Knowledge spillovers in US patents: A dynamic patent intensity model with secret common innovation factors

Abstract

During the past two decades, innovations protected by patents have played a key role in business strategies. This fact enhanced studies of the determinants of patents and the impact of patents on innovation and competitive advantage. Sustaining competitive advantages is as important as creating them. Patents help sustaining competivite advantages by increasing the production cost of competitors, by signaling a better quality of products and by serving as barriers to entry. If patents are rewards for innovation, more R&D should be reflected in more patents applications but this is not the end of the story. There is empirical evidence showing that patents through time are becoming easier to get and more valuable to the firm due to increasing damage awards from infringers. These facts question the constant and static nature of the relationship between R&D and patents. Furthermore, innovation creates important knowledge spillovers due to its imperfect appropriability. Our paper investigates these dynamic effects using U.S. patent data from 1979 to 2000 with alternative model specifications for patent counts. We introduce a general dynamic count panel data model with dynamic observable and unobservable spillovers, which encompasses previous models, is able to control for the endogeneity of R&D and therefore can be consistently estimated by maximum likelihood. Apart from allowing for firm specific fixed and random effects, we introduce a common unobserved component, or secret stock of knowledge, that affects differently the propensity to patent of each firm across sectors due to their different absorptive capacity.JEL classification: C15; C31; C32; C33; C41

The Effect of the Sarbanes-Oxley Act on Innovation

“…The response in patents may be delayed by lags between investment and patenting. The patents literature has generally found a economically and statistically strong contemporaneous effect (Blazsek and Escribano, 2010;Gurmu and Perez-Sebastian, 2008;Hall et al, 1986;Montalvo, 1997); an exception is Blundell et al (2002) who find a slower effect under additional modelling assumptions.…”

The reward and contract theories of patents in a model of endogenous growth

“…As we will see, this implies that the expected licensing revenue from owning a patent does not 8 Empirical analyses of patent citations provide direct empirical support for the presence of such inter-industry patent overlap. Fung (2005) and Blazsek and Escribano (2010) document that newly granted patents routinely include citations of existing patents across different industries, and such inter-industry citations often comprise the majority of a patent's total citations. In addition, Niwa (2016Niwa ( , 2018 analyze licensing agreements across industries in the context of horizontal innovation in a variety expansion model of growth.…”

Research on the Influencing Factors of Green Process Innovation Path of Manufacturing Based on Niche Ecostate-Ecorole

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