Has the market structure for inventive ideas in the Information and Communications Technology (“ICT”) equipment industry undergone dramatic changes in the last three decades in the United States? What does statistical evidence from U.S. patent activity suggest about change to the concentration of sources of inventive ideas? This Study characterizes levels, and changes in those levels, in the concentration of sources of new invention from 1976 to 2010. The analysis finds pervasive deconcentration across a wide set of areas. It also finds that the deconcentration takes place despite the role lateral entry by existing firms plays in driving concentration levels up. Furthermore, the evidence suggests that the deconcentration trend cannot be attributed to a single supply factor in the market for ideas, such as the breakdown of AT&T during the deregulation of the telecommunications industry.
This article investigates the determinants of pairing decisions in M&A activity of knowledge-intensive firms. Using standard patent-based metrics from novel data on 2,378 M&A deals, I show that there is a positive assortative sorting on acquirer and target innovation output quality; conditional on participating in M&A activity, high quality targets pair with high quality acquirers. The positive sorting on innovation quality is consistent with the view that external innovation complements internal innovation output of firms. I also show that the pairing probability in an acquisition decreases with distance between the acquirer and the target Firm in technology, product market, and geography. Furthermore, I show that sorting on innovation quality in acquisition of private firms is weaker than in public firms. This difference has implications for acquirer returns in public-private acquisitions.
Open access increases citation of medical research in patent applications by 25 to 51 percent, suggesting that gated academic journals may meaningfully restrict the flow of knowledge from academia to inventors. We identify this effect using the 2008 NIH open access mandate in conjunction with the fact that some journals make their full archives free-to-read whether or not an article is bound by an institutional mandate. This increased citation by patentees occurs even though there is minimal impact on citations within academia. Methodologically, we introduce a new data source for scholars investigating knowledge transfer using patent records: the in-specication citation. These citations can be extracted in a straightforward way directly from the patent text, and differ substantially from prior art citations.
What does statistical evidence from patent activity suggest about change to the concentration of sources of inventive ideas in Information and Communications (ICT) Equipment? This article characterizes levels, and changes in those levels, in the concentration of sources of invention from 1976 to 2010. The analysis finds pervasive long run deconcentration across a wide set of areas. It also finds that the deconcentration happens despite the role lateral entry by existing firms play in driving concentration levels up. Although we find evidence that new firm entry drives part of this deconcentration, the evidence also suggests that the deconcentration trend cannot be attributed to a single supply factor in the market for ideas, such as the breakup of AT&T during the deregulation of the telecommunications industry. Finally, the evidence also shows that mergers and acquisitions activity results in the transfer of approximately 11% of patents in the ICT equipment industry, but this transfer does not make up for the declines in concentration. That conclusion holds for high-quality patents, and, to a weaker extent, when examining the entire US patent database.
Work in Progress:
"Acquiring a String of Pearls"
(with Mitsuru Igami), since June 2015
"Corporate Restructuring, Human Capital, and Innovation,"
Approved Research Project with the US Census Bureau, since April 2014
"Complementary Assets and Innovation Commercialization Strategies,"
since September 2014