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Reassessing patent propensity: Evidence from a dataset of R&D awards, 1977–2004

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Abstract

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.

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... Patents have been one of the main topics investigated in several fields of scientific literature (Abbas et al., 2014;Lubango, 2015;Wagner and Leydesdorff, 2005;Forti et al., 2013;Ejermo and Karlsson, 2006;Sternitzke et al., 2008). In fact, they provide a wealth of useful information on the state of art and on the protagonists of a research and development (R&D) sector (World Intellectual Property Organization, 2009;Balconi et al., 2002;Fontana et al., 2013;Guellec and van Pottelsberghe de la Potterie, 2001;Hingley and Bas, 2009;Hsueh and Wang, 2009;Lissoni, 2012;33, Landini et al., 2015;Miguélez and Moreno, 2013;Singh, 2008;Lubango, 2015). Patent submission is usually the first public claim of a new invention or innovation. ...
... In Fontana et al. (2013), systematically compare patented and unpatented innovations over the period 1977-2004 across industrial sectors. In this way, they can analyse the variations of patent propensity across different contexts (industries, geographical areas and organisations). ...
... Over the years, as data-mining techniques have become more accessible and popular, patents have become an important tool in studying innovation. Although patent generation is an incomplete measure (Archibugi & Pianta, 1996;Fontana et al., 2013) and not the only way to protect intellectual property (Strumsky & Lobo, 2015) it is linked to firm value (Hall et al., 2005;Trajtenberg, 1990) and startup growth (Helmers & Rogers, 2011). The importance of patents varies with firm size (Brouwer & Kleinknecht, 1999) and industry (Arora et al., 2008;Fontana et al., 2013;Pérez-Cano & Villén-Altamirano, 2013). ...
... Although patent generation is an incomplete measure (Archibugi & Pianta, 1996;Fontana et al., 2013) and not the only way to protect intellectual property (Strumsky & Lobo, 2015) it is linked to firm value (Hall et al., 2005;Trajtenberg, 1990) and startup growth (Helmers & Rogers, 2011). The importance of patents varies with firm size (Brouwer & Kleinknecht, 1999) and industry (Arora et al., 2008;Fontana et al., 2013;Pérez-Cano & Villén-Altamirano, 2013). In the aerospace industry, patents are tracked as a signal of cluster development (Mcguire & Islam, 2015). ...
Article
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The Small Business Innovation Research (SBIR) program provides federally funded research awards to companies with 500 or fewer employees. We explore the differential effects of the National Aeronautics and Space Administration SBIR program on firms of various sizes on their future patenting activity. Using propensity score matching, we construct comparable samples of selected and non-selected Phase II SBIR applicants by firm size. We then estimate the effect of selection for the matched sample on the probability of forward patent activity and conditional on any forward patenting, the count of patents within three years of the proposal. While firms with fewer than 10 employees, are least likely to patent, their probability of patenting is positively affected by receiving a Phase II award. We find sparse evidence of corresponding increase for larger firms. Nor do we find any evidence that a Phase II award impacts the conditional number of forward patents in the three years following the award. These data suggest that the Phase II award serves to advance the smallest teams "over the hump" to creating a potential source of competitive advantage.
... Patents have been one of the main topics investigated in several fields of scientific literature (Abbas et al., 2014;Lubango, 2015;Wagner and Leydesdorff, 2005;Forti et al., 2013;Ejermo and Karlsson, 2006;Sternitzke et al., 2008). In fact, they provide a wealth of useful information on the state of art and on the protagonists of a research and development (R&D) sector (World Intellectual Property Organization, 2009;Balconi et al., 2002;Fontana et al., 2013;Guellec and van Pottelsberghe de la Potterie, 2001;Hingley and Bas, 2009;Hsueh and Wang, 2009;Lissoni, 2012;33, Landini et al., 2015;Miguélez and Moreno, 2013;Singh, 2008;Lubango, 2015). Patent submission is usually the first public claim of a new invention or innovation. ...
... In Fontana et al. (2013), systematically compare patented and unpatented innovations over the period 1977-2004 across industrial sectors. In this way, they can analyse the variations of patent propensity across different contexts (industries, geographical areas and organisations). ...
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Patents have been one of the main topics investigated in several fields of scientific literature. Currently, data about patents is rapidly increasing, and the adoption of data mining and big-data-centred approaches to investigating them appears compulsory. Among these last approaches, social network analysis (SNA) is extremely promising. In this paper, we propose an SNA-based approach to extracting knowledge patterns about patent inventors and their collaborations. Our approach is extremely general and can be exploited to investigate patents of any country. It allows the analysis of some issues that have not been considered in the past, such as the presence of 'power inventors' in a country, the existence of a backbone and of possible cliques among them, the influence and the benefits of power inventors on their co-inventors and, more in general, in the R&D activities of their country. All these issues represent innovation geography knowledge patterns that can be extracted, thanks to our approach.
... Further, they may not necessarily translate into product innovation that is successfully commercialized. Fontana et al. (2013) noted that only 10 percent of the 'important' (i.e. award winning and breakthrough) innovations across industry sectors, over the period 1977-2004, were actually patented. ...
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Using field study data on complete supply networks for 153 components, collected from a large automotive firm and two consumer electronics manufacturers, we characterize the supply networks for the components in terms of social network analysis metrics and examine the impact of direct ties, indirect ties, and their interaction on innovation performance. Analysis of complete networks is essential for a fuller understanding of the influence of supply network architecture on innovation performance, in particular. In addition, we examine the influence of the original equipment manufacturer (OEM) on direct suppliers and its moderating influence on the impact of direct and indirect ties in the supply network on innovation performance. Specifically, we find that the impact of direct ties on innovation performance is significant and positive. Interestingly, the indirect ties negatively moderate the impact of direct ties on innovation performance. Further, we find that the greater the degree of influence the OEM exerts on its direct suppliers, the lower the performance gains. We discuss these findings and their implications for innovation performance.
... In order to capture the R&D-intensive parts of the robotisation chain (RDs, RMs, and IRDs), this study retrieved and analysed patent data from the PATSTAT 2019 spring edition, as maintained by the European Patent Office (EPO). It is definitely the case that the usefulness of patents as a measure of innovation at national, regional, and firm levels could vary greatly across industries (Fontana et al., 2013), and that there are extensive limitations to patent analyses (Archibugi, 1992), since not all innovations are patented, and not all patents lead to new products. Nevertheless, patents have a long and widespread history of being used to account for technological innovation which has been developed for commercial purposes, and the literature treats it as a 'tolerable assumption' that they measure commercially useful innovation (Griliches, 1990). ...
... domestic patent application, as an alternative way of measuring R&D. Patents are widely used in the literature as a proxy for R&D and innovation (see, e.g.,Aghion et al., 2019;Awaworyi Churchill, 2017;Fontana et al., 2013;Van Roy et al., 2018). We employ data on patents fromMadsen et al. (2018), which we update using statistics from the World Intellectual Property ...
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We examine how research and development (R&D) has contributed to income inequality in the Group of Seven (G7) countries from 1870 to 2016. Using newly developed panel data models that incorporate interactive fixed effects, we find that R&D is negatively associated with income inequality. Non-parametric models that allow us to capture the time-varying effect of R&D suggest that this average effect has been negative for most of this period. We find that legal origin moderates the relationship between R&D and income inequality and that the relationship is stronger for common law countries. We also examine three channels through which R&D could affect income inequality – economic growth, trade and employment – and find that economic growth and trade are mechanisms through which R&D transmits to income inequality. Of these two mediators, we find that the negative relationship between R&D and income inequality is mainly channelling through economic growth.
... First, we examine the robustness of our results to the use of patents, specifically domestic patent application, as an alternative way of measuring R&D. Patents are widely used in the literature as a proxy for R&D and innovation (see, e.g., Aghion et al., 2019;Awaworyi Churchill, 2017;Fontana et al., 2013;Van Roy et al., 2018). We employ data on patents from Madsen et al. (2018), which we update using statistics from the World Intellectual Property Organization (WIPO). ...
Technical Report
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We examine how research and development (R&D) has contributed to income inequality in the Group of Seven (G7) countries from 1870 to 2016. Using newly developed panel data models that incorporate interactive fixed effects, we find that R&D is negatively associated with income inequality. Non-parametric models that allow us to capture the time-varying effect of R&D suggest that this average effect has been negative for most of this period. We find that legal origin moderates the relationship between R&D and income inequality and that the relationship is stronger for common law countries. We also examine three channels through which R&D could affect income inequality-economic growth, trade and employment-and find that economic growth and trade are mechanisms through which R&D transmits to income inequality. Of these two mediators, we find that the negative relationship between R&D and income inequality is mainly channelling through economic growth.
... First, one apparent limitation of this study could be the generalizability related to the results. We used patent as the organizational incremental innovation indicator, which might suffer from patent propensity issues (Fontana et al., 2013). Future research can develop different measures of IIC by considering patents, trademarks and trade secrets. ...
