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on Innovation |
| By: | Daryna Grechyna; Pamela Efua Ofori |
| Abstract: | This study examines the impact of Conference of the Parties (COP) summits on innovation using an event study framework. Innovation is measured by patent grants, distinguishing between the total number of patents and the number of patents in environmental technologies, based on the World Intellectual Property Organization classification. We find that hosting a COP summit leads to a significant and lasting increase in the total number of patent grants, with an average rise of about 35 percent per year from the seventh to the thirteenth year after the summit, but has only a limited effect on the number of patent grants in environmental technologies. We further examine potential heterogeneity in the effects of COP summits by analyzing the impact of hosting a summit on patents in environmental technology compared to other technologies separately for each host country. The results suggest that while hosting a COP summit generally promotes environmental patenting, the effect is negative in some countries. We discuss possible reasons, including diminishing returns in green innovation and the influence of large industrial emitters. The findings are robust across alternative estimators, the inclusion of control variables, and different measures of patenting activity. |
| Keywords: | COP summits, environmental technologies, patents, innovation, event study |
| JEL: | O34 O44 Q54 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12120 |
| By: | Martin, Ralf; Solorzano Mosquera, Jenniffer; Thomas, Catherine; Verhoeven, Dennis |
| Abstract: | We examine the relationship between firms' markups and the economic value of their innovation, including both the private value captured by the innovating firm and the knowledge spillovers that benefit other firms. Using a sample of over 14, 500 EU firms and 2, 400 US firms granted patents between 2005 and 2014, we find that innovation by high-markup firms is more valuable privately and also creates more external value. These associations are robust to controlling for the stock of past innovation and to estimating innovation value in various ways. |
| JEL: | D24 L11 O31 O33 |
| Date: | 2025–09–30 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:129003 |
| By: | Howell, Sabrina T.; Rathje, Jason; Van Reenen, John; Wong, Jun |
| Abstract: | For governments procuring innovation, one choice is whether to specify desired products (a “Conventional” approach) or allow firms to suggest ideas (an “Open” approach). Using a U.S. Air Force R&D grant program, where Open and Conventional competitions were held simultaneously, we find that Open awards increase both commercial innovation and technology adoption by the military. In contrast, Conventional awards have no positive effects on new technology, but do create more program lock-in. We present evidence that openness matters independently from inducing differential selection, for example of less well-established firms. These results suggest benefits from open approaches to innovation procurement. |
| Keywords: | innovation; defense; R&D; procurement |
| JEL: | O31 O32 O38 H56 H57 |
| Date: | 2025–09–10 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:128343 |
| By: | Golebiowska-tataj Daria; Reimeris Ramojus (European Commission - JRC) |
| Abstract: | In the era of global geopolitical shifts, innovation and entrepreneurship are essential to Europe’s resilience, competitiveness, and strategic autonomy. This paper focuses on increase Europe’s competitiveness through instruments feeling innovation and entrepreneurial culture. The paper analyzes the position of European Union at national and regional level according to various global innovation indexes. It examines how to leverage the power of key innovation regions in Europe and how to tap on the potential of the most dynamic innovation hubs in Central and Eastern Europe. The authors examine quantitative databased and present two cases of Paris and Vilnius. The analysis leads to a conclusion that European innovation policy needs to reexamine innovation instruments which are not sufficiently focused on competitiveness and invest more in such instruments as for example the European Innovation Council. On the other hand, the most dynamic innovation ecosystems in CEE regions should be better networked with the leading hubs and used to test new policy approaches. |
| Date: | 2025–08 |
| URL: | https://d.repec.org/n?u=RePEc:ipt:iptwpa:jrc142615 |
| By: | Bijan Aghdasi; Abhijit Tagade |
| Abstract: | Do markets price knowledge spillovers? We show that patent grants influence the stock returns of firms that are connected through technological knowledge dependencies. Using directed patent citations among publicly listed companies in the United States, we construct a granular measure of each firm's exposure to new patents granted to its technologically upstream firms. Patents granted to these upstream companies significantly boost its abnormal stock returns during the week of the grant. We find that these financial spillovers are predominantly localized within a firm's immediate technological connections. Additionally, we provide a novel empirical decomposition of financial spillovers generated from patent grants, by distinguishing those spillovers emerging from sources of technological knowledge, from those emerging from product market rivals (negative effect) and suppliers (positive effect). Our findings are robust to alternative specifications and placebo tests, and they suggest that technological knowledge spillovers create important market-priced ties between firms that are not fully captured by traditional product market relationships. |
| Keywords: | innovation, networks, spillovers, patents, stock returns, supply chains |
| Date: | 2025–08–13 |
| URL: | https://d.repec.org/n?u=RePEc:cep:cepdps:dp2117 |
| By: | Nils H. Lehr |
| Abstract: | This paper provides evidence that rising misallocation in the R&D sector contributed to the recent slowdown in U.S. productivity growth. I develop a growth accounting framework allowing for misallocation of R&D resources across firms captured by wedges between their marginal cost and benefits of R&D. I show that R&D wedges can be measured from R&D returns and document large and persistent differences in R&D returns across US-listed firms. Combining data and model, I estimate that frictions reduced productivity growth by 18% over 1975–2014 and that rising misallocation in the R&D sector accounts for 25% of the growth slowdown. |
| Keywords: | R&D; productivity growth; growth slowdown |
| Date: | 2025–09–12 |
| URL: | https://d.repec.org/n?u=RePEc:imf:imfwpa:2025/183 |
| By: | Lin William Cong; Stephen Q. Yang |
