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Accounting for the recent surge in U.S. patenting: changes in R&D expenditures, patent yields, and the high tech sector

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  • Jinyoung Kim
  • Gerald Marschke

Abstract

We decompose the recent patent increase into components representing (1) an increase in resources made available to research and development, (2) an across-the-board rise in the patent yield of an R&D dollar, and (3) changes in the patent yield in individual industries. Two high tech fields, computer hardware and pharmaceuticals, account for 22 percent of the patent increase. While these two industries had the fastest R&D growth among the industries we study, the pharmaceutical industry experienced a decline in its patent yield, limiting its patent growth. We show that increased R&D spending accounts for 70 percent of the patent increase. We discuss our results in the context of alternative hypotheses of the patent surge. We also compare our results to the anecdotal evidence of firm R&D performance at the industry level.

Suggested Citation

  • Jinyoung Kim & Gerald Marschke, 2004. "Accounting for the recent surge in U.S. patenting: changes in R&D expenditures, patent yields, and the high tech sector," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 13(6), pages 543-558.
    • Handle: RePEc:taf:ecinnt:v:13:y:2004:i:6:p:543-558
    DOI: 10.1080/1043859032000124693
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    Cited by:

    1. Mario Benassi & Elena Grinza & Francesco Rentocchini, 2020. "The rush for patents in the Fourth Industrial Revolution," Economia e Politica Industriale: Journal of Industrial and Business Economics, Springer;Associazione Amici di Economia e Politica Industriale, vol. 47(4), pages 559-588, December.
    2. William R Kerr, 2018. "Heterogeneous Technology Diffusion and Ricardian Trade Patterns," The World Bank Economic Review, World Bank, vol. 32(1), pages 163-182.
    3. Frietsch, Rainer & Schubert, Torben & Neuhäusler, Peter, 2017. "Secular trends in innovation and technological change," Studien zum deutschen Innovationssystem 7-2017, Expertenkommission Forschung und Innovation (EFI) - Commission of Experts for Research and Innovation, Berlin.
    4. Seong-Sang Lee & Yeonbae Kim, 2009. "The Impact of Efficiency Parameters on Firms Innovative Activities: Evidence from Korean Firm-level data," TEMEP Discussion Papers 200924, Seoul National University; Technology Management, Economics, and Policy Program (TEMEP), revised Nov 2009.
    5. Battke, Benedikt & Schmidt, Tobias S. & Stollenwerk, Stephan & Hoffmann, Volker H., 2016. "Internal or external spillovers—Which kind of knowledge is more likely to flow within or across technologies," Research Policy, Elsevier, vol. 45(1), pages 27-41.
    6. Jérôme Danguy & Gaetan de Rassenfosse & Bruno van Pottelsberghe de la Potterie, 2014. "On the origins of the worldwide surge in patenting: an industry perspective on the R&D–patent relationship," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 23(2), pages 535-572.
    7. Yun Hou & I.P.L. Png & Xi Xiong, 2023. "When stronger patent law reduces patenting: Empirical evidence," Strategic Management Journal, Wiley Blackwell, vol. 44(4), pages 977-1012, April.
    8. Carsten Fink & Mosahid Khan & Hao Zhou, 2016. "Exploring the worldwide patent surge," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 25(2), pages 114-142, March.
    9. Bronwyn H. Hall, 2005. "Exploring the Patent Explosion," Springer Books, in: Albert N. Link & F. M. Scherer (ed.), Essays in Honor of Edwin Mansfield, pages 195-208, Springer.
    10. Anuraag Singh & Giorgio Triulzi & Christopher L. Magee, 2020. "Technological improvement rate estimates for all technologies: Use of patent data and an extended domain description," Papers 2004.13919, arXiv.org.
    11. Jinyoung Kim & Sangjoon John Lee & Gerald Marschke, 2009. "International Knowledge Flows: Evidence from an Inventor-Firm Matched Data Set," NBER Chapters, in: Science and Engineering Careers in the United States: An Analysis of Markets and Employment, pages 321-348, National Bureau of Economic Research, Inc.
    12. Nemet, Gregory F., 2012. "Inter-technology knowledge spillovers for energy technologies," Energy Economics, Elsevier, vol. 34(5), pages 1259-1270.
    13. William R. Kerr, 2010. "The Agglomeration of US Ethnic Inventors," NBER Chapters, in: Agglomeration Economics, pages 237-276, National Bureau of Economic Research, Inc.
    14. William R. Kerr, 2007. "The Ethnic Composition of US Inventors," Harvard Business School Working Papers 08-006, Harvard Business School.
    15. Godinho, Manuel Mira & Ferreira, Vítor, 2012. "Analyzing the evidence of an IPR take-off in China and India," Research Policy, Elsevier, vol. 41(3), pages 499-511.
    16. Luciano Lombardo, 2008. "New indicators linking patenting and business R&D expenditure," Scientometrics, Springer;Akadémiai Kiadó, vol. 76(2), pages 201-224, August.
    17. Vincent Wenxiong Yao, 2006. "Intra-industry spillovers and innovation: An econometric analysis at the firm level," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 15(2), pages 119-135.
    18. Larry D. Qiu & Huayang Yu, 2010. "Does the Protection of Foreign Intellectual Property Rights Stimulate Innovation in the US?," Review of International Economics, Wiley Blackwell, vol. 18(5), pages 882-895, November.
    19. Hoenen, Sebastian & Kolympiris, Christos & Schoenmakers, Wilfred & Kalaitzandonakes, Nicholas, 2014. "The diminishing signaling value of patents between early rounds of venture capital financing," Research Policy, Elsevier, vol. 43(6), pages 956-989.
    20. Ashish Arora & Marco Ceccagnoli, 2006. "Patent Protection, Complementary Assets, and Firms' Incentives for Technology Licensing," Management Science, INFORMS, vol. 52(2), pages 293-308, February.
    21. Ajay Bhaskarabhatla & Deepak Hegde, 2014. "An Organizational Perspective on Patenting and Open Innovation," Organization Science, INFORMS, vol. 25(6), pages 1744-1763, December.

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    More about this item

    Keywords

    Patents; Innovation; Technology and Research productivity;
    All these keywords.

    JEL classification:

    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D
    • O34 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Intellectual Property and Intellectual Capital

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