How Do the Speed, Science Linkage, Focus and New Entry Matter in IT Inventions?

Abstract

This paper examines the speed, science linkage and focus of corporate R&D, as well as new entry matter, as the determinants of R&D performance of the IT (information technology) sector,1 and discusses the recent R&D performance of US, Japanese and European firms from this perspective. We use the number of (forward) patent citations per patent and the number of patents as the performance measures of R&D, both based on US patents. Past studies suggest that the patent citation provides very useful information on the value of patents.2 In particular, citation per patent of a firm is significantly correlated with its market value (Deng et al., 1999; Hall et al., 2000; Hirschey and Richardson, 2001, 2004; and Nagaoka, 2005). Given the extreme heterogeneity of the value of patents (see, for example, Scherer and Harhoff, 2000), it is important to use both quality and quantity measures of patents in assessing the R&D performance of a firm. The R&D performance of US firms in the IT sector improved significantly relative to the rest of the world in the 1990s in both of these two respects. The average citation per patent of the US firms is 28 per cent higher than that of the Japanese firms for the patents granted for the 1983–7 period, but it is 73 per cent higher than that of the Japanese firms for the patents granted for the 1993–7 period (see Figure 8.1).3 KeywordsPatent CitationTechnology AreaCore SectorJapanese FirmFocus VariableThese keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.