venture capitalists on boards of mature public firms venture capitalists vcs often serve on the board of mature public firms long after their initial public offering ipo even for companies that were not vc backed at the ipo board appointments of vc directors are followed by increases in research and development intensity innovation output and greater deal activity with other vc backed firms vc director appointments are associated with positive announcement returns and are followed by an improvement in operating performance firms experience higher announcement returns from acquisitions of vc backed targets following the appointment of a vc director to the board hence in addition to providing finance monitoring and advice for small private firms vcs play a significant role in mature public firms and have a broader influence in promoting innovation than has been established in the literature

did bank distress stifle innovation during the great depression we find a negative relationship between bank distress and the level quality and trajectory of firm level innovation during the great depression particularly for r d firms operating in capital intensive industries however we also show that because a sufficient number of r d intensive firms were located in counties with lower levels of bank distress or were operating in less capital intensive industries the negative effects were mitigated in aggregate although depression era bank distress was associated with the stifling of innovation our results also help to explain why technological development was still robust following one of the largest shocks in the history of the u s banking system

collateral damage for r d manufacturers how patent sharks operate in markets for technology patent sharks small firms that exploit information asymmetries in markets for technology to gain patent based competitive advantages challenge established theory by which i markets for technology benefit large firms and ii intellectual property rights systems strictly support markets for technology empirically linking the sharks different assault strategies to the patents they deploy we illustrate that patent sharks will likely be an enduring phenomenon in markets for technology we discuss policy and strategy implications copyright 2010 the author 2010 published by oxford university press on behalf of associazione icc all rights reserved oxford university press

education and invention abstract modern growth theory puts invention on the center stage inventions are created by individuals raising the question of whether we can increase the number of inventors to answer this question we study the causal effect of msc engineering education on invention using data on u s patents finnish inventors and the distance to the nearest technical university as an instrument we find a positive effect of engineering education on the propensity to patent and a negative ols bias our counterfactual calculation suggests that establishing three new technical universities resulted in a 20 increase in the number of uspto patents by finnish inventors

patent trolls on markets for technology an empirical analysis of npes patent acquisitions abstract patent trolls or npes appropriate profits from innovation solely by enforcing patents against infringers they are often characterized as relying on low quality patents an assessment that if correct would imply that eradicating such patents would effectively terminate the npe business in this paper we shed light on this issue by empirically analyzing npes patent acquisitions we draw on a unique dataset of 392 u s patents acquired by known npes between 1997 and 2006 which we compare to three control groups of 784 u s patents each acquired by practicing firms we find that the probability that a traded patent is acquired by an npe rather than a practicing entity increases in the scope of the patent in the patent density of its technology field and contrary to common belief in the patent s technological quality our findings thus support recent theoretical propositions about the npe business model showing that npes procure patents that are more likely to be infringed harder to substitute for and robust to legal challenges the fact that npe acquired patents are of significantly higher quality than those in the control group implies that elevating minimum patent quality will not put an end to the npe business and suggests that this business is sustainable in the long run we furthermore discuss the fact that npes are peculiar players on markets for technology insofar as they are solely interested in the exclusion right not in the underlying knowledge we posit that transactions involving npes may only be the tip of the iceberg of patent only transactions a conjecture with strong implications for the efficiency and the study of markets for technologies managerial and policy implications are discussed

mergers acquisitions and innovation performance in the telecommunications equipment industry the worldwide telecommunications equipment industry has experienced an enormous number of mergers and acquisitions m a this article examines the innovation determinants of m a activity a

lone inventors as sources of breakthroughs myth or reality are lone inventors more or less likely to invent breakthroughs recent research has attempted to resolve this question by considering the variance of creative outcome distributions it has implicitly assumed a symmetric thickening or thinning of both tails i e that a greater probability of breakthroughs comes at the cost of a greater probability of failures in contrast we propose that collaboration can have opposite effects at the two extremes it reduces the probability of very poor outcomes because of more rigorous selection processes while simultaneously increasing the probability of extremely successful outcomes because of greater recombinant opportunity in creative search analysis of over half a million patented inventions supports these arguments individuals working alone especially those without affiliation to organizations are less likely to achieve breakthroughs and more likely to invent particularly poor outcomes quantile regressions demonstrate that the effect is more than an upward mean shift we find partial mediation of the effect of collaboration on extreme outcomes by the diversity of technical experience of team members and by the size of team members external collaboration networks supporting our meta argument for the importance of examining each tail of the distribution separately experience diversity helps trim poor outcomes significantly more than it helps create breakthroughs relative to the effect of external networks

innovation and firm value an investigation of the changing role of patents 1985 2007 abstract this paper examines how the relationship between firm value and patent based indicators of inventive activity has changed over time we use data from more than 33 000 mergers and acquisitions deals between 1985 and 2007 and distinguish between american uspto and european epo patents our results indicate that over time epo patents have become the dominant indicator of innovative activity while uspto patents have no effect on firm value near the end of the sample period the results are robust to controlling for citations and are especially strong for small firms for firms operating in the drug and chemical industries and when target and acquiring firms operate in different industries or countries

technology gap global value chain and carbon intensity evidence from global manufacturing industries abstract the technological progress of a country may mean that its technology gap compared to the frontier has changed which will induce a change in its positioning in the global value chain and affect its carbon intensity using paten data input output database and the global value chain index we employ systematic generalized method of moments quantile regression with panel data and multilevel mediation analysis to measure empirically the impact of the technology gap on carbon intensity and positioning on the global value chain the empirical analysis shows that narrowing the technology gap will reduce significantly a country s carbon intensity further the effect of the technology gap on carbon intensity is more pronounced on industries with higher carbon intensity the mechanism test using the mediation effect model proves that the impact of the technology gap on carbon intensity is achieved by changing in the position of global value chain the findings suggest that a country s carbon intensity performance is not only affected by its own technological progress but also by global frontiers therefore a country should not only pay attention to its own technological progress but also to the development of global frontier technologies and speed of technological progress