Article
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Purpose This paper aims to propose the following questions: How do structural network embeddedness influence firms’ incremental innovation capability? Does technology cluster moderate the relationships between them? Design/methodology/approach In this empirical research, the authors collected a sample of patent data in the smartphone industry over the period of 2000-2018. Then, the authors examined the direct roles of structural network embeddedness on firms’ incremental innovation capability and the moderating role of technology cluster by using ordinary linear squares regression. Findings The empirical results show that occupying the central position positively affects firms’ incremental innovation capability, and clustering strengthens this linear relationship. Furthermore, bridging structural holes has an inverted U-shaped effect on incremental innovation capability, and clustering positively moderated this nonlinear relationship, while bridging ties across different clusters plays a negative moderation role in this relationship. Originality/value This empirical research provides new insights into whether and how firms can grasp the benefits of structural network embeddedness to conduct incremental innovations and the moderation effects of technology cluster contingencies. It further contributes to the structural network embeddedness–incremental innovation capability issue by extending its research context to the smartphone industry.
... Patents have been largely investigated in the past scientific literature Abbas et al. (2014); Lubango (2015); Wagner & Leydesdorff (2005); Ejermo & Karlsson (2006); Sternitzke et al. (2008); Lanjouw & Schankerman (2004). In fact, their analysis can supply a large amount of information concerning both the state of art and the protagonists of a certain Research & Development (R&D) field World Intellectual Property Organization (2009); Fontana et al. (2013); Guellec & van Pottelsberghe de la Potterie (2001); Hingley & Bas (2009) ;Hsueh & Wang (2009) ;Miguélez & Moreno (2013); Singh (2008); Lo Giudice et al. (2017). This also because the submission of a patent is usually the first public claim of a new invention or innovation. ...
Preprint
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Patents have been largely investigated in the past. The impressive development of innovations in all the R&D fields is making the adoption of big data centered-techniques compulsory for their analysis. In this context, network analysis-based approaches are extremely promising. Centrality is one of the most investigated issues in network analysis and, in the past, several centrality measures have been proposed in the literature. However, none of them is tailored to the specificity of the patent scenario. In this paper, we propose a well-tailored centrality measure for evaluating patents and their citations. We also experimentally prove that it is well suited to capture the peculiarities of the patent scenario. Finally, we present three possible applications of our measure, i.e., the computation of the "scope" of a patent, the computation of the lifecycle of a patent, and the detection of the so-called power patents.
... Not all innovations are associated with patents, and not all patents lead to new products or processes in the first place. Moreover, the usefulness of patents as a measure of innovation varies greatly across industries (Fontana et al., 2013). Nonetheless, patents have been widely used in accounting for technological innovation developed for commercial purpose (Griliches, 1990), and the literature treats it as a "tolerable assumption" that they measure commercially useful innovation (Archibugi and Pianta, 1992;Schmookler, 1962). ...
Article
The diversity of knowledge and skill is an important element of a national system of innovation. We propose atheory of how certain labor market institutions affect diversity, and through that route affect levels of in-novation. Specifically, unemployment protection (UP) encourages diversity by reducing the risk burden of abroad range of learning, or human capital investment; for that reason, UP fosters innovation. Employmentprotection (EP) reduces the risk burden of a much narrower range of learning; for this reason, it will not enhancediversity to the extent UP does, and it may actually depress overall diversity and innovation. Our approachdiffers from previous research on labor market insurance and skill formation, much of which has dealt with adistinction between general and specific skills, and which has treated the effects of UP and EP as similar.Estimating the effects of UP and EP on patenting for 25 OECD countries over 24 years, wefind a positive effectfrom UP, a negative effect from EP, and evidence that the UP effect is mediated by diversity of skill.
... 126 Ibid., p. 15. 127 Contrary to the perception that patents are primary drivers of innovation, numerous 'important' inventions such as penicillin, x-ray machine, and many life-saving vaccines were never patented by the respective innovators. See Fontana, R., Nuvolari, A., Shimizu, H., & Vezzulli, A. (2013). Reassessing patent propensity: Evidence from a dataset of R&D awards, 1977-2004 absence of further explanation -we are not sure how exactly this relates to commercialisation of IPRs. ...
Chapter
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This chapter argues for the recognition of knowledge sharing as an integral part of the sharing economy, by taking India as a case study. It analyses the attitudes and practices pertaining to knowledge sharing in India through a mixed methods approach. The quantitative data discussed in the chapter include data from two empirical studies – one on sharing practices of researchers in India and their attitudes towards openness, and the other on perceptions of Indian consumers regarding film piracy and copyright protection. The quantitative findings have been contextualised in an analysis of historical exclusionary structures in India which created intellectual monopolies for privileged sections of the society on lines of gender and caste. The chapter challenges dominant narratives which suggest that knowledge sharing was a common practice in ancient India. Further, the chapter examines two prominent and recent Indian policies which have a bearing on shaping incentives for innovation and creativity in the sharing economy, but fail to take balanced and inclusive approaches. Through these analyses, the chapter seeks to establish the need for all stakeholders to recognise the need for equitable knowledge sharing and take appropriate steps to challenge and change the status quo.
... Hall et al (2005) found that firm market value (Tobin's Q ratio) was correlated to the citationweighted patent portfolio of the firms. Carpenter et al (1981) and Fontana et al (2013) compared patents associated with inventions that received a prize and patents from a control group, finding again evidence that "important" patents are more cited (the mean number of citations received was found to be about 50% higher for important patents). ...
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One of the most challenging problems in technological forecasting is to identify as early as possible those technologies that have the potential to lead to radical changes in our society. In this paper, we use the US patent citation network (1926–2010) to test our ability to early identify a list of expert-selected historically significant patents through citation network analysis. We show that in order to effectively uncover these patents shortly after they are issued, we need to go beyond raw citation counts and take into account both the citation network topology and temporal information. In particular, an age-normalized measure of patent centrality, called rescaled PageRank, allows us to identify the significant patents earlier than citation count and PageRank score. In addition, we find that while high-impact patents tend to rely on other high-impact patents in a similar way as scientific papers, the patents’ citation dynamics is significantly slower than that of papers, which makes the early identification of significant patents more challenging than that of significant papers. In the context of technology management, our rescaled metrics can be useful to early detect recent trends in technical improvement, which is of fundamental interest for companies and investors.
... To capture the R&D-intensive parts of the robotisation chain (RDs, RMs, IRDs) this study retrieves and analyses patent data from PATSTAT 2019 spring edition maintained by the European Patent Office (EPO). The patents have long been widely used in accounting for technological innovation developed for commercial purposes and despite of their obvious limitations (Archibugi 1992;Fontana et al. 2013) the literature treats as a 'tolerable assumption' that they measure commercially useful innovation at national, regional and firm level (Griliches 1990). One advantage that patents offer in the analysis is due to the International Patent Classification scheme (IPC), which is a hierarchical classification system used primarily to classify and search patent documents according to technical fields. ...
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Who leads the robotisation race in Europe? For the answer, this paper develops a novel analytical framework, primarily by applying the concept of the global value chain to robotisation. By doing this, we investigate in detail the entire robotisation chain, from robotics developers over robot manufacturers to companies that deploy the industrial robots. For the R&D-intensive part of the chain (robotics development), we analyse robotics patent data from PATSTAT combined with firm data from ORBIS while for the capital-intensive part (deployment of robots) the source of information is the International Federation of Robotics. Our results show that the European robotisation landscape is fragmented into three groups. The first includes economies (Sweden, Germany, Austria, Denmark and France) that have the highest densities both in robotics development and in robot deployment. Countries of the second group (Spain, Italy, Belgium, the Netherlands and Finland) possess good positions only in some specific parts of the chain, while the lagging behind region (the majority of Central and Eastern Europe) is integrated into the robotisation chain solely by robot deployment. Hence, one of the main related policy challenges is to find ways for upgrading along the robotisation chain.
... the low end,Fontana et al. (2013) report a 12.6-per-cent patenting rate. This estimate was developed by examining patenting of new products that were recognized as one of the top 100 most technologically important in a competition organized by the magazine Research and Development. ...
