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Running to Stand Still? - Intellectual Property and Value Added in Innovating Firms

Author

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  • Christine Greenhalgh
  • Mark Longland

Abstract

We construct a unique panel dataset to examine how R&D and intellectual property (IP), via patents and trade marks, increase firm productivity. Knowledge has public good characteristics of non-depletability and non-excludability. Even with IP, imitation and inventing around other firm`s products is possible, so we examine the size and duration of benefits to IP protection. If non-depletion is correct, this implies that absolute R&D, or total IP assets are important. We examine this hypothesis against the alternative of depletability, where innovative intensity relative to the size of the firm matters. The results support rapid depletability and poor ability to exclude.

Suggested Citation

  • Christine Greenhalgh & Mark Longland, 2002. "Running to Stand Still? - Intellectual Property and Value Added in Innovating Firms," Economics Series Working Papers 134, University of Oxford, Department of Economics.
  • Handle: RePEc:oxf:wpaper:134
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    File URL: http://www.economics.ox.ac.uk/materials/working_papers/paper134.pdf
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    References listed on IDEAS

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    1. Romer, Paul M, 1986. "Increasing Returns and Long-run Growth," Journal of Political Economy, University of Chicago Press, vol. 94(5), pages 1002-1037, October.
    2. Van Reenen, John, 1997. "Employment and Technological Innovation: Evidence from U.K. Manufacturing Firms," Journal of Labor Economics, University of Chicago Press, vol. 15(2), pages 255-284, April.
    3. Rachel Griffith & Stephen Redding & John Van Reenen, 2004. "Mapping the Two Faces of R&D: Productivity Growth in a Panel of OECD Industries," The Review of Economics and Statistics, MIT Press, vol. 86(4), pages 883-895, November.
    4. Hall, B.H., 1999. "Innovation and Market Value," Economics Papers 1999-w3, Economics Group, Nuffield College, University of Oxford.
    5. Kenneth Arrow, 1962. "Economic Welfare and the Allocation of Resources for Invention," NBER Chapters,in: The Rate and Direction of Inventive Activity: Economic and Social Factors, pages 609-626 National Bureau of Economic Research, Inc.
    6. Rachel Griffith & Stephen Redding & John Van Reenen, 2001. "Measuring the cost-effectiveness of an R&D tax credit for the UK," Fiscal Studies, Institute for Fiscal Studies, vol. 22(3), pages 375-399, September.
    7. Greenhalgh, C & Longland, M & Bosworth, D, 2001. "Technological Activity and Employment in a Panel of UK Firms," Scottish Journal of Political Economy, Scottish Economic Society, vol. 48(3), pages 260-282, August.
    8. Greenhalgh, Christine & Longland, Mark, 2001. " Intellectual Property in UK Firms: Creating Intangible Assets and Distributing the Benefits via Wages and Jobs," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 63(0), pages 671-696, Special I.
    9. Bosworth, Derek & Rogers, Mark, 2001. "Market Value, R&D and Intellectual Property: An Empirical Analysis of Large Australian Firms," The Economic Record, The Economic Society of Australia, vol. 77(239), pages 323-337, December.
    10. Nicolas Bloom & John Van Reenen, 2000. "Patents, productivity and market value: evidence from a panel of UK firms," IFS Working Papers W00/21, Institute for Fiscal Studies.
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    Citations

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    Cited by:

    1. Christine Greenhalgh & Padraig Dixon, 2002. "The Economics of Intellectual Property: A Review to Identify Themes for Future Research," Economics Series Working Papers 135, University of Oxford, Department of Economics.
    2. Mark Rogers, 2006. "R&D and Productivity in the UK: evidence from firm-level data in the 1990s," Economics Series Working Papers 255, University of Oxford, Department of Economics.
    3. Greenhalgh, Christine & Rogers, Mark, 2006. "The value of innovation: The interaction of competition, R&D and IP," Research Policy, Elsevier, vol. 35(4), pages 562-580, May.
    4. William Griffiths & Elizabeth Webster, 2004. "The determinants of research and development and intellectual property usage among Australian Companies, 1989 to 2002," Centre for International Economic Studies Working Papers 2004-15, University of Adelaide, Centre for International Economic Studies.
    5. Mark Rogers, 2010. "R&D and productivity: using UK firm-level data to inform policy," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 37(3), pages 329-359, July.
    6. Mainwaring, Lynn & Moore, Nigel J. & Murphy, Philip D., 2007. "A regional comparison of enterprise patent holdings: A study of British and Irish data," Research Policy, Elsevier, vol. 36(10), pages 1655-1665, December.
    7. Sabine Visser, 2007. "R&D in Worldscan," CPB Memorandum 189, CPB Netherlands Bureau for Economic Policy Analysis.

    More about this item

    Keywords

    intellectual property; R&D; value added; manufacturing;

    JEL classification:

    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General
    • 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

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