On the Profitability of Innovative Assets
Posted: 19 Oct 2007
Successful innovative activity is a major contribution to the intangible capital of firms. Although its importance is generally acknowledged, the contribution to companies' profits is a priori unclear. We present the results of an empirical study on the effects of the patent stock on profitability. The database is a representative sample of German manufacturing firms and we use a number of control variables including measures of competition and firm governance. It turns out that the patent stock has a strong and robust effect on profitability.
Keywords: Innovation, Patents, Profitability, Intellectual Property
JEL Classification: L11, O31, O32
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