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Technological Opportunity and Spillovers of R&D: Evidence from Firms' Patents, Profits, and Market Value

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  • Jaffe, Adam B

Abstract

This paper quantifies the effects of exogenous variations in the state of technology (technological opportunity) and of the R&D of other firms (spillovers of R&D) on the productivity of firms' R&D. The R&D productivity is increased by the R&D of "technological neighbors," though neighbors' R&D lowers the profits and market value of low-R&D-intensity firms. Firms are shown to adjust the technological composition of their R&D in response to technological opportunity. Copyright 1986 by American Economic Association.

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  • Jaffe, Adam B, 1986. "Technological Opportunity and Spillovers of R&D: Evidence from Firms' Patents, Profits, and Market Value," American Economic Review, American Economic Association, vol. 76(5), pages 984-1001, December.
    • Handle: RePEc:aea:aecrev:v:76:y:1986:i:5:p:984-1001
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    References listed on IDEAS

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    1. Bronwyn H. Hall & Zvi Griliches & Jerry A. Hausman, 1983. "Patents and R&D: Searching for a Lag Structure," NBER Working Papers 1227, National Bureau of Economic Research, Inc.
    2. White, Halbert, 1982. "Instrumental Variables Regression with Independent Observations," Econometrica, Econometric Society, vol. 50(2), pages 483-499, March.
    3. John Bound & Clint Cummins & Zvi Griliches & Bronwyn H. Hall & Adam B. Jaffe, 1984. "Who Does R&D and Who Patents?," NBER Chapters, in: R&D, Patents, and Productivity, pages 21-54, National Bureau of Economic Research, Inc.
    4. Hirschey, Mark & Wichern, Dean W, 1984. "Accounting and Market-Value Measures of Profitability: Consistency, Determinants, and Uses," Journal of Business & Economic Statistics, American Statistical Association, vol. 2(4), pages 375-383, October.
    5. Zvi Griliches, 1998. "Productivity and R&D at the Firm Level," NBER Chapters, in: R&D and Productivity: The Econometric Evidence, pages 100-133, National Bureau of Economic Research, Inc.
    6. Posner, Richard A, 1975. "The Social Costs of Monopoly and Regulation," Journal of Political Economy, University of Chicago Press, vol. 83(4), pages 807-827, August.
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    8. Pakes, Ariel, 1985. "On Patents, R&D, and the Stock Market Rate of Return," Journal of Political Economy, University of Chicago Press, vol. 93(2), pages 390-409, April.
    9. Demsetz, Harold, 1973. "Industry Structure, Market Rivalry, and Public Policy," Journal of Law and Economics, University of Chicago Press, vol. 16(1), pages 1-9, April.
    10. 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.
    11. Ariel Pakes & Zvi Griliches, 1984. "Patents and R&D at the Firm Level: A First Look," NBER Chapters, in: R&D, Patents, and Productivity, pages 55-72, National Bureau of Economic Research, Inc.
    12. Zvi Griliches, 1984. "Market Value, R&D, and Patents," NBER Chapters, in: R&D, Patents, and Productivity, pages 249-252, National Bureau of Economic Research, Inc.
    13. Michael A. Salinger, 1984. "Tobin's q, Unionization, and the Concentration-Profits Relationship," RAND Journal of Economics, The RAND Corporation, vol. 15(2), pages 159-170, Summer.
    14. Ariel Pakes & Mark Schankerman, 1984. "The Rate of Obsolescence of Patents, Research Gestation Lags, and the Private Rate of Return to Research Resources," NBER Chapters, in: R&D, Patents, and Productivity, pages 73-88, National Bureau of Economic Research, Inc.
    15. Fisher, Franklin M & McGowan, John J, 1983. "On the Misuse of Accounting Rates of Return to Infer Monopoly Profits," American Economic Review, American Economic Association, vol. 73(1), pages 82-97, March.
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