Knowledge technological proximity: evidence from US and European patents

The purpose of this paper is to explore the correlation between the technological proximity measures in three areas: USA, Japan and the Europe. In each economic area, we use information from two international patent systems to construct the technological proximity for 240 large international firms. In particular, we select firms’ patents from United States Patent and Trademarks Office data and European Patent Office data. In order to compute the technological proximity, we follow the methodology developed by Jaffe [1986. “Technological Opportunity and Spillovers of R&D: Evidence from Firms’ Patents, Profits and Market Value.” American Economic Review 76 (5): 984–1001], where a technological vector is based on the distribution of patents of each firm across technology classes. Since the Jaffe distance assumes that spillovers only occur within the same technology class, but rules out spillovers between different classes, we develop also a distance measure which exploits the Mahalanobis norm to identify the distance between different technology classes based on the frequency that patents are taken out in different classes by the same firm. The contribution to the existing literature is to investigate the robustness of the technological proximity measure and the extent to which it may be affected by patent system features.     

Two-way relationship between innovation and market structure: evidence from Indian high and medium technology firms

ABSTRACT

This study analyses a two-way relationship between innovation and market structure in Indian high and medium technology firms. We perform an empirical analysis based on a simultaneous equation model on data for 991 high and medium technology firms during 2000–2015. Patent applications and patent grants capture innovation activity of the firms. We find that the market structure has an insignificant impact on innovation. A separate analysis of neck-and-neck firms also suggests that market structure has no impact on innovation. On the other hand, patenting has a positive and significant impact on market structure in both high and medium technology firms. The study concludes that in-house technology creation is a vital source of market dominance in Indian high and medium technology firms.     

Pre-empting technology competition through firm acquisitions

This paper shows that firms engage in horizontal mergers and acquisitions to pre-empt competition in technology markets. Making use of the patent application procedure at the European Patent Office we introduce a measure for potential entry barriers in technology markets.     

Inter-Firm Technological Cooperation: Effects Of Absorptive Capacity,Firm-Size And Specialization

This paper aims to add evidence on the role played by firms' technological competencies in the determination of their intensity of cooperation with other firms. Using a database composed by patents jointly filcd by two or more firms in the European Patent Office, the paper confronts the hypotheses of complementary or substitutive character of technological cooperation in relation to intra-mural R&D. The results suggest that more technologically and productive specialized firms are more likely to cooperate and find no support for the hypothesis that greater level of R&D expenditure will induce greater reliance on technological cooperation. It is also suggested that firms cooperate with partners that hold cotilplenientary competencies.     

Sources and characteristics of software patents in the European Union: Some empirical considerations

Software patenting is an increasingly important phenomenon in the European Union. Using a novel database of more than 30,000 software patents granted to both European and Non-European companies, we investigate the relevant factors explaining firm-level software patenting at the European Patent Office. We find that software patents are mainly applied for by American and Japanese firms, that they are characterised by a higher than average length of the granting procedure and that firms belonging to the software sector generally do not apply for them. Finally, results from non-linear panel data estimation reveal that patents are not deemed as useful appropriability instruments by software firms and that a “threat effect” by hardware firms is growing in importance. This last result is in line with recent developments in the literature relative to strategic patenting.     

An integrated indicator system for patent portfolios: evidence from the telecommunication manufacturing industry

Against the background of ‘patent portfolio races’ in industries such as telecommunications, this paper proposes a set of patent portfolio indicators to measure patents’ scale and diversity. This indicator system is used in a time series to analyse the patenting activity and technology strategy of the world’s top 20 firms in the telecommunication manufacturing industry, based on a large data set from United States Patent and Trade Office. In combination with composite and relative measures, we identify the firms’ comparative positions in patenting activity. The paper adds to the ongoing discussion about, and enriches the theory of, patent portfolios.     

How should firms carry out technological diversification to improve their performance? An analysis of patenting of Korean firms

This research aims to analyze how a firm's technological diversification strategies influence its financial performances, in terms of ‘technological diversification’ in broad technology sectors and ‘technological concentration’ on its own core technology, especially in the case of Korean large firms. The data used in the analysis were panel data encompassing the years between 1990 and 2006, which linked Korean firms’ patent information registered in the United States Patent and Trademark Office to the financial data of those firms collected from Korea Investors Service, Inc. (Kis-Value). For the estimation of the panel data, a fixed effect model, which considers the individual firms’ own effect on the financial performance, was used. Tobin's q was used as a dependent variable representing firm performance, while ‘broad technology diversity’ and ‘core technology diversity’ were used as the focal explanatory variables. The results show that a firm seeking to have more technological assets should invest in a broad technological diversification strategy in its search for new business opportunities; it should likewise concentrate on the core technology in order to maintain its financial performance.     