learning by doing and the locus of innovative capability in biotechnology research innovative capability the knowledge a firm uses to innovate is an input into and an output of the process of innovation in this paper i put forward the notion that innovative capability similar to experience in production accumulates by learning by doing and that innovation is characterized by a learning curve using patent data from 20 886 scientists working in 611 biotechnology firms in the u s and canadian biotechnology industry from 1970 to 2007 i estimate a learning curve in innovation and determine the loci of innovative capability although knowledge stocks in the different loci accumulate over time in day to day firm activities empirical results suggest that the individual is the primary repository of innovative capability and that experience working together in teams has a secondary influence on productivity contrary to prior learning curve research accumulated firm experience has no direct effect on productivity however when individuals possess relevant domain knowledge and have experience working together they benefit from knowledge spillovers within the firm this suggests that knowledge stocks in the different loci are complementary to one another and that the comingling of these disparate bins of knowledge is an important facet of innovative capability

innovation cycles and learning at the patent office does the early patent get the delay we study the relationship between the length of patent review and the importance of inventions we build a simple model of the u s patent review process among the model predictions are that controlling for a patent s position in a new technology cycle more important innovations would be approved more quickly also the approval delay is likely to decrease as an industry moves from the early stages of an innovation cycle to later stages these predictions are in line with the evidence we obtain from a data set on u s patents granted in the field of genetically modified crops from 1983 to 1999 we also show that failing to account for the innovation lifecycle as previous studies have done is likely to bias upwards the estimates of the relationship between delay and importance 2010 the authors journal compilation 2010 blackwell publishing ltd and the editorial board of the journal of industrial economics

reassessing patent propensity evidence from a dataset of r d awards 1977 2004 it is well known that not all innovations are patented but the exact volume of innovative activities undertaken outside the coverage of patent protection and relatedly the actual propensity to patent an innovation in different contexts remain to a major degree a matter of speculation this paper presents an exploratory study comparing systematically patented and unpatented innovations over the period 1977 2004 across industrial sectors the main data source is the r d 100 awards competition organized by the journal research and development since 1963 the magazine has been awarding this prize to the 100 most technologically significant new products available for sale or licensing in the year preceding the judgments we match the products winners of the r d 100 awards competition with uspto patents and we examine the variation of patent propensity across different contexts industries geographical areas and organizations finally we compare our findings with previous assessments of patent propensity based on several sources of data

publicly funded r d programs and survival of patents i apply a survival model to a detailed data set of swedish patents to estimate how different financing factors affect the likelihood of patent renewal since the owners know more about the patents than potential external financiers there is a problem of asymmetric information to overcome this sweden has for a long time relied on government support rather than private venture capital pvc in the empirical analysis two kinds of government loans are unbundled the empirical results show that patents which have received soft government loans in the r d phase have a higher probability of expiring than patents without such financing but patents that have received more market oriented government loans during the commercialization phase are renewed for as long as other commercialized patents this finding suggests that rather than bad choices of projects it is the nature of the contract terms that explains the low renewal of some patents with government financing

r d co practice and reverse knowledge integration in multinational firms this paper contributes to the developing literature on the management of distributed innovation in multinational firms we focus on a specific organizational mechanism r d co practice which we believe is an important facilitator of knowledge integration in multinationals with global innovation strategies in our formulation r d co practice joint technical activities between units increases levels of absorptive capacity and social capital among participating units thus increasing the likelihood that they will share knowledge at future time periods we find strong support for this hypothesis through an empirical analysis of reverse subsidiary to headquarters knowledge integration in two sectors automotive and pharmaceuticals over a 21 year period

a role based ecology of technological change this article considers what factors determine whether an innovation becomes a foundation for future technological developments rather than a dea end the authors introduce the concept of the technological niche which includes a focal innovation the innovations on which the focal innovations builds the innovations that build upon the focal innovation and the technological ties among the innovations within the niche using patents and patent citations to measure characteristics of innovation niches within the semiconductor industry the authors show that the size of the niche and the status of the actors within the niche have a positive effect on the likelihood that subsequent innovations will build upon the focal innovation competitive intensity within the niche has a negative effect on this likelihood

the welfare analysis of product innovations with an application to computed tomography scanners the main goal of this paper is to put forward a methodology for the measurement of product innovations using a value metric that is equating the magnitude of innovations with the welfare gains they generate this research design is applied to the case of computed tomography scanners a revolutionary innovation in medical technology the econometric procedure centers on the estimation of a discrete choice model the nested multinominal logit which yields the parameters of a utility function defined over the changing quality dimensions of the innovative product the estimated flow of social gains from innovation is used to compute a social rate of return to r d to explore the interrelation between innovation and diffusion and to trace the time profile of benefits and costs the latter suggesting the possible occurrence of technological cycles

measuring innovative performance is there an advantage in using multiple indicators abstract the innovative performance of companies has been studied quite extensively and for a long period of time however the results of many studies have not yet led to a generally accepted indicator of innovative performance or a common set of indicators so far the variety in terms of constructs measurements samples industries and countries has been substantial this paper studies the innovative performance of a large international sample of nearly 1200 companies in four high tech industries using a variety of indicators these indicators range from r d inputs patent counts and patent citations to new product announcements the study establishes that a composite construct based on these four indicators clearly catches a latent variable innovative performance however our findings also suggest that the statistical overlap between these indicators is that strong that future research might also consider using any of these indicators to measure the innovative performance of companies in high tech industries

