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DERIVATIVE IDEAS AND THE VALUE OF INTANGIBLE ASSETS *
Author(s) -
Laitner John,
Stolyarov Dmitriy
Publication year - 2013
Publication title -
international economic review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 2.658
H-Index - 86
eISSN - 1468-2354
pISSN - 0020-6598
DOI - 10.1111/j.1468-2354.2012.00726.x
Subject(s) - derivative (finance) , aggregate (composite) , value (mathematics) , economics , productivity , creative destruction , capital (architecture) , total factor productivity , measure (data warehouse) , econometrics , mathematical economics , microeconomics , classical economics , neoclassical economics , financial economics , mathematics , macroeconomics , computer science , statistics , history , materials science , archaeology , database , composite material
We build a general equilibrium model where growth is driven by two invention types: fundamental ideas that cause creative destruction, and derivative ideas that enhance the value of existing inventions. The model provides a new mapping from microeconomic, patent data to aggregate total factor productivity growth and the aggregate value of privately owned knowledge. We show how to measure the frequency of derivative ideas and the rate of creative destruction. We estimate that derivative ideas account for 70–80% of all patents and their presence more than doubles the value of knowledge capital relative to what the measured innovation rate might otherwise imply.