June 1, 2026, 14:00–15:30
Toulouse
Room Auditorium 5
Finance Seminar
Abstract
We construct a novel measure of technology sectoral disruptions (TSDs) using a dynamic text-based spatial model of patents based on the extent to which innovation is suddenly highly correlated across multiple industries. We identify multiple TSDs occurring over a 70-year period of time. Abnormal stock returns and insider trading indicate that TSDs are unexpected and have a permanent positive impact. Relative to large firms, small firms experience higher R&D, investments, asset growth, and longlasting value gains. The gains among small firms are consistent with Schumpeter’s 1912 theory of creative destruction and Arrow’s 1962 replacement theory of innovation by smaller firms.
Keywords
Patents, sectoral disruptions; innovation; R&D; creative destruction;
JEL codes
- O31: Innovation and Invention: Processes and Incentives
- O34: Intellectual Property and Intellectual Capital
- D43: Oligopoly and Other Forms of Market Imperfection
- F13: Trade Policy • International Trade Organizations