taxation and the international mobility of inventors we study the eect of top tax rates on superstar inventors international mobility since 1977 using panel data on inventors from the u s and european patent oces we exploit the dierential impact of changes in top tax rates on inventors of dierent qualities superstar inventors location choices are signicantly aected by top tax rates in our preferred specication the elasticity to the net of tax rate of the number of domestic superstar inventors is around 0 03 while that of foreign superstar inventors is around 1 these elasticities are larger for inventors in multinational companies an inventor is less sensitive to taxes in a country if his company performs a higher share of its research there

the diminishing signaling value of patents between early rounds of venture capital financing a long stream of research has documented the positive effects that patents bring about to emerging firms in high technology industries the general consensus is that patents contribute to firm growth because they confer monopolistic market rights offer protection from competitors increase the negotiating position of patent holders and other benefits what has received relatively less attention in the literature is whether patents act as a signal that attracts investors such as venture capital firms the handful of studies that have addressed that question has not analyzed whether the signaling function of patents decreases after the initial attraction of venture capital as information asymmetries between investors and target firms reduce in this study we hypothesize that patent activity has a signaling value that diminishes once information asymmetries between investors and funded firms lessen to study our proposition we draw upon a longitudinal dataset of more than 580 u s based biotechnology firms to empirically demonstrate that biotechnology firms that have submitted patent applications substantially increase the level of funding they receive for their first round of financing in line with a reduction of information asymmetries once the initial investment has materialized patent applications and granted patents have no effect on the growth of venture capital funds raised during the second round of financing we conclude the study with a discussion of avenues for new research implications for policy makers that consider the usefulness of the current patent system and with insights that can be employed by managers of firms in knowledge intensive areas such as biotechnology

the value of control in emerging markets when a developed country multinational firm acquires majority control of a firm in an emerging market there is an economically large and statistically significant increase in the acquiring firm s stock price in 1986 2006 developed market acquirers experienced positive and significant abnormal returns of 1 16 on average over a three day event window positive acquirer returns and dollar value gains appear unique to emerging market mergers and acquisitions and are not replicated when the same developed market acquirers take over firms in developed markets the size of the stock price increase is more pronounced a the weaker the contracting environment in the emerging market and b for industries with high asset intangibility the author 2009 published by oxford university press on behalf of the society for financial studies all rights reserved for permissions please e mail journals permissions oxfordjournals org oxford university press

what determines patent value insights from the semiconductor industry abstract this paper contributes to an understanding which impacts certain patent characteristics have on the value of patent rights in an exploratory study 127 individual patents from a semiconductor company were evaluated comprehensively by technical and marketing representatives the analysis of this rare data shows that for patents used as bargaining chips novelty and inventive activity are most important difficulty of inventing around and disclosure turn out to be of limited importance due to a selection bias the influence of patent age on its value cannot be determined the results hint at a differentiated theoretical plausibility of value indicators

industry technical committees technological distance and innovation performance abstract in most technology based markets industry technical committees tcs that establish new technical standards and specifications have assumed importance for companies as a critical source of information on existing and emerging technologies in this study we investigate how the technological distance of a tc from the firm will shape the impact of tc participation on the firm s innovation performance specifically we posit that participation in tcs that are central low technological distance to the company s existing product technologies and offerings will contribute to its competence enhancing innovation whereas participation in tcs that are peripheral high technological distance to current technologies and offerings will contribute to its new competence innovation given the need to interpret and apply the information internally we also consider the moderating effects of the firm s absorptive capacity and knowledge integration mechanisms the study hypotheses are validated by combining survey based and archival data related to a sample of 168 us based wireless telecommunication firms the findings provide broad support for the study theses and imply the need for companies to carefully plan the nature of their tc participation so as to advance the desired type of innovation broader implications for future research on external knowledge sourcing and competence based innovation are discussed

the embeddedness of networks institutions structural holes and innovativeness in the fuel cell industry plentiful research suggests that embeddedness in alliance networks influences firms innovativeness this research however has mostly overlooked the fact that interorganizational ties are themselves embedded within larger institutional contexts that can shape the effects of networks on organizational outcomes we address this gap in the literature by arguing that national institutions affect the extent to which specific network positions such as brokerage influence innovation we explore this idea in the context of corporatism which fosters an institutional logic of collaboration that influences the broker s ability to manage its partnerships and recombine the knowledge residing in its network as well as the extent of knowledge flows among network participants we argue that differences in institutional logics lead brokerage positions to exert different effects on firm innovativeness we propose that the firm spanning structural holes obtains the greatest innovation benefits when the firm the broker or its alliance partners are based in highly corporatist countries or under certain combinations of broker and partner corporatism we find support for these ideas through a longitudinal study of cross border fuel cell technology alliance networks involving 109 firms from nine countries between 1981 and 2001

patent citations an analysis of quality differences and citing practices in hybrid corn a growing empirical literature uses patent citations as a quality adjusted measure for innovation despite concerns about the validity of this measure this paper links patents with objective measures of improvements in the quality of patented inventions measured through performance in field trials for hybrid corn to examine three potential factors that influence citations 1 improvements in performance 2 citing practices of patent attorneys and 3 citing practices of patent examiners this analysis reveals that citations are robustly correlated with performance which confirms that citations are a useful quality adjusted measure for innovation the citing practices of patent attorneys and examiners however also influence citations patent attorneys cite early patents which help establish the patentability of an invention this practice may inflate citation counts for early patents particularly for inventions that have only recently become patentable attorneys also add self citations our anal

communication networks externalities and the price of information information goods or information for short play an essential role in modern economies we consider a trading framework where information has some idiosyncratic value for each consumer exerts externalities and can be freely replicated and transmitted through links in a communication network prices paid for information are determined via the asymmetric nash bargaining solution with endogenous disagreement points this decentralized approach leads to unique prices and payoffs in any exogenous network we use these payoffs to find connection structures that emerge under different externality regimes in pre trade network formation stage an application to citation graphs results in eigenvector like measures of intellectual influence

