Patents and R and D at the Firm Level: A First Look
AbstractThis is a first report from a larger study of inventive activity of U.S. firms and some of its consequences. It reports on the relationship between patents applied for and R&D expenditures based on data for 121 large corporations covering the 1968-1975 period. The main conclusion is that there is a statistically significant relationship between a firm's R&D expenditures and the number of patents it applied for and receives. This relationship is very strong in the cross-sectional dimension (squared partial correlations of .8 or higher). It is weaker in the within-firm time-series dimension (partial r[squared]'s of .2 to .3). Attempts to fit an unconstrained distributed lag relationship yields only significant coefficients for the first and last terms in the lag structure, indicating both a quick response of patenting to changes in R&D and a small but persistent effect of past R&D, the truncation of this long lag being reflected in a significant coefficient for R&D lagged five years. In spite of these difficulties, patent counts do measure something systematic and hence are worthy of further study.
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Bibliographic InfoPaper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 0561.
Date of creation: Oct 1980
Date of revision:
Publication status: published as Ariel Pakes, Zvi Griliches. "Patents and R&D at the Firm Level: A First Look," in Zvi Griliches, ed., "R & D, Patents, and Productivity" University of Chicago Press (1984)
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Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.
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- Ariel Pakes & Mark Schankerman, 1979.
"The Rate of Obsolescence Of Knowledge, Research Gestation Lags, and the Private Rate of Return to Research Resources,"
NBER Working Papers
0346, National Bureau of Economic Research, Inc.
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- Mundlak, Yair, 1978. "On the Pooling of Time Series and Cross Section Data," Econometrica, Econometric Society, vol. 46(1), pages 69-85, January.
- Griliches, Zvi, 1980.
"R & D and the Productivity Slowdown,"
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American Economic Association, vol. 70(2), pages 343-48, May.
- Simon Kuznets, 1962. "Inventive Activity: Problems of Definition and Measurement," NBER Chapters, in: The Rate and Direction of Inventive Activity: Economic and Social Factors, pages 19-52 National Bureau of Economic Research, Inc.
- Comanor, William S & Scherer, Frederic M, 1969. "Patent Statistics as a Measure of Technical Change," Journal of Political Economy, University of Chicago Press, vol. 77(3), pages 392-98, May/June.
- M. Ishaq Nadiri & George C. Bitros, 1980. "Research and Development Expenditures and Labor Productivity at the Firm Level: A Dynamic Model," NBER Chapters, in: New Developments in Productivity Measurement, pages 387-418 National Bureau of Economic Research, Inc.
- Harold M. Groves, Chairman, Universities-National Bureau Committee for Economic Research, 1962. "The Rate and Direction of Inventive Activity: Economic and Social Factors," NBER Books, National Bureau of Economic Research, Inc, number univ62-1, October.
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