William R. Latham

The Variation of Estimated Impacts from Five Regional Input-Output Models

Since construction of a regional input-output model for impact analysis is very time-consuming, a market for ready-made regionally customized model systems has developed. This article compares five such systems. It is based on a survey of five modelers who estimated impacts of seven hypothetical regional development scenarios. The article presents the estimates generated; then compares them, focusing on the degree of variation among the estimates and also comparing them to a survey models results. Although estimated impacts were relatively similar for regionwide output and income impacts, there was great dissimilarity among employment impact estimates.

COLLECTIVE KNOWLEDGE, PROLIFIC INVENTORS AND THE VALUE OF INVENTIONS: AN EMPIRICAL STUDY OF FRENCH, GERMAN AND BRITISH PATENTS IN THE US, 1975–1999

Abstract The objective of this paper is to test two related hypotheses: The first is that the involvement of both prolific and foreign inventors in the production of knowledge has a direct, positive impact on the collective dimension of this knowledge production as measured by the size of the inventive team. The second is that the involvement of both prolific and foreign inventors has a direct, positive impact on the value of the new knowledge produced. We use detailed information from nearly 300,000 patents granted by the US Patent Office to French, German, and British inventors over the period from 1975 to 1999. From the data available from each patent regarding citations of prior patents and the numbers and identities of the inventors listed in the patent application, we are able to construct measures of collective knowledge, the presence of prolific and foreign inventors, and the imputed value of patents. In a novel approach in this literature, we estimate negative binomial multiple regression models for determining both the size of the collective dimension and the value of the patents. After controlling for the effects of years, technological fields, and patenting country, we find a strong support for the hypothesis that both prolific and foreign inventors tend to be parts of larger teams of inventors and for the hypothesis that prolific and foreign inventors tend to produce inventions having more value. In the conclusion, we draw some implications from these results for knowledge governance.

The economics of persistent innovation : an evolutionary view

Persistence in Innovation: Definitions and Current Development of the Field.- Determinants of Persistence in Innovation: A Study of French Patenting.- Factors of Entry and Persistence In Innovation: A Competence Based Approach.- Characteristics of Persistent Inventors as Revealed in Patent Data.- Comparing Innovative Persistence Across Countries: A Cox-Model of Patenting in the UK and France.- Persistent Adoption of Time-Saving Process Innovations.- Towards an Evolutionary Theory of Persistence in Innovation.- Principal Findings, Policy Implications and Research Agenda.

Information Asymmetry, Litigation Risk, Uncertainty and the Demand for Fairness Opinions: Evidence from U.S. Mergers and Acquisitions, 1980-2002

In the market for corporate control, a potential market failure of asymmetric or inadequate information arises if any of the market participants (the acquiring or target firms’ management, boards of directors or shareholders) have insufficient knowledge about the real market value of a target firm. This failure may be mitigated by the market’s participants choosing to purchase additional information about the value of the target firm. An opinion by a third party regarding this value is known as a “fairness opinion.” Although it is often the case that at least one party to an acquisition obtains a fairness opinion, the issue of whether they provide any informational value is still debated. US court rulings have increased the potential costs to firms and their boards of directors of making merger and acquisition decisions without sufficient information, thus potentially raising the value of fairness opinions. The paper examines factors influencing the decisions of firms engaged in merger and acquisition activity during the 1980-2002 period to obtain or not to obtain fairness opinions. For each transaction information is available on the primary industry in which the acquiring and target firms operate and on the numbers and types of additional information, including fairness opinions, each of the parties to the transaction sought during the progress of the transaction. Our results show that, for the acquiring firm in an acquisition, the likelihood of purchasing fairness opinions is influenced significantly by (1) the market values of the acquirer and the target firm, (2) the volatility of excess returns of both firms, (3) whether or not the transaction is a “cash” deal, (3) the degree of asymmetric information as measured by the similarity of the acquirer and target firms, (4) the amount of monopoly power the target firm has, (5) whether the acquisition is “hostile,” and (6) whether other financial advisory services have been purchased by either firm. Finally, strong evidence is found indicating that (7) the behavior of acquiring firms, whether incorporated in Delaware or not, has been significantly altered since the 1985 Van Gorkom v. Smith decision by a Delaware court regarding fairness opinions. Our results for target firms are not as strong as those for acquirers, nor are the results for financial advisory services more broadly defined.