a dynamic analysis of university agricultural biotechnology patent production this article examines the factors that account for agricultural biotechnology patenting success among universities using a dynamic count data model it builds a theoretical and econometric model to capture the inherently dynamic and nonlinear process of technological innovation wherein a feedback mechanism from previous success partially determines current patent counts the econometric estimates reveal the importance to agricultural biotechnology patent production of land grant infrastructure quality faculty patent oriented technology transfer offices as well as dynamic feedback effects the advent of exclusive property rights for university research specifically the bayh dole act has created the potential for major changes in the missions of u s universities especially among land grant universities lgus as well as in the overall system of technology creation and distribution in agriculture at the same time new genetic and cloning technologies along with the recently created ability to patent plants and living organisms are profoundly changing the range of agricultural technologies that are likely to be available in the united states and internationally indeed as zilberman yarkin and heiman argue these new agricultural biotechnologies ag biotech and their associated intellectual property rights appear to be creating a new paradigm a veritable revolution in the organization and interaction of university research and the agricultural sector under this new paradigm universities emphasize patenting innovations and then granting at times

the effect of intellectual property rights on domestic innovation in the pharmaceutical sector summary there is little empirical evidence concerning the effect of intellectual property rights ipr protecting pharmaceutical products and processes on pharmaceutical domestic innovation indeed existing literature does not provide a punctual estimate of this effect for developing countries this paper fills this gap by exploiting a self constructed dataset which provides for a 22 year period information concerning ipr reforms involving pharmaceuticals for 74 developed and developing countries the identification strategy exploits the different timing across these countries of two sets of ipr reforms domestic innovation is measured as citation weighted domestic patent applications filed at the european patent office epo the highly skewed distribution of the dependent variable and the high number of zero observations are taken into account using count data models in particular a zero inflated negative binomial model is adopted to overcome previous literature assumption that all innovations are patented in the main markets of reference and to take into consideration the choice not to patent at the epo results show that innovation is sensitive to ipr protection but not to its degree moreover the effect is not long lasting my study also finds that developing countries profit significantly less than developed ones from the protection benefiting from an effect that is roughly half of that for developed countries consequent policy implications are examined and include the conclusions that a one size fits all approach can be inappropriate and that gradual reforms should be preferred to rare reforms that greatly alter the level of ipr protection

characteristics of patent litigation a window on competition we examine the patenting behavior of firms in an industry characterized by rapid technological change and cumulative innovation recent survey evidence suggests that semiconductor firms do not rely heavily on patents to appropriate returns to r d yet the propensity of semiconductor firms to patent has risen dramatically since the mid 1980s we explore this apparent paradox by conducting interviews with industry representatives and analyzing the patenting behavior of 95 u s semiconductor firms during 1979 1995 the results suggest that the 1980s strengthening of u s patent rights spawned patent portfolio races among capital intensive firms but it also facilitated entry by specialized design firms copyright 2001 by the rand corporation

patents learning by doing and market structure in the chemical processing industries for a sample of 24 chemical products count data models are used to evaluate firms propensity to patent and the link between patented process innovations and output prices the results show that process patenting was largely an outgrowth of learning by doing propensity to patent increased with firm size but decreased with market concentration reductions in output prices were strongly linked to learning by doing and more weakly to the rate of patenting producer firms appear to have been more successful than non producers in appropriating the value of patented process innovations

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

the dynamics of patent citations abstract the use of patent citations as a measure of patent quality increased dramatically in recent years i estimate the hazard of patent citation and find evidence of unobserved heterogeneity hazard estimation provides a means to separate patent quality from citation inflation

do national patent laws stimulate domestic innovation in a global patenting environment a cross country analysis of pharmaceutical patent protection 1978 2002 this paper evaluates the effects of patent protection on phar maceutical innovations for 26 countries that established pharmaceutical patent laws during 1978 2002 controlling for country characteristics through matched sampling techniques to establish two proper comparison sets among 92 sampled countries and through country pair fixed effects regressions this study yields robust results national patent protection alone does not stimulate domestic innovation as estimated by changes in citation weighted u s patent awards domestic r d and pharmaceutical industry exports however domestic innovation accelerates in countries with higher levels of economic development educational attainment and economic freedom additionally there appears to be an optimal level of intellectual property rights regulation above which further enhancement reduces innovative activities

the dynamics of the transfer and renewal of patents this article explores new data on the transfer and renewal of u s patents and interprets this new evidence using a model of patent transfers and renewal we find that the proportion of transferred patents is large and differs across technology fields and especially type of patentees we also find that the probability of a patent being traded depends on a number of factors the age of the patent the number of citations received by a given age the patent generality and whether the patent has been previously traded or not these findings are consistent with the predictions of a model of patent transfers and renewals

structural modeling of the value of patent abstract there is a considerable volume of prior research on the relationship between innovation and patents those research studies reveal that patents contain a great deal of noise and unless a correction is made in terms of the value of individual patents a simple count of the number of patents does not constitute a very useful indicator from research that has been conducted for the purpose of finding such an indicator to show the value of individual patents that is research to identify the characteristics of valuable patents many kinds of value indicators have been proposed nevertheless research hitherto has focused primarily on business or private value derived from the possession of patents and little attention has been paid to value in terms of technical knowledge or social value in a survey of inventors conducted by rieti in 2007 terminology describing broad concepts was used when questioning inventors about the value of individual patents and this has provided an excellent opportunity to analyze the multiple factors lying behind the value of patents and how they impact one another the purpose of this research is to use data from the rieti survey of inventors and structural equation modeling methods to elucidate the relationships between the technological and business value of patents and the latent factors that influence them the findings show that a scientific technological motive for inventors would have a positive effect on both the business and technological value meanwhile the monetary or promotion motive would not have any direct effects on the value of a patent the model also suggests that academic linkage would have a strong positive effect on the technological value but a weak negative effect on the business value furthermore these relationships differ more markedly according to technological field

