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on Innovation |
| By: | Sergio Petralia; Ron Boschma |
| Abstract: | The patent system rests on a fundamental bargain: temporary monopoly rights in exchange for the disclosure of technical knowledge. Yet, the complexity of transferring technical know-how often limits the effectiveness of disclosure, keeping innovation highly localized. We study whether actionable disclosure in the form of publicly available executable code can overcome these frictions. We rely on a novel dataset linking two decades of patenting activity in the United States to contributions in public code repositories by 1, 556 organizations. Using neural language models, we measure the semantic similarity between patent descriptions and public code contributions by these firms to identify patents with high digital disclosure. We find that these patents attract citations from inventors located approximately 17% farther away than those citing a group of control patents, suggesting that actionable disclosure in the form of executable code reduces spatial barriers to knowledge diffusion. |
| Keywords: | patent disclosure, knowledge diffusion, open-source software, geography of innovation, spatial spillovers |
| JEL: | O31 O33 O34 R12 |
| Date: | 2026–07 |
| URL: | https://d.repec.org/n?u=RePEc:egu:wpaper:2611 |
| By: | Bergeaud, Antonin; Nur Gozen, Ruveyda; Van Reenen, John |
| Abstract: | We introduce a methodology to measure cross-country trends in innovation capability- “technological trajectories†and implement this on a new rich dataset covering patents between 1836 and 2016 across multiple countries. Intuitively, trajectories are revealed by a country’s sustained increases in patenting across multiple patent offices. We first describe the data patterns, showing the relative decline of the UK, and the rise first of the US and Germany, and then later of Japan and China. We then econometrically estimate trajectories on (i) the post-1902 period for France, Germany, Japan, the UK and US, and (ii) the post-1960 period for a wider sample of 40 countries. Our trajectories are strongly positively correlated with Total Factor Productivity growth, and also (but less strongly) associated with the growth of labour productivity and capital intensity. We show that future trajectories are predicted by a country’s initial levels of R&D, education and defence spending, classic drivers of innovation in modern growth theory. |
| Keywords: | Patents; Technical progress; Economic history; Innovation |
| JEL: | O31 O33 O34 |
| Date: | 2026–01 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:21066 |
| By: | Baslandze, Salomé; Vardishvili, Ia |
| Abstract: | Large productivity differences across firms reflect substantial ex-ante heterogeneity at entry, yet the origins of this heterogeneity remain poorly understood. This paper shows that innovating spinouts—firms formed by inventors leaving incumbent innovators—are a key endogenous source of high-growth entrepreneurship and aggregate productivity growth. Using inventor mobility in patent data, we document that spinouts systematically outperform other entrants throughout their life cycle, their performance is strongly linked to parent-firm technological strength, and their formation temporarily depresses parent-firm innovation. We develop a Schumpeterian growth model that endogenizes spinout formation and the fundamental tradeoff between knowledge diffusion, creative destruction, and appropriability. Closely disciplined by rich microlevel data, the model implies that spinouts account for a disproportionate share of high-growth firms and nearly forty percent of aggregate productivity growth, but that inventor departures also impose sizable costs on incumbents, generating a fundamental policy tradeoff. Policy counterfactuals show that relaxing non-compete restrictions raises aggregate growth and welfare and amplifies the effectiveness of entry subsidies. |
| Keywords: | Innovation; entrepreneurship |
| JEL: | O30 O43 |
| Date: | 2026–01 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:21016 |
| By: | Erik CANTON (European Commission) |
| Abstract: | This policy brief examines how firms’ ability to reorganise their workforce plays a role in the uptake of artificial intelligence and related technologies. Using firm-level data across OECD countries, it finds that adoption patterns differ across technologies and firms and are associated with differences in workforce adjustment costs. The results highlight that technology diffusion depends not only on innovation, but also on how easily firms can adapt their organisation to new technologies. |
| Keywords: | Artificial intelligence, technology adoption, labour market institutions, employment protection legislation, workforce adjustment, organisational change |
| JEL: | O33 J24 L25 O32 |
| Date: | 2026–06 |
| URL: | https://d.repec.org/n?u=RePEc:eug:wpaper:ki-01-26-095-en-n |
| By: | José Luis Moraga-González (Vrije Universiteit Amsterdam); Evgenia Motchenkova (Vrije Universiteit Amsterdam) |
| Abstract: | We investigate the impact of mergers on R&D incentives within a framework of R&D competition where effort can influence both the probability of innovation and the payoff conditional on success. Our framework nests the results of two classes of existing models and reveals assumptions that are restrictive. In models where R&D effort increases the probability of innovation but does not directly affect the payoff upon success, we show that the assumption of zero payoff upon innovation failure is restrictive. In models where R&D effort influences the payoff conditional on success, but not the probability of success itself, the assumption of deterministic innovation success (i.e., a success probability of one) is similarly restrictive. Across both modeling approaches, we offer a novel insight: the shape of investment costs, and by implication the pre-merger level of innovation, can be pivotal in determining whether a merger strengthens or weakens firms’ incentives to invest in R&D. In an extensions section, we further examine the role of R&D input and output synergies, firm asymmetries, as well as the implications for consumer surplus. |
| Keywords: | Merger Policy, R&D Investments, Innovation |
| JEL: | K21 L13 L40 |
| Date: | 2026–01–06 |
| URL: | https://d.repec.org/n?u=RePEc:tin:wpaper:20260001 |
| By: | Feyler, Emilie; Heim, Sven; Szücs, Florian; Spiegel, Yossi |