Locational behavior in manufacturing industries

1. Introduction.- The need for industrial location analysis.- Concentration on disaggregated manufacturing activity.- The location of economic activity.- The factors of location approach.- Agglomerative economies as location factors.- Outline of following chapters.- 2. Description Of The Data Base.- Regions used.- Location data.- Industrial linkage data.- Summary.- 3. Measurement of Factors Influencing Industrial Location.- Nonrandomness in location.- The orientation of industries.- Labor orientation.- Market orientation.- Material orientation.- Agglomerative economy orientation.- Summary.- 4. The Measurement of Geographic Association.- Previous measures of geographic association.- The measure of association used.- The effect of cluster size on geographic association.- Variation in the measure of geographic association between urban and rural regions.- Geographic associations among more than two industries.- Summary.- 5. The Impact of Linkages on Industrial Location.- Analysis of results for all industries.- Regression analysis of individual manufacturing industries.- Industrial complexes.- Summary.- 6. Summary of Results and Conclusions.- Summary of preceding chapters.- Implications for industrial location practice and policy.- Suggested extensions of the analysis.- List Of References.- Appendices.- A-1. Substitution of SEAs for SMSAs in the Northeast.- A-2. Method of selecting 199 industries used.- A-3. Extent and consequences of errors remaining in data.- B-1. Biased correlation coefficients with disaggregated regional data.- B-2. Factor analysis identification of industrial complexes.- C-1. Summary of bilateral linkages and associations by industry.- C-2. Correlations between employment estimates for three subdivisions of ten sample industries.- C-3. Correlations between employment estimates for SMSA and non-SMSA subdivisions of fifteen sample industries.

Value of Invention, Prolific Inventor Productivity and Mobility: Evidence from Five Countries, 1975-2002

The aim of this paper is to provide new insights into (1) the determinants of the value of inventions and (2) the role that mobility plays in the behavior of prolific inventors, whom we identify based on the number of patents exceeding a threshold of productivity. We examine mobility in two dimensions: from firm to firm (inter-firm) and from one technical field to another. We exploit data on patents filed by inventors from five countries (France, the UK, Germany, the US and Japan) in the US Patent and Trademark office during the period from 1975 to 2002. From our regressions we obtain a rich set of results. In particular we show that: (1) as predicted by evolutionary theory, inventor productivity is a positive determinant of invention value, (2) inter-firm mobility is a consistently positive determinant of productivity and (3) technological mobility is a negative determinant. The last implies that the more specialized an inventor is, the higher his productivity is.

Persistence of Firm Innovative Behavior: Towards an Evolutionary Theory

A growing body empirical literature deals with persistence in innovation. However, there is neither a survey of the development and status of the field nor a clear statement of a theory of persistence which includes a formal model of the dynamics of firm persistence. This paper fills these gaps by first providing a survey of previous studies of persistence, then presenting a theory, based on the evolutionary approach, to explain the choice of firms to innovate persistently, sporadically or not at all, and finally describing a formal model which shows some striking results corroborated by recent empirical evidence.

Evidence on the Efficient Market Hypothesis from 44 Global Financial Market Indexes

This paper employs Granger causality tests to identify the impacts of historical information from global financial markets on their current levels in 30-day windows. The dataset consists primarily of the daily index levels of the (1) open, (2) close, (3) intra-day high, (4) intra-day low, and (5) trading volume series for the world’s 37 most influential equity market indexes, two crude oil prices, a gold price, and four major money market prices in the United States are used as controls. Our results indicate a persistent impact of historical information from global markets on their current levels, and this impact duplicates itself in a cyclical pattern consistently over decades. Such persistence in the patterns causes some market indexes to be upgraded to global or regional market leaders. These findings can be interpreted as constituting violations of the weak-form efficient market hypothesis. The results also reveal recursive impacts of information in these markets and the existence of an information digestion effect.

Domestic Innovation and Chinese Regional Growth, 1991-2004

Many other papers, notably those of Jefferson et al. (1996, 1997, 2002, 2003) have examined foreign investment and innovation in China. Other papers listed in the Appendix to this paper give the history and development of examinations of the modern Chinese innovation system. The contribution of this paper is its focus on the contributions of Chinese domestic innovation to economic growth at the provincial level.We have elsewhere (Latham and Yin 2009) described the nature of China’s domestic innovation system. Such an examination is a necessary part of an assessment of whether or not policies that promote domestic R&D, such as China’s Science and Technology Policy, could be productive for China’s regions. We are grateful for the comments of an anonymous referee for helping us to clarify that our work on the effects of innovation on growth cannot reveal whether or not the Science and Technology policies in place during the whole period have actually had any effect because we do not have data for the counterfactual. Our results show only that, if S&T policies promote innovation and innovation has an effect on grow, then S&T policy may be effective in promoting growth.

Characteristics of Persistent Inventors as Revealed in Patent Data

There is empirical evidence regarding the role of certain key individuals in the creation of technological knowledge. In particular, studies of knowledge-based industries have identified the significant roles of key scientists and key engineers in the process of technological innovation (Zucker and Darby, 1996, 1998, and Almeida and Kogut, 1997). With respect to the process of technological invention, (2003) using patent data provided by the US Patent Office found a high positive correlation between the presence of consistent inventors or strong inventors (who patented from 10 to 50 times during the period under observation) and the technological value of patented inventions as measured by the number of citations to the patent by subsequent patents. The Patent Value survey provides the opportunity to make value comparisons. (1992) pointed out that, among the factors which could explain the success of a firm’s innovative strategy, was the presence of certain key individuals: effective “product champions” or “technological gatekeepers”. He considered product champions and project leaders as playing an important role in achieving both more successful and faster new product development. Many other scholars in the field of management and organization have emphasized the importance of individuals in the generation and promotion of ideas in the innovation process as well. Individuals emerge to actively promote innovations through the various organizational stages.