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Abstract:
Enhanced energy efficiency occupies a central role in evaluating the efficacy and cost of climate change policies. Ultimately, total greenhouse gas (GHG) emissions are the product of population, economic activity per capita, energy use per unit of economic activity, and the carbon intensity of energy used. Although greenhouse gas emissions can be limited by reducing economic activity, this option obviously has little appeal even to rich countries, let alone poor ones. Much attention has therefore been placed on the role that technological improvements can play in reducing carbon emissions and in lowering the cost of those reductions. In addition, the influence of technological changes on the emission, concentration, and cost of reducing GHGs will tend to overwhelm other factors, especially in the longer term. Understanding the process of technological change is therefore of utmost importance. Nonetheless, the task of measuring, modeling, and ultimately influencing the path of technological development is fraught with complexity and uncertainty?as are the technologies themselves.

Although there is little debate over the importance of energy efficiency in limiting GHG emissions, there is intense debate about its cost-effectiveness and about the government policies that should be pursued to enhance energy efficiency. At the risk of excessive simplification, we can characterize "technologists" as believing that there are plentiful opportunities for low-cost, or even "negative-cost" improvements in energy efficiency, and that realizing these opportunities will require active intervention in markets for energy-using equipment to help overcome barriers to the use of more efficient technologies. Most economists, on the other hand, acknowledge that there are "market barriers" to the penetration of various technologies that enhance energy efficiency, but that only some of these barriers represent real "market failures" that reduce economic efficiency.

In this essay, we examine what lies behind this dichotomy in perspectives. Ultimately, the veracity of different perspectives is an empirical question and reliable empirical evidence on the issues identified above is surprisingly limited. We review the evidence that is available, finding that although energy and technology markets certainly are not perfect (no markets are), the balance of evidence supports the view that there is not as much "free lunch" in energy efficiency as some would suggest. On the other hand, a case can be made for the existence of certain inefficiencies in energy technology markets, thus raising the possibility of some inexpensive GHG control through energy-efficiency enhancement. We conclude with some reflections on the role of appropriate energy efficiency policy in climate change mitigation.

Abstract:
Environmental policy discussions increasingly focus on issues related to technological change. This is partly because the environmental consequences of social activity are frequently affected by the rate and direction of technological change, and partly because environmental policy interventions can themselves create constraints and incentives that have significant effects on the path of technological progress. This paper, prepared as a chapter draft for the forthcoming Handbook of Environmental Economics (North-Holland/Elsevier Science), summarizes current thinking on technological change in the broader economics literature, surveys the growing economic literature on the interaction between technology and the environment, and explores the normative implications of these analyses. We begin with a brief overview of the economics of technological change, and then examine theory and empirical evidence on invention, innovation, and diffusion and the related literature on the effects of environmental policy on the creation of new, environmentally friendly technology. We conclude with suggestions for further research on technological change and the environment.

Abstract:
Environmental policy discussions increasingly focus on issues related to technological change. This is partly because the environmental consequences of social activity are frequently affected by the rate and direction of technological change, and partly because environmental policy interventions can themselves create constraints and incentives that have significant effects on the path of technological progress. This paper, prepared as a chapter draft for the forthcoming Handbook of Environmental Economics (North-Holland/Elsevier Science), summarizes for environmental economists current thinking on technological change in the broader economics literature, surveys the growing economic literature on the interaction between technology and the environment, and explores the normative implications of these analyses. We begin with a brief overview of the economics of technological change, and then examine three important areas where technology and the environment intersect: the theory and empirical evidence of induced innovation and the related literature on the effects of environmental policy on the creation of new, environmentally friendly technology; the theory and empirics of environmental issues related to technology diffusion; and analyses of the comparative technological impacts of alternative environmental policy instruments. We conclude with suggestions for further research on technological change and the environment.

