HOME » Publications » Economic Review


Vol. 72, No. 3, pp. 228-245 (2021)

“R&D and Innovation: Evidence from Patent Data”
Yusuke Oh (Bank of Japan), Koji Takahashi (Bank of Japan)

We investigate innovation dynamics and R&D activity in Japanese listed firms by calculating an indicator, the citation stock, for the accumulation of innovation based on patent citations and obtain three main findings. First, an increase in a firm's citation stock contributes to its productivity growth. Second, entering into new technological fields for each firm has a positive effect on innovation, which implies that explorative R&D activity stimulates innovation. Finally, such explorative R&D is more pronounced in young but large firms with high leverage, low return on assets and a high market share.