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Decomposing regional patenting rates: how the composition factor confounds the rate factor

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  • Timothy R. Wojan
  • Kathryn R. Dotzel
  • Sarah A. Low

Abstract

Patents per capita is a widely used innovation indicator. Rural areas generally perform very poorly using this metric, suggesting that inventive activity that leads to patents is an urban phenomenon. However, newly available inventor-disambiguated patenting data demonstrate that inventions per inventor are roughly equal across urban and rural areas. A critical assessment of the patents-per-capita measure questions its construct validity. An alternative measure is constructed that empirically identifies a plausible ‘inventive class’ and does not confound the patenting rate with irrelevant information. This allows the decomposition of overall patenting rates into a compositional factor and a rate factor which leads to a more meaningful regional comparison of patenting productivity.

Suggested Citation

  • Timothy R. Wojan & Kathryn R. Dotzel & Sarah A. Low, 2015. "Decomposing regional patenting rates: how the composition factor confounds the rate factor," Regional Studies, Regional Science, Taylor & Francis Journals, vol. 2(1), pages 535-551, January.
    • Handle: RePEc:taf:rsrsxx:v:2:y:2015:i:1:p:535-551
    DOI: 10.1080/21681376.2015.1095112
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