Patent-based Measures Research Articles

Financial information, spillovers, and innovation performance

We hypothesize that high-quality financial information can, through its spillovers to peer firms’ strategic decision-making, have an adverse effect on the disclosing firm’s innovation performance. Using the degree of disaggregation in financial reports and patent-based measures to proxy for financial information quality and significance of innovative outputs, respectively, we find that the patented inventions of firms with more disaggregated financial reports are less innovative. We also document that the negative association is more pronounced for firms with more intense product market threats, a situation in which the spillover of more detailed information is costlier. We further validate our argument by documenting that disclosures of more and finer information actually help peers increase innovation activities and investments, consistent with the peers’ effective strategic responses to the disclosing firm’s innovation. Overall, the results from the cross-sectional analysis and validation tests confirm the channel through which more disaggregated financial information can lead to a decline in firm innovation performance. This study contributes to the literatures on information spillovers, economic consequences of financial reporting, proprietary costs of disclosures, and innovation.

New Frontiers: The Origins and Content of New Work, 1940–2018

Abstract We answer three core questions about the hypothesized role of newly emerging job categories (“new work”) in counterbalancing the erosive effect of task-displacing automation on labor demand: what is the substantive content of new work, where does it come from, and what effect does it have on labor demand? We construct a novel database spanning eight decades of new job titles linked to U.S. Census microdata and to patent-based measures of occupations’ exposure to labor-augmenting and labor-automating innovations. The majority of current employment is in new job specialties introduced since 1940, but the locus of new-work creation has shifted from middle-paid production and clerical occupations over 1940–1980 to high-paid professional occupations and secondarily to low-paid services since 1980. New work emerges in response to technological innovations that complement the outputs of occupations and demand shocks that raise occupational demand. Innovations that automate tasks or reduce occupational demand slow new-work emergence. Although the flow of augmentation and automation innovations is positively correlated across occupations, the former boosts occupational labor demand while the latter depresses it. The demand-eroding effects of automation innovations have intensified in the past four decades while the demand-increasing effects of augmentation innovations have not.

Introducing DynaPTI-constructing a dynamic patent technology indicator using text mining and machine learning.

Patent data is an established source of information for both scientific research and corporate intelligence. Yet, most patent-based technology indicators fail to consider firm-level dynamics regarding their technological quality and technological activity. Accordingly, these indicators are unlikely to deliver an unbiased view on the current state of firm-level innovation and are thus incomplete tools for researchers and corporate intelligence practitioners. In this paper, we develop DynaPTI, an indicator that tackles this particular shortcoming of existing patent-based measures. Our proposed framework extends the literature by incorporating a dynamic component and is built upon an index-based comparison of firms. Furthermore, we use machine-learning techniques to enrich our indicator with textual information from patent texts. Together, these features allow our proposed framework to provide precise and up-to-date assessments about firm-level innovation activities. To present an exemplary implementation of the framework, we provide an empirical application to companies from the wind energy sector and compare our results to alternatives. Our corresponding findings suggest that our approach can generate valuable insights that are complementary to existing approaches, particularly regarding the identification of recently emerging, innovation-overperformers in a particular technological field.

Recombination and the role of personality, knowledge sourcing and organizational diversification

Inventors recombine existing knowledge elements to identify new technological solutions and novel inventions. We study how inventors’ reliance on different sources of knowledge, their personality traits, and the diversification of the organizational knowledge of their employers jointly determine recombination outcomes. In our theorizing, we distinguish inventors’ overall recombination success from the share of technologically novel recombinations. Our predictions are tested relying on a large-scale survey of 1,327 industrial inventors, enhanced with patent-based measures of recombination outcomes. The results confirm earlier findings that access to a diverse set of knowledge is positively related to both recombination success and the rate of novel recombinations. Further, we are able to show that this clear relation holds only for inventors employed by firms with low knowledge diversification. Finally, personality dominates the effect of inventors’ reliance on different sources of knowledge and is relatively more important.

How does distant collaboration influence R&D quality?

