Who Does R&D and Who Patents?

57 Pages Posted: 3 Oct 2000 Last revised: 27 Jun 2021

See all articles by John Bound

John Bound

University of Michigan; National Bureau of Economic Research (NBER)

Clint Cummins

Harvard University; National Bureau of Economic Research (NBER)

Zvi Griliches

(Deceased)

Bronwyn H. Hall

University of California at Berkeley; National Bureau of Economic Research (NBER); Institute for Fiscal Studies (IFS); Max Planck Institute for Innovation and Competition

Adam B. Jaffe

Brandeis University; Motu Economic and Public Policy Research; National Bureau of Economic Research (NBER)

Date Written: June 1982

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.

Suggested Citation

Bound, John and Cummins, Clint and Griliches, Zvi and Hall, Bronwyn H. and Jaffe, Adam B., Who Does R&D and Who Patents? (June 1982). Available at SSRN: https://ssrn.com/abstract=228077

John Bound (Contact Author)

University of Michigan ( email )

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National Bureau of Economic Research (NBER)

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Clint Cummins

Harvard University

Institute of Economic Research
Cambridge, MA 02138
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Zvi Griliches

(Deceased)

Bronwyn H. Hall

University of California at Berkeley ( email )

549 Evans Hall #3880
Berkeley, CA 94720-3880
United States

HOME PAGE: http://emlab.berkeley.edu/users/bhhall/index.html

National Bureau of Economic Research (NBER)

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United States

Institute for Fiscal Studies (IFS)

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Max Planck Institute for Innovation and Competition

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Germany

Adam B. Jaffe

Brandeis University ( email )

Waltham, MA 02454-9110
United States
781-736-2251 (Phone)
781-736-2263 (Fax)

HOME PAGE: http://www.brandeis.edu/global/people/faculty/jaff

Motu Economic and Public Policy Research ( email )

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Wellington, 6142
New Zealand

HOME PAGE: http://motu.org.nz

National Bureau of Economic Research (NBER)

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