Abstract:
Environmental policy discussions increasingly focus on issues related to technological change. This is partly because the environmental consequences of social activity are frequently affected by the rate and direction of technological change, and partly because environmental policy interventions can themselves create constraints and incentives that have significant effects on the path of technological progress. This paper, prepared as a chapter draft for the forthcoming Handbook of Environmental Economics (North-Holland/Elsevier Science), summarizes for environmental economists current thinking on technological change in the broader economics literature, surveys the growing economic literature on the interaction between technology and the environment, and explores the normative implications of these analyses. We begin with a brief overview of the economics of technological change, and then examine three important areas where technology and the environment intersect: the theory and empirical evidence of induced innovation and the related literature on the effects of environmental policy on the creation of new, environmentally friendly technology; the theory and empirics of environmental issues related to technology diffusion; and analyses of the comparative technological impacts of alternative environmental policy instruments. We conclude with suggestions for further research on technological change and the environment.

technological change, environment, invention, innovation, diffusion

Abstract:
The relationship between technological change and environmental policy has received increasing attention from scholars and policy makers alike over the past ten years. This is partly because the environmental impacts of social activity are significantly affected by technological change, and partly because environmental policy interventions themselves create new constraints and incentives that affect the process of technological developments. Our central purpose in this article is to provide environmental economists with a useful guide to research on technological change and the analytical tools that can be used to explore further the interaction between technology and the environment. In Part 1 of the article, we provide an overview of analytical frameworks for investigating the economics of technological change, highlighting key issues for the researcher. In Part 2, we turn our attention to theoretical analysis of the effects of environmental policy on technological change, and in Part 3, we focus on issues related to the empirical analysis of technology innovation and diffusion. Finally, we conclude in Part 4 with some additional suggestions for research.

Abstract:
This paper describes the database on U.S. patents that we have developed over the past decade, with the goal of making it widely accessible for research. We present main trends in U. S. patenting over the last 30 years, including a variety of original measures constructed with citation data, such as backward and forward citation lags, indices of 'originality' and 'generality', self-citations, etc. Many of these measures exhibit interesting differences across the six main technological categories that we have developed (comprising Computers and Communications, Drugs and Medical, Electrical and Electronics, Chemical, Mechanical and Others), differences that call for further research. To stimulate such research, the entire database about 3 million patents and 16 million citations is now available on the NBER website. We discuss key issues that arise in the use of patent citations data, and suggest ways of addressing them. In particular, significant changes over time in the rate of patenting and in the number of citations made, as well as the inevitable truncation of the data, make it very hard to use the raw number of citations received by different patents directly in a meaningful way. To remedy this problem we suggest two alternative approaches: the fixed-effects approach involves scaling citations by the average citation count for a group of patents to which the patent of interest belongs; the quasi-structural approach attempts to distinguish the multiple effects on citation rates via econometric estimation.

Abstract:
Studies of firm-level data have shown that a firm's R&D and the R&D of other firms increase conventional factor productivity. We investigate these phenomena further by examining the relationship between plant-level productivity and firm-level R&D. We find that (1) the productivity-enhancing effects of parent firm R&D are diminished by geographic distance from the research lab and "technological" distance between the product-field focus of the R&D and the plants; (2) productivity appears to depend on the intensity of parent firm R&D (R&D per plant), not on the total amount; and (3) spillovers of research effects from technologically related firms are significant but also depend on R&D intensity rather than total industry R&D. These results suggest that, despite the externalities created by spillovers of R&D, the "dilution" of R&D across multiple target plants reduces its potency sufficiently that spillovers may not be a source of industry-wide or economy-wide increasing returns.

