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Do Firms Face a Trade-Off between the Quantity and the Quality of Their Inventions?

  • Gaétan de Rassenfosse

    (Melbourne Institute of Applied Economic and Social Research, The University of Melbourne; Intellectual Property Research Institute of Australia, The University of Melbourne)

This paper presents evidence that firms face a trade-off between the quantity and quality of their research output. The econometric analysis uses survey data on patent applicants at the European Patent Office and addresses the identification problem caused by differences in firms’ propensity to patent. The existence of a trade-off emphasizes the need to take the quality of research output into account when assessing research productivity. It also raises questions about the optimal quantity–quality mix that firms should target.

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Paper provided by Melbourne Institute of Applied Economic and Social Research, The University of Melbourne in its series Melbourne Institute Working Paper Series with number wp2013n06.

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Length: 18 pages
Date of creation: Feb 2013
Date of revision:
Handle: RePEc:iae:iaewps:wp2013n06
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  1. Mariani, Myriam & Romanelli, Marzia, 2007. ""Stacking" and "picking" inventions: The patenting behavior of European inventors," Research Policy, Elsevier, vol. 36(8), pages 1128-1142, October.
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  4. Gaétan de Rassenfosse & Bruno Van Pottelsberghe, 2008. "On the price elasticity of demand for patents," Working Papers CEB 08-031.RS, ULB -- Universite Libre de Bruxelles.
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  9. Bruno Van Pottelsberghe & Nicolas van Zeebroeck, 2007. "A brief history of space and time: the scope-year index as a patent value indicator based on families and renewals," Working Papers CEB 07-019.RS, ULB -- Universite Libre de Bruxelles.
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  12. Ernst, Holger, 1998. "Industrial research as a source of important patents," Research Policy, Elsevier, vol. 27(1), pages 1-15, May.
  13. Gaétan de Rassenfosse, 2010. "How SMEs Exploit Their Intellectual Property Assets: Evidence from Survey Data," Melbourne Institute Working Paper Series wp2010n20, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.
  14. James J. Anton & Dennis A. Yao, 2004. "Little Patents and Big Secrets: Managing Intellectual Property," RAND Journal of Economics, The RAND Corporation, vol. 35(1), pages 1-22, Spring.
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  17. Gourieroux, Christian & Monfort, Alain & Trognon, Alain, 1984. "Pseudo Maximum Likelihood Methods: Applications to Poisson Models," Econometrica, Econometric Society, vol. 52(3), pages 701-20, May.
  18. Hausman, Jerry & Hall, Bronwyn H & Griliches, Zvi, 1984. "Econometric Models for Count Data with an Application to the Patents-R&D Relationship," Econometrica, Econometric Society, vol. 52(4), pages 909-38, July.
  19. Jean O. Lanjouw & Mark Schankerman, 2004. "Patent Quality and Research Productivity: Measuring Innovation with Multiple Indicators," Economic Journal, Royal Economic Society, vol. 114(495), pages 441-465, 04.
  20. Encaoua, David & Guellec, Dominique & Martinez, Catalina, 2006. "Patent systems for encouraging innovation: Lessons from economic analysis," Research Policy, Elsevier, vol. 35(9), pages 1423-1440, November.
  21. Erkal, Nisvan, 2005. "The decision to patent, cumulative innovation, and optimal policy," International Journal of Industrial Organization, Elsevier, vol. 23(7-8), pages 535-562, September.
  22. Guellec, Dominique & Pottelsberghe de la Potterie, Bruno v., 2000. "Applications, grants and the value of patent," Economics Letters, Elsevier, vol. 69(1), pages 109-114, October.
  23. Rebecca Henderson & Iain Cockburn, 1996. "Scale, Scope, and Spillovers: The Determinants of Research Productivity in Drug Discovery," RAND Journal of Economics, The RAND Corporation, vol. 27(1), pages 32-59, Spring.
  24. Harhoff, Dietmar & Scherer, Frederic M. & Vopel, Katrin, 2003. "Citations, family size, opposition and the value of patent rights," Research Policy, Elsevier, vol. 32(8), pages 1343-1363, September.
  25. Neuhäusler, Peter & Frietsch, Rainer & Schubert, Torben & Blind, Knut, 2011. "Patents and the financial performance of firms - An analysis based on stock market data," Discussion Papers "Innovation Systems and Policy Analysis" 28, Fraunhofer Institute for Systems and Innovation Research (ISI).
  26. Lee Fleming, 2001. "Recombinant Uncertainty in Technological Search," Management Science, INFORMS, vol. 47(1), pages 117-132, January.
  27. Alexandra Zaby, 2010. "Losing the lead: the patenting decision in the light of the disclosure requirement," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 19(2), pages 147-164.
  28. Karan Girotra & Christian Terwiesch & Karl T. Ulrich, 2010. "Idea Generation and the Quality of the Best Idea," Management Science, INFORMS, vol. 56(4), pages 591-605, April.
  29. Mark Schankerman & Ariel Pakes, 1985. "Estimates of the Value of Patent Rights in European Countries During thePost-1950 Period," NBER Working Papers 1650, National Bureau of Economic Research, Inc.
  30. Kortum, Samuel & Lerner, Josh, 1999. "What is behind the recent surge in patenting?1," Research Policy, Elsevier, vol. 28(1), pages 1-22, January.
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