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Mega Firms and New Technological Trajectories in the U.S

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Abstract

We provide evidence that mega firms have played an increasingly important role in shaping new technological trajectories in recent years. While the share of novel patents---defined as patents introducing new combinations of technological components---produced by mega firms declined until around 2000, it has rebounded sharply since then. Furthermore, we find that the technological impact and knowledge diffusion of novel patents by mega firms have grown relative to those by non-mega firms after 2001. We also explore potential drivers of this trend, presenting evidence that the rise in novel patenting by mega firms is tied to their disproportionate increase in cash holdings and the expansion of their technological scope. Our findings highlight an overlooked positive role of mega firms in the economywide innovation process.

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  • Serguey Braguinsky & Joonkyu Choi & Yuheng Ding & Karam Jo & Seula Kim, 2025. "Mega Firms and New Technological Trajectories in the U.S," Finance and Economics Discussion Series 2025-060, Board of Governors of the Federal Reserve System (U.S.).
    • Handle: RePEc:fip:fedgfe:2025-60
    DOI: 10.17016/FEDS.2025.060
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    2. Macher, Jeffrey T. & Rutzer, Christian & Weder, Rolf, 2024. "Is there a secular decline in disruptive patents? Correcting for measurement bias," Research Policy, Elsevier, vol. 53(5).
    3. Teresa C. Fort & Nathan Goldschlag & Jack Liang & Peter K. Schott & Nikolas Zolas, 2025. "Growth is Getting Harder to Find, Not Ideas," Working Papers 25-21, Center for Economic Studies, U.S. Census Bureau.
    4. Mohammed Abdulfasi, 2024. "The Transformative Patent Landscape in Saudi Arabia Since the Saudi Vision 2030 Announcement," Publications, MDPI, vol. 12(4), pages 1-16, December.

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    Keywords

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    JEL classification:

    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • O34 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Intellectual Property and Intellectual Capital
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance

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