Abstract:
It follows from Hicks' induced innovation hypothesis that rising energy prices in the last two decades should have induced energy-saving innovation. We formulate the hypothesis concretely using a product-characteristics model of energy-using consumer durables, augmenting Hicks' hypothesis to allow for the possibility that government efficiency standards also induce innovation. Through estimation of characteristics transformation surfaces, we find that technological change reduced the total capital and operating costs of air air conditioning by half and water heating by about one-fifth. Although the rate of overall innovation in these products appears to be independent of energy prices and regulations, the evidence suggests that the direction of innovation has been responsive to energy price changes. In particular, energy price increases induced innovation in a direction that lowered the capital cost tradeoffs inherent in producing more energy-efficiency products. In addition, energy price changes induced changes in the subset of technically feasible models that were offered for sale. Our estimates indicate that about one-quarter to one-half of the improvements in mean energy-efficiency of the menu of new models for these products over the last two decades were associated with rising energy prices since 1973. We also find that this responsiveness to price changes increased substantially after product labeling requirements came into effect, and that minimum efficiency standards had a significant positive effect on average efficiency levels. Nonetheless, a sizeable portion of efficiency improvements in these technologies appears to have been autonomous.

Abstract:
We develop a methodology for testing Hick's induced innovation hypothesis by estimating a product-characteristics model of energy-using consumer durables, augmenting the hypothesis to
allow for the influence of government regulations. For the products we explored, the evidence suggests: (i) that the rate of overall innovation was independent of energy prices and regulations, (ii) the direction of innovation was responsive to energy price changes for some products but not for others,
(iii) energy price changes induced changes in the subset of technically feasible models that were offered for sale, (iv) this responsiveness increased substantially during the period after energy-efficiency product labeling was required, and (v) nonetheless, a sizeable portion of efficiency improvements were autonomous.

Abstract:
We develop a methodology for testing Hick?s induced innovation hypothesis by estimating a product-characteristics model of energy-using consumer durables, augmenting the hypothesis to
allow for the influence of government regulations. For the products we explored, the evidence suggests: (i) that the rate of overall innovation was independent of energy prices and regulations, (ii) the direction of innovation was responsive to energy price changes for some products but not for others,
(iii) energy price changes induced changes in the subset of technically feasible models that were offered for sale, (iv) this responsiveness increased substantially during the period after energy-efficiency product labeling was required, and (v) nonetheless, a sizeable portion of efficiency improvements were autonomous.

Abstract:
The rate of patenting in the U.S. has exploded in the last half of the 1990s. It is widely believed that the increase in patent grants is at least partly a result of the apparent decline in examination standards. There has been little exploration, however, of the theoretical prediction that a decline in examination standards would itself induce an increase in dubious applications. We estimate a simultaneous equation model, in which the number applications depend on the perceived rigor of the examination process, amongst other things and patent grants depend on the number and quality of applications. We have a multi-dimensional panel, with data on the application and grant rates for each year, countries of origin, and jurisdiction of examination. We find that a 'loosening' of the grants standards by one percent increases applications by 8 percent in the full sample and by 3 percent in the Non-U.S. sample. This result points to the importance of accounting for the endogenous application response particularly for the U.S. case. Controlling for this effect, we find that application elasticity of grants is around 0.124 for the full sample and 0.145 for the Non-U.S. one, and is declining over time in both. In addition countries whose patent applications are more likely to be successful in the U.S. are more likely to be successful in other countries as well. These findings confirm that inventors respond to increased likelihood of success at the patent office by filing more applications, but also confirm earlier findings that the surge in patenting in the U.S. in the last two decades appears to be driven to a significant extent by an increase in the underlying invention rate.

Patent Explosion, Application Propensity, Grants Rates

Abstract:
As patent data become more available in machine-readable form, an increasing number of researchers have begun to use measures based on patents and their citations as indicators of technological output and information flow. This paper explores the economic meaning of these citation-based patent measures using the financial market valuation of the firms that own the patents. Using a new and comprehensive dataset containing over 4800 U. S. Manufacturing firms and their patenting activity for the past 30 years, we explore the contributions of R&D spending, patents, and citation-weighted patents to measures of Tobin's Q for the firms. We find that citation-weighted patent stocks are more highly correlated with market value than patent stocks themselves and that this fact is due mainly to the high valuation placed on firms that hold very highly cited patents.