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

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

optimal univariate inflation forecasting with symmetric stable shocks monthly inflation in the united states indicates non normality in the form of either occasional big shocks or marked changes in the level of the series we develop a univariate state space model with symmetric stable shocks for this series the non gaussian model is estimated by the sorenson alspach filtering algorithm even after removing conditional heteroscedasticity normality is rejected in favour of a stable distribution with exponent 1 83 our model can be used for forecasting future inflation and to simulate historical inflation forecasts conditional on the history of inflation relative to the gaussian model the stable model accounts for outliers and level shifts better provides tighter estimates of trend inflation and gives more realistic assessment of uncertainty during confusing episodes 1998 john wiley sons ltd

japan s shift from process to product patents in the pharmaceutical industry an event study of the impact on japanese firms in 1975 japan expanded the scope of its patent law by introducing product patents for newly developed chemical and pharmaceutical products we use rate of return data from the tokyo stock exchange for japanese pharmaceutical companies to examine the impact of the change in the patent law our empirical findings indicate that the passage of the new patent law induced an excess return of approximately 26 percent to a portfolio of large pharmaceutical companies companies with r d programs specializing in new product development experienced large gains while companies with r d programs specializing in imitative process patents experienced no gains

co ownership of intellectual property exploring the value appropriation and value creation implications of co patenting with different partners combining both interview data and empirical analyses at the patent and firm levels we explore the value appropriation and value creation implications of r d collaboration resulting in the co ownership of intellectual property i e co patents we make an explicit distinction between three different types of co patenting partners intra industry partners inter industry partners and universities our findings indicate that the value appropriation challenges of ip sharing are clearly evident with intra industry co patenting where partners are more likely to encounter overlapping exploitation domains co patenting with universities is associated with higher market value since appropriation challenges are unlikely to play a role and collaboration may signal novel technological opportunities although we find some evidence that co patenting corresponds to higher patent value patents co owned with firms are significantly less likely to receive self citations indicating constraints on the future exploitation and development of co owned technologies

institutionalized incentives for ingenuity patent value and the german employees inventions act in 2001 the eu15 countries invested a total of 175 5 billion in research and development activities approximately two thirds of this amount were r d expenditures made by business enterprises the remainder shared by publicly financed research institutions and academia almost 70 percent of these investments are expenditures for r d personnel yet it is surprising how little attention is given to the transformational process behind these numbers clearly the development of ideas and new concepts is financed by the funds just summarized but the actual work is done by inventors either in corporate labs in publicly financed research institutions or in academic research and their motivation and incentives should matter greatly for europe s chances of becoming more successful in global technology markets

trade agreements and the nature of price determination the terms of trade theory of trade agreements holds that governments are attracted to trade agreements as a means of escape from a terms of trade driven prisoner s dilemma see bagwell and staiger 1999 one of the termsof trade theory s most striking predictions is about the treatment of behind the border policy measures in trade agreements according to this prediction in the noncooperative nash equilibrium from which countries would begin in the absence of a trade agreement tariffs are set inefficiently high but behind the border policies are set at efficient levels hence even in the context of a complex policy environment there is no need for member governments of a trade agreement to negotiate directly over the levels of their behind the border policies rather according to the terms of trade theory the fundamental problem for a trade agreement to solve is to prevent terms of trade manipulation and to thereby reduce tariffs and raise trade volumes without introducing distortions into the unilateral choices of domestic tax subsidy and regulatory policies as a result of the negotiated constraints on tariffs see bagwell and staiger 2001 importantly this result holds for a wide variety of government preferences and has also been shown to hold in imperfectly competitive environments the terms of trade theory of trade agreements therefore provides strong support for shallow integration as the most direct means to solve the policy inefficiencies that would arise absent a trade agreement simply put according to the terms of trade theory negotiations over tariffs alone coupled with an effective market access preservation rule that prevents governments

does culture still matter the effects of individualism on national innovation rates abstract does a society s culture affect its rate of inventive activity this article analyzes several independent datasets of culture and innovation from 62 countries spanning more than two decades it finds that most measures of individualism have a strong significant and positive effect on innovation even when controlling for major policy variables however the data also suggest that a certain type of collectivism i e patriotism and nationalism can also foster innovation at the national level meanwhile other types of collectivism i e familism and localism not only harm innovation rates but may hurt progress in science worse than technology

leviathan as an inventor an extended agency model of state owned versus private firm invention in emerging and developed economies we examine the relative merits of state soe and private poe ownership on firm invention output in emerging as well as developed economies firm soe affords a vehicle by which governments throughout the world encourage risky investment in new technological paths yet from a traditional agency theoretical standpoint soes are plagued by low powered incentives and dysfunctional involvement e g wasteful budgets and political meddling which reduces soe performance relative to poes to examine this paradox we build an extended agency model which rather than overlooking agency cost drivers entertains a more balanced view in which these so called agency liabilities in fact benefit soes particularly in the sphere of inventions we argue that given relatively higher levels of managerial autonomy soes may outperform poes in some types of inventive output we further propose that key boundary conditions operate to modify this base effect in that contexts lacking political constraints a condition found in most emerging economies increase the risk of political meddling reducing managerial autonomy so that any soe inventive advantages wane significantly we also hypothesize that this negative effect of weak institutions is attenuated in high invention productivity sectors empirically we track the frequency pioneerism and impact of patent inventions of 521 soes and matched poes for 16 years across 43 countries and 22 industries we find empirical support for our hypotheses based on a robust set of fixed effects regression analyses aided by a battery of checks to assess self selection and omitted variable bias

