What Happens when Firms Patent? New Evidence from US Economic Census Data

Posted: 25 Jun 2007 Last revised: 4 May 2013

See all articles by Natarajan Balasubramanian

Natarajan Balasubramanian

Syracuse University - Whitman School of Management

Jagadeesh Sivadasan

University of Michigan, Stephen M. Ross School of Business; University of Michigan at Ann Arbor - Survey Research Center

Date Written: August 1, 2009

Abstract

We build a new concordance between the NBER Patent Data and US Census micro-data, and use it to examine what happens when firms patent. We find strong evidence that increases in patent stock are associated with increases in firm size and scope as well as with changes in factor intensity. We find somewhat weaker evidence that changes in patenting are positively correlated with changes in total factor productivity. We also analyze a sample of first-time atentees, and find significant increases in firm size, scope, and factor intensity subsequent to their first patent application. Evidence for increases in total factor productivity is slightly weaker. Together, these results suggest that patenting is indeed associated with real changes within rms, and in particular that patenting is strongly associated with firm growth through increases in scope. These findings are robust to alternative measures of size, scope and productivity, and to various sample selection criteria.

Keywords: Innovation, productivity, new products, firm scope

JEL Classification: O30, O31, O34, O33, L25

Suggested Citation

Balasubramanian, Natarajan and Sivadasan, Jagadeesh, What Happens when Firms Patent? New Evidence from US Economic Census Data (August 1, 2009). Ross School of Business Paper No. 1090, US Census Bureau Center for Economic Studies Paper No. CES-WP-08-03, Review of Economics and Statistics, Forthcoming, Available at SSRN: https://ssrn.com/abstract=995761

Natarajan Balasubramanian

Syracuse University - Whitman School of Management ( email )

United States

Jagadeesh Sivadasan (Contact Author)

University of Michigan, Stephen M. Ross School of Business ( email )

701 Tappan Street
Ann Arbor, MI MI 48109
United States

University of Michigan at Ann Arbor - Survey Research Center ( email )

Ann Arbor, MI
United States

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