Advanced Search
MyIDEAS: Login to save this paper or follow this series

Patents, R and D, and the Stock Market Rate of Return

Contents:

Author Info

  • Ariel Pakes

Abstract

The purpose of this paper is to present and estimate a model which allows one to use the recently computerized U.S. Patent Office's data base to identify when and where changes in inventive output have occurred. The model assumes a firm which chooses a research strategy to maximize the expected discounted value of the net cash flows from its activities, and a stock market that evaluates this expectation at different dates (it is a version of the Lucas-Prescott, 1971, investment model). Patents are taken as an indicator of the output of the firm's research laboratories. These assumptions place a set of testable restrictions on the stochastic process generating patents, R&D, and the stock market rate of return on the firm's equity (the econometric framework used is that of a restricted index, or dynamic factor-analysis model [Sargent and Sims, 1977; Geweke, 1977b]). The data contain observations on these three variables for 120 firms over an eight year period. The model fits these data quite well and the final section reports on the implications of the parameter estimates.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.nber.org/papers/w0786.pdf
Download Restriction: no

Bibliographic Info

Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 0786.

as in new window
Length:
Date of creation: Oct 1981
Date of revision:
Publication status: published as Pakes, Ariel. "Patents, R&D, and the Stock Market Rate of Return: A Summaryof Some Empirical Results." R&D, Patents and Productivity, edited by Zvi Griliches, (1984).
Handle: RePEc:nbr:nberwo:0786

Note: PR
Contact details of provider:
Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.
Phone: 617-868-3900
Email:
Web page: http://www.nber.org
More information through EDIRC

Related research

Keywords:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Ariel Pakes & Mark Schankerman, 1984. "An Exploration into the Determinants of Research Intensity," NBER Chapters, in: R & D, Patents, and Productivity, pages 209-232 National Bureau of Economic Research, Inc.
  2. Zvi Griliches, 1979. "Issues in Assessing the Contribution of Research and Development to Productivity Growth," Bell Journal of Economics, The RAND Corporation, The RAND Corporation, vol. 10(1), pages 92-116, Spring.
  3. Sims, Christopher A, 1972. "Money, Income, and Causality," American Economic Review, American Economic Association, American Economic Association, vol. 62(4), pages 540-52, September.
  4. Lucas, Robert E, Jr & Prescott, Edward C, 1971. "Investment Under Uncertainty," Econometrica, Econometric Society, Econometric Society, vol. 39(5), pages 659-81, September.
  5. Kenneth Arrow, 1962. "Economic Welfare and the Allocation of Resources for Invention," NBER Chapters, in: The Rate and Direction of Inventive Activity: Economic and Social Factors, pages 609-626 National Bureau of Economic Research, Inc.
  6. Richard Meese, 1980. "Dynamic factor demand schedules for labor and capital under rational expectations," International Finance Discussion Papers, Board of Governors of the Federal Reserve System (U.S.) 153, Board of Governors of the Federal Reserve System (U.S.).
  7. Ariel Pakes & Zvi Griliches, 1980. "Patents and R and D at the Firm Level: A First Look," NBER Working Papers 0561, National Bureau of Economic Research, Inc.
  8. Rosenberg, Nathan, 1974. "Science, Invention and Economic Growth," Economic Journal, Royal Economic Society, Royal Economic Society, vol. 84(333), pages 90-108, March.
  9. Thomas J. Sargent, 1978. "Estimation of dynamic labor demand schedules under rational expectations," Staff Report, Federal Reserve Bank of Minneapolis 27, Federal Reserve Bank of Minneapolis.
  10. Comanor, William S & Scherer, Frederic M, 1969. "Patent Statistics as a Measure of Technical Change," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 77(3), pages 392-98, May/June.
  11. 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, July.
  12. Fama, Eugene F, 1970. "Efficient Capital Markets: A Review of Theory and Empirical Work," Journal of Finance, American Finance Association, American Finance Association, vol. 25(2), pages 383-417, May.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Slottje, Daniel J. & Millimet, Daniel L. & Buchanan, Michael J., 2007. "Econometric analysis of copyrights," Journal of Econometrics, Elsevier, Elsevier, vol. 139(2), pages 303-317, August.
  2. Deeds, David L. & Decarolis, DONA & Coombs, Joseph, 2000. "Dynamic capabilities and new product development in high technology ventures: An empirical analysis of new biotechnology firms," Journal of Business Venturing, Elsevier, vol. 15(3), pages 211-229, May.
  3. Clemente Forero & Andrés Zambrano, 2004. "La dinámica de las publicaciones y las patentes como una aproximación al desarrollo científico y tecnológico de los países," BORRADORES DE INVESTIGACIÓN, UNIVERSIDAD DEL ROSARIO 002977, UNIVERSIDAD DEL ROSARIO.
  4. Iain Cockburn & Rebecca Henderson & Scott Stern, 1999. "Balancing Incentives: The Tension Between Basic and Applied Research," NBER Working Papers 6882, National Bureau of Economic Research, Inc.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:nbr:nberwo:0786. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ().

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.