a dynamic stochastic analysis of international patent application and renewal processes abstract this paper formulates a dynamic stochastic model to examine the joint patent application and renewal behaviors under an international patent protection regime the framework makes it possible to utilize both the cross sectional multi country application and the time series patent renewal dimensions of available international patenting data to estimate the private value of patent protection and allows us to distinguish more aspects of patent returns the evolution dynamics of the value of european patents in pharmaceutical and electronics industries are examined estimation results indicate that pharmaceutical patents are endowed with higher initial returns thus their owners tend to seek patent protection in more countries than electronics patent holders however pharmaceutical patents become obsolete at a much faster pace than electronics patents and consequently they have lower renewal rates and shorter lives

science and the diffusion of knowledge abstract scientists social scientists and politicians frequently credit basic science with stimulating technological innovation and with it economic growth despite a substantial body of research investigating this general relationship relatively little empirical attention has been given to understanding the mechanisms that might generate this linkage this paper considers whether more rapid diffusion of knowledge brought about by the norm of publication might account for part of this effect we identify the importance of publication by comparing the patterns of citations from future patents to three groups of focal patents i those that reference scientific peer reviewed publications ii those that reference commercial non scientific publications and iii those that reference neither our analyses strongly implicate publication as an important mechanism for accelerating the rate of technological innovation patents that reference published material whether peer reviewed or not receive more citations primarily because their influence diffuses faster in time and space

derivative ideas and the value of intangible assets we build a general equilibrium model where growth is driven by two invention types fundamental ideas that cause creative destruction and derivative ideas that enhance the value of existing inventions the model provides a new mapping from microeconomic patent data to aggregate total factor productivity growth and the aggregate value of privately owned knowledge we show how to measure the frequency of derivative ideas and the rate of creative destruction we estimate that derivative ideas account for 70 80 of all patents and their presence more than doubles the value of knowledge capital relative to what the measured innovation rate might otherwise imply

international knowledge diffusion and home bias effect do uspto and epo patent citations tell the same story this paper estimates the international diffusion of technical knowledge using patent citations we control for self citations and for procedural differences between patent offices using equivalent patents we find that 1 there are clear biases in patent examination processes that generate citations in the two offices 2 at the epo there is a strong localization effect at the country level and the size is comparable to that found at the uspto 3 technological fields have different properties of diffusion in the two patent offices that do not depend on a patent office bias 4 using epo data the us is not the leading country in terms of citations made and received as occurs at the uspto

indicators for national science and technology policy how robust are composite indicators abstract this article addresses a set of issues that were central to keith pavitt s research that is the construction and use of tools to measure national innovative performance and to design national policies relating to innovation it presents an overview of the development of science and technology s t indicators and their use in national policy making and provides evidence of the vulnerability of composite s t indicators to manipulation a brief history of the development of s t indicators begins with the role of the united states followed by their worldwide diffusion with particular emphasis on europe newer developments towards composite indicators benchmarking and scoreboarding are discussed to investigate the robustness of innovation scoreboards empirically a sensitivity analysis of one selected case is presented it is shown that composite scores and country rank positions can vary considerably depending on the selection process thus the use of scoreboards leaves room for manipulation in the policymaking system further research is needed on alternative methods of calculation to prevent their misuse and abuse

collaborative promotion of technology standards and the impact on innovation industry structure and organizational capabilities evidence from modern patent pools this study explores the impact of modern patent pools inter organizational collaborative arrangements for promoting the adoption of technology standards on the rate of follow on innovations based on pooled technologies the vertical structure of associated industries and organizational capabilities of noncollaborating firms on one hand the formation of modern pools can boost follow on innovation by lowering the search negotiation and licensing costs associated with pooled standards on the other hand modern pools may decrease the incentives to invest in follow on innovations because of cannibalization risks and grant back provisions to the extent that modern pools succeed in establishing a dominant standard their collaborative nature and their reliance on markets for technology can reduce technological uncertainty and appropriation hazards hence triggering vertical disintegration in related industries moreover by establishing a dominant standard modern pools can effectively diminish the relati

a penny for your quotes patent citations and the value of innovations the use ofpatents in economic research has been seriously hindered by the fact that patents vary enormously in their importance or value and hence simple patent counts cannot be informative about innovative output the purpose of this article is to put forward patent counts weighted by citations as indicators of the value of innovations thereby overcoming the limitations of simple counts the empirical analysis of a particular innovation computed tomography scanners indeed shows a close association between citation based patent indices and independent measures of the social value of innovations in that field moreover the weighting scheme appears to be nonlinear increasing in the number of citations implying that the informational content of citations rises at the margin as in previous studies simple patent counts are found to be highly correlated with contemporaneous rd however here the association is within afield over time rather than cross sectional

intergenerational hybrids spillbacks spillforwards and adapting to technology discontinuities during technological discontinuities incumbents frequently develop hybrids of competing technical generations although some prior work implies that such intergenerational hybrids may be the result of organizational dysfunction we propose that in some cases hybrids may be sophisticated learning tools that shape organizational adaptation to a technological discontinuity in this paper we suggest two mechanisms through which intergenerational hybrids may affect organizational adaptation spillbacks and spillforwards in an empirical test among the population of automobile carburetor manufacturers during a technological discontinuity we observe that organizations developing intergenerational hybrids capture spillback benefits knowledge spillovers from an emerging technology generation to the current generation furthermore we find that these same organizations also capture spillforwards spillover benefits from developing higher performing intergenerational hybrids that improve their product performance in the future technology generation these results suggest that intergenerational hybrids may be stepping stones for organizations to learn about and adapt to technology discontinuities