| Abstract: | We study the effect of horizontal minority stake acquisitions on firms’ innovation incentives and patenting behavior. Using patent data from 34 countries between 2001 and 2019, we employ a staggered, matching-based difference-in-differences approach, complemented by an event study. We find that such acquisitions lead to a decline in both the number of patents granted and the number of citations received, indicating a reduction in innovation activity. These results suggest that horizontal minority acquisitions can serve as a mechanism to soften rivalry, not only in product markets, but also in innovation. |
| Keywords: | Innovation; Merger policy; Patents; Minority shareholdings |
| JEL: | D22 G14 L13 L40 O31 |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:20917 |
| By: | Guccione, Andrea; Roldan-Blanco, Pau |
| Abstract: | Firms’ innovation outcomes depend on their ability to attract and retain talented inventors. What market frictions prevent the sorting between firms with high innovation potential and high-productivity inventors? How does this sorting impact aggregate innovation, growth and welfare? We address these questions both empirically and theoretically. Empirically, we show that firms facing strong competition in the product market employ more productive inventors, while less productive inventors tend to be allocated in concentrated industries. Theoretically, we embed a frictional labor market for inventors into an endogenous-growth model of strategic innovation. In line with the data, the model predicts that high-productivity inventors are disproportionately employed in firms that operate in competitive industries. We then use the model to quantify the growth and welfare implications of this inventor sorting. Our results show that matching frictions in the market for inventors impede the allocation of highproductivity inventors to firms with high implementation intensity, and are responsible for a 32% loss in economic growth. Industrial policies that subsidize R&D spending relax these frictions by boosting inventor productivity, helping high-quality inventors reallocate to firms with high implementation incentives. Under optimal subsidies, growth increases as much as 74 basis points, closing most of the gap in missing growth caused by frictions in the market for inventors. |
| Keywords: | Inventors; Innovation; Growth; Misallocation; Search |
| JEL: | L16 J6 O3 O4 |
| Date: | 2026–02 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:21186 |
| By: | ZIyu Chen; Christopher Esposito |
| Abstract: | U.S. policy increasingly seeks to slow China's technological rise by restricting its access to American science, on the assumption that Chinese innovation depends on U.S. science. Linking the full corpus of Chinese invention patents to the global scientific literature, we show that this dependence has fallen in recent years: the share of the China-produced science behind Chinese patents rose from 1% in 2000 to 26% in 2025, overtaking the U.S. share in 2021. As China's reliance on U.S.-produced science fades, policies restricting access fall out of alignment with the U.S.' actual strategic position. |
| Date: | 2026–06 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2606.26470 |
| By: | Akcigit, Ufuk; Chikis, Craig A.; Dinlersoz, Emin; Goldschlag, Nathan |
| Abstract: | We construct a novel dataset linking academic publication records to U.S. Census employer–employee data to track 42, 000 AI researchers over two decades. We document systematic changes in the allocation of AI talent. Industry increasingly attracts younger and foreign-born researchers, while gender representation improves more in academia. The top 1% of publishing industry scientists now earn $1.5 million more annually than comparable academics, a fivefold increase since 2001. Rising wage premia coincide with greater sorting into large incumbent firms. Researchers who move to industry publish less but patent more, consistent with a shift from open science toward proprietary innovation. |
| Keywords: | Artificial intelligence; open science; Innovation; Research and development |
| JEL: | I23 J45 L33 O31 |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:21293 |
| By: | Aldasoro, Inaki; Gambacorta, Leonardo; Pál, Rozália; Revoltella, Debora; Weiss, Christoph; Wolski, Marcin |
| Abstract: | This paper provides new evidence on how the adoption of artificial intelligence (AI) affects productivity and employment in Europe. Using matched EIBIS-ORBIS data on more than 12, 000 non-financial firms in the European Union (EU) and United States (US), we instrument the adoption of AI by EU firms by assigning the adoption rates of US peers to isolate exogenous technological exposure. Our results show that AI adoption increases the level of labor productivity by 4%. Productivity gains are due to capital deepening, as we find no adverse effects on firm-level employment. This suggests that AI increases worker output rather than replacing labor in the short run, though longer-term effects remain uncertain. However, productivity benefits of AI adoption are unevenly distributed and concentrate in medium and large firms. Moreover, AI-adopting firms are more innovative and their workers earn higher wages. Our analysis also highlights the critical role of complementary investments in software and data or workforce training to fully unlock the productivity gains of AI adoption. |
| Keywords: | Artificial intelligence; Firm productivity; Europe; Digital transformation |
| JEL: | D22 J24 L25 O33 O47 |
| Date: | 2026–01 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:21082 |
| By: | Bernardo Ribeiro (Yale University) |
| Abstract: | This paper proposes a semi-endogenous growth theory that incorporates technology vintages and the endogenous evolution of multiple technological paradigms through innovation. It provides a characterization of both balanced growth equilibrium and transitional dynamics in an environment where new technologies continuously emerge. From a positive perspective, the model rationalizes two distinct empirical patterns. Using two centuries of US patent data, I first document that the age profile of patents has a pronounced hump shape: most contemporary patents build upon technologies that are between 50 and 100 years old. Second, this age profile has remained stable throughout the past century. From a normative standpoint, the theory underscores a misallocation of research effort induced by the tendency among profit-maximizing firms to overinvest in further developing mature technologies. This yields a suboptimally slow development of emerging technologies. According to a calibrated version