IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Login to save this paper or follow this series

Basic Innovation and Firm Performance

  • Burak Dindaroglu

    ()

    (Department of Economics, Izmir University of Economics)

I study the effects of basic and applied innovation on a firm's market value and total factor productivity for a panel of U.S. manufacturing firms. Basicness of innovation is measured by the index of generality proposed by Trajtenberg, Henderson and Jaffe (1997), and basic and applied innovation stocks are proxied by the stocks of patents that score at the relevant tails of the generality distribution. I find that the market valuation and productivity effects of basic and applied innovation are drastically different. Market value is positively associated with a firm's applied innovation stock, but it exhibits no association with its basic innovation stock. On the other hand, patents at the higher (resp. lower) quartiles of the generality distribution are positively (resp. negatively) associated with total factor productivity and productivity growth. Therefore, complementing previous studies on basic research, I find that the basicness of innovation is associated with a productivity premium.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://eco.ieu.edu.tr/wp-content/wp1301.pdf
Download Restriction: no

Paper provided by Izmir University of Economics in its series Working Papers with number 1301.

as
in new window

Length: 32 pages
Date of creation: Mar 2013
Date of revision:
Handle: RePEc:izm:wpaper:1301
Contact details of provider: Fax: (90) 232 279 2626
Web page: http://eco.ieu.edu.tr

More information through EDIRC

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

as in new window
  1. Link, Albert N, 1981. "Basic Research and Productivity Increase in Manufacturing: Additional Evidence," American Economic Review, American Economic Association, vol. 71(5), pages 1111-12, December.
  2. Crepon, B. & Duguet, E. & Mairesse, J., 1998. "Research Investment, Innovation and Productivity: An Econometric Analysis at the Firm Level," Papiers d'Economie Mathématique et Applications 98.15, Université Panthéon-Sorbonne (Paris 1).
  3. Henderson, R. & Jaffe, A.B.: Tratenberg, M., 1995. "Universities as a Source of Commercial Technology: A Detailed Analysis of University Patenting 1965-1988," Papers 09-95, Tel Aviv.
  4. Griliches, Zvi, 1981. "Market value, R&D, and patents," Economics Letters, Elsevier, vol. 7(2), pages 183-187.
  5. Albert N. Link, 1982. "Productivity Growth, Environmental Regulations and the Composition of R&D," Bell Journal of Economics, The RAND Corporation, vol. 13(2), pages 548-554, Autumn.
  6. Bruno Crépon & Emmanuel Duguet & Jacques Mairesse, 1998. "Research, Innovation and Productivity : An Econometric Analysis at the Firm Level," Working Papers 98-33, Centre de Recherche en Economie et Statistique.
  7. Czarnitzki, Dirk & Thorwarth, Susanne, 2012. "Productivity effects of basic research in low-tech and high-tech industries," Research Policy, Elsevier, vol. 41(9), pages 1555-1564.
  8. G. Steven Olley & Ariel Pakes, 1992. "The Dynamics of Productivity in the Telecommunications Equipment Industry," NBER Working Papers 3977, National Bureau of Economic Research, Inc.
  9. Frank R. Lichtenberg & Donald Siegel, 1989. "The Impact of R&D Investment On Productivity - New Evidence Using Linked R&D-LRD Data," NBER Working Papers 2901, National Bureau of Economic Research, Inc.
  10. Bronwyn H. Hall & Adam B. Jaffe & Manuel Trajtenberg, 2001. "The NBER Patent Citation Data File: Lessons, Insights and Methodological Tools," NBER Working Papers 8498, National Bureau of Economic Research, Inc.
  11. Richard Blundell & Steve Bond, 1999. "GMM estimation with persistent panel data: an application to production functions," IFS Working Papers W99/04, Institute for Fiscal Studies.
  12. Griliches, Zvi, 1990. "Patent Statistics as Economic Indicators: A Survey," Journal of Economic Literature, American Economic Association, vol. 28(4), pages 1661-1707, December.
  13. Richard R. Nelson, 1959. "The Simple Economics of Basic Scientific Research," Journal of Political Economy, University of Chicago Press, vol. 67, pages 297.
  14. Manuel Trajtenberg & Rebecca Henderson & Adam Jaffe, 1997. "University Versus Corporate Patents: A Window On The Basicness Of Invention," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 5(1), pages 19-50.
  15. repec:fth:harver:1473 is not listed on IDEAS
  16. Mahmut Yasar & Rafal Raciborski & Brian Poi, 2008. "Production function estimation in Stata using the Olley and Pakes method," Stata Journal, StataCorp LP, vol. 8(2), pages 221-231, June.
  17. Bronwyn H. Hall & Adam Jaffe & Manuel Trajtenberg, 2005. "Market Value and Patent Citations," RAND Journal of Economics, The RAND Corporation, vol. 36(1), pages 16-38, Spring.
  18. James Bessen, 2006. "The Value of U.S. Patents by Owner and Patent Characteristics," Working Papers 0603, Research on Innovation.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:izm:wpaper:1301. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Ayla Ogus Binatli)

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.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with 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 profile, as there may be some citations waiting for confirmation.

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

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.