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Trade Marks and Performance in UK Firms: Evidence of Schumpeterian Competition through Innovation

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Author Info
Christine Greenhalgh
Mark Rogers

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Abstract

This paper uses novel data on trade mark activity of UK manufacturing and service sector firms to investigate whether trade marks improve the profitability and productivity of firms. We first analyse Tobin`s q, the ratio of stock market value to book value of tangible assets. We then investigate the relationship between trade mark activity and productivity, using a value added production function. Finally we examine interactions between firms IP activity, to explore creative destruction and growth via innovation. We find trade marks are positively related to both Tobin`s q and to productivity. Also in the short run greater IP activity by other firms in the industry reduces the value added of the firm, but this same competitive pressure has later benefits via productivity growth, also reflected in higher stock market value. This describes the Schumpeterian process of competition through innovation, restraining profit margins while increasing product variety and quality.

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Paper provided by University of Oxford, Department of Economics in its series Economics Series Working Papers with number 300.

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Date of creation: 2007
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Handle: RePEc:oxf:wpaper:300

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Keywords: Trade Marks; Market Value; Productivity; Manufacturing; Services;

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Find related papers by JEL classification:
O30 - Economic Development, Technological Change, and Growth - - Technological Change - - - General
L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General
L80 - Industrial Organization - - Industry Studies: Services - - - General

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  2. Sandro Mendonça & Tiago Santos Pereira & Manuel Mira Godinho, 2004. "Trademarks as an Indicator of Innovation and Industrial Change," LEM Papers Series 2004/15, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy. [Downloadable!]
    Other versions:
  3. 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. [Downloadable!] (restricted)
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  6. Giulio Cainelli & Rinaldo Evangelista & Maria Savona, 2006. "Innovation and economic performance in services: a firm-level analysis," Cambridge Journal of Economics, Oxford University Press, vol. 30(3), pages 435-458, May. [Downloadable!] (restricted)
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Cited by:
(explanations, 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.)

  1. Christian Helmers & Mark Rogers, 2008. "Innovation and the Survival of New Firms Across British Regions," Economics Series Working Papers 416, University of Oxford, Department of Economics. [Downloadable!]
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