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Technological Innovation, Resource Allocation, and Growth

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  • Leonid Kogan
  • Dimitris Papanikolaou
  • Amit Seru
  • Noah Stoffman

Abstract

We explore the role of technological innovation as a source of economic growth by constructing direct measures of innovation at the firm level. We combine patent data for US firms from 1926 to 2010 with the stock market response to news about patents to assess the economic importance of each innovation. Our innovation measure predicts productivity and output at the firm, industry and aggregate level. Furthermore, capital and labor flow away from non-innovating firms towards innovating firms within an industry. There exists a similar, though weaker, pattern across industries. Cross-industry differences in technological innovation are strongly related to subsequent differences in industry output growth.

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Bibliographic Info

Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 17769.

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Date of creation: Jan 2012
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Handle: RePEc:nbr:nberwo:17769

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  30. repec:fth:harver:1473 is not listed on IDEAS
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Citations

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Cited by:
  1. Acemoglu, Daron & Akcigit, Ufuk & Bloom , Nicholas & Kerr , William, 2013. "Innovation, reallocation and growth," Research Discussion Papers 22/2013, Bank of Finland.
  2. Hyunbae Chun & Jung-Wook Kim & Randall Morck, 2013. "Productivity Growth and Stock Returns: Firm- and Aggregate-Level Analyses," NBER Working Papers 19462, National Bureau of Economic Research, Inc.
  3. Claudio Morana, 2013. "Insights on the global macro-finance interface: Structural sources of risk factors fluctuations and the cross-section of expected stock returns," Working Papers 264, University of Milano-Bicocca, Department of Economics, revised Dec 2013.
  4. David S. Abrams & Ufuk Akcigit & Jillian Popadak, 2013. "Patent Value and Citations: Creative Destruction or Strategic Disruption?," PIER Working Paper Archive 13-065, Penn Institute for Economic Research, Department of Economics, University of Pennsylvania.

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