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Patent Activity and Technical Change

Author

Listed:
  • Robert L. Basmann

    (Department of Economics, Binghamton University)

  • Michael McAleer

    (Department of Economics, University of Western Australia)

  • Daniel Slottje

    (Department of Economics, Southern Methodist University)

Abstract

This paper presents an aggregate production function of the generalized Fechner-Thurstone (GFT) form to analyze the impact of an important component of intellectual industrial property, namely patent activity, on technical change in the USA for the period 1947-1981. We define a technology-changer as a variable that has an impact on the elasticity of the marginal rate of technical substitution (mrts) between inputs of the GFT production function over time. Various types of US patent grant activity, specifically total, domestic, foreign, successful and unsuccessful patents, are used as instruments for the technology-changer. Using the GFT specification, the impacts of various technology-changers on the elasticity of the mrts between inputs are estimated directly. It is found that granted (or successful) patents, patents granted to foreign companies and individuals, total patent applications, and even unsuccessful patent applications, have significant impacts on the rates at which inputs are substituted for each other over time in production.

Suggested Citation

  • Robert L. Basmann & Michael McAleer & Daniel Slottje, 2003. "Patent Activity and Technical Change," CIRJE F-Series CIRJE-F-217, CIRJE, Faculty of Economics, University of Tokyo.
  • Handle: RePEc:tky:fseres:2003cf217
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    References listed on IDEAS

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    Cited by:

    1. Oh, Donghyun & Heshmati, Almas & Lööf, Hans, 2014. "Total factor productivity of Korean manufacturing industries: Comparison of competing models with firm-level data," Japan and the World Economy, Elsevier, vol. 30(C), pages 25-36.
    2. Michalski, Tomasz, 2012. "Input substitutability, trade costs and location," Economics Letters, Elsevier, vol. 117(1), pages 57-59.
    3. repec:gam:jsusta:v:10:y:2018:i:1:p:187-:d:126983 is not listed on IDEAS

    More about this item

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • L23 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Organization of Production
    • K1 - Law and Economics - - Basic Areas of Law

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