Trade marks and performance in UK firms: evidence of Schumpeterian competition through innovation

Christine Greenhalgh, Mark Rogers

Research output: Working paper

Abstract

This paper uses novel data on trade mark activity of UK manufacturing and service sector firms to investigate whether trade marks improve the profitability and productivity of firms. We first analyse Tobin`s q, the ratio of stock market value to book value of tangible assets. We then investigate the relationship between trade mark activity and productivity, using a value added production function. Finally we examine interactions between firms IP activity, to explore creative destruction and growth via innovation. We find trade marks are positively related to both Tobin`s q and to productivity. Also in the short run greater IP activity by other firms in the industry reduces the value added of the firm, but this same competitive pressure has later benefits via productivity growth, also reflected in higher stock market value. This describes the Schumpeterian process of competition through innovation, restraining profit margins while increasing product variety and quality.
Original languageEnglish
Place of PublicationOxford (UK)
PublisherUniversity of Oxford
Number of pages38
Publication statusPublished - Mar 2007

Publication series

NameEconomics Series Working Papers
PublisherUniversity of Oxford
No.300

Keywords

  • trade marks
  • market value
  • productivity
  • services
  • manufacturing

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