Chapter 18 Empirical studies of innovation and market structure

Cohen, Wesley M.; Levin, Richard C.

doi:10.1016/s1573-448x(89)02006-6

Cited by 933 publications

(741 citation statements)

References 136 publications

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“…In particular, not all firms patent their inventions because some inventions do not meet the patentability criteria, and others are not patented for strategic reasons. Moreover, firms differ in their patenting propensity, and the degree to which these factors are problematic varies substantially across industries (e.g., Levin, Klevorick, Nelson, Winter, Gilbert, and Griliches, 1987;Cohen and Levin, 1989;Griliches, 1990). We believe that limiting our study to specific industries in which patents are a meaningful indicator of technological activities reduces such concerns because other factors that may affect patent propensity are relatively stable within such a context (Cohen and Levin, 1989;Griliches, 1990).…”

Section: Dependent Variablesmentioning

confidence: 99%

“…Moreover, firms differ in their patenting propensity, and the degree to which these factors are problematic varies substantially across industries (e.g., Levin, Klevorick, Nelson, Winter, Gilbert, and Griliches, 1987;Cohen and Levin, 1989;Griliches, 1990). We believe that limiting our study to specific industries in which patents are a meaningful indicator of technological activities reduces such concerns because other factors that may affect patent propensity are relatively stable within such a context (Cohen and Levin, 1989;Griliches, 1990). Because firms may differ in their patenting propensity for unobserved reasons even in R&D-intensive industries, we treated this problem as one of unobserved heterogeneity across industries and firms, and control for such variations in our statistical analysis.…”

Section: Dependent Variablesmentioning

confidence: 99%

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The bright side of financial derivatives: Options trading and firm innovation

Blanco

Wehrheim

2017

Journal of Financial Economics

118

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Do financial derivatives enhance or impede innovation? We aim to answer this question by examining the relationship between equity options markets and standard measures of firm innovation. Our baseline results show that firms with more options trading activity generate more patents and patent citations per dollar of R&D invested. We then investigate how more active options markets affect firms' innovation strategy. Our results suggest that firms with greater trading activity pursue a more creative, diverse and risky innovation strategy. We discuss potential underlying mechanisms and show that options appear to mitigate managerial career concerns that would induce managers to take actions that boost short-term performance measures. Finally, using several econometric specifications that try to account for the potential endogeneity of options trading, we argue that the positive effect of options trading on firm innovation is causal.

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Section: Dependent Variablesmentioning

confidence: 99%

Section: Dependent Variablesmentioning

confidence: 99%

The bright side of financial derivatives: Options trading and firm innovation

Blanco

Wehrheim

2017

Journal of Financial Economics

118

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“…Other studies from Cohen and Levin (1989) and Kamien and Schwartz (1982) also show that small firms can keep up with large firms in the field of innovation. They spend relatively more on R&D and are more efficient in using this R&D for innovative output.…”

Section: Introductionmentioning

confidence: 84%

“…See for example Gilbert and Newberry (1982) or Harris and Vickers (1985). 4 As αi is smaller than 1 there is a chance that no firm will win the patent contest.…”

Section: Modelmentioning

confidence: 99%

Acquisitions in a Patent Contest Model with Large and Small Firms

Kleer

2009

J Ind Compet Trade

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Big companies and small innovation factories possess different advantages in a patent contest. While large firms typically have better access to product markets, small firms often have a superior R&D efficiency. These distinct advantages immediately lead to the question of cooperations between firms. In this paper, we model a patent contest with heterogeneous firms. In a pre-contest acquisition game large firms bid sequentially for small firms to combine respective advantages. Sequential bidding allows the first large firms to bid strategically to induce a reaction of its competitor. For high efficiencies both large firms prefer to acquire immediately leading to a symmetric market structure. For low efficiencies strategic waiting of the first large firm leads to an asymmetric market structure even though the initial situation is symmetric. Furthermore, acquisitions increase the chances for a successful innovation.

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“…A set of industry-specific characteristics defines such a technological environment, providing opportunities and constraints for firms that seek to undertake innovative activities. These industry-specific features refer in particular to the following main characteristics (Cohen and Levin, 1989;Malerba and Orsenigo, 1995;Lee and Lim, 2001). 3 Cumulativeness conditions.…”

Section: Theoretical Model and Main Hypothesesmentioning

confidence: 99%

Technological regimes, Schumpeterian patterns of innovation and firm-level productivity growth

Castellacci

Zheng

2010

Industrial and Corporate Change

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The paper investigates the relationships between technological regimes and firm-level productivity performance, and it explores how such a relationship differs in different Schumpeterian patterns of innovation. The analysis makes use of a rich dataset containing data on innovation and other economic characteristics of a large representative sample of Norwegian firms in manufacturing and service industries for the period 1998-2004. First, we decompose TFP growth into technical progress and efficiency changes by means of data envelopment analysis. We then estimate an empirical model that relates these two productivity components to the characteristics of technological regimes and a set of other firm-specific factors. The results indicate that: (1) TFP growth has mainly been achieved through technical progress, while technical efficiency has on average decreased; (2) the characteristics of technological regimes are important determinants of firm-level productivity growth, but their impacts on technical progress are different from the effects on efficiency change; (3) the estimated model works differently in the two Schumpeterian regimes. Technical progress has been more dynamic in Schumpeter Mark II industries, while efficiency change has been more important in Schumpeter Mark I markets.

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Chapter 18 Empirical studies of innovation and market structure

Cited by 933 publications

References 136 publications

The bright side of financial derivatives: Options trading and firm innovation

The bright side of financial derivatives: Options trading and firm innovation

Acquisitions in a Patent Contest Model with Large and Small Firms

Technological regimes, Schumpeterian patterns of innovation and firm-level productivity growth

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