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====Artz et al 2010====
@article{artz_longitudinal_2010,
title = {A {Longitudinal} {Study} of the {Impact} of {R}\&{D}, {Patents}, and {Product} {Innovation} on {Firm} {Performance}},
volume = {27},
copyright = {© 2010 Product Development \& Management Association},
issn = {1540-5885},
url = {http://onlinelibrary.wiley.com/doi/10.1111/j.1540-5885.2010.00747.x/abstract},
doi = {10.1111/j.1540-5885.2010.00747.x},
abstract = {Because of increasing levels of competition and decreasing product life cycles, a firm's ability to generate a continuous stream of innovations may be more important than ever in allowing a firm to improve profitability and maintain competitive advantage This paper investigates several issues that are central to an examination of the innovation productivity in a firm. First, the relationship between a firm's commitment to research and development and its innovative outcomes is examined. Two innovative outcomes are analyzed: (1) invention, which focuses on the development of new ideas; and (2) innovation, the development of commercially viable products or services from creative ideas. Invention is measured by the number of patents granted, and innovation is assessed by the number of new product announcements. Second, because many inventions ultimately result in marketable innovations and because patents may provide protection for new products, the relationship between patents and product announcements is also investigated. Finally, the ability of a firm to benefit from its inventions and innovations is studied by examining their separate effects on firm performance, measured as return on assets (ROA) and sales growth. Drawing from a sample of 272 firms in 35 industries over 19 years, the results from a model of simultaneous equations provided support for some of the hypotheses, but several other surprising findings were found. As expected, R\&D spending was positively related to patents. This finding is consistent with others who argue that internal research capabilities, particularly those with a strong basic research component, is key to enabling a firm to generate creative outputs. More surprising was the finding of increasing returns to scale to R\&D spending. While this contradicts much of the existing research, it is consistent with economic arguments for the advantages of scale in innovation. Also interesting is the finding that, while a significant curvilinear relationship exists between R\&D spending and product announcements, it is not the predicted inverse-U but instead a U-shaped relationship. Consistent with previous work, product announcements were found to be positively related to both performance measures. A negative relationship was found between patents and both ROA and sales growth. While these findings were unexpected, they are intriguing and call into question the value of patents as protection mechanisms. In addition, these results may be resulting from the rise of strategic patenting, where an increasing number of firms are using patents as strategic weapons. As expected, a positive relationship was found between patents and new product announcements.},
language = {en},
number = {5},
urldate = {2016-06-17},
journal = {Journal of Product Innovation Management},
author = {Artz, Kendall W. and Norman, Patricia M. and Hatfield, Donald E. and Cardinal, Laura B.},
month = sep,
year = {2010},
pages = {725--740},
file = {Artz et al (2010) - Impact of RD Patents and Innovation on Firm Performances.pdf}
}
Analyzes relationship between firm performance and R&D/innovative activity.
*Argues for increasing returns to scale in R&D spending.
*Also claims patents are negatively related to growth in this sample.
Data:
*272 firms for 19 one-year periods
*COMPUSTAT 1984 to 2004, NBER Patent Citation Data Files (2001), Patents BIB, new product announcements from Factivia (cross-checked with F&S Predicast)
Variables:
*Measures innovative activity with patents and new product announcements.
*Measures firm performance with after tax ROA, sales growth 3-year moving average.
*Controls for year and industry (two digit SIC code)
*Does not control for firm size, since it is correlated with R&D spending.
→Artz et al 2010
===Annotated===
====Axelson 2013====
