Economic Returns to Innovation: Between Efficiency and Effectiveness

A large subset of studies estimated the economic value of the patent rights, as ex post R&D outcomes and quasi indicators of the innovation competence and their economic performances. Hence, recent approaches of innovation, particularly evolutionary theoreticians and patricians, described innovations as not linear but sequential and described through evolutionary learning how complex processes are filled with feedback circuits (Nelson and Winter 1982). In fact, innovation theory is dynamic, for instance, chain-linked models (Rosenberg, 1986) and evolutionary approaches highlight the learning element within innovation process. Nevertheless, a few research inquiring intellectual property practices as a priori incentive of innovation competence, leading to corporate performance have been carried out. The basic aim of our study is to shed light on the existence of a positive relationship between the investment in intellectual property rights assets and the economic growth at the industrial firm level. The mechanisms underlying would be the following: the more a firm intends to protect its intellectual capital by patents, trademarks, and industrial designs, the more it protects its profits flowing from its innovation against its competitors, and the more it can fund its own future growth. Intellectual property practices are seen as a priori incentive of innovation competence, meaning R&D investments. We also intend to test the statistical significance between corporate performance of eventual patents grants to the firm (and not only the total amount of patent grants as a lot of previous studies did) and its growth. Each stage of this process is affected by various exogenous variables as firm size; the state of economy, and corporate performance. Hence, organizational capability is hard to outsource from the market, which is the reason why dynamic competences and intellectual property practices are measured by French survey proxies, made in 1997 up to the year 2000.