Technological evolution and interdependence in China's emerging biofuel industry

This study uses the European Patent Office worldwide patent database and applies two-stage interactive data collection methods to reveal the evolving technological interdependence for China's emerging biofuel industry. Three findings are excerpted from our empirical results. First, due to dominant patterns of business ownership, China's biofuel technology is seen as largely based on the evolutionary strength of the foodstuff and chemical fields. Second, China's biofuel technology development has evolved in the mode of ‘forward engineering’, led by Chinese universities rather than initiated by the public research institutes as in the experience of other East Asian latecomers. Third, our patent map and technology trajectory analyses illustrate that China's biofuel technology tends to be application-oriented and highly intertwined with the pharmaceutical industry since the 2000s, which evidences the development of biofuel industry as reciprocally reinforcing China's innovation capability deriving from its prominent chemical sector. By examining endogenous technology capability embedded in the national innovation capacity, this study uncovers public implications for other technology latecomers attempting to build an emerging industry while facing technology uncertainty in a transitional society.     

企业专利与外部融资

除保护技术输出的传统职能外,专利在企业和利益相关者沟通中也发挥着重要的信号传递职能。其中,专利在资本市场上的信号价值近年来备受关注,已有研究指出专利作为质量信号有助于企业获得投资者认可,并且专利信号效果依赖于投资者获得企业信息的多少。在此基础上,进一步讨论了投资者获得企业信息的内容对信号价值的影响。具体地,在负面信号情境下（企业过去的财务绩效差、收益波动性大、未来不确定性高）,专利的信号价值更强,而在正面信号情境专利信号效果减弱。利用来自深沪两市1 787家上市公司2000-2011年面板数据验证了以上假设,专利数量和外部融资之间存在正向关系,并且在负面信号情境下二者正向关系更强。稳健性检验进一步表明,发明专利的信号效应比非发明专利更强,而私企的专利信号效应比国企更强。     

International Knowledge Flows and Productivity: Intra- vs. Inter-Industry Spillovers

The effects of international knowledge spillovers on total factor productivity (TFP) at the industry level are examined by using a panel of 13 manufacturing industries across 15 OECD countries over 23 years. We distinguish between intra- and inter-industry spillovers from the information on patent applications and citations. Patent data are taken from the Japan Patent Office and the United States Patent and Trademark Office. Using four alternative spatial panel estimation techniques, we find that international knowledge spillovers within the same industry significantly contribute to sectoral TFP. In contrast, there is little evidence of a positive effect of international knowledge spillovers on TFP across industries.     

How well do patent citations measure flows of technology? Evidence from French innovation surveys

Patent citation data are used in a growing body of economics and business research on technological diffusion. Until now, there exists little evidence on whether patent citations are a good measure of knowledge flows. Our paper assesses the legitimacy of using European patent citations as a measure of technology flows. It uses information from the Community Innovation Survey collected by the French Service des Statistiques Industrielles (SESSI), which contain firms’ responses to questions about their innovative activity. We show that patent citations are indeed related to firms’ statements about their acquisition and dispersion of new technology, but that the strength and statistical significance of this relationship varies across geographical regions and across channels of knowledge diffusion.     

Getting Started with PATSTAT Register

This article provides a technical introduction to the PATSTAT Register database, which contains bibliographical, procedural and legal status data on patent applications handled by the European Patent Office. It presents eight MySQL queries that cover some of the most relevant aspects of the database for research purposes. It targets academic researchers and practitioners who are familiar with the PATSTAT database and the MySQL language.     

Patents and R&D at the firm level: A first report

The U.S. Patent Office has recently computerized its data base. Thus an easily accessible rather direct indicator of the inventive output of firms is now available. We examine the sense in which the patent measure is a ‘good’ indicator of inventive activity by relating it to the R&D expenditures of a cross-section of 121 firms over an 8 year period.     

Booming or emerging? China's technological capability and international collaboration in patent activities

China's economy and technology have experienced astounding growth in the last two decades. The OECD 2005 reports show that China has overtaken the USA to become the world's largest exporter of information and communications technology goods. In order to assess the progress China has made in technology development, this study examines the inventive activities in China and the pattern of international collaborations between China and other major industrialized countries or regions. This study analyzes the patent data from the United States Patent and Trademark Office (USPTO) focusing on joint patent application between China and the eight most inventive OECD countries and two Asian economic entities (South Korea and Taiwan). The results reveal increasing collaborations in inventive activities between China and other major inventive countries over the past decade, and suggest that China's technology capability may have begun to boom along with its fast economic growth.     

