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Examining Biases in Measures of Firm Innovation

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Author Info

  • Paul H. Jensen

    (Melbourne Institute of Applied Economic and Social Research, The University of Melbourne)

  • Elizabeth Webster

    ()
    (Melbourne Institute of Applied Economic and Social Research, The University of Melbourne)

Abstract

A challenge for applied studies of innovation is to find quality-adjusted and unbiased measures for the extent and type of innovative activity in firms. This paper considers, in the light of the uses for these measures, how well we expect these common indicators quantify innovative services and how well they actually correlate using data from a sample of 641 companies. The results suggest that while the correlations between indicators are positive, they are quite small. In addition, our findings show that compared with survey measures, the accounting and administrative measures have different biases with respect to firm size, industry sector and innovation type. This should be born in mind when using these measures to depict trends in innovative activity and reveal relationships between firm activities.

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Bibliographic Info

Paper provided by Melbourne Institute of Applied Economic and Social Research, The University of Melbourne in its series Melbourne Institute Working Paper Series with number wp2004n10.

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Length: 37 pages
Date of creation: May 2004
Date of revision:
Handle: RePEc:iae:iaewps:wp2004n10

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Postal: Melbourne Institute of Applied Economic and Social Research, The University of Melbourne, Victoria 3010 Australia
Phone: +61 3 8344 2100
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References

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  8. Lanjouw, Jean O & Pakes, Ariel & Putnam, Jonathan, 1998. "How to Count Patents and Value Intellectual Property: The Uses of Patent Renewal and Application Data," Journal of Industrial Economics, Wiley Blackwell, vol. 46(4), pages 405-32, December.
  9. Blundell, Richard & Griffith, Rachel & van Reenen, John, 1999. "Market Share, Market Value and Innovation in a Panel of British Manufacturing Firms," Review of Economic Studies, Wiley Blackwell, vol. 66(3), pages 529-54, July.
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  14. Richard C. Levin & Alvin K. Klevorick & Richard R. Nelson & Sidney G. Winter, 1988. "Appropriating the Returns from Industrial R&D," Cowles Foundation Discussion Papers 862, Cowles Foundation for Research in Economics, Yale University.
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Citations

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Cited by:
  1. Paul H. Jensen & Elizabeth Webster, 2004. "SMEs and Their Use of Intellectual Property Rights in Australia," Melbourne Institute Working Paper Series wp2004n17, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.
  2. William Griffiths & Elizabeth Webster, 2004. "The Determinants of Research and Development and Intellectual Property Usage among Australian Companies, 1989 to 2002," Melbourne Institute Working Paper Series wp2004n27, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.
  3. Ucbasaran, Deniz & Westhead, Paul & Wright, Mike, 2009. "The extent and nature of opportunity identification by experienced entrepreneurs," Journal of Business Venturing, Elsevier, vol. 24(2), pages 99-115, March.
  4. Mohammad Hosein Tavassoli, 2011. "A Comparative Investigation of Firms’ Innovative behaviors During Different Stages of the Cluster Life-Cycle (Cover study for PhD dissertation)," ERSA conference papers ersa10p1045, European Regional Science Association.
  5. Godinho, Manuel Mira & Ferreira, Vítor, 2012. "Analyzing the evidence of an IPR take-off in China and India," Research Policy, Elsevier, vol. 41(3), pages 499-511.
  6. Nicolas van Zeebroeck, 2007. "Patents only live twice: a patent survival analysis in Europe," Working Papers CEB 07-028.RS, ULB -- Universite Libre de Bruxelles.
  7. Nicolas van Zeebroeck, 2007. "The puzzle of patent value indicators," Working Papers CEB 07-023.RS, ULB -- Universite Libre de Bruxelles.

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