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The Determinants of Research and Development and Intellectual Property Usage among Australian Companies, 1989 to 2002

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  • William Griffiths

    ()
    (Centre for Microeconometrics, Department of Economics, The University of Melbourne)

  • Elizabeth Webster

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

Abstract

This paper traces the innovation pathways of new creations from R & D activity through to intellectual property (IP) applications using enterprise panel data from 1989 to 2002. Our estimation method explicitly addresses the selection issues associated with missing R&D data which is a common problem among this type of data set. We find that R&D activity is a highly path dependent process that relies heavily on firm specific effects. These firm specific effects were subsequently found to be correlated with managerial style – more aggressive and intuitive managers have higher R&D ceteris paribus – and extensive use of incentive schemes for employees within the firm. In addition, we find that R&D is higher when the previous year’s enterprise debt ratio is lower, the speed of technological change is faster, the firm’s ability to absorb knowledge spillovers is greater and the product market is less contestable. Furthermore, these firms appear to be using the various methods of appropriation, IP and non-IP, as complementary packages to capture the quasi-rents from previous R&D expenditure rather than as substitutes.

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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 wp2004n27.

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Length: 36 pages
Date of creation: Sep 2004
Date of revision:
Handle: RePEc:iae:iaewps:wp2004n27

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Postal: Melbourne Institute of Applied Economic and Social Research, The University of Melbourne, Victoria 3010 Australia
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  1. Jaffe, Adam B, 1986. "Technological Opportunity and Spillovers of R&D: Evidence from Firms' Patents, Profits, and Market Value," American Economic Review, American Economic Association, vol. 76(5), pages 984-1001, December.
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  7. Keith W. Chauvin & Mark Hirschey, 1997. "Market structure and the value of growth," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 18(3), pages 247-254.
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  15. Greenhalgh, Christine & Longland, Mark, 2001. " Intellectual Property in UK Firms: Creating Intangible Assets and Distributing the Benefits via Wages and Jobs," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 63(0), pages 671-96, Special I.
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  20. 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.
  21. John Scott, 1984. "Firm versus Industry Variability in R&D Intensity," NBER Chapters, in: R & D, Patents, and Productivity, pages 233-248 National Bureau of Economic Research, Inc.
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Cited by:
  1. Russell Thomson, 2009. "Tax Policy and R&D Investment by Australian Firms," Melbourne Institute Working Paper Series wp2009n10, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.

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