Patents and R and D at the Firm Level: A First Look

   (358 K)

This is a first report from a larger study of inventive activity of U.S. firms and some of its consequences. It reports on the relationship between patents applied for and R&D expenditures based on data for 121 large corporations covering the 1968-1975 period. The main conclusion is that there is a statistically significant relationship between a firm's R&D expenditures and the number of patents it applied for and receives. This relationship is very strong in the cross-sectional dimension (squared partial correlations of .8 or higher). It is weaker in the within-firm time-series dimension (partial r[squared]'s of .2 to .3). Attempts to fit an unconstrained distributed lag relationship yields only significant coefficients for the first and last terms in the lag structure, indicating both a quick response of patenting to changes in R&D and a small but persistent effect of past R&D, the truncation of this long lag being reflected in a significant coefficient for R&D lagged five years. In spite of these difficulties, patent counts do measure something systematic and hence are worthy of further study.

Published:

• Pakes, Ariel and Zvi Griliches. "Patents and R and D at the Firm Level: A First Report." Economics Letter, No. 5, (1980), pp. 377-381. ,
• Pakes, Ariel and Zvi Griliches. "Patents and R and D at the Firm Level: A First Look." R and D Patents & Productivity, edited by Zvi Griliches. Chicago: University of Chicago Press, (1984). pp. 55-72. ,
• Patents and R&D at the Firm Level: A First Look, Ariel Pakes, Zvi Griliches, in R & D, Patents, and Productivity (1984), University of Chicago Press
  

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