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

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  • Christine Greenhalgh
  • Mark Rogers

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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Bibliographic Info

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: 01 Jan 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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Citations

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Cited by:
  1. Christine Greenhalgh & Mark Rogers, 2007. "The Value of Intellectual Property Rights to Firms," Economics Series Working Papers 319, University of Oxford, Department of Economics.
  2. Haskel, J & Goodridge, P & Wallis, G, 2012. "Spillovers from R&D and other intangible investment: evidence from UK industries," Working Papers 10009, Imperial College, London, Imperial College Business School.
  3. Patrick Llerena & Valentine Millot, 2013. "Are Trade Marks and Patents Complementary or Substitute Protections for Innovation," Working Papers of BETA 2013-01, Bureau d'Economie Théorique et Appliquée, UDS, Strasbourg.
  4. Duygun, Meryem & Sena, Vania & Shaban, Mohamed, 2013. "Schumpeterian competition and efficiency among commercial banks," Journal of Banking & Finance, Elsevier, vol. 37(12), pages 5176-5185.
  5. Christian Helmers & Mark Rogers, 2010. "Innovation and the Survival of New Firms in the UK," Review of Industrial Organization, Springer, vol. 36(3), pages 227-248, May.
  6. Bascavusoglu-Moreau, Elif, 2010. "Entrepreneurship and the National System of Innovation - What is Missing in Turkey?," MERIT Working Papers 030, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
  7. Bascavusoglu-Moreau, Elif, 2010. "Entrepreneurship and the National System of Innovation: What is Missing in Turkey?," Working Paper Series wp2010-54, World Institute for Development Economic Research (UNU-WIDER).
  8. de Vries, A.G.B. & Pennings, H.P.G. & Block, J.H., 2013. "Trademark or patent? The effects of market structure, customer type and venture capital financing on start-ups' IP decisions," ERIM Report Series Research in Management ERS-2013-002-STR, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus Uni.
  9. 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.

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