| Abstract: | We develop an empirical approach for analyzing multi-dimensional discrimination using multimodal data, combining human perception measures with language-embedding-based, nonlinear controls for latent quality to relax restrictive assumptions in causal machine learning. Applying it to the U.S. patent examination process, we find that, ceteris paribus, applications from female inventors are 1.8 percentage points less likely to be approved, and those from Black inventors are 3 percentage points less likely—inconsistent with legally prescribed criteria. Jointly studying multiple bias dimensions and their intersections for the first time, we uncover new biases, including an affiliation bias—individual inventors are disadvantaged by 6.6 percentage points relative to employees of large, public firms, a disparity larger than any demographic gap. Moreover, innovation quality, location, and other factors can mitigate or compound discrimination, and the disparities interact: for example, racial gaps vanish among public-firm employees, masking more severe discrimination against individuals. Existing theories such as homophily cannot fully explain the results, but a simple model of correlation neglect does. |
| JEL: | G30 J15 J16 O31 |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34197 |
| By: | Ina Ganguli; Megan MacGarvie |
| Abstract: | This paper examines the evolving trends and policy dynamics of international student migration, focusing on their implications for STEM workforce development and innovation. While the United States has remained a leading destination for international students, recent years have seen a plateau or decline in incoming students, contrasted by growth in countries like Canada, Australia, and emerging hubs such as China and India. International students, particularly in STEM fields, play a critical role in shaping host countries' innovation ecosystems, often transitioning to permanent residents and STEM workers. We review immigration policies, including post-graduation work and residency pathways, highlighting their varying impacts on student inflows and innovation. Policies in Canada and Australia have until recently eased these transitions, while restrictive measures in the U.S. and U.K. have posed challenges. By documenting these trends and policy shifts, we identify gaps in the literature and outline directions for future research at the intersection of international education, immigration, and innovation. |
| JEL: | I23 O31 J61 |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34212 |
| By: | Eric Budish; Maya M. Durvasula; Benjamin N. Roin; Heidi L. Williams |
| Abstract: | For large classes of potential inventions, intellectual property rights that are available on paper are either not possible or not profitable for firms to enforce in practice. In this paper, we show that these missing incentives yield quantitatively significant underinvestment in research and development. We develop a simple model that formalizes the conditions under which such missing markets for innovation arise. We identify an empirical setting—research into new uses for existing drugs—in which there is sharp variation in the enforceability of intellectual property rights on otherwise comparable inventions over time. We show that when intellectual property rights become unenforceable, research investment and commercialization nearly cease. In doing so, we test two claims central both to our model and the innovation literature more generally—that stronger intellectual property protection does, in fact, induce investment, and that heterogeneity in the availability of these rights distorts investment. The welfare consequences of inadequate incentives in our empirical context are large. Our estimates suggest that 200-800 new uses for existing drugs would have been developed under counterfactual policies. Measures of the value of these uses drawn from existing literature suggest that the social cost of this particular missing market is on the order of several trillion dollars. |
| JEL: | D47 I10 I18 K23 L65 O0 O3 O30 O34 |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34222 |
| By: | Tate, Anya |
| Abstract: | The late 19th-century reforms to the British patenting system reduced the cost of obtaining a patent from over £100 in 1851 to just £4 by 1883. While increasing accessibility, this cost reduction led to an increase of low-quality patents often replicating previous inventions, raising concerns about the system's effectiveness. As a result, the 1902 policy proposed novelty examination for the first time, increasing the cost by 25%. This paper examines whether the implementation of this policy in 1905 had a differential effect on patenting activity across British regions. Despite the significance of this policy, it has received extremely limited academic attention. This research aims to fill this gap and add to the literature on the regional impacts of patent system reforms in this period. This study employs panel regressions using data on every geocoded patent sealed between 1895-1915 in the PatentCity database with regional employment in 28 industries as controls. Results indicate no change in the regional distribution of patenting activity as a result of the novelty examination. These findings are consistent with those of Nicholas (2011) for the 1883 policy and have important implications for the geography of inventive activity and the distributional impacts of invention policies. |
| JEL: | O30 R10 |
| Date: | 2025–08 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:129440 |
| By: | Quentin Hoarau; Jean-Pierre Ponssard |
| Abstract: | This paper studies the adoption of clean technology in an oligopolistic setting, focusing on carbon capture and storage (CCS) in the cement sector. Firms can choose between two technologies: a carbon-intensive ("dirty") technology and a low-carbon ("clean") one. Initially, all firms operate with the dirty technology, whose variable cost increases over time with the social cost of carbon, following Hotelling’s rule. Clean technology has a constant marginal cost but requires a sunk investment cost. Firms engage in short-term Cournot competition, and the adoption decision is modeled as a dynamic game in continuous time. We show that imperfect competition leads to inefficiently delayed adoption due to preemption incentives, with firms eventually coordinating on a late joint adoption equilibrium. We propose two corrective public policies: a fixed-cost subsidy and a time-dependent subsidy on profit flows. Calibrating our model to the cement industry, assuming five competitors, we find that without policy intervention, CCS adoption would occur in 2042 rather than the socially optimal date of 2030. Obtaining optimal timing requires either a 70% fixed-cost subsidy or a time-dependent subsidy equivalent to 20% of that amount, although it requires more information for implementation. |
| Keywords: | imperfect competition, innovation, cement, carbon capture and storage |
| JEL: | L13 O31 Q5 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12127 |