Exploration and Exploitation in US Technological Change

Vasco Carvalho, Mirko Draca and Nikolas Kuhlen
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Mirko Draca: University of Warwick and CAGE Research Centre
Nikolas Kuhlen: University of Cambridge and The Alan Turing Institute

The Warwick Economics Research Paper Series (TWERPS) from University of Warwick, Department of Economics

Abstract: How do firms and inventors move through ‘knowledge space’ as they develop their innovations? We propose a method for tracking patterns of ‘exploration and exploitation’ in patenting behaviour in the US for the period since 1920. Our exploration measure is constructed from the text of patents find involves the use of ‘Bayesian Surprise’ to measure how different current patent-based innovations are from existing portfolios. Our results indicate that there are distinct ‘life-cycle’ patterns to firm and inventor exploration. Furthermore, exploration activity is more geographically concentrated than general patenting, but this concentration is centred outside the main hubs of patenting.

Date: 2021
New Economics Papers: this item is included in nep-geo, nep-ino, nep-isf, nep-sbm and nep-tid
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https://warwick.ac.uk/fac/soc/economics/research/w ... erp_1366_-_draca.pdf

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Working Paper: Exploration and Exploitation in US Technological Change (2021)
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Persistent link: https://EconPapers.repec.org/RePEc:wrk:warwec:1366

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