Patents, Citations and Innovations: Tracing the Links
NBER Working Paper No. 2457
The goal is to tackle anew the main problems encountered in using patent data in economic research, namely, the large variance in the value of patents, and the difficulties in matching patents with economic categories. The first is addressed with the aid of patent citations, the second with computerized search techniques for large databases. The proposed solutions are applied to the case of Computed Tomography (CT) Scanners, a pathbreaking innovation in medical technology. The main findings are that patents weighted by citations are highly correlated with the value of innovations, and that important innovations generate further innovative activity (R&D), and hence bring about down-the-line patents.
Published: "A Penny for Your Quotes: Patent Citations and the Value of Innovations," The Rand Journal of Economics, Spring 1990, 21(1), 172-187.