Product sophistication and spillovers from foreign direct investment

Foreign direct investment (FDI) in developing countries is often associated with higher economic growth due to knowledge and technology spillovers to local firms. One way that FDI speeds up growth is by facilitating the manufacturing of more sophisticated products by local firms. So far, there is a lack of firm‐level evidence how the presence of multinational firms affects the product sophistication of firms in a developing country. The aim of this paper is to fill this gap. We compile an extensive firm–product‐level data set of Indian manufacturing firms, which we complement with information on product sophistication and spillovers from FDI. We then explore different channels through which spillovers from multinationals to local Indian firms foster the manufacturing of sophisticated products. We find evidence that spillovers through supplier linkages strongly increase the manufacturing of sophisticated products in India.     

From less promising to green? Technological opportunities and their role in (green) ICT innovation

This article aims to shed light on the role of technological opportunities for green innovation by studying the case of Green ICT innovation. We test whether firms active in low-opportunity technological areas are less likely to be innovative and whether they are more likely to change their direction of technical change. To do so, we construct a firm-level panel data set for the years 1992–2009 combining patent data from the European Patent Office with firm-level data from the German Innovation Panel (Mannheim Innovation Panel). The results are based on dynamic count data estimation models applying General Methods of Moments estimators. Our results support our hypotheses: firms active in low-opportunity technological areas are less innovative but are more likely to switch from pure ICT innovation to Green ICT innovation.     

Drivers of firm growth: micro-evidence from Indian manufacturing

This paper investigates the determinants of firm growth for Indian manufacturing enterprises. The study uses the data obtained from the Prowess database, provided by the Centre for Monitoring Indian Economy (CMIE), covering the period 1991–2010. The study explores the growth of Indian manufacturing firms with respect to 1) its cross-sectional distribution, 2) its dynamics over time, and 3) its determinants. The cross-sectional distributional analysis exhibits high levels of heterogeneity in firm growth patterns, even across firms operating within the same sector, which increases over time. The inter-temporal dynamics observed with the help of transition probabilities matrices suggests that firm growth rates are not highly persistent in time, which is in contrast with the evidence from developed countries. It also reveals the coexistence of firms with very different characteristics and performance within sectors. Given the wide heterogeneity and non-persistent behavior of firm growth rates, this paper resorts to quantile regression analysis to identify the differential effect of regressors at different deciles of the conditional distribution.     

Selection bias in innovation studies: A simple test

The study of the innovative output of organizations often relies on a count of patents filed at one single office of reference such as the European Patent Office (EPO). Yet, not all organizations file their patents at the EPO, raising the specter of a selection bias. Using novel datasets of the whole population of patents by Belgian firms and German universities, we show that the single-office count results in a selection bias that affects econometric estimates of invention production functions. We propose an easy-to-implement methodology to evaluate whether estimates that rely on the single-office count are affected by a selection bias.     

An empirical analysis of patents flows and R&D flows around the world

In this article, we empirically investigate the effect of Research and Development (R&D) flows on patent flows around the world. We do this using an unbalanced panel consisting primarily of Organization for Economic Co-operation and Development (OECD) countries that have both patent and R&D expenditure information broken down by domestic and foreign sources. Our analysis shows that even among a fairly homogeneous group of countries, the sources of patents and R&D differ substantially. Using a dynamic panel framework, we find that domestic R&D per capita increases domestic patents per capita only for the European Patent Convention (EPC) countries that already have a decentralized approach to innovation. Foreign R&D per capita increases foreign patents per capita in all countries even though foreign R&D constitutes a very small fraction of total R&D. We find that some of these differences can be attributed to the locations of the patent applications, including those to the European Patent Office (EPO), United States Patent and Trademark Office (USPTO) and triadic patent applications to the EPO, USPTO and Japan Patent Office (JPO) simultaneously.     

Global Influences on U.S. Auto Innovation

There is a growing interest in the role that patents in one country have on product innovation in other countries. This paper contributes to the existing literature by using a firm fixed-effects model to investigate the connection between industry innovation (specifically that of the U.S. automobile industry) and a variety of micro and macroeconomic factors. Knowledge spillovers between countries are modeled using data from the Patent and Trademark Office, Census Bureau, and COMPUSTAT. The results indicate that German innovations affect U.S. firms differently from Japanese innovations: Japanese patents have a larger negative influence on U.S. auto manufacturers' patenting behavior.