Patent intensity and concentration: The effect of institutional quality on MSA patent activity

Gary A. Wagner, Jamie Bologna Pavlik

Research output: Contribution to journalArticlepeer-review

2 Scopus citations

Abstract

Patented innovation is a predominately local phenomenon. It is also an indicator of economic growth. Using data on U.S. metropolitan statistical areas, we examine the long-run effect of economic freedom, and each of its three components, on local patent activity. Using an instrumental variables approach for identification, we find that increased government spending is associated with reduced individual patent activity, though this effect is modest in magnitude. Our strongest results suggest that increased economic freedom significantly reduces patent concentration in both ownership and product types. This implies that economic freedom creates an environment conducive to diverse and diffused innovation and may provide a viable alternative to place-based economic development strategies. Our results are robust to a quantile regression instrumental variable analysis.

Original languageEnglish
Pages (from-to)857-898
Number of pages42
JournalPapers in Regional Science
Volume99
Issue number4
DOIs
StatePublished - Aug 1 2020

Keywords

  • economic freedom
  • innovation
  • institutions
  • patents

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