Technological Innovation, Resource Allocation, and GrowthLeonid Kogan, Dimitris Papanikolaou, Amit Seru, Noah Stoffman
NBER Working Paper No. 17769 We explore the role of technological innovation as a source of economic growth by constructing direct measures of innovation at the firm level. We combine patent data for US firms from 1926 to 2010 with the stock market response to news about patents to assess the economic importance of each innovation. Our innovation measure predicts productivity and output at the firm, industry and aggregate level. Furthermore, capital and labor flow away from non-innovating firms towards innovating firms within an industry. There exists a similar, though weaker, pattern across industries. Cross-industry differences in technological innovation are strongly related to subsequent differences in industry output growth. You may purchase this paper on-line in .pdf format from SSRN.com ($5) for electronic delivery.
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