ABSTRACT Geographical distance plays a key role in R&D collaboration for technological development. The relationship between geographical collaboration distance and technological development has been a key topic in innovation studies. However, how geographical distance in relation to R&D collaboration influences technological development quality has not been explored holistically or systematically. Thus, this study used patent-based measures to explore how spatial distance between inventors influences R&D output quality by employing three technology-related proxies, i.e. originality, generality, and innovation. It is found that geographic distance between collaborators has a significant and positive effect on originality, generality, and innovation. This paper contributes to understanding the underlying impact on technological development and provides researchers with a more thorough understanding of the spatial distance trajectory of technological innovation.

How Do Patent-Based Measures Inform Patent Collateral? A Holistic Analysis on All USPTO Patents Between 1986 and 2016

Technology market has been proposed to benefit technology development and increase productivity, and there is a growing interest on technology market in recent years. However, there is little specific guidance documented the link between patent-based measures and patent collateral. Therefore, the purpose of this article attempts to investigate how patent-based measures and patents used as collateral are related. This article employed eight frequently used patent-based measures categorized into three dimensions, i.e., knowledge flow, technological diversity, and legal protection, to analyze which factors increase patent collateral likelihood and patent collateral speed. The results of this article shows that reference count, times cited count, originality index, generality index, claim count, and family size all increase patent collateral likelihood. On the other hand, reference count, nonpatent reference count, originality index, claim count, and family size accelerate patent collateral speed.

Mapping Patent Usage in Management Research: The State of Prior Art

Patents play an important, and increasingly influential, role in management scholarship. In this study, we conduct a broad and systematic review of patent-based empirical work in the management field, which involves mapping the ways in which scholars are using patent-based measures to represent concepts and assessing this usage based on measurement principles. With respect to mapping, our review identifies the different types of measures that researchers have constructed based on different types of patent data (e.g., patent counts, backward citations) as well as delineates the classes of theoretical concepts that are being represented by those measures. In terms of assessing, as a complement to prior surveys of patent-based research that have assessed patents as indicators based on features of patents, patenting, and patent offices, we develop a framework that is based on measurement principles. Using this framework, our assessment of patent-based research in management reveals important patterns surrounding foundational measurement issues, i.e., method bias, validation threats, model misspecification. Our review makes two core contributions: one centering on summarizing how patents have been used in management research and one focusing on guiding management scholars in terms of common measurement issues for patent-based indicators. These contributions have important implications for future scholarly work in management.

Financing Technological Innovation: Evidence from Patent-Intensive Firms

ABSTRACTEquityholders of firms with high debt loads have an incentive to underinvest, a distortion that can be most costly for firms with attractive growth options. Using a novel patent-based measure of a firm's growth options, we find that firms issue more equity and shy away from debt financing when they have larger investment opportunities sets. The results are more pronounced among firms in patent-intensive industries. The findings suggest the existence of conflicts of interest between debtholders and equityholders. Our results are consistent with the use of conservative debt policies by technology-intensive firms to mitigate the debt overhang associated with their future growth options.

How do patent-based measures inform product commercialization? —The case of the United States pharmaceutical industry

Abstract Patents have frequently been used to analyze innovation and technological trajectory in the economic literature. The present study explored how 13 frequently used patent indicators inform product approval probability and product commercialization speed. A total of 2943 drugs approved by the FDA and the corresponding 4660 patents were analyzed to understand how patent-based indicators inform 1) which factors influence the likelihood of product approval and 2) which factors influence product commercialization speed. The results show that inventor count, nonpatent reference count, foreign reference count, originality index, claim count, and litigation probability index increase product commercialization probability and speed.

Knowledge Spillovers and Local Industry Growth: A Patent Citation Approach

We create unique patent-based measures of Marshall–Arrow–Romer (MAR) and Jacobs knowledge spillovers using patent citations data and use them to test the Glaeser et al. model of local industry employment growth on three emerging technology categories, namely, computing and communications, drugs and medical, and electrics and electronics. We test growth in 45 U.S. metropolitan statistical areas (MSAs) and consolidated metropolitan statistical areas (CMSAs) for eight two-digit industries over the period 1994 to 2000. We find strong evidence for MAR spillovers from specialization, but little for Jacobs spillovers from diversity. Our results suggest that regional specialization, but not diversity, boosts local industry employment growth in these knowledge fields. JEL classifications: J21, L16

