling error in the appropriability measures derived from it this information was used by us in an errors in variables context but with little success in the absence of r d variables our estimates imply that a two standard deviation increase in our index of patent effectiveness would raise the value of a patent held by our average firm from 0 4 million to 1 0 million when r d variables are introduced into the equations the patents variables become insignificant r d expenditures are a better measure of input to the innovative function of firms than patents are of its output but we estimate that the same experiment would induce changes in q of between 10 and 27 percent for the average firm approximately doubling the market s valuation of this kind of capital this abstract was borrowed from another version of this item

the feldstein horioka hypothesis versus the long run solvency constraint model a critical assessment abstract this paper proposes an extended version of the long run solvency constraint model developed by coakley et al coakley j kulasi f smith r 1996 current account solvency and the feldstein horioka puzzle economic journal 106 620 627 that provides a theoretical and empirically testable distinction from the feldstein horioka hypothesis the empirical application shows that the feldstein horioka approach presents a useful but incomplete measure of capital mobility in 6 oecd countries

technological diversity uncertainty and innovation performance abstractwe analyse the impact of technological diversity on innovation performance in the discovery stage measured by r d intensity and patent applications and in the commercialization stage mea

why do industries coagglomerate how marshallian externalities differ by industry and have evolved over time abstract the fact that firms benefit from close proximity to other firms with which they can exchange inputs skilled labor or know how helps explain why many industrial clusters are so successful studying the evolution of coagglomeration patterns we show that the type of agglomeration that benefits firms has drastically changed over the course of a century and differs markedly across industries whereas at the beginning of the twentieth century industries tended to colocate with their value chain partners in more recent decades the importance of this channel has declined and colocation seems to be driven more by similarities in industries skill requirements by calculating industry specific marshallian agglomeration forces we are able to show that today skill sharing is the most salient motive behind the location choices of services whereas value chain linkages still explain much of the colocation patterns in manufacturing moreover the estimated degrees to which labor and input output linkages are reflected in an industry s coagglomeration patterns help improve predictions of city industry employment growth

companies learning to innovate in recessions abstract innovating in downturns can affect corporate success by improving a firm s position relative to competitors during the recovery period however increased uncertainty and more binding financial constraints complicate such innovation activity i find that past experience with innovation during recessions improves a firm s ability to invest in r d when a new downturn hits this result holds controlling for traditional drivers of innovation as cumulated innovations and financial constraints as well as mitigating endogeneity and selection concerns moreover i find that past experience with innovation during recessions is beneficial to patent outcomes after a new recession overall the paper provides novel evidence on how business cycles shape innovative capabilities

patenting by manufacturing firms in india its production and impact this paper attempts to simultaneously study the production and impact of patenting in a less developed country using panel firm level data for the period 1975 79 for india the authors results suggest that despite the limited protection of intellectual property rights in india patenting is associated with a significant increase in total factor productivity growth at the firm level after controlling for unobserved fixed firm effects r d manpower appears to be the only input that significantly influences the probability of patenting copyright 1989 by blackwell publishing ltd

the value of intellectual property rights to firms and society economists view intellectual property rights iprs as policy tools for encouraging innovation but they recognize that they can also inhibit competition there are many types of iprs and institutions concerned with their administration we begin by outlining how these complex and varied rights are supposed to work and how they interact with other characteristics of firms and markets we then survey the available literature on patents trade marks and copyright to assess the value of these iprs to firms and the costs to firms of acquiring and defending their rights the paper concludes with suggestions for topics requiring further research to inform public policy better

defending against rival innovation we analyze how an incumbent defends its competitive advantage with a focus on the under examined methods of actively defending against the threats posed by rival innovation we describe delineate and analyze the set of such defenses and their likely effects the set of such defenses differs substantially from many standard defenses such as those aimed at defeating the threat of imitation the further study of these pre emptive innovation defenses is important because these defenses are different and because they can substantially affect the sustainability of firm profits and the pace of different of types of innovation