Article
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In 2017, 29 of the 35 members of the Organisation for Economic Co-operation and Development (OECD) provided tax incentives for spending on R&D. In addition to these expenditure-based measures, 15 OECD countries provided preferential tax treatment for the income generated by commercializing R&D and other innovative activities. These income-based measures are often described as patent boxes, since they first applied to income realized from patented products and processes. In most cases, the qualifying patents did not have to be based on R&D performed in the country offering the incentive, so patent boxes were criticized for creating an incentive to shift taxable income without encouraging additional R&D. Recently, however, most countries have accepted the OECD recommendation that both the R&D and the income from its commercialization must be located in the same jurisdiction before an income-based incentive can be provided. With this linkage, income-based incentives can be a useful policy tool, particularly for large firms. Income- and expenditure-based incentives are likely to have similar impacts on the amount of R&D undertaken by large firms, but income-based measures have the advantage of providing a greater incentive to commercialize R&D in the implementing jurisdiction. They also blunt the incentive to shift the taxable income generated by commercializing R&D to lower-tax jurisdictions. However, smaller firms, who are more likely to be cash-flow constrained, will respond less strongly to income-based measures since the subsidy is available with a delay. Further, small firms have limited opportunities to shift taxable income across international borders. A key determinant of the success of income-based incentives is how they affect tax revenue on income from commercialization of R&D. If a lower tax rate generates higher revenue as a result of tax base shifting effects, income-based measures have a clear advantage over their expenditure-based counterparts. If competing jurisdictions have very low corporate income tax rates, feasible reductions in tax rates may not cause tax base shifting effects large enough to make the policy a success.
... We study the involvement of customer investors in crowdfunding projects in a unique data set comprising 21,491 projects from a diverse set of entrepreneurs and industries. Unlike most of the previous innovation literature, which uses data on successful innovations such as granted patents (e.g., Singh andFleming 2010, Chatterji andFabrizio 2011; for a discussion of patent data, see Fontana et al. 2013, Hall et al. 2013, prescreened innovation projects (e.g., Lilien et al. 2002, Bajaj et al. 2004, or management questionnaires (e.g., Gruner andHomburg 2000, Foss et al. 2010), our data comprise a balanced set of successful and unsuccessful projects, thus reducing selection bias (Dahlander and Piezunka 2014). The detailed data also allow us to granularly observe actual instead of perceived customer input and to employ a range of control variables, such as creator preparedness and crowdfunding experience. ...
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Entrepreneurs increasingly use reward-based crowdfunding to finance innovation projects through a large number of customer investments. The existing academic literature has predominantly studied factors that drive crowd investments and whether crowdfunding predicts market success. However, we argue that the involvement of customers goes beyond the provision of capital. As investors, customers enter into a principal–agent relationship with entrepreneurs. Thus, entrepreneurs are often faced with a crowd of customer investors who try to influence product development. We show that entrepreneurs can benefit from this influence, because customer investors provide some of the support usually received from institutional investors. Greater involvement from customer investors thus increases funding success. This holds when we control for creator ability and project quality. The effect is driven by customers’ influence on product development and the reduction in agency costs for prospective customers. We also link the involvement of customer investors during crowdfunding to the crowdsourcing literature and show that its positive effect is augmented by the elicitation of external information through distant search.
... Numerosi studiosi hanno fatto affidamento ai brevetti come strumento volto a fornire informazioni dettagliate sulle fonti, sulla natura e sugli effetti delle attività innovative, considerandoli per lungo tempo una misura quantitativa dell'innovazione (Fontana et al., 2013). Solo alcuni autori hanno però focalizzato l'attenzione sui brevetti, considerandoli nelle sue reali caratteristiche, come strumento volto a proteggere le proprie idee innovative, dimostrando una propensione a brevettare piuttosto eterogenea tra le aziende di diverse dimensioni, settori di appartenenza e tipo di innovazione (Bugamelli et al., 2012;Arundel e Kabla, 1998). ...
Preprint
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Obiettivo del paper: Il paper intende comprendere l'influenza del ruolo della famiglia sul grado di propensione ad utilizzare il brevetto nelle sussidiarie estere di imprese familiari rispetto alla propensione a brevettare a livello nazionale. Il framework teorico è quello della socioemotional wealth (SEW). Metodologia: I dati si riferiscono ad un campione rappresentativo di 2.760 imprese sussidiarie estere di aziende italiane. Le stime sono state condotte servendosi di due modelli di regressione Probit e due modelli di regressione lineare multipla scelti in funzione della variabile dipendente. Risultati: La proprietà familiare inibisce l' attitudine a brevettare nelle sussidiarie estere; viceversa, il coinvolgimento di giovani successori nel business stimola l' azienda a brevettare le proprie innovazioni all' estero. Limiti della ricerca: il campione è composto da sole imprese sussidiarie estere a controllo italiano. Implicazioni pratiche: Emerge la necessità da parte delle imprese familiari di aprirsi verso nuovi soci finanziatori e coinvolgere le nuove generazioni. Per quanto concerne le politiche, opportuni incentivi andrebbero predisposti così da sviluppare una strategia brevettuale in grado di tutelare la proprietà industriale e favorire la valorizzazione economica dei brevetti nelle imprese familiari all' estero. Originalità del lavoro: In letteratura pochi sono gli articoli che analizzano la propensione a brevettare delle imprese familiari all'interno dei propri confini nazionali e, al meglio della nostra conoscenza, non sono noti studi che indagano in merito alla propensione a utilizzare brevetti nelle imprese sussidiarie rispetto alla casa madre. Parole chiave: impresa familiare; sussidiarie estere; proprietà; governance; ricambio generazionale; propensione a brevettare. Innovation in family firms: propensity to patent in foreign subsidiaries Purpose of the paper: The main objective is to understand, through the socioemotional wealth lens, whether innovative family firms tend to use patents as a tool for protecting intellectual property in foreign subsidiaries. Methodology: The sample is composed of 2.760 foreign subsidiaries of Italian multinational companies. We decided to adopt two Probit regression models and two multiple linear regression models chosen as a function of the dependent variable. Findings: The involvement of the family in the ownership is negatively associated with the propensity to patent in foreign subsidiaries. In contrast, the presence of
... 57-58). Patent applications offer a reasonably good measure of specifically commercially viable, more tangible innovation-especially that which is generated by/ in sectors and industries with higher propensities to patent (e.g., Mäkinen, 2007;Fontana, Nuvolari, Shimizu, & Vezzulli, 2013)-but, as noted by Capello and Lenzi (2014, p. 189), they do not reflect "innovative efforts that can be developed either in the form of process, marketing, and organizational innovations or in the form of product innovation not [necessarily] obtained via research and patenting activities." We are therefore only able to observe certain types of innovations and certain dimensions of a region's overall innovative capacity. ...
Article
Not all economically disadvantaged—“less developed” or “lagging”—regions are the same. They are, however, often bundled together for the purposes of innovation policy design and implementation. This paper attempts to determine whether such bundling is warranted by conducting a regional level investigation for Canada, the United States, on the one hand, and Europe, on the other, to (a) identify the structural and socioeconomic factors that drive patenting in the less developed regions of North America and Europe, respectively; and (b) explore how these factors differ between the two contexts. The empirical analysis, estimated using a mixed‐model approach, reveals that, while there are similarities between the drivers of innovation in North America's and Europe's lagging regions, a number of important differences between the two continents prevail. The analysis also indicates that the territorial processes of innovation in North America's and Europe's less developed regions are more similar to those of their more developed counterparts than to one another.
... The indicator also differs from patents, since not all innovations are patented, and not all patents result in innovations (for a discussion of patenting propensity, see e.g. Arundel & Kabla, 1998;Cohen, Nelson, & Walsh, 2000;Fontana, Nuvolari, Shimizu, & Vezzulli, 2013). ...
Article
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We examine trends in innovation output for two highly ranked innovative countries: Finland and Sweden (1970–2013). Our novel dataset, collected using the LBIO (literature-based innovation output) method, suggests that the innovation trends are positive for both countries, despite an extended downturn in the 1980s. The findings cast some doubt on the proposition that the current stagnation of many developed countries is due to a lack of innovation and investment opportunities. Our data show that Finland catches up to, and passes, Sweden in innovation output in the 1990s. In per capita terms, Finland stays ahead throughout the period. We find that the strong Finnish performance is largely driven by innovation increase in just a handfull of sectors, but is not restricted to few companies. Both countries saw a rise in innovation during the dot-com era and the structural changes that followed. Since 2000 however, Sweden has outperformed Finland in terms of total innovations, especially in machinery and ICT, while the Finnish rate of innovation has stabilised. We suggest that these patterns may be explained by different paths of industrial renewal.
... Regarding the competitive advantage of NTBFs, though patents are important, they are also a challenge for new firms. Patents are often used as an indicator of technological development (Hottenrott et al. 2016), although the propensity to register patents varies between sectors, firms, and countries (Taylor and Silberston 1973;Fontana et al. 2013). The development of patents can be used as a measure of firm output; however, for a large number of small firms undertaking R&D, the goal is the launch of new products and services (Löfsten and Lindelöf 2002). ...
Article
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This study examines the business networks and localization effects for new technology-based firms (NTBFs) in the context of innovation performance (the number of patents and product differentiation). In this regard, the study includes 28 variables. A survey was conducted in 2016 with 401 Swedish NTBFs that were small and young (the employment mean was 1.80 and the average age of each firm was 28.3 months). The biggest category of NTBFs was knowledge-intensive high-technology services, followed by medium high-technology manufacturing, and high-technology manufacturing. Hypotheses on how business networks and localization are related to innovation performance were tested using principal component analysis, correlation analysis, and regression analysis. The results show that the primary significant factor for innovation performance regarding business networks and localization dimensions are professional network services, while industrial and regional areas also have a positive relationship on product differentiation. Our study also shows that innovation performance enhances firms’ abilities to access external financing through professional network services (e.g., venture capital companies).