Abstract:
This paper surveys the major changes in patent policy and practice that have occurred in the last two decades in the U.S., and reviews the existing analyses by economists that attempt to measure the impacts these changes have had on the processes of technological change. It also reviews the broader theoretical and empirical literature that bears on the expected effects of changes in patent policy. Despite the significance of the policy changes and the wide availability of detailed data relating to patenting, robust conclusions regarding the empirical consequences for technological innovation of changes in patent policy are few. Possible reasons for these limited results are discussed, and possible avenues for future research are suggested.

Abstract:
A survey of recent patentees was conducted to elicit their perceptions regarding the importance of their inventions, the extent of their communication with other inventors, and the relationship of both importance and communication to observed patent citations. A cohort of 1993 patentees were asked specifically about 2 patents that they had cited, and a third placebo' patent that was similar but which they did not cite. One of the two cited inventors was also surveyed. We find that inventors report significant communication, at least some of which is in forms that suggests spillovers from the cited inventor to the citing inventor. The perception of such communication was substantively and statistically significantly greater for the cited patents than for the placebos. There is, however, a large amount of noise in citations data; it appears that something like one-half of all citations do not correspond to any perceived communication, or even necessarily to a perceptible technological relationship between the inventions. We also find a significant correlation between the number of citations a patent received and its importance (both economic and technological) as perceived by the inventor.

Abstract:
This paper presents evidence that firms' patents, profits and market value are systematically related to the "technological position" of firms' research programs. Further, firms are seen to "move" in technology space in response to the pattern of contemporaneous profits at different positions. These movements tend to erode excess returns.

"Spillovers" of R&D are modelled by examining whether the R&D of neighboring firms in technology space has an observable impact on the firm's R&D success. Firms whose neighbors do much R&D produce more patents per dollar of their own R&D, with a psoitive interaction that gives high R&D firms the largest benefit from spillovers. In terms of profit and market value, however, their are both positive and negative effects of nearby firms' R&D. The net effect is positive for high R&D firms, but firms with R&D about one standard deviation below the mean are made worse off overall by the R&D of others.

Abstract:
Despite their magnitude and potential economic impact, federal R&D expenditures outside of research universities have been little scrutinized by economists. This paper examines whether the series of initiatives since 1980 that have sought to encourage the patenting and technology transfer at the national laboratories have had a significant impact, and how the features of these facilities affected their success in commercialization. Employing both case studies of and databases about the U.S. Department of Energy's laboratories, we challenge much of the conventional wisdom. The policy changes of the 1980s had a substantial impact on the patenting activity by the national laboratories, which have gradually reached parity in patents per R&D dollar with research universities. Using citation data, we show that, unlike universities, the quality of the laboratory patents has remained constant or even increased as their numbers have grown. The cross-sectional patterns are generally consistent with theoretical suggestions regarding the impact and determinants of the decision to privatize government functions.

Abstract:
Within the field of environmental economics, the role of technological change has received much attention. The long-term nature of many environmental problems, such as climate change, makes understanding the evolution of technology an important part of projecting future impacts. Moreover, in many cases environmental problems cannot be addressed, or can only be addressed at great cost, using existing technologies. Providing incentives to develop new environmentally-friendly technologies then becomes a focus of environmental policy. This chapter reviews the literature on technological change and the environment. Our goals are to introduce technological change economists to how the lessons of the economics of technological change have been applied in the field of environmental economics, and suggest ways in which scholars of technological change could contribute to the field of environmental economics.

Institutional subscribers to the NBER working paper series, and residents of developing countries may download this paper without additional charge at www.nber.org.

