Trade Marks and Performance in UK Firms: Evidence of Schumpeterian Competition through Innovation
AbstractThis 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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Bibliographic InfoPaper provided by University of Oxford, Department of Economics in its series Economics Series Working Papers with number 300.
Date of creation: 01 Jan 2007
Date of revision:
Trade Marks; Market Value; Productivity; Manufacturing; Services;
Other versions of this item:
- Christine Greenhalgh & Mark Rogers, 2006. "Trade Marks and Performance in UK Firms: Evidence of Schumpeterian Competition through Innovation," Discussion Papers 06-034, Stanford Institute for Economic Policy Research.
- O30 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - General
- L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General
- L80 - Industrial Organization - - Industry Studies: Services - - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2007-04-14 (All new papers)
- NEP-BEC-2007-04-14 (Business Economics)
- NEP-COM-2007-04-14 (Industrial Competition)
- NEP-CSE-2007-04-14 (Economics of Strategic Management)
- NEP-EFF-2007-04-14 (Efficiency & Productivity)
- NEP-INO-2007-04-14 (Innovation)
- NEP-INT-2007-04-14 (International Trade)
- NEP-TID-2007-04-14 (Technology & Industrial Dynamics)
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