Mega Firms and Recent Trends in the U.S. Innovation: Empirical Evidence from the U.S. Patent Data

58 Pages Posted: 17 Jul 2023 Last revised: 18 Jul 2023

See all articles by Serguey Braguinsky

Serguey Braguinsky

University of Maryland - Department of Management & Organization; National Bureau of Economic Research (NBER); Osaka University - Institute of Social and Economic Research

Joonkyu Choi

Board of Governors of the Federal Reserve System

Yuheng Ding

University of Maryland - Robert H. Smith School of Business

Karam Jo

Korea Development Institute (KDI)

Seula Kim

Princeton University - Department of Economics

Date Written: July 2023

Abstract

We use the U.S. patent data merged with firm-level datasets to establish new facts about the role of mega firms in generating “novel patents”—innovations that introduce new combinations of technology components for the first time. While the importance of mega firms in novel patents had been declining until about 2000, it has strongly rebounded since then. The timing of this turnaround coincided with the ascendance of firms that newly became mega firms in the 2000s, and a shift in the technological contents, characterized by increasing integration of Information and Communication Technology (ICT) and non-ICT components. Mega firms also generate a disproportionately large number of “hits”—novel patents that lead to the largest numbers of follow-on patents (subsequent patents that use the same combinations of technology components as the first novel patent)—and their hits tend to generate more follow-on patents assigned to other firms when compared to hits generated by non-mega firms. Overall, our findings suggest that mega firms play an increasingly important role in generating new technological trajectories in recent years, especially in combining ICT with non-ICT components.

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

Suggested Citation

Braguinsky, Serguey and Choi, Joonkyu and Ding, Yuheng and Jo, Karam and Kim, Seula, Mega Firms and Recent Trends in the U.S. Innovation: Empirical Evidence from the U.S. Patent Data (July 2023). NBER Working Paper No. w31460, Available at SSRN: https://ssrn.com/abstract=4512494

Serguey Braguinsky (Contact Author)

University of Maryland - Department of Management & Organization ( email )

United States

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Osaka University - Institute of Social and Economic Research ( email )

6-1, Mihogaoka
Ibaraki, Osaka 567-0047
Japan

Joonkyu Choi

Board of Governors of the Federal Reserve System ( email )

20th Street and Constitution Avenue NW
Washington, DC 20551
United States
+1 (202) 973-6884 (Phone)

HOME PAGE: http://sites.google.com/site/jooonkyuc/

Yuheng Ding

University of Maryland - Robert H. Smith School of Business ( email )

College Park, MD 20742-1815
United States

Karam Jo

Korea Development Institute (KDI) ( email )

263 Namsejong-ro
Sejong-si 30149
Korea, Republic of (South Korea)

Seula Kim

Princeton University - Department of Economics ( email )

Princeton, NJ 08544-1021
United States

Do you have negative results from your research you’d like to share?

Paper statistics

Downloads
7
Abstract Views
231
PlumX Metrics