Working Paper: CEPR ID: DP17486
Authors: Antonin Bergeaud; Julia Schmidt; Riccardo Zago
Abstract: When a technology becomes the new standard, the firms that are leaders in producing this technology have a competitive advantage. Matching the semantic content of patents to standards and exploiting the exogenous timing of standardization, we show that firms closer to the new technological frontier increase their market share and sales. In addition, if they operate in a very competitive market, these firms also increase their R&D expenses and investment. Yet, these effects are temporary since standardization creates a common technological basis for everyone, which allows followers to catch up and the economy to grow
Keywords: standardization; patents; competition; innovation; text mining
JEL Codes: L15; O31; O33
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| proximity to the technological frontier (shockit) (O33) | market share (L17) |
| proximity to the technological frontier (shockit) (O33) | sales (M31) |
| standardization (L15) | R&D (O32) |
| standardization (L15) | capital expenditures (G31) |
| standardization (L15) | sectoral growth (O41) |
| low competition (L13) | investment (G31) |