Appropriability mechanisms, innovation and productivity: Evidence from the UK

B.H. Hall, V. Sena

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We use an extended version of the well-established Crepon, Duguet and
Mairesse model (1998) to model the relationship between appropriability
mechanisms, innovation and firm-level productivity. We enrich this model
in several ways. First, we consider different types of innovation
spending and study the differences in estimates when innovation spending
(rather than R&D spending) is used to predict innovation in the CDM
model. Second, we assume that a firm simultaneously innovates and
chooses among different appropriability methods (formal or informal) to
protect the innovation. Finally, in the third stage, we estimate the
impact of the innovation output conditional on the choice of
appropriability mechanisms on firms�f productivity. We find that firms
that innovate and rate formal methods for the protection of Intellectual
Property (IP) highly are more productive than other firms, but that the
same does not hold in the case of informal methods for the protection of
a firm�fs IP, except possibly for large firms as opposed to SMEs. We
also find that this result is strongest for firms in the services,
trade, and utility sectors, and negative in the manufacturing sector.
Original languageEnglish
Place of PublicationMaastricht
Publication statusPublished - 1 Jan 2014

Publication series

SeriesUNU-MERIT Working Papers

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