Abstract:
This Paper describes the database on US patents that we have developed over the past decade, with the goal of making it widely accessible for research. We present main trends in US patenting over the last 30 years, including a variety of original measures constructed with citation data, such as backward and forward citation lags, indices of 'originality' and 'generality', self-citations, etc. Many of these measures exhibit interesting differences across the six main technological categories that we have developed (comprising Computers and Communications, Drugs and Medical, Electrical and Electronics, Chemical, Mechanical and Others), differences that call for further research. To stimulate such research, the entire database - about 3 million patents and 16 million citations - is now available on the NBER website. We discuss key issues that arise in the use of patent citations data, and suggest ways of addressing them. In particular, significant changes over time in the rate of patenting and in the number of citations made, as well as the inevitable truncation of the data, make it very hard to use the raw number of citations received by different patents directly in a meaningful way. To remedy this problem we suggest two alternative approaches: the fixed-effects approach involves scaling citations by the average citation count for a group of patents to which the patent of interest belongs; the quasi-structural approach attempts to distinguish the multiple effects on citation rates via econometric estimation.

Patents, citations, data construction, truncation

Abstract:
This paper describes the construction of a large panel data set covering about 2600 firms in the U.S. manufacturing sector for up to twenty years which contains annual data on financial variables, employment, research and development expenditures, and aggregate patent applications. This data set is to be used in a larger study of R&D, inventive output and technological change. In the present paper we present preliminary results on the R&D and patenting behavior of the 1976 cross section of these firms. We find an elasticity of R&D with respect to sales of close to unity, with both very small and very large firms being slightly more R&D intensive than average. Because only 60% of the firms report R&D expenditures, we attempt to correct for selectivity bias and find that though the correction is small, it increases the estimated complementarity between capital intensity and R&D intensity. In exploring the relationship of the patenting activity of these firms to their contemporaneous R&D expenditures, we look with some care at the choice of econometric specifications since the discrete nature of the patents variable for our smaller firms may cause difficulties with the conventional log linear model. The choice of specification does indeed make a difference, and the negative binomial model, which is a Poisson-type model with a disturbance, is preferred. Substantively, we find a much larger output of patents per R&D dollar for the small firms, with a decreasing propensity to patent with size of R&D programs throughout the sample. However, this conclusion is highly tentative both because of its sensitivity to specification and choice of sample and also because we expect that errors in variables bias due to our focus on R&D and patent applications in a single year is far worse for the small firms.

Abstract:
This paper explores changes in university patenting behavior between 1965 and 1988. We show that university patents have increased 15-fold while real university research spending almost tripled. The causes of this increase are unclear, but may include increased focus on commercially relevant technologies, increased industry funding of university research, a 1980 change in federal law that facilitated patenting of results from federally funded research, and the widespread creation of formal technology licensing offices at universities. Up until approximately the mid-1980s, university patents were more highly cited, and were cited by more technologically diverse patents, than a random sample of all patents. This difference is consistent with the notion that university inventions are more important and more basic than the average invention. The differences between the two groups disappeared, however, in the middle part of the 1980s, partly due to a decline in the citation rates for all universities, and partly due to an increasing share of patents going to smaller institutions, whose patents are less highly cited throughout this period. Moreover at both large and small institutions there was a large increase in the fraction of university patents receiving zero citations. Our results suggest that the rate of increase of important patents from universities is much less than the overall rate of increase of university patenting in the period covered by our data.

