Citations or dollars? Early signals of a firm's research success

Abstract

Scientific and technological progress is largely driven by firms in many domains, including artificial intelligence and vaccine development. However, we do not know yet whether the success of firms’ research activities exhibits dynamic regularities and some degree of predictability. By inspecting the research lifecycles of 7,440 publicly listed firms, we find that the economic value of a firm’s early patents is an accurate predictor of various dimensions of a firm’s future research success. At the same time, a smaller set of future top-performers do not generate early patents of high economic value, but they are detectable via the technological value of their early patents. Importantly, the observed predictability cannot be explained by a cumulative advantage mechanism, and the observed heterogeneity of the firms’ temporal success patterns markedly differs from patterns previously observed for individuals’ research careers. Our results uncover the dynamical regularities of the research success of firms, and they could inform managerial strategies as well as policies to promote corporate development and accelerate human progress.