TY  - JOUR
AU  - Lerner,Josh
TI  - The New New Financial Thing: The Sources of Innovation Before and After State Street
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 10223
PY  - 2004
Y2  - January 2004
UR  - http://www.nber.org/papers/w10223
L1  - http://www.nber.org/papers/w10223.pdf
N1  - Author contact info:
Josh Lerner
Harvard Business School
Rock Center 214
Boston, MA 02163
Tel: 617/495-6065
Fax: 617/496-7357
E-Mail: jlerner@hbs.edu
AB  - This paper examines the sources of financial innovations between 1990 and 2002, using Wall Street Journal articles as indicators of innovations. No evidence suggests that larger firms are particularly innovative; in many specifications, there is a disproportionate representation of smaller firms among the innovators. Less profitable firms and those with stronger academic ties also innovate more. The elasticity of innovation with respect to size appears to have increased sharply since the State Street decision that greatly accelerated the rate of financial patenting. I conclude by exploring how the origins of financial patents resemble or differ from those of innovations.
ER  -