R D Patents And Productivity

"An essential reference for specialists in the economics of technological change."--D. G. McFertridge, Canadian Journal of Economics

What are the economics of patents? What problems arise in implementing a patent system? How much do distortions in developing countries affect the benefits and costs of a patent system? And what are the policies that would increase the likelihood of patents benefiting a developing country?

During the past few decades, the interest of economists in the sources of long-term economic growth has led an increasing number of them to focus on the role of innovation in creating that growth. Although some researchers have always been interested in this topic, the groundbreaking work of Solow (1957), Nelson (1959) and Arrow (1962) made many other economists recognize the central role played by innovation in almost all spheres of economic activity. The Economics and Econometrics of Innovation presents a valuable overview of the work of the world's most renowned experts in the field of innovation and technical change. It collects 22 outstanding contributions that reflect the results of the vast, worldwide research efforts and remind us of the importance of economic incentives in shaping and directing innovative activities. The volume presents an edited selection of papers that were first presented at the 10th International ADRES conference. One particular goal of this book is to bring out the complementary nature of the various approaches to innovation, and to facilitate in-depth dialogues both between microeconomists and macroeconomists, and between theoreticians and econometricians. General topics that are considered range from the economy-wide effects of innovation on growth and employment to the variation of individual firm innovative performance; from the analysis of networks and standardization to the role of intellectual property rights and the assessment of knowledge spillovers. Besides the wealth of information presented in the chapters, readers of this volume will also appreciate the value of examining a single question from different angles and by using different methods.

Zvi Griliches, a world-renowned pioneer in the field of productivity growth, has compiled in a single volume his pathbreaking research on R&D and productivity. Griliches addresses the relationship between research and development (R&D) and productivity, one of the most complex yet vital issues in today's business world. Using econometric techniques, he establishes this connection and measures its magnitude for firm-, industry-, and economy-level data. Griliches began his studies of productivity growth during the 1950s, adding a variable of "knowledge stock" to traditional production function models, and his work has served as the point of departure for much of the research into R&D and productivity. This collection of essays documents both Griliches's distinguished career as well as the history of this line of thought. As inputs into production increasingly taking the form of "intellectual capital" and new technologies that are not as easily measured as traditional labor and capital, the methods Griliches has refined and applied to R&D become crucial to understanding today's economy.

This paper provides empirical evidence on the response of labor productivity to the arrival of new inventions. The benchmark measure of technological progress is given by data on patent applications in the U.S. over the period 1889-2002. The analysis shows that labor productivity may temporarily fall below trend after technological progress. However, the effects on productivity differ between the pre- and post-World War II periods. The pre-war period shows evidence of a productivity slowdown as a result of the arrival of new technology, whereas the post-World War II period does not. Positive effects of technology shocks tend to show up sooner in the productivity data in the later period.

We develop and estimate a model of technological innovation and its contribution to growth at home and abroad. International patents indicate where innovations come from and where they are used. Countries grow at a common steady-state rate. A country's relative productivity depends upon its capacity to absorb technology. We estimate that, except for the United States, OECD countries derive almost all of their productivity growth from abroad.