Selection Bias in Innovation Studies: A Simple Test

Abstract

Die Dis cus si on Pape rs die nen einer mög lichst schnel len Ver brei tung von neue ren For schungs arbei ten des ZEW. Die Bei trä ge lie gen in allei ni ger Ver ant wor tung der Auto ren und stel len nicht not wen di ger wei se die Mei nung des ZEW dar.Dis cus si on Papers are inten ded to make results of ZEW research prompt ly avai la ble to other eco no mists in order to encou ra ge dis cus si on and sug gesti ons for revi si ons. The aut hors are sole ly respon si ble for the con tents which do not neces sa ri ly repre sent the opi ni on of the ZEW.Download this ZEW Discussion Paper from our ftp server:http://ftp.zew.de/pub/zew-docs/dp/dp12012.pdf Non-technical SummaryThe study of the innovative output of firms often relies on a count of patents filed at one single patent office, although companies have the option to file patents at multiple offices such as their national patent office, the European Patent office (EPO), the World Intellectual Property Office, the US Patent and Trademark Office, or in any other jurisdiction. In Europe, the office of reference used is often the EPO. Yet, not all firms file their patents at the EPO, raising the specter of a selection bias.Motivated by the tension between the popularity of the single office count and the threat of a selection bias, the objective of this paper is twofold. First, we study whether the single-office count biases econometric estimates of innovation production functions.Innovation production functions, which relate a firm's inventive input to its output, are a key object of analysis in the innovation literature. Second, we propose a simple way to test the existence of bias when the econometrician observes patents at only one patent office.The analysis is performed on a panel of Belgian patenting firms. Three databases are We show that the single-office count results in a selection bias that affects econometric estimates of innovation production functions. In addition, we demonstrate the usefulness of our test to evaluate whether estimates that rely on the single-office count are affected by a selection bias. The test, which uses information that is readily available to most researchers, successfully spots variables that are subject to a selection bias. It should be of interest to a wide audience given its ease of use and the popularity of the single-office count among innovation scholars. Das Wichtigste in Kürze December 2011 AbstractThe study of the innovative output of firms often relies on a count of patents filed at one single office of reference such as the European Patent Office (EPO). Yet, not all firms file their patents at the EPO, raising the specter of a selection bias. Using a novel dataset of the whole population of patents by Belgian firms, we show that the singleoffice count results in a selection bias that affects econometric estimates of innovation production functions. We propose a methodology to evaluate whether estimates that rely on the singleoffice count are affected by a selection bias. JEL Codes: O31, C18, C52, C81

The geography of duplicated inventions: evidence from patent citations

“…When Time elapsed is set at its 90th percentile value, the predicted probability within the same NUTS3 region is 20%, while it increases to 28% across different NUTS2 regions and to 35% across different countries (an increase of 40% and 75%, respectively). for this test is that country-specific characteristics or countries being covered differently in EPO patent data might drive in part the results (De Rassenfosse et al, 2014). The results on time and geographic distance variables hold for all main countries in our sample (France, Germany, Italy, Japan, the USA) and other countries considered together; while those on the awareness variables are relatively less robust.…”