Abstract:
Explores the geographic localization of knowledge spillover by comparing the location of inventors of citing patents to the location of the inventors of the patents they cite. The originating patents considered were from 1975 and 1980 and included all patents granted to U.S. universities and two samples from U.S. corporations. The citing patents were identified as of the end of 1989. Self-citations, that is when the owner of a cited patent is the same as the owner of the citing patent, are distinguished in this analysis. Results for the 1980 patents indicate that there is a definite and statistically significant pattern of localization at the country, state, and metropolitan statistical areas. The same pattern occurs for the 1975 patents, but it is at a weaker level. Further, the results show that localization fades over time though slowly. Technological area of the patent appears to have little impact on localization, nor is there a large difference in knowledge flows between patents held by universities and those held by corporations. Further investigation into the mechanisms of knowledge transfer is necessary, as this analysis was limited by the patent and citation data. (SRD)

Knowledge spillovers, Patents, Geography, Localization, Patent ownership, Knowledge transfer

Abstract:
We compare the geographic location of patent citations to those of the cited patents, as evidence of the extent to which knowledge spillovers are geographically localized. We find that citations to U.S. patents are more likely to come from the U.S., and more likely to come from the same state and SMSA as the cited patents than one would expect based only on the preexisting concentration of related research activity. These effects are particularly significant at the local (SMSA) level, and are particularly apparent in early citations.

Abstract:
We explore the commercialization of government-generated technology by analyzing patents awarded to the U.S. government and the citations to those patents from subsequent patents. We use information on citations to federal patents in two ways: (1) to compare the average technological impact of NASA patents, other Federal' patents, and a random sample of all patents using measures of importance' and generality;' and (2) to trace the geographic location of commercial development by focusing on the location of inventors who cite NASA and other federal patents. We find, first, that the evidence is consistent with increased effort to commercialize federal lab technology generally and NASA specifically. The data reveal a striking NASA golden age' during the second half of the 1970s which remains a puzzle. Second, spillovers are concentrated within a federal lab complex of states representing agglomerations of labs and companies. The technology complex links five NASA states through patent citations: California, Texas, Ohio, DC/Virginia-Maryland, and Alabama. Third, qualitative evidence provides some support for the use of patent citations as proxies for both technological impact and knowledge spillovers.

Abstract:
The extent to which new technological knowledge flows across institutional and national boundaries is a question of great importance for public policy and the modeling of economic growth. This paper develops a model of the process generating subsequent citations to patents as a lens for viewing knowledge diffusion. We find that the probability of patent citation over time after a patent is granted fits well to a double-exponential function that can be interpreted as the mixture of diffusion and obsolescence functions. The results indicate that diffusion is geographically localized. Controlling for other factors, within-country citations are more numerous and come more quickly than those that cross country boundaries.

Abstract:
This paper explores the patterns of citations among patents taken out by inventors in the U.S., the U.K., France, Germany and Japan. We find (1) patents assigned to the same firm are more likely to cite each other, and come sooner than other citations; (2) patents in the same patent class are approximately 100 times as likely to cite each other as patents from different patent classes there is not a strong time pattern to this effect; (3) patents whose inventors reside in the same country are typically 30 to 80% more likely to cite each other than inventors from other countries, and these citations come sooner; and (4) there are clear country-specific citation tendencies; e.g., Japanese citations typically come sooner than those of other countries.

Abstract:
We explore the use of patent citations to measure the "basicness" and appropriability of inventions. We propose that the basicness of research underlying an invention can be characterized by the nature of the previous patents cited by an invention; that the basicness of research outcomes relates to the subsequent patents that cite an invention; and that the fraction of citing patents that are assigned to the same organization as the original invention is a measure of appropriabiity. We test the validity of these presumptions by comparing the value of our measures for university and corporate patents, and find that many of the measures do conform to our a priori belief that university research and research outcomes are more basic and harder to appropriate than those of corporations. We also find some evidence that basicness of outcomes is correlated with basicness of research, and that appropriability is lower for basic outcomes.

Abstract:
In a 1991 essay in Scientific American, Michael Porter suggested that environmental regulation may have a positive effect on the performance of domestic firms relative to their foreign competitors by stimulating domestic innovation. We examine the stylized facts regarding environmental expenditures and innovation in a panel of manufacturing industries. We find that lagged environmental compliance expenditures have a significant positive effect on R&D expenditures when we control for unobserved industry-specific effects. We find little evidence, however, that industries' inventive output (as measured by successful patent applications) is related to compliance cost.

