IDEAS home Printed from https://ideas.repec.org/h/pal/palchp/978-0-230-59588-0_2.html
   My bibliography  Save this book chapter

Innovations, Patents and Cash Flow

In: Innovation and Firm Performance

Author

Listed:
  • Paul Geroski

    (London Business School)

  • John Reenen

    (University College London)

  • Chris Walters

    (London Business School)

Abstract

Studies of the innovative activity of firms which focus on R&D spending generally conclude that relatively few firms engage in R&D, but that those who do display a relatively stable pattern of spending on R&D over time. Differences between firms in R&D spending (or in spending intensity) are typically much more important than variations in spending within firms over time. As a consequence, the interesting research question to be addressed in these studies is: ‘Which firms do R&D?’ By contrast, studies of innovative output using patents or counts of major innovations generally show that many of the firms who do produce an innovation do so only sporadically. Few firms put together multi-year spells of sustained patent or ‘major’ innovation production, and the timing of their innovative activities is episodic, idiosyncratic and relatively hard to predict. This adds a second interesting question to the research agenda, namely: ‘When (if ever) do firms innovate?’ At a purely statistical level, answering this second question means finding exogenous variables that display the same kinds of variation as patents or ‘major’ innovation counts; that is, finding independent variables that display a high ratio of within to between variation, plus a tendency towards irregular bursts of sub- or supernormal activity. For economists interested in the determinants of innovative activity, this is likely to rule out factors such as ‘technological opportunity’, ‘conditions of appropriability’ or market structure (all of which tend to be different for different firms or industries, but stable over time). However, potential determinants of innovation, such as demand or the financial state of firms, are both interesting on theoretical grounds and potential candidates on purely statistical grounds.

Suggested Citation

  • Paul Geroski & John Reenen & Chris Walters, 2002. "Innovations, Patents and Cash Flow," Palgrave Macmillan Books, in: Alfred Kleinknecht & Pierre Mohnen (ed.), Innovation and Firm Performance, chapter 2, pages 31-55, Palgrave Macmillan.
  • Handle: RePEc:pal:palchp:978-0-230-59588-0_2
    DOI: 10.1057/9780230595880_2
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Czarnitzki, Dirk & Licht, Georg, 2004. "Die Rolle der Innovationsförderung im Aufholprozess Ostdeutschlands," ZEW Discussion Papers 04-68, ZEW - Leibniz Centre for European Economic Research.
    2. Francesco Daveri & Maria Laura Parisi, 2010. "Experience, Innovation and Productivity - Empirical Evidence from Italy's Slowdown," CESifo Working Paper Series 3123, CESifo.
    3. William Griffiths & Elizabeth Webster, 2004. "The Determinants of Research and Development and Intellectual Property Usage among Australian Companies, 1989 to 2002," Melbourne Institute Working Paper Series wp2004n27, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.
    4. Daniel Gonçalves & Ana Martins, 2016. "The Determinants of TFP Growth in the Portuguese Manufacturing Sector," GEE Papers 0062, Gabinete de Estratégia e Estudos, Ministério da Economia, revised Nov 2016.
    5. Paul H. Jensen & Elizabeth Webster, 2004. "Examining Biases in Measures of Firm Innovation," Melbourne Institute Working Paper Series wp2004n10, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.
    6. William Griffiths & Elizabeth Webster, 2009. "What Governs Firm-Level R&D: Internal or External Factors?," Melbourne Institute Working Paper Series wp2009n13, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.
    7. Santos, David Ferreira Lopes & Basso, Leonardo Fernando Cruz & Kimura, Herbert & Kayo, Eduardo Kazuo, 2014. "Innovation efforts and performances of Brazilian firms," Journal of Business Research, Elsevier, vol. 67(4), pages 527-535.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pal:palchp:978-0-230-59588-0_2. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.palgrave.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.