... However, not all innovations are patented and the propensity to patent an innovation remains an open question (Fontana et al., 2013). ...
Article
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What determines companies to file patents? To answer this question we present a systematic review, in which 22 empirical studies published in scientific periodicals were selected. Based on the descriptive analysis of these studies, a framework is proposed that brings together a set of explanatory variables that influence the propensity to patent in internal and external factors. The cumulative results of the reviewed articles suggest a positive correlation of firm size and R & D with the propensity to patent. A unanimous result among the articles is that the Industrial Sector in which the company is inserted has a significant influence on the propensity to patent. Regarding the variables Age, Collaboration Network and Competition, the results of the research were divergent, indicating a positive, negative or non-significant relationship. However, these determinants are still poorly understood due to the divergence of the research results.
... Firstly, because patents vary in terms of technological and economic value, only a few are remarkably valuable, while many are less valuable (Schankerman & Pakes, 1985). Secondly, various essential innovations are not patented (because of diverse reasons: the invention cannot be patentable or is not considered significant enough to be worth being patented, or the inventor chooses not to patent it) (Fontana et al., 2013). When it comes to the EU countries, the overall performance of the innovation system is measured through the Summary Innovation Index. ...
Article
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In today's globalised world, international migration represents one of the most important topics of the 21st century, with diverse effects on a country's economic, political, and social dimensions. Depending on how well government actors succeed to manage these flows, the positive effects can be further boosted, while the adverse effects can be diminished (for both receiving and sending countries). A great deal of attention must be paid to policy strategies that foster domestic investments and innovation, as they represent a meaningful engine of economic growth, influencing positively and significantly the income in the long run. This research aims to evaluate the influence of human capital (with a focus on foreign human resources), innovation activities and investments (finance and support) on per capita economic growth (proxied by GDP per capita), in the case of all the European Union countries. The timeframe is between 2014 and 2021. For the econometric analysis of the panel data, we used Fixed-Effects regression and System GMM approach (both short-run and long-run estimations). The econometric results emphasise the positive and statistically significant effects (both on short-run and long-run) of foreign PhD students, patent applications, resource productivity, employment in innovative enterprises and tertiary educated people on per capita economic growth. The coefficients of the independent variables were higher in the long run than in the short run. Therefore, in the long run, a one standard deviation improvement in variables: foreign PhD students and patent applications lead to a 0.014-fold, respectively 0.088-fold increase in the logarithm GDP per capita.
... However, the use of both data has been subject to various criticism: R&D expenditures are just one input among others that might be difficult to approach and measure (Freeman, 1987;van Raan, 1988;van Raan et al., 1989;Barr et al., 1994), and patents do not account for all innovations, but only for the ones that are sufficiently new and considered worthy to be patented. Furthermore, firms sometimes apply alternative methods to protect innovation that do not include patenting, as industrial secrecy (Fontana et al., 2013;Hall et al., 2013). These and other critical remarks led to the introduction of the third source of innovation measures from innovation surveys. ...
Thesis
This dissertation studies the contribution of universities to industrial innovation by focusing on the impact that university demand has on the innovative performance of firms.In the first chapter, we conduct an in-depth literature review of the main research streams studying universities’ influence on industrial firms through the procurement of instrumentation. [...] In the second chapter,we consider the scientific instruments suppliers' of the second largest French public university – the University of Strasbourg - and we investigate the impact of university demand on firms’ innovative performance. [...] In the second chapter,we consider the scientific instruments suppliers' of the second largest French public university – the University of Strasbourg - and we investigate the impact of university demand on firms’ innovative performance. [...] In the fourth chapter, we go beyond the excessive focus on quantitative relations which does not allow one to fully explore the complexity of inter-personal and inter-organisational relations underlying the processes explaining the observed empirical results in the above chapters.
... domestic patent application, as an alternative way of measuring R&D. Patents are widely used in the literature as a proxy for R&D and innovation (see, e.g.,Aghion et al., 2019;Awaworyi Churchill, 2017;Fontana et al., 2013;Van Roy et al., 2018). We employ data on patents fromMadsen et al. (2018), which we update using statistics from the World Intellectual Property ...
Article
We examine how R&D has contributed to income inequality in the Group of Seven countries from 1870 to 2016. Using newly developed panel data models that incorporate interactive fixed effects, we find that R&D is negatively associated with income inequality. Non‐parametric models that allow us to capture the time‐varying effect of R&D suggest that this average effect has been negative for most of this period. We find that economic growth and trade are important mechanisms through which R&D transmits to income inequality.
... Notwithstanding the common use of these R&D and patenting proxies, the following limitations are highlighted. First, according to Fontana et al. (2013), most innovations are not patented. Second, patents vary enormously in their importance and value, and therefore simple patent counts cannot indicate innovative output. ...
Article
Corporate innovation is an important driver of a firm’s value and long‐term growth. It is the outcome of the creation and/or recreation of new and existing knowledge as well as resources of a firm. Innovation adds values not only to the firm, but also to its suppliers and customers. Drawing on upper echelon theory, this paper examines the effect of the marital status of corporate executives on firms’ innovation efficiency, as measured by R&D productivity. To do so, we combine financial data on U.S. listed firms with data on CEOs’ identities, their compensations, and their firms’ R&D productivity. Our results show a strong connection between unmarried chief executive officers (CEOs) among Standard & Poor’s (S&P) 1500 companies and elevated levels of corporate innovation efficiency. The association continues to hold when we control for a set of CEO attributes and adopt alternative identification strategies such as propensity score matching and difference‐in‐difference analysis. Moreover, the observed positive impact is more pronounced when the CEOs have higher levels of discretion due to lower institutional shareholding and smaller firm size. Further evidence indicates that unmarried CEOs generate higher impact innovation and exhibit a greater tolerance for failure, which are the possible mechanisms that underpin the observed association between unmarried CEOs and superior innovation outcomes. Our findings have potential implications for understanding variations in innovation practices between firms and can help firms to identify executives who are more likely to generate innovation and drive growth via R&D. The latter will be particularly important during periods of firm expansion and downsizing.
... As such, trademarks are used at least as widely in service industries as they are elsewhere. Moreover, because companies selling physical products frequently do not patent (Fontana et al., 2013;Moser, 2012), trademark data can capture innovation missed in patent data. ...
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This paper employs goods and services descriptions from US trademarks to study spatial diffusion of innovations. Identifying novel, fast-spreading tokens (words) in trademark descriptions, we outline patterns of regional innovation and estimate how distance affects diffusion. Novel trademark tokens are frequently new to English, they capture many unpatented innovations, and their appearance in language co-evolves with their use in intellectual property filings. We analyse the introduction of novel tokens to capture the emergence of innovations and show that spatial distance affects their diffusion. Estimating the intensity of diffusion between locations in the United States, we confirm strong, negative effects of distance.
... Patents are commonly used in economic theory and economic history to estimate the level of innovation of a firm or a country (Cantwell 1995;Chang 2001;Fontana et al. 2013). The focus in this chapter is on patent applications for medtech innovations (International Patent Classification code A61B) made between 1960 and 2014 by individuals and organizations based in Japan. ...
Chapter
This chapter discusses the dynamics of the Japanese medtech industry since the 1960s, based on an analysis of patents, and mergers and acquisitions (M&A) databases. It demonstrates the stability of the structure of this industry despite the growth of the market since the 1970s and the increasing presence of imported foreign products since the 1990s. Few large multinational enterprises of the electronics industry (e.g., Hitachi, Panasonic, Toshiba) and specialized medical companies (e.g., Olympus, Shimadzu, Terumo) have maintained their domination over time. M&A is a strategy adopted since the mid-1990s to internalize new knowledge and to expand internationally. Another important feature of Japan’s medtech industry is the low presence of foreign companies. They access the Japanese market through export but rarely invest directly in research and production. This chapter argues that this restraint results from the specificities of the Japanese hospital market, which is based on a large number of small private hospitals. It makes it necessary to develop different equipment for the Japanese and foreign markets. General Electric is an exceptional case, having co-developed a CT (computed tomography) scanner with Yokogawa Electrics in the mid-1980s to answer a specific local demand. This knowledge enabled the US multinational to develop new markets afterwards.
... Indeed, we share the consideration that: "[…] a single replication cannot overturn prior evidence any more than a single empirical study can establish that we 'know' something with certainty"(Bettis et al. 2016: 260).3 We are aware that patents, as indicators of innovation, may have many shortcomings ranging from skewness of patenting activity towards big firms(Mansfield 1986), differences in the propensity to patent across industries(Fontana et al. 2013) and type of innovation(Arundel and Kabla 1998). These shortcomings notwithstanding, patents indicators are available across industries and over time. ...
