Selection Bias in Innovation Studies: A Simple Test

Abstract

The study of the innovative output of organizations often relies on a count of patents filed at one single office of reference such as the European Patent Office (EPO). Yet, not all organizations file their patents at the EPO, raising the specter of a selection bias. Using novel datasets of the whole population of patents by Belgian firms and German universities, we show that the single-office count results in a selection bias that affects econometric estimates of invention production functions. We propose a methodology to evaluate whether estimates that rely on the single-office count are affected by a selection bias.

Keywords: knowledge production function, patent count, R&D, selection bias

JEL Classification: O31, C18, C52, C81