Abstract

http://ssrn.com/abstract=2193068
 
 

References (56)



 
 

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Technological Innovation, Resource Allocation and Growth


Leonid Kogan


Massachusetts Institute of Technology (MIT) - Sloan School of Management; National Bureau of Economic Research (NBER)

Dimitris Papanikolaou


Northwestern University - Kellogg School of Management - Department of Finance; National Bureau of Economic Research (NBER)

Amit Seru


University of Chicago - Booth School of Business

Noah Stoffman


Indiana University - Kelley School of Business - Department of Finance

May 10, 2016


Abstract:     
We propose a new measure of the economic importance of each innovation. Our measure uses newly collected data on patents issued to US firms in the 1926 to 2010 period, combined with the stock market response to news about patents. Our patentlevel estimates of private economic value are positively related to the scientific value of these patents, as measured by the number of citations that 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.

Number of Pages in PDF File: 78

Keywords: Innovation, patents, growth, reallocation

JEL Classification: G14, E32, O3, O4


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Date posted: December 22, 2012 ; Last revised: May 21, 2016

Suggested Citation

Kogan, Leonid and Papanikolaou, Dimitris and Seru, Amit and Stoffman, Noah, Technological Innovation, Resource Allocation and Growth (May 10, 2016). Available at SSRN: http://ssrn.com/abstract=2193068 or http://dx.doi.org/10.2139/ssrn.2193068

Contact Information

Leonid Kogan (Contact Author)
Massachusetts Institute of Technology (MIT) - Sloan School of Management ( email )
100 Main Street
E62-636
Cambridge, MA 02142
United States
617-253-2289 (Phone)
617-258-6855 (Fax)
HOME PAGE: http://web.mit.edu/lkogan2/www/
National Bureau of Economic Research (NBER)
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
Dimitris Papanikolaou
Northwestern University - Kellogg School of Management - Department of Finance ( email )
Evanston, IL 60208
United States
National Bureau of Economic Research (NBER) ( email )
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
Amit Seru
University of Chicago - Booth School of Business ( email )
5807 S. Woodlawn Avenue
Chicago, IL 60637
United States

Chicago Booth School of Business Logo

Noah Stoffman
Indiana University - Kelley School of Business - Department of Finance ( email )
1309 E. 10th St.
Bloomington, IN 47405
United States
(812) 856-5664 (Phone)
HOME PAGE: http://kelley.iu.edu/nstoffma/

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References:  56
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