NK model as a representation of innovative search

The process of innovation is frequently modeled as a bounded, iterative, trial-and-error search over a complex landscape using an NK model. An important question, however, is whether such theoretical approximation is consistent with empirical data. Prior work tested specific insights of the NK model while yielding mixed evidence. I examine how the full set of predictions generated by the NK model map onto observed empirical patterns while relying on commonly used patent-based measures of complexity. While the fit between the predictions and data is not perfect, I find that the ability of the NK model to capture innovative processes is better than previously thought. While doing so, I draw attention to potential boundary conditions for both the applicability of the model and usefulness of the measures. The study sheds new light on an important discussion within the field of innovation and technology management and helps to bridge the gap between the NK model and its empirical implementation.

Predicting developmental toxicity: Fishing with ‘Omics technology

The process of innovation is frequently modeled as a bounded, iterative, trial-and-error search over a complex landscape using an NK model. An important question, however, is whether such theoretical approximation is consistent with empirical data. Prior work tested specific insights of the NK model while yielding mixed evidence. I examine how the full set of predictions generated by the NK model map onto observed empirical patterns while relying on commonly used patent-based measures of complexity. While the fit between the predictions and data is not perfect, I find that the ability of the NK model to capture innovative processes is better than previously thought. While doing so, I draw attention to potential boundary conditions for both the applicability of the model and usefulness of the measures. The study sheds new light on an important discussion within the field of innovation and technology management and helps to bridge the gap between the NK model and its empirical implementation.

What do patent-based measures tell us about product commercialization? Evidence from the pharmaceutical industry

Patent-based measures are frequently used as indicators in empirical research on innovation and technological change. Currently, there is little evidence as to what extent patent-based indicators relate to product market outcomes. Using a unique dataset that links outcomes from product commercialization in the pharmaceutical industry with detailed patent data, we relate patent-based indicators that capture either an invention's value or the uncertainty surrounding the patenting process to the outcomes of the product development process. Our findings suggest that the speed of commercialization increases with value but reduces with uncertainty. Using a variety of alternative indicators we derive implications for the use and the proper interpretation of individual measures. Moreover, our study has broader implications as it highlights the detrimental effect of uncertainty on the speed of innovation.

Knowledge Spillovers and Their Impact on Innovation Success - A New Approach Using Patent Backward Citations

We propose a new patent-based measure of knowledge spillovers that calculates technological proximity based on firms that were identified via patent backward citations links. We argue that this measure has a couple of advantages as compared to the 'standard' measure proposed by Jaffe: First, it reflects spillovers from both domestic and foreign technologically 'relevant' firms, second, it is more precise because it only takes into account knowledge relations with technologically 'relevant' firms. Our empirical results indeed show that the measure performs better than the standard measure in an innovation model. We find - for a representative sample of Swiss firms - that knowledge spillovers measured in this way have a positive and significant impact on innovation success. However, the knowledge spillovers appear to be localized: Spillovers from geographically distant areas such as the USA and Japan matter less than spillovers from near destinations such as Europe and particularly Switzerland itself. Moreover, the spillover effect on innovation performance decreases with increasing number of competitors on the main product market so that this effect would appear only in niche markets or oligopolistic market structures. However, an additional effect of competition can only be detected for more radical innovation success.

International technology sourcing between a developing country and the rest of the world. A case study of China

Developing countries are increasingly seen as competitors in knowledge intensive activities. However, their rapidly growing innovation potential suggests that they will become important producers of technology demanded by other countries, and at the same time, they will increase their demand for technology produced elsewhere. To study the evolution, composition and drivers of international technology sourcing between a developing country and the rest of the world, we look at the case of China. To quantify these technology flows we use patent-based measures of cross-border ownership of inventions and a patent database providing worldwide coverage of patents. We show that although China has a large deficit in international technology sourcing, the flow of technology from abroad to China and vice versa is intensifying. In both directions of technology sourcing, we observe strong concentration in terms of partners and technological fields. While geographic distance hinders the technology flow from China to other countries, it does not impede Chinese entities from acquiring property rights over inventions developed by inventors from distant countries. China maintains intensive linkages with a number of relatively small and developing countries. This way it accelerates the process of South–South interactions in international technology sourcing.