Abstract:
In a 1991 essay in Scientific American, Michael Porter suggested that environmental regulation may have a positive effect on the performance of domestic firms relative to their foreign competitors, by stimulating domestic innovation. We examine the stylized facts regarding environmental expenditures and innovation in a panel of manufacturing industries. We find that lagged environmental compliance expenditures have significant positive effect on R&D expenditures when we control for unobserved industry-specific effects. We find little evidence, however, that industries' inventive output (as measured by patent applications) is related to compliance costs.

Abstract:
This paper examines patterns of knowledge diffusion from US and Japan to Korea and Taiwan using patent citations as an indicator of knowledge flow. We estimate a knowledge diffusion model using a data set of all patents granted in the U.S. to inventors residing in these four countries. Explicitly modeling the roles of technology proximity and knowledge decay and knowledge diffusion over time, we have found that knowledge diffusion from US and Japan to Korea and Taiwan exhibits quite different patterns. It is much more likely for Korean patents to cite Japanese patents than US patents, whereas Taiwanese inventors tend to learn evenly from both US and Japanese inventors. The frequency of a Korean patent citing a Japanese patent is almost twice that of the frequency of a Taiwanese patent citing a Japanese patent. We also find that a patent is much more likely to cite a patent from its own technological field than from another field.

Abstract:
This paper uses sales and patent distribution data to establish the market and technological "positions" of firms. A notion of technological proximity of firms is developed in order to quantify potential R&D spillovers. The importance of the position variables and the potential spilover pool in explaining R&D intensity, patent productivity and TFP growth is explored.I find that both technological and market positions are signifi-cant in explaining R&D intensity, and that the technological effects are significant in explaining patent productivity. I cannot distinguish between the two effects in explaining TFP growth. Spillovers are important in all three contexts. Firms in an area where there is a high level of research by other firms do more R&D themselves, they produce more patents per R&D dollar, and their productivity grows faster, even controlling for the increased R&D and patents. These effects are present controlling for both industry and technological position effects.

Abstract:
Between 1965 and 1992 university patenting increased 1500%, while all patenting increased less than 50% and patents granted to US citizens remained constant. Because universities are dedicated to the principle of knowledge dissemination, knowledge transfer to the private sector is probable. Federal legislation in 1980 and 1984 facilitated universities' retention of rights to patents resulting from federally-funded research; because competition for federal funding has increased, much university research has sought alternative funding and universities have also created institutional technology offices. At first it appears that legislative and institutional changes have had significant effects on the way in which university-generated knowledge is transferred to the private sector. The evidence indicates, however, that the Bayh-Dole Act and other changes in federal law have not engendered significant changes in the underlying rate of the university generation of commercially important inventions. Statistics from a database of all patents assigned to universities and related institutions between 1965 and mid-1992, a 1% random sample of all US patents granted during the same time period, and the complete set of all patents that cite either of these groups are mobilized. They indicate that rather than an increase in the number of ‘important' inventions from universities, the observed increase in university patenting evinces a ‘propensity to patent,' with a possible concomitant increase of knowledge transfer to the private sector. (RAS)

Commercialization, University-industry-government relations, Knowledge transfer, Bayh-Dole Act of 1980, Patent productivity, Colleges & universities, Patents, Technology transfer, Federal legislation

Abstract:
Quantifies the effects of technological opportunity and R&D spillovers on the productivity of private sector R&D. The technological positions of the firms considered in this study are determined based on classifications of their U.S. patents. The 328 patent classifications are grouped into 49 categories for purposes of this analysis. Data used are for 432 manufacturing firms that had patents granted between 1969 and 1979. Results indicate that firms with research in areas where many other firms perform similar research have more patents per dollar of R&D, implying spillovers from or imitation of other firms. There is also a higher return to R&D as measured by accounting profits and market value. Further, firms that have very low R&D expenditures have lower profits and market value when their neighbors are R&D intensive. The study also finds that firms adjust their R&D technical composition, but further research is needed to link this to technological opportunity. By constructing a methodology for characterizing technological position of a firm's research program, spillover and technological opportunity are better able to be examined. (SRD)