in search of complementary assets the determinants of alliance formation of high tech start ups abstract why do new technology based firms ntbfs cooperate starting from teece s teece d j 1986 profiting from technological innovation implications for integration collaboration licensing and public policy research policy 15 285 305 conceptual framework and taking advantage of subsequent literature on alliance formation in the resource and competence based tradition and in the social structure perspective we derive an empirical model that aims at highlighting the inducements and obstacles that these firms face in alliance formation according to firm specific characteristics and the nature of the alliance in particular a distinction is made between exploitative commercial alliances and explorative technological alliances the econometric estimates based on a large sample of italian young high tech firms that are observed from 1994 to 2003 provide strong evidence supporting two key intuitions of teece s work first the combination of specialized complementary assets appears to be a key driver of the formation of exploitative commercial alliances by ntbfs more specifically patent holding affects positively the likelihood to establish commercial alliances but this propensity is found to rapidly decrease with firm size suggesting that as long as ntbfs become larger and possess specialized commercial assets their urge for commercial alliances diminishes second following the parallelism set forth by teece between search for alliance partners and access to external financing the analysis indicates that potentially beneficial alliances may not take place because of the high transaction costs faced by smaller ntbfs in this respect our results clearly support the view that sponsor institutions as public research organizations venture and corporate venture capitalists may sensibly reduce these costs and that their role crucially depends on both the identity of the sponsor and the type of alliance

patent pools and innovation in substitute technologies evidence from the 19th century sewing machine industry patent pools which combine complementary patents of competing firms are expected to increase overall welfare but potentially discourage innovation in substitutes for the pool technology this article exploits a new historical data set on changes in patenting and firm entry for a clearly defined pool technology and substitutes in the 19th century sewing machine industry this analysis reveals a substantial increase in innovation for an albeit technologically inferior substitute technology historical evidence suggests that the creation of a pool diverted innovation toward an inferior substitute technology by creating differential license fees and litigation risks

the duality of collaboration inducements and opportunities in the formation of interfirm linkages i argue that the linkage formation propensity of firms is explained by simultaneously examining both inducement and opportunity factors drawing upon resource based and social network theory literatures i identify three forms of accumulated capital technical commercial and social that can affect a firm s inducements and opportunities to form linkages firms possessing these capital stocks enjoy advantages in linkages formation however firms lacking these accumulated resources can still form linkages if they generate a radical technological breakthrough thus i identify paths to linkage formation for leading as well as peripheral firms i test these arguments with longitudinal data on technical collaborative linkages in the global chemicals industry copyright 2000 john wiley sons ltd

the greener the better job creation effects of environmentally friendly technological change this article investigates the link between environment related innovation and job creation at firm level employing italian data on 4507 manufacturing firms matched with patent records for the period 2001 2008 we test whether green innovation measured by the number of environment related patents has a positive effect on long run employment growth that is specific with respect to non environmental innovation results show a strong positive impact of green innovation on long run job creation substantially bigger than the effect of other innovations our findings are robust to a number of additional tests including controls for patents quality and cost differential between generic and green innovation and endogeneity

success in high technology markets is marketing capability critical we propose a conceptual framework with the resource based view rbv of the firm as its theoretical underpinning to explain interfirm differences in firms profitability in high technology markets in terms of differences in their functional capabilities specifically we suggest that marketing r d and operations capabilities along with interactions among these capabilities are important determinants of relative financial performance within the industry this paper contributes to the rbv literature by proposing the input output perspective to conceptualize the notion of capabilities specifically this approach entails modeling a firm s functional activities viz marketing r d and operations as transformation functions that relate the productive factors resources to its functional objectives if the firm were to deploy these resources most efficiently any underattainment of the functional objective then is attributable to functional inefficiency or equivalently to a lower functional capability of the firm the input output conceptualization of a firm s capabilities is then estimated using the stochastic frontier estimation sfe methodology sfe provides the appropriate econometric technique to empirically estimate the efficient frontier and hence the level of efficiency achieved by the various firms our study contributes to a number of literatures both methodologically and substantively first it contributes both conceptually and methodologically to the rbv literature conceptually our study suggests that firm capabilities can be viewed in an input output framework methodologically the study suggests the use of stochastic frontier estimation to operationalize and estimate firm capabilities this methodology is to the best of our knowledge the first to allow the researcher manager to infer capabilities from archival data substantively our study contributes to the literature on market orientation by suggesting that a stronger market orientation of a firm should be reflected in a higher marketing capability it also adds to the literature on design for manufacturability by explicating the complementarity among the various functional capabilities and offering empirical evidence on their relative importance in influencing a firm s performance finally our study builds on prior literature that has highlighted the importance of marketing r d coordination as important determinants of new product development and success we highlight below some of our main findings 1 a strong base of innovative technologies enhances a firm s sales by favorably influencing consumers expectations about the externality benefits associated with its product this suggests that a past track record of consistent innovation is a credible signal to current and potential customers of the firm s continued excellence in a technologically evolving market given the importance of influencing customers managers need to tailor their marketing activities around the need to inform customers of the technological excellence of their firm thus customers need to be informed of the innovative technologies that the firm possesses and of the future r d initiatives undertaken by it similarly any potential applications of innovative technology developed by the firm and of technologies under development should be emphasized 2 marketing capability has its greatest impact on the quality adjusted innovative output for firms that have a strong technological base in other words firms with a strong r d base are the ones with the most to gain from a strong marketing capability 3 marketing capability strongly influences the width of applicability of innovations i e a firm s marketing capability enhances its ability to generate innovative technologies that have applications across a range of industries this result carries a strong message for managers a strong market orientation is one of the most fertile sources of ideas for innovation thus marketing needs to be involved from the beginning of the innovation process namely right at the stage when technological ideas are being generated 5 the most important determinant of a firm s performance is the interaction of marketing and r d capabilities this supports the assertion that firms in high technology markets need to excel at two things the ability to come up with innovations constantly and the ability to commercialize these innovations into the kinds of products that capture consumer needs and preferences this finding offers further evidence on the importance of coordination between r d and marketing as suggested in the extant marketing literature finally using archival data our methodology can be used to benchmark a firm s capabilities with other firms in the industry along various functional dimensions this would be an important step in making more informed resource allocation decisions thus the firm can spend more money on those capabilities where it most lags the competition or on those capabilities that are shown to have the maximum impact on firm performance

