Technological Innovation, Resource Allocation, and Growth
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Author(s)
Kogan, Leonid
Papanikolaou, Dimitris
Seru, Amit
Stoffman, Noah
Date Issued
February 22, 2019
Journal
The Quarterly Journal of Economics
Publisher
Oxford University Press (OUP)
Citation
Kogan, Leonid, Dimitris Papanikolaou, Amit Seru, and Noah Stoffman. “Technological Innovation, Resource Allocation, and Growth*.” The Quarterly Journal of Economics 132, 2 (March 2017): 665–712 © 2016 The Author(s)
Version
Original manuscript
Abstract
We propose a new measure of the economic importance of each innovation. Our measure uses newly collected data on patents issued to U.S. firms in the 1926 to 2010 period, combined with the stock market response to news about patents. Our patent-level estimates of private economic value are positively related to the scientific value of these patents, as measured by the number of citations the patent receives in the future. Our new measure is associated with substantial growth, reallocation, and creative destruction, consistent with the predictions of Schumpeterian growth models. Aggregating our measure suggests that technological innovation accounts for significant medium-run fluctuations in aggregate economic growth and TFP. Our measure contains additional information relative to citation-weighted patent counts; the relation between our measure and firm growth is considerably stronger. Importantly, the degree of creative destruction that is associated with our measure is higher than previous estimates, confirming that it is a useful proxy for the private valuation of patents.
MIT Department
Sloan School of Management
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Creative Commons Attribution-Noncommercial-Share Alike
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DOI of Published Version
https://doi.org/10.1093/QJE/QJW040