Technological opportunity, Patent classifications, R&D, Knowledge spillovers, Financial performance, Market value, Opportunity recognition, Research productivity, Industrial research, Manufacturing industries

Abstract:
The role of interfirm alliances as a mechanism forsharing technological knowledge is examined. It is hypothesized thatknowledge-sharing between alliance partners, when the exchange is in theinterest of both parties, is greater than sharing between nonallied firms.Also, the flow of knowledge between units within a single firm should begreater than between firms. Knowledge flow is measured by patent citations.Data on 975 firms were obtained from three sources: the Cooperative Agreementsand Technology Indicators (CATI) database to identify pairs of firms that sharealliances, the U.S. Patent Office for patent data, and Compustat for firmdata. Results support the hypotheses. A positive correlation is identified betweenthe existence of an alliance and patent citation rates, providing evidence thatalliances promote patent citations. However, a reverse causation is alsopossible in that a high citation rate between two firms could cause them toform an alliance. Results also show that knowledge flows are affected bycharacteristics of the allied firms, in particular with regard to geographiclocation and firm size. (LKB)

Knowledge flows, Patent citations, Knowledge transfer, Patents, Organizational communication, Information networks, International alliances, Interfirm alliances

Abstract:
The Europe and Central Asia (ECA) Knowledge Economy Study aims to offer ECA policy makers options to increase and maintain productivity and growth by creating an environment conducive to the application of knowledge in the economy via innovation and learning. The tradition of excellence in learning and basic research in several ECA countries provides some basis for hope that commercial innovation could be adopted and built "on the shoulders" of the past. Translating this research foundation into economically productive commercial applications, however, remains a critical missing link in ECA countries. Against that background, this study focuses on public policies for building institutions and creating an incentives framework for the support of commercial innovation. Basic research policies are outside our scope.

innovation, technology, transition, knowledge economy, public support

Abstract:
The determinants of energy-saving innovation, and particularly the roles of energy prices and efficiency standards in affecting the development of new energy-saving technologies, are exceptionally important considerations in modeling global climate change and evaluating alternative policy options. We analyze the effects of energy prices and energy-efficiency regulations on the menu of air conditioner and water heater models available on the market over approximately a 30-year period. By adapting the induced innovation model to a product characteristics framework, we develop econometric estimates that indicate that a large portion of the improvement in energy efficiency in these technologies has taken the form of neutral (equiproportional) improvement in all product characteristics, and that this neutral innovation does not appear to be responsive to energy prices or regulations. There is also a significant non-neutral component of innovation, which was tilted away from energy efficiency before 1970, but later shifted to favor energy efficiency. This non-neutral component of innovation was substantially and significantly influenced by energy prices, by product labeling requirements, and by mandatory efficiency standards. Looking forward, we estimate that if energy prices remain at current levels, declining rates of neutral innovation combined with a return to non-neutral innovation tilted away from energy efficiency will result in little further improvement in the energy-efficiency of new models. Energy taxes of 10 to 30 percent of retail prices could significantly change this prediction. We predict that such taxes would lead to further energy efficiency increases of 10 to 50 percent for air conditioners by the year 2025.

Abstract:
We find that the effects of parent firm R & D on plant-level productivity are diminished by both the geographic and technological distance between the research lab and the plants, that productivity appears to depend on R & D per plant rather than on the total amount, and that spillovers from technologically related firms are significant but also depend on R & D intensity rather than on total industry R & D. These results suggest that the "dilution" of R & D across multiple target plants reduces its potency sufficiently that spillovers may not be a source of industrywide or economywide increasing returns.