patents as options some estimates of the value of holding european patent stocks in many countries holders of patents must pay an annual renewal fee in order to keep their patents in force this paper uses data on the proportion of patents renewed and the renewal fees faced by post world war ii cohorts of patents in france the united kingdom and germany in conjunction with a model of patent holders renewal decisions to estimate the returns earned from holding patents in these countries since patents are often applied for at a nearly stage in the innovation process the model allows agents to be uncertain about the sequence of returns that will be earned if the patent is kept inforce formally then the paper presents and solves a discrete choice optimal stochastic control model derives the implications of the model on aggregate behaviour and then estimates the parameters of the model from aggregate data the estimates enable a detailed description of the evolution of the distribution of returns earned from holding patents over their life spans and calculations of both the annual returns earned from holding the patents still in force or the patent stocks in the alternative countries and the distribution of the discounted value of returns earned from holding the patents in a cohort this abstract was borrowed from another version of this item

the technological origins of radical inventions this paper aims to trace down the origins of radical inventions in spite of many theoretical discussions on the effect of radical inventions the specific nature of radical inventions has received much less attention in the theoretical and empirical literature we try to fill that void by an empirical investigation into the specific origins of radical inventions we explore this issue by a close examination of 157 individual patents which are selected from a pool of more than 300 000 patents in contrast to the conventional wisdom that radical inventions are based less on existing knowledge we find that they are to a higher degree based on existing knowledge than non radical inventions a further result that follows from our analysis is that radical inventions are induced by the recombination over more knowledge domains the combination of knowledge from domains that might usually not be connected seems to deliver more radical inventions

the value of u s patents by owner and patent characteristics abstract this paper uses renewal data to estimate the value of u s patents controlling for patent and owner characteristics estimates of u s patent value are substantially larger than estimates for european patents however the ratio of u s patent value to r d for firms is only about 3 contrary to a common assertion patents issued to small patentees are much less valuable than those issued to large corporations litigated patents are more valuable as are highly cited patents however patent citations explain little variance in value suggesting limits to their use as a measure of patent quality

why put all your eggs in one basket a competition based view of how technological uncertainty affects a firm s technological specialization conventional wisdom suggests that when a firm faces technological uncertainty it responds by becoming less technologically specialized so as to remain adaptable to subsequent resolution of this uncertainty we adopt a competition based view of technological uncertainty to identify an opposite effect in competitive settings the firm may instead become more specialized when faced with greater technological uncertainty so as to focus on advancing its technologies against competition and influence the resolution of uncertainty in its favor over rivals we propose that this effect is accentuated when the firm expects that it cannot easily adapt to rivals technologies subsequently specifically when rivals are a greater deterrent through being litigious or innovative using u s government funding for fuel cell research as a policy shock with stock option implied volatilities to measure expected uncertainty we find empirical support for our propositions among firms active in research and development in the u s communications equipment industry through these findings we demonstrate that a competition based view of uncertainty identifies an alternative path for the firm s resource accumulation under uncertainty and we stress that the resolution of uncertainty can be something the firm attempts to influence rather than adapt to

measuring patent s influence on technological evolution a study of knowledge spanning and subsequent inventive activity we introduce technological influence as a variable to measure an invention s direct and indirect impact on the evolution of technology this provides a novel means to study the short and long run effect of invention antecedents on technological evolution invention activity and economic growth a comparison between models of technological influence and direct technological impact is presented model estimations are based on data from semiconductor patents granted over a 5 year period results from quantile regression estimations show significant differences in the relationships between antecedents of technological influence and impact for example pioneering the spanning of knowledge boundaries has a positive relationship with the patent s influence while no relationship is found with direct citations these results have important implications for public policy and the management of technology they suggest the need for deeper understanding of the micro foundations of the technological evolution process and raise the question of whether inventors under current ip protection receive adequate economic incentives to promote actions driving economic growth

wacky patents meet economic indicators we investigate whether standard indicators can distinguish between wacky patents and a control group forward citations are good predictors of importance however wacky patents have higher originality generality and citation lags suggesting that these indicators should be interpreted carefully

can patent family size and composition signal patent value abstractrecent research has proposed a method of patent valuation based on weighting patent family size by the market size of the countries in the family the premise is that inventors tend to seek

getting competition down to a science the effects of technological competition on firms scientific publications prior research about the interaction between private firms and the scientific community has largely viewed firms articles in scientific publications as a means to improve research and development productivity by encouraging their researchers to publish scientific papers firms can maintain linkages with the scientific community attract talent and access external knowledge on which they can build to create innovations this paper in contrast emphasizes the role of scientific publications in firms battles for market dominance and examines how competitive conditions shape firms propensities to publish scientific articles about their innovations focusing on the context of pharmaceutical drugs we develop propositions about how the competition that one drug faces from similar drugs and potential substitutes influences the innovating firm s inclination to publish articles in the top medical journals about that drug to facilitate its assessment by the u s food and drug administration and the medical community we also propose that scientific articles about competing drugs compel a firm to highlight its own drug in scientific papers to assert the drug s uniqueness and mitigate the threat of substitution whereas prior research has elucidated how science contributes to enhancing firms competence at creating innovations which is critical to their ability to compete in technology intensive environments this paper draws attention to how competition in turn permeates into the scientific arena creating inducements for firms to use scientific publications to position their innovations in the marketplace