활용과 탐색 측정을 위한 방법론으로써 콘텐츠 분석 :세계 광디스크 라이브러리장치 산업

활용과 탐색을 측정하는 방법은 특허 기반의 방법, 설문 기반의 방법, 언론 기반의 방법 세 가지로 나뉜다. 다양한 방법론이 나오게 된 이유는 활용과 탐색의 정의에 대한 합의가 아직 이루어지지 않았기 때문이다. 활용과 탐색 활동은 기업이 장기적으로 행하기 때문에 언론 기반의 방법이 가장 적절하며, 이 논문에서는 세계 광디스크 라이브러리 장치 산업의 데이터를 활용하여 유효하고, 신뢰성 있는 언론 기반의 방법에 의해 활용과 탐색을 어떻게 측정하는 것인지를 보여주고자 한다. Measures of exploration and exploitation fall into three categories, patent-based measures, survey-based measures, and press-based measures. Such variety stems from the lack of consensus on definitions of exploration and exploitation. Given a dynamic nature of exploration and exploitation, I suggested how to improve existing press-based measures by suggesting strategies and procedures for constructing valid and reliable press-based measures in a single industry context. I illustrate my arguments through a study of the worldwide optical disk industry.

What Do Patent-Based Measures Tell Us About Product Commercialization? Evidence from the Pharmaceutical Industry

What Do Patent-Based Measures Tell Us About Product Commercialization? Evidence from the Pharmaceutical Industry

Knowledge Bases and Collaboration Propensity during Clinical Drug Development

We apply the theory of the knowledge-based view on the firm to investigate why pharmaceutical companies enter into inter-organizational collaborations during clinical drug development. A firm’s propensity to collaborate is influenced by the firm’s knowledge base, i.e. its stock of knowledge resources. We consider two knowledge bases that exist within pharmaceutical firms: early-stage R&D and late-stage R&D knowledge bases. As pharmaceutical companies possess and utilize both knowledge bases during drug development, traditional patent-based measures present too homogeneous a view on the firm's knowledge base. We complement traditional measures with a measure that captures late-stage R&D knowledge base and answer the following research question: What is the impact of the concentration of the early-stage R&D and late-stage R&D knowledge bases on the propensity of pharmaceutical companies to engage in collaborative clinical drug development? We find that pharmaceutical companies with a concentrated clinical development knowledge base collaborate less during clinical drug development. Contrary to previous research, we do not find that a highly concentrated preclinical R&D knowledge base leads to less collaboration. We do confirm that R&D intensive firms collaborate more during new product development. Our dataset covers 17 large pharmaceutical firms for the period 2005 – 2011.

Patent indicators and product commercialization - Evidence from the pharmaceutical industry

Patent-based measures are frequently used indicators in empirical research on innovation and technology as well as firms’ strategies and organizational choices. We contribute to their validation in a unique setting that allows us to combine data on product commercialization in the pharmaceutical industry with the underlying patents on the level of individual products. Our findings draw a complex picture regarding the information content of various patent indicators are bear important implications for the use and the proper interpretation of these indicators in settings where they are employed to describe outcomes beyond the patent system itself.

EFFECTS OF EXPLORATION ON THE RELATIONSHIP BETWEEN INTELLECTUAL CAPITAL AND THE RETAINED TECHNICAL VALUE OF INNOVATION

As organizational success becomes increasingly tied to the generation of new technologies and the continuous improvement of existing technologies, numerous questions arise regarding the management of knowledge in ways that maximize the technical value of the resulting innovations. Scholars and practitioners alike need to gain a better understanding of not only how knowledge can be applied to the generation of technically valuable innovations, but also how that value can be captured and retained by the innovating organization itself. Using patent-based measures across 117 innovations in the inkjet printing field over the last two decades of the twentieth century, the research described in this study investigates the relationships among selected components of intellectual capital, different knowledge exploration (i.e., search and selection) strategies, and the retained technical value of organizationally generated innovations.