Abstract
We propose a new measure of the economic importance of each innovation. Our measure uses newly collected data on patents issued to U.S. firms in the 1926 to 2010 period, combined with the stock market response to news about patents. Our patent-level estimates of private economic value are positively related to the scientific value of these patents, as measured by the number of citations the patent receives in the future. Our new measure is associated with substantial growth, reallocation, and creative destruction, consistent with the predictions of Schumpeterian growth models. Aggregating our measure suggests that technological innovation accounts for significant medium-run fluctuations in aggregate economic growth and TFP. Our measure contains additional information relative to citation-weighted patent counts; the relation between our measure and firm growth is considerably stronger. Importantly, the degree of creative destruction that is associated with our measure is higher than previous estimates, confirming that it is a useful proxy for the private valuation of patents.
| Original language | English (US) |
|---|---|
| Pages (from-to) | 665-712 |
| Number of pages | 48 |
| Journal | Quarterly Journal of Economics |
| Volume | 132 |
| Issue number | 2 |
| DOIs | |
| State | Published - Jan 1 2017 |
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ASJC Scopus subject areas
- Economics and Econometrics
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Technological innovation, resource allocation, and growth. / Kogan, Leonid; Papanikolaou, Dimitris; Seru, Amit; Stoffman, Noah.
In: Quarterly Journal of Economics, Vol. 132, No. 2, 01.01.2017, p. 665-712.Research output: Contribution to journal › Article
TY - JOUR
T1 - Technological innovation, resource allocation, and growth
AU - Kogan, Leonid
AU - Papanikolaou, Dimitris
AU - Seru, Amit
AU - Stoffman, Noah
PY - 2017/1/1
Y1 - 2017/1/1
N2 - We propose a new measure of the economic importance of each innovation. Our measure uses newly collected data on patents issued to U.S. firms in the 1926 to 2010 period, combined with the stock market response to news about patents. Our patent-level estimates of private economic value are positively related to the scientific value of these patents, as measured by the number of citations the patent receives in the future. Our new measure is associated with substantial growth, reallocation, and creative destruction, consistent with the predictions of Schumpeterian growth models. Aggregating our measure suggests that technological innovation accounts for significant medium-run fluctuations in aggregate economic growth and TFP. Our measure contains additional information relative to citation-weighted patent counts; the relation between our measure and firm growth is considerably stronger. Importantly, the degree of creative destruction that is associated with our measure is higher than previous estimates, confirming that it is a useful proxy for the private valuation of patents.
AB - We propose a new measure of the economic importance of each innovation. Our measure uses newly collected data on patents issued to U.S. firms in the 1926 to 2010 period, combined with the stock market response to news about patents. Our patent-level estimates of private economic value are positively related to the scientific value of these patents, as measured by the number of citations the patent receives in the future. Our new measure is associated with substantial growth, reallocation, and creative destruction, consistent with the predictions of Schumpeterian growth models. Aggregating our measure suggests that technological innovation accounts for significant medium-run fluctuations in aggregate economic growth and TFP. Our measure contains additional information relative to citation-weighted patent counts; the relation between our measure and firm growth is considerably stronger. Importantly, the degree of creative destruction that is associated with our measure is higher than previous estimates, confirming that it is a useful proxy for the private valuation of patents.
UR - http://www.scopus.com/inward/record.url?scp=85021766438&partnerID=8YFLogxK
UR - http://www.scopus.com/inward/citedby.url?scp=85021766438&partnerID=8YFLogxK
U2 - 10.1093/qje/qjw040
DO - 10.1093/qje/qjw040
M3 - Article
AN - SCOPUS:85021766438
VL - 132
SP - 665
EP - 712
JO - Quarterly Journal of Economics
JF - Quarterly Journal of Economics
SN - 0033-5533
IS - 2
ER -