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One of the most significant results of the empirical literature on innovation studies of the 1980s and 1990s was that innovation patterns were characterized by important inter-sectoral differences. This finding prompted a lively research agenda that: i) provided empirical characterizations of sectoral patterns of innovation by means of taxonomic exercises; ii) sought to interpret sectoral patterns of innovation as emerging properties of underlying selection and learning processes reflecting the structural properties of technical change at sectoral level (“technological regimes”). In this paper, we reconsider one of the landmark works on technological regimes (e.g., Breschi et al. 2000), reassess its findings, and perform a quasi-replication of their its exercise. Our conclusion is that the proposed distinction between Schumpeterian patterns of innovation (Mark I vs. Mark II) and their interpretation in terms of technological regimes has still the promise of yielding important insights concerning on the connection between inventive activities and industrial dynamics.
... However, these studies are based on quantitative data and do not discuss how MNEs organize and manage their extension into foreign countries. The accessibility of historical data concerning patents makes them an attractive source to discuss innovation, economic development and globalization (Cantwell, 1995;Chang, 2001;Fontana et al., 2013). Yet, few business historians go over the quantitative analysis and focus on the management of IPR from a global perspective, even though various strategies use this perspective. ...
Article
Purpose The purpose of this paper is to discuss how multinational enterprises have historically managed global patenting and to what extent the localization of patent management has supported the expansion of these enterprises. This study focuses on the electric appliance industry (one of the first industries to see the emergence of global companies) and consider the case of Siemens, a German multinational company, comparing it to General Electric (GE), an American company. Design/methodology/approach The work adopts a global business history approach. Taking GE’s global patent-management model, described by Nishimura (2004, 2009, 2016), as the benchmark, this study analyzed Siemens’ worldwide control of its intellectual property rights between 1890 and Second World War, using German, Japanese and American primary sources. Findings Patent management is a common means for firms to globalize and transfer technology internationally, but it can take various forms. While GE transferred patent management to its foreign subsidiaries (a process known as localization), Siemens kept worldwide patent management at its headquarters – except in Japan, where in time it transferred this activity to a joint venture. The transfer of production called for localization of patent management while focusing on exporting to other markets made it possible to keep patent management at headquarters. Originality/value Patents are usually a source for quantitative surveys. This paper uses them to discuss how multinational companies manage property rights globally. It is the first paper to address this issue by comparing two major actors in a similar industry.
... domestic patent application, as an alternative way of measuring R&D. Patents are widely used in the literature as a proxy for R&D and innovation (see, e.g.,Aghion et al., 2019;Awaworyi Churchill, 2017;Fontana et al., 2013;Van Roy et al., 2018). We employ data on patents fromMadsen et al. (2018), which we update using statistics from the World Intellectual Property ...
Article
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We examine how R&D has contributed to income inequality in the Group of Seven countries from 1870 to 2016. Using newly developed panel data models that incorporate interactive fixed effects, we find that R&D is negatively associated with income inequality. Non-parametric models that allow us to capture the time-varying effect of R&D suggest that this average effect has been negative for most of this period. We find that economic growth and trade are important mechanisms through which R&D transmits to income inequality.
Chapter
This chapter continues the general overview of the medtech industry, this time using a ranking of the top 100 largest firms in 2014, published by the professional publication Medical Design & Outsourcing. For each firm, the ranking includes data about gross sales, profit, R&D spending, and number of employees. The ranking is supplemented by several other sources detailing the historical development of these companies. It is thus possible to discuss what kinds of firms (large diversified multinationals, large specialized medtech firms, family firms, and start-ups) dominated the global medtech industry in 2014 and how they were able to build competitive advantages (through M&A, in-house R&D, diversification, spin-offs, etc.).
Conference Paper
Entrepreneurs increasingly use reward-based crowdfunding to finance innovation projects through a large number of customer investments. The existing academic literature has predominantly studied the process and the efficiency of these crowd investments. However, we argue that the involvement of customers goes beyond the provision of capital. As investors, customers enter a principal-agent relationship with project creators. As a result, project creators are often confronted with a crowd of customer investors who try to influence the development of product ideas. We show that project creators can actually benefit from this influence, as customer investors partly substitute for the support usually received from conventional investors. Greater involvement of customer investors thus increases the likelihood of funding success. This holds when we control for creator ability and project quality. However, the positive effect of involvement is lower for teams, because customers face lower agency costs when they invest in team projects. We also link the involvement of customer investors during crowdfunding to the crowdsourcing literature and show that its positive effect can be attributed to the elicitation of external information through distant search.
Chapter
China is today one of the most innovative countries in the medtech industry. This chapter discusses the role of new policies supporting the development of the industry after the “Lehman Shock” and the rapid development of university research. The analysis also addresses the nature of firms engaged in this process (private Chinese firms, state-owned companies, and foreign companies) and the competitive advantage of each.
Chapter
Japan is the second-largest nation in the global medtech industry, and its firms present several specificities in regard to other major nations. The most important feature is that large diversified electronics firms have dominated the Japanese medtech sector since the end of World War II. This chapter investigates the cases of Toshiba, Hitachi, and Olympus, analyzing the firms’ developmental processes in the medtech industry and drawing comparisons with General Electric (USA) and Siemens (Germany). Second, the chapter explores the competitive advantage of specialized medtech companies and investigates why the number of start-ups is extremely low in Japan. Finally, a discussion of the minimal presence of foreign firms—despite Japan’s position as the second-largest healthcare market in the world—closes the chapter.
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This chapter argues for the recognition of knowledge sharing as an integral part of the sharing economy, by taking India as a case study. It analyses the attitudes and practices pertaining to knowledge sharing in India through a mixed methods approach. The quantitative data discussed in the chapter include data from two empirical studies- one on sharing practices of researchers in India and their attitudes towards openness, and the other on perceptions of Indian consumers regarding film piracy and copyright protection. The quantitative findings have been contextualised in an analysis of historical exclusionary structures in India which created intellectual monopolies for privileged sections of the society on lines of gender and caste. The chapter challenges dominant narratives which suggest that knowledge sharing was a common practice in ancient India. Further, the chapter examines two prominent and recent Indian policies which have a bearing on shaping incentives for innovation and creativity in the sharing economy, but fail to take balanced and inclusive approaches. Through these analyses, the chapter seeks to establish the need for all stakeholders to recognise the need for equitable knowledge sharing and take appropriate steps to challenge and change the status quo.
Chapter
This chapter provides general data about the US medtech and investigates two main models of companies. First, there are the giants of the electronic industry, especially General Electric. A classical business history approach, based on company archives, shows how the firm built, maintained, and developed its competitive advantage in the medtech industry over time. Second, the chapter focuses on the formation and growth of a new breed: the medtech multinationals (Medtronic, Boston Instruments, Johnson & Johnson, Baxter, etc.). This model is unique to the American medtech industry, and the process of growth (through R&D, diversification, and domestic and global M&As) sheds light on the basis of their development.
Chapter
Knowledge is unequivocally one of the new sources of economic growth, though its use is not a new phenomenon from the economic perspective. The role of knowledge, along with its connection to innovation and economic performance, is a topic of interest for a growing number of researchers. Thus, many studies have been investigating not only the relationship between creating knowledge and innovation, but also the relationship between knowledge, creating innovation, and company performance—as well as economic growth. The collaboration plays in this process very important role. Participation in cooperation has thus become an important company tool, thanks to which the given participants are able to mutually support creation of knowledge, acquisition, transfer knowledge spillovers. The process of knowledge spillover is becoming increasingly important—primarily due to the potential it has for bringing value added to production processes. However, it is a process that is difficult to record and analyze; moreover, its results can be seen only over the long term. The goal of this theoretical overview chapter is to define spillover effects, describe their emergence and relationship to innovative activities, and subsequently depict their diverse influence as they operate in individual countries. The last section is devoted to the problem of measuring spillover effects, because it has not yet been possible to record and measure knowledge spillovers, and there is still the problem of which method to use when measuring them.
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This research investigates the effect of R&D internationalization and contingency variables on innovation performance. A number of prior studies addressing this question have concluded in diverse and inconsistent findings, which can be attributed only partly to sample selection and measurement discrepancies. Using a longitudinal dataset of global pharmaceutical firms, we partly solve this ambiguity in the R&D internationalization and innovation performance relationship. The results reveal an S-shaped relationship, suggesting the benefits of R&D internationalization ultimately overcome the costs after critical levels of R&D internationalization. This finding combines and unites prior findings of a U-shaped, followed by an inverse U-shaped curve. In addition, we find that the experience in conducting R&D internationally, but not the degree of general internationalization, moderates the relationship between degree of R&D internationalization and performance. This suggests that the effect is contingent on the knowledge of internationalization path of the firm but can flourish in the absence of overall internationalization as well. Implications for theory and practice are derived.
