ABSTRACT
This chapter utilizes regionalized patent data for Swedish regions to examine the relationship of know ledge ac tiv ities with eco nomic growth. The nov elty of these data is that they are quality adjusted, which means that different indic ators of quality (to be explained below) are used to characterize regional patent quality. In order to streamline the discussion, patents granted are labelled inven tions, or inventive ac tiv ities, and quality adjusted patents are labelled in nova tions, as it is more likely that patents of higher quality lead to in nova tions. It is a requirement that what can be patented should have suffcient inventive height and industrial applic abil ity. Hence, patents granted may be con sidered good indic ators of tech no logy cre ation, even if not all new in nova tions are patented, but they do not neces sar ily meas ure the eco nomic value of the technologies. Instead, they are costs in the in nova tion pro cess. The bene fts from the pro cess are meas ured when patents are commercialized and con trib ute to eco nomic growth. A liter at ure has now de veloped to dem on strate that patents adjusted for quality can be more appropriately linked to the value of the very same patents (Trajtenberg, 1990; Lanjouw et al., 1998; Harhoff et al., 1999, 2003; Jaffe & Trajtenberg, 2002; Lanjouw & Schankerman, 2004; Gambardella et al., 2005; Hall et al., 2005; Hall & Trajtenberg, 2005). OECD (2009) also ac know ledges that patents can be characterized by different value and quality indic ators. In Ejermo (2009), it was shown that, compared to inventions, in nova tions, in the sense discussed, were much more geographically concentrated. Ejermo found that this concentration was mainly towards regions of high inventive levels and to regions with high employment levels. Ejermo and Gråsjö (2008) further showed that the explan at ory power from regional R&D to regional in nova tions was much higher. This chapter extends this work by examining the link between inventions and in nova tions, and regional eco nomic growth. Our frst inquiry concerns to what extent patent data used in empirical models can explain regional eco nomic growth. We will also examine whether effects of inventive and innov at ive activity are mainly local, or whether know ledge ac tiv ities in one region also tend to spill over to another region. We further examine the extent to which the meas ures differ in nature: Is it the case that the productive effect differs between inventive and innov at ive ac tiv ities? Given that our meas ure of innov at ive activity better captures quality, could it be that this meas ure has a more spatially bounded growth effect? Which regions seem to bene ft more from patent ac tiv ities? Is it the case that increasing returns to scale prevails, in the sense that patent ac tiv ities do in fact have stronger effects at the local level in regions which are highly productive to start out with, or are there in dica tions of di min ishing returns to scale so that less productive regions bene ft mar ginally more from patents? Section 9.2 discusses the role of know ledge ac tiv ities and growth. In section 9.3 we present the data and the prin ciples behind quality adjustment. Section 9.4 discusses the empirical model tested. The regression techniques and sub sequent results are presented in section 9.5. Section 9.6 concludes.
