Innovation, Technology Scope and Firm Productivity

35 Pages Posted: 11 Nov 2018

See all articles by Jingbo Cui

Jingbo Cui

Duke Kunshan University

Xiaogang Li

Iowa State University, College of Liberal Arts & Sciences, Department of Economics, Students

Date Written: October 20, 2018

Abstract

In this paper, we examine the relationship between productivity and innovation, using the U.S. manufacturers' patent data from 1976-2006. First, we investigate whether productive firms actively participate in innovation in terms of having more patents. We then examine whether their innovation activities are involved in a wide spectrum of technological categories. Moreover, we are interested in, to successfully develop a new patent in a certain technological field, whether productive firms need to cite more or less patents within the field and/or across various related fields. The firm-level productivity is estimated as the total factor productivity (TFP). We find that: (1) productivity is positively correlated with the number of patents granted and the number of technological categories for these patents; and (2) productivity is positive correlated with the number of citations per granted patent, and is also positively correlated with the number of technological categories for cited patents per granted patent. Whereas the former finding indicates that productive firms actively conduct research and their innovation is involved in different technological fields, the latter suggests that, to develop a new patent, productive firms are capable of learning from cited patents in various technological fields.

Keywords: Productivity, Backward Citations, Innovation, Knowledge Stock

JEL Classification: D22, O31

Suggested Citation

Cui, Jingbo and Li, Xiaogang, Innovation, Technology Scope and Firm Productivity (October 20, 2018). Available at SSRN: https://ssrn.com/abstract=3270200 or http://dx.doi.org/10.2139/ssrn.3270200

Jingbo Cui (Contact Author)

Duke Kunshan University ( email )

No. 8 Duke Avenue
Kunshan, Jiangsu 215316
China

Xiaogang Li

Iowa State University, College of Liberal Arts & Sciences, Department of Economics, Students ( email )

260 Heady Hall
Ames, IA 50011
United States

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