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Technological competition plays an important role in technological development and innovation. However, technological competition networks have long been ignored in research. Based on the social network theory, we proposed that the innovation of an organization is greatly affected by the technological competition networks that it is embedded in. We introduced International Patent Classifications (IPCs) information to construct technological competition networks of organizations, and explored how competition network characteristics influence the organizational competitive capability and innovation performance. Based on the wind energy patent data between 2005 and 2014, we synthetically investigated the technological development and competition networks in the industry. Our findings show that (1) the evolutionary trends of patents and technology elements growth exhibit similar patterns (i.e., increasing before 2011 and decreasing after 2011); (2) the burst detection algorithm detects that 140 technological elements and 132 organizations experienced a sudden growth in production; (3) wind energy organizations intensively compete with each other, and in each year, only 10% of organizations can improve their technological competitive positions in the following year; (4) competition density in a competition network increases the technological competitive capability and innovation performance of firms. Additionally, competition strength has an inverted-U shaped relationship with both the aforementioned outcomes.
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Although the relevant risks, threats and vulnerabilities of critical infrastructure and the methods for securing critical national infrastructure are similar in the EU, the single member states use individual approaches, institutions and initiatives with specific and national conations to handle this problem. Threat analysis for the Czech Republic was carried out on the basis of a task set by The Conception of Civil Protection. Common dependencies and vulnerabilities together with existing protection strategies were gathered. The working group set up the procedure and then in cooperation with the relevant sector specialists within principles, processes and instruments for its implementation provided step by step risk assessment of threat identification, analysis and evaluation comparing the related potential risks, theoretical understanding of phenomena, practical preventive and reactive measures, and required a national coordination and cooperation. The outcome of this is a survey of hazards types for which a type plan will be prepared.
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Purpose The development of innovations in all the research and development (R&D) fields is leading to a huge increase of patent data. Therefore, it is reasonable to foresee that, in the next future, Big Data-centered techniques will be compulsory to fully exploit the potential of this kind of data. In this context, network analysis-based approaches are extremely promising. The purpose of this paper is to provide a contribution to this setting. In fact, the authors propose a well-tailored centrality measure for evaluating patents and their citations. Design/methodology/approach The authors preliminarily introduce a suitable support directed network representing patents and their citations. After this, the authors present the centrality measures, namely, “Naive Patent Degree” and “Refined Patent Degree.’” Then, the authors show why they are well tailored to capture the specificities of the patent scenario and why classical centrality measure fails to fully reach this purpose. Findings The authors present three possible applications of the measures, namely: the computation of a patent “scope” allowing the evaluation of the width and the strength of the influence of a patent on a given R&D field; the computation of a patent lifecycle; and the detection of the so-called “power patents,” i.e., the most relevant patents, and the investigation of the importance, for a patent, to be cited by a power patent. Originality/value None of the approaches proposing the application of centrality measures to patent citation networks consider the main peculiarity of this scenario, i.e., that, if a patent pi cites a patent pj, then the value of pi decreases. So, differently from classical scientific paper citation scenario, in this one performing a citation has a cost for the citing entity. This fact is not considered by all the approaches conceived to investigate paper citations. Nevertheless, this feature represents the core of patent citation scenario. The approach has been explicitly conceived to capture this feature.
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The number of studies exploring the role of intra-organizational inventor networks in firm knowledge recombination and diffusion processes has surged in recent years. The typical approach of these studies–to construct intra-firm inventor networks based on archival patent grant data–suffers from a major issue: incomplete data. This incomplete data may have implications for network measures and regression estimates based on these measures. To shed light on these implications, this study explores the consequences of missing data for inventor network studies in the field of technology invention. We do so by comparing networks based on granted patent data–the incomplete data–with networks based on patent application data that also include failed patent applications–the more complete data. The findings from replications of two prior studies–one firm-level study and one inventor-level study–indicate that intra-firm network measures are systematically biased for both network-level and inventor-level measures and cause bias in regression estimates. We further find that these systematic measurement errors are also statistically significantly related to the outcomes in the studies, thereby implying omitted variable biases in the effect estimates in prior studies. These findings have implications for research on networks of scientific collaborations specifically, and networks based on incomplete archival data more generally.
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Patent Citation Analysis has been gaining considerable traction over the past few decades. In this paper, we collect extensive information on patents and citations and provide a perspective of citation network analysis of patents from a statistical viewpoint. We identify and analyze the most cited patents, the most innovative and the highly cited companies along with the structural properties of the network by providing in-depth descriptive analysis. Furthermore, we employ Exponential Random Graph Models (ERGMs) to analyze the citation networks. ERGMs enables understanding the social perspectives of a patent citation network which has not been studied earlier. We demonstrate that social properties such as homophily (the inclination to cite patents from the same country or in the same language) and transitivity (the inclination to cite references’ references) together with the technicalities of the patents ( e.g., language, categories), has a significant effect on citations. We also provide an in-depth analysis of citations for sectors in patents and how it is affected by the size of the same. Overall, our paper delves into European patents with the aim of providing new insights and serves as an account for fitting ERGMs on large networks and analyzing them. ERGMs help us model network mechanisms directly, instead of acting as a proxy for unspecified dependence and relationships among the observations.
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This paper examines how the number, quality, and depth of the relationships, between a corporate venture capital (CVC) unit and the traditional venture capital (VC) that it coinvests with, affect the corporate investor's innovation performance. We find that there is an inverted U-shaped relationship between the number and the quality of the CVC unit's partners and the corporate investor's innovation performance. The depth of the relationship weakens the diminishing benefits of coinvesting with many partners. Jointly, our findings illustrate the danger of the ‘more is always better’ principle in terms of VC centrality and provide in-depth insights for corporate investors to organize innovation.
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This article uses a quantitative analysis of patent applications to shed light on the dynamics of the global medtech industry between 1960 and 2014. It demonstrates the existence of three types of innovative companies that maintained their competitiveness over time: large multinationals in the electronics industry, large specialized medtech companies arising from mergers between startups; and traditional specialized SMEs. Moreover, the research illustrates the disappearance of nonspecialized manufacturing firms after the integration of electronics in the 1970s.
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Drawing on organizational learning theory, we investigate the technological performance implications of acquiring one's alliance partners. We do so using a sample of 252 firms in four high tech industries, who jointly announced 2,398 acquisitions and filed 125,440 new patent applications, in the period of our analysis. We argue a history of collaboration will allow the acquirer to more easily identify and absorb the target's knowledge, and show that the share of ‘alliance-to-acquisition transitions’, in the total set of the firm's acquisitions, increases the firm's inventive quantity. We also argue that a history of collaboration reduces the opportunity to encounter unknown and unexpected knowledge, which will affect both the type and quality of invention. We find support for the former, and show that the share of alliance-to-acquisition transitions increases the firms exploitative tendencies. In terms of the latter, we find a weak relationship between the share of transitions and overall patent quality, but find that the share of transitions does not affect the number of high quality breakthrough inventions. In so doing, we provide new insights, relevant to the acquisition literature, the literature on transitional governance, and the literature on organisational learning, and position alliance-to-acquisition transitions as a mechanism for altering the firm's technology production function.
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Host-country policies shape the incentives and opportunities of MNC subsidiaries to innovate. However, prior research largely ignores the agency of foreign MNC subsidiaries receiving government R&D subsidies from their host countries. Subsidiaries may increase R&D investments and innovation outputs as intended by governments or merely accept the additional funds while continuing R&D programs that they would have undertaken anyway. In this exploratory study, we investigate whether R&D subsidies trigger additional input, output, and behavioral innovation effects in foreign MNC subsidiaries. Based on longitudinal data from Germany, we find that foreign MNC subsidiaries increase their R&D investments more than comparable domestic firms in response to an R&D subsidy. Moreover, MNC subsidiaries experience comparatively stronger effects in innovation performance from subsidy-induced R&D. However, subsidies also shift attention away from the subsidiaries’ original R&D activities. We interpret our findings by integrating theory from subsidy additionality literature into models of MNC subsidiary innovation. Our findings have implications for both MNC subsidiaries and policymakers who seek to attract foreign R&D investment in a host country.
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La pandémie du coronavirus a pris de court quasiment tout le monde, les gouvernements et les acteurs de la vie économique et sociale. L’état de l’art dans les domaines médical et pharmaceutique, a peiné à trouver des réponses immédiates, montrant l’incapacité de la connaissance à répondre d’une manière rapide dans les pays avancés. Cependant l’insertion dans l’économie de la connaissance semble avoir atténué ces effets. Si cela a également joué mais à moindre degré, force est de constater que les effets dans les pays du Sud ont été inattendus. Cette crise a impulsé de nouvelles dynamiques et révélé des capacités d’innovation insoupçonnées, des capacités dormantes dans quasiment tous les domaines dans les pays maghrébins et permettant à certains pays comme l’Inde de faire d’importants leapfroggings. Cet article analysera comment l’ économie de la connaissance a permis de construire des réponses rapides à la crise d’une part et comment ces effets sont différenciés dans le Nord et dans le Sud de l’autre.
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We examine how firms react to their competitors’ highly publicized technology breakthroughs measured by the renowned R&D 100 Award. These awards have been granted to top 100 technological inventions every year since 1965 and have come to be known as the “Oscar of Invention” (e.g., Verhoeven et al., 2016). We find that a firm's propensity to acquire another firm significantly increases after its competitors win these awards. A causal interpretation of our finding is supported by instrumental variable analysis, coarsened exact matched samples, and differential effects of award winners vs. finalists. Such award-driven acquisitiveness is more pronounced among firms with more confident CEOs or in industries with a shorter technology lifecycle and a higher R&D intensity. Moreover, the acquirers with rivals winning awards pursue innovative targets whose products overlap with those rivals, confirming these acquirers’ catch-up purpose.
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During the Industrial Revolution technological progress and innovation became the main drivers of economic growth. But why was Britain the technological leader? We argue that one hitherto little recognized British advantage was the supply of highly skilled, mechanically able craftsmen who were able to adapt, implement, improve, and tweak new technologies and who provided the micro inventions necessary to make macro inventions highly productive and remunerative. Using a sample of 759 of these mechanics and engineers, we study the incentives and institutions that facilitated the high rate of inventive activity during the Industrial Revolution. First, apprenticeship was the dominant form of skill formation. Formal education played only a minor role. Second, many skilled workmen relied on secrecy and first-mover advantages to reap the benefits of their innovations. Over 40 percent of the sample here never took out a patent. Third, skilled workmen in Britain often published their work and engaged in debates over contemporary technological and social questions. In short, they were affected by the Enlightenment culture. Finally, patterns differ for the textile sector; therefore, any inferences from textiles about the whole economy are likely to be misleading.Institutional subscribers to the NBER working paper series, and residents of developing countries may download this paper without additional charge at www.nber.org.
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‘Intellectual property’ - patents and copyrights - have become controversial. We witness teenagers being sued for ‘pirating’ music - and we observe AIDS patients in Africa dying due to lack of ability to pay for drugs that are high priced to satisfy patent holders. Are patents and copyrights essential to thriving creation and innovation - do we need them so that we all may enjoy fine music and good health? Across time and space the resounding answer is: No. So-called intellectual property is in fact an ‘intellectual monopoly’ that hinders rather than helps the competitive free market regime that has delivered wealth and innovation to our doorsteps. This book has broad coverage of both copyrights and patents and is designed for a general audience, focusing on simple examples. The authors conclude that the only sensible policy to follow is to eliminate the patents and copyright systems as they currently exist.
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This paper looks more closely at the sources of patent growth in the United States since 1984. It confirms that the increase is largely due to U.S. patenters, with an earlier surge in Asia, and some increase in Europe. Growth has taken place in all technologies, but not in all industries, being concentrated in the electrical, electronics, computing, and scientific instruments industries. It then examines whether these patents are valued by the market. We know from survey evidence that patents in these industries are not usually considered important for appropriability, but are sometimes considered necessary to secure financing for entering the industry. I compare the market value of patents held by entrant firms to those held by incumbents (controlling for R&D). Using data on publicly traded firms 1980–1989, I find that in industries based on electrical and mechanical technologies the market value of entrants’ patents is positive in the post-1984 period (after the patenting surge), but not before, when patents were relatively unimportant in these industries. Also, the value of patent rights in complex product industries (where each product relies on many patents held by a number of other firms) is much higher for entrants than incumbents in the post-1984 period. For discrete product industries (where each product relies on only a few patents, and where the importance of patents for appropriability has traditionally been higher), there is no difference between incumbents and entrants.
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Exxon Mobil and ConocoPhillips stock price has been predicted using the difference between core and headline CPI in the United States. Linear trends in the CPI difference allow accurate prediction of the prices at a five to ten-year horizon.
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This paper reviews and analyses several issues in the measurement and interpretation of patent value indicators over a large database. Each of the five most classical indicators proposed in the literature (family sizes, renewals, grant decision outcomes, forward citations, and oppositions) witnesses the well-known properties of patent value: a severe skewness and significant country and technology variations. Nonetheless, a high degree of orthogonality appears between them as well as opposite trends in their evolution, suggesting that they actually capture different dimensions of a patent’s value and therefore do not always pinpoint the same patents as being the most valuable. To maximize the chances of capturing all potentially valuable patents in a large database, a composite index is proposed, which reflects the intensity of the patent value signal provided by all five constituting indicators. Its declining trend reflects a rarefaction of this signal on average, leading to different plausible int erpretations.
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In the 1990s, patenting schemes changed in many respects: Upcoming new technologies accelerated the shift from price competition towards competition based on technical inventions, a worldwide surge in patenting took place, and the 'patent thicket' arose as a consequence of strategic patenting. This study analyzes the importance of patenting versus secrecy as an effective alternative to protect intellectual property (IP) in the inventions' market phase. The sales figure with new products is introduced as a new measure of the importance of IP protection tools among product innovating firms. Focusing on German manufacturing in 2000, it turns out that patents are an effective means to protect IP in the market, whereas secrecy seems to be rather important for inventions that are not yet commercialized.
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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 US semiconductor firms during 1979-95. The results suggest that the 1980s strengthening of US patent rights spawned "patent portfolio races" among capital-intensive firms, but also facilitated entry by specialized design firms.
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Estimation of a varying parameter model reveals that the trend of patents issued in England accelerated markedly in 1757. Similar results are obtained when patents are weighted by the number of production processes in which the patented invention may be used. There is no evidence that the rules or regulations regarding patents changed around 1757, and investigation of the propensity to patent in individual industries, and of the industrial distribution of patents, does not reveal a systematic change in the propensity to patent. Therefore, an acceleration in patentable invention must have caused the acceleration in patenting. The increase of the growth rate of patenting preceded an increase of the growth rate of total factor productivity, suggesting a causal relationship. Additionally, the fluctuation of patents around trend is much smaller after 1757, which reflects a widely based increase in patentable invention. Finally, the 1762 to 1851 period was characterized by an increased growth rate of patents and invention per person; England had entered her “Age of Invention.”
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This paper analyzes the relationship between 1974 R&D expenditures and invention patenting by 4,274 narrowly-defined lines of business in 443 U.S. industrial corporations. The probability of non-zero patenting rose systematically with company-financed R&D outlays, as did the number of patents received. Within industries, patents tended most frequently to rise in proportion to R&D; among the exceptions, the tendency was toward diminishing returns. Variables measuring overseas sales, federal R&D support, diversification, scope of invention use, and invention type had only modest explanatory power. There was no significant evidence of disproportionate patent accumulation in the more highly concentrated industries.
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This paper starts out by reviewing the literature that in different ways utilizes patent data as a source of information in measuring technological change. The main focus, however, is an assessment of patent statistics used as a technology indicator. This is done by investigating the relationship between patenting and the innovation process. The analysis reveals many, and well-known, problems. The second part of the paper therefore reviews the research directed at improving the quality of the patent statistics as a technology indicator. This has been done in a number of ways depending on the focus of the analysis. In general we may conclude that it seems necessary to utilize the data at the lowest possible level of aggregation to overcome the problems of validity.
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Growth during the 1980s and 1990s in patenting and licensing by American universities is frequently asserted to be a direct consequence of the Bayh–Dole Act of 1980. However, there has been little empirical analysis of the effects of this legislation. This paper uses previously unexploited data to consider the effects of Bayh–Dole at three leading universities: the University of California, Stanford University, and Columbia University. Two of these universities (California and Stanford) were active in patenting and licensing before Bayh–Dole, and one (Columbia) became active only after its passage. The evidence suggests that Bayh–Dole was only one of several important factors behind the rise of university patenting and licensing activity. Bayh–Dole also appears to have had little effect on the content of academic research at these universities. A comparison of these three universities reveals remarkable similarities in their patent and licensing portfolios 10 years after the passage of the Bayh–Dole Act. The concluding section raises several questions about the effects of Bayh–Dole and related policy shifts that are not addressed by this analysis but that deserve attention in future research.
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This paper focuses on the analysis of size distributions of innovations, which are known to be highly skewed. We use patent citations as one indicator of innovation significance, constructing two large datasets from the European and US Patent Offices at a high level of aggregation, and the Trajtenberg [1990, A penny for your quotes: patent citations and the value of innovations. Rand Journal of Economics 21(1), 172–187] dataset on CT scanners at a very low one. We also study self-assessed reports of patented innovation values using two very recent patent valuation datasets from the Netherlands and the UK, as well as a small dataset of patent licence revenues of Harvard University. Statistical methods are applied to analyse the properties of the empirical size distributions, where we put special emphasis on testing for the existence of ‘heavy tails’, i.e., whether or not the probability of very large innovations declines more slowly than exponentially. While overall the distributions appear to resemble a lognormal, we argue that the tails are indeed fat. We invoke some recent results from extreme value statistics and apply the Hill [1975. A simple general approach to inference about the tails of a distribution. The Annals of Statistics 3, 1163–1174] estimator with data-driven cut-offs to determine the tail index for the right tails of all datasets except the NL and UK patent valuations. On these latter datasets we use a maximum likelihood estimator for grouped data to estimate the tail index for varying definitions of the right tail. We find significantly and consistently lower tail estimates for the returns data than the citation data (around 0.6–1 vs. 3–5). The EPO and US patent citation tail indices are roughly constant over time, but the latter estimates are significantly lower than the former. The heaviness of the tails, particularly as measured by value indicators, we argue, has significant implications for technology policy and growth theory, since the second and possibly even the first moments of these distributions may not exist.
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Changes in patent law, global competition, and the rise of several new technologies suggest that patents could be of greater value than secrecy for many innovative firms, particularly small firms that are unable to use market power or other factors to appropriate their investments in innovation. Data from the 1993 European Community Innovation Survey (CIS) for up to 2849 R&D-performing firms is analysed to determine the relative importance of secrecy vs. patents. This particular combination of appropriation methods is interesting because secrecy can act as a mutually-exclusive alternative to patents. The results show that a higher percentage of firms in all size classes rate secrecy as more valuable than patents. However, ordered logit regressions show that the probability that a firm rates secrecy as more valuable than patents declines with an increase in firm size for product innovations, while there is no relationship for process innovations. The firm's R&D intensity has no effect on the relative value of secrecy vs. patents. There is weak evidence to show that participation in cooperative R&D increases the value of patents over secrecy for product innovations. The results are relevant to ongoing debates over changes to the patent system and the need for policies to encourage small firms to patent more.
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We investigate the cause of an unprecedented surge of US patenting over the past decade. Conventional wisdom points to the establishment of the Court of Appeals of the Federal Circuit by Congress in 1982. We examine whether this institutional change, which has benefited patent holders, explains the burst in US patenting. Using both international and domestic data on patent applications and awards, we conclude that the evidence is not favorable to the conventional view. Instead, it appears that the jump in patenting reflects an increase in US innovation spurred by changes in the management of research.
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A 1993 survey on the innovative activities of Europe's largest industrial firms obtained useable results on patenting activities for 604 respondents. The data are used to calculate the sales-weighted propensity rates for 19 industries. The propensity rates equal the percentage of innovations for which a patent application is made. The propensity rates for product innovations average 35.9%, varying between 8.1% in textiles and 79.2% in pharmaceuticals. The average for process innovations is 24.8%, varying from 8.1% in textiles to 46.8% for precision instruments. Only four sectors have patent propensity rates, for both product and process innovations combined, that exceed 50%: pharmaceuticals, chemicals, machinery, and precision instruments. Regression results that control for the effect of industry sector show that patent propensity rates increase with firm size and are higher among firms that find patents to be an important method for preventing competitors from copying both product and process innovations. The effect of secrecy is not so straightforward. Firms that find secrecy to be an important protection method for product innovations are less likely to patent, as expected, but secrecy has little effect on the propensity to patent process innovations. The R&D intensity of the firm has no effect on patent propensity rates for both product and process innovations. The sector of activity has a strong influence on product patent propensities but very little effect on process patent propensities, after controlling for the effect of other factors.
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The growth in inventive activity during early American industrialization is explored by examining the careers of 160 inventors credited with important technological discoveries. Analysis of biographical information and complete patent histories through 1865 indicates that these were entrepreneurial and responded systematically to market demand. Their inventions were procyclical and originated disproportionately from localities linked with extensive markets. Although unexceptional in terms of schooling or technical skills, they vigorously pursued the returns to their inventions, redirected their inventive activity to meet emerging needs, and were distinguished by high geographical mobility toward districts conducive to invention and its commercialization.
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The purpose of this study was to determine whether the average number of citations received by issued U.S. patents from subsequently issued U.S. patents is higher for patents associated with important technological advances than for a group of randomly selected patents. Analysis of examiners' citations to 100 selected patents showed that these selected patents, which underlay technically important products, were more than twice as frequently cited (significance level of 0.0001) as a randomly selected set of 102 control patents. This finding provides strong evidence for the hypothesis that patent citation data can be used in technological indicators development, and in technological policy analysis, since it implies that the location and analysis of groups of highly cited patents can provide a valid indicator of patent areas of technical importance.
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This article seeks to reconnect to scholarship from the 1970s and 1980s that emphasized significant discontinuities in the development of the US economy. Drawing on a unique data set of prize-winning innovations between 1971 and 2006, we document three key changes in the US economy. The first is an expanding role of inter-organizational collaborations in producing award-winning innovations. The second is the diminishing role of the largest corporations as sources of innovation. The third is the expanded role of public institutions and public funding in the innovation process. This leads us to the surprising conclusion that the USA increasingly resembles a Developmental Network State in which government initiatives are critical in overcoming network failures and in providing critical funding for the innovation process.
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This paper reviews the economic literature on the role of fees in patent systems. Two main research questions are usually addressed: the impact of patent fees on the behavior of applicants and the question of optimal fees. Studies in the former group confirm that a range of fees affect the behavior of applicants and suggest that a patent is an inelastic good. Studies in the latter group provide grounds for both low and high application (or pre-grant) fees and renewal (or post-grant) fees, depending on the structural context and on the policy objectives. The paper also presents new stylized facts on patent fees of thirty patent offices worldwide. It is shown that application fees are generally lower than renewal fees, and renewal fees increase more than proportionally with patent age (to the notable exception of Switzerland and the U.S.).
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This paper examines the recent decentralization of governance in Indonesia and its impact on local infrastructure provision. The decentralization of decisionmaking power to local jurisdictions in Indonesia may have improved the matching of public infrastructures provision with local preferences. However, decentralization has made local public infrastructures depend on local resources. Due to differences in initial endowments, this may result in the divergence of local public infrastructures in rich and poor jurisdictions. Using data from village-level panel surveys conducted in 1996, 2000, and 2006, this paper finds that (1) local public infrastructures depend on local resources, (2) decentralization has improved the availability of local public infrastructures, (3) local jurisdictions are converging to a similar level of local public infrastructure, and (4) to some extent, decentralized public infrastructures' provision reflects local preferences.
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Patent laws are designed to create the optimal incentives for innovation, but we know little about how exactly this works. The need to better understand the effects of patent laws is particularly urgent today, as industrialized countries lobby to introduce and strengthen patent laws in developing countries around the world. Although it is difficult to predict the results of such changes, historical data from the mid-nineteenth century may hold important lessons for patent policies today. The nineteenth century is an ideal period to study the effects of patent laws: Mid-nineteenth-century patent laws were adopted in a relatively ad-hoc manner, depending on legal traditions rather than economic considerations. Large differences in patent systems existed across countries, and patentees depended on domestic patent laws because patenting abroad was prohibitively expensive and almost all countries discriminated heavily against foreign patentees. As a result, domestic patent laws played a more important role in creating incentives for domestic invention than at any later stage in history.
Article
When companies decide to engage in technology transfer through exclusive licensing to other firms, they have two basic options: to use standard licensing contracts or to set-up more elaborate partnership-embedded licensing agreements. We find that broader partnership-embedded licensing agreements are preferred with higher levels of technological sophistication of industries, with greater perceived effectiveness of secrecy as a means of appropriability, and when licensors are smaller than their licensees. Innovative differential between companies, innovative supremacy of the licensor and market and technological overlap between partners appear to have no effect on the preference for a particular form of licensing. Copyright 2009 , Oxford University Press.
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Exxon Mobil and ConocoPhillips stock price has been predicted using the difference between core and headline CPI in the United States. Linear trends in the CPI difference allow accurate prediction of the prices at a five to ten-year horizon.
Protecting their intellectual assets: appropriability conditions and why US manufacturing firms patent (or not) In: NBER working paper no. 7552. De Rasenfosse, G., 2010. How much do we know about firms' propensity to patent and should we worry about it
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Cohen, W.M., Nelson, R.R., Walsh, J.P., 2000. Protecting their intellectual assets: appropriability conditions and why US manufacturing firms patent (or not). In: NBER working paper no. 7552. De Rasenfosse, G., 2010. How much do we know about firms' propensity to patent and should we worry about it? In: Paper presented at the 2010 Druid Summer Conference.
The Economics and Management of Intellectual Property: Towards Intellectual Capitalism Patents statistics as economic indicators. A survey
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Granstrand, O., 1999. The Economics and Management of Intellectual Property: Towards Intellectual Capitalism. Edward Elgar, Aldershot. Griliches, Z., 1990. Patents statistics as economic indicators. A survey. Journal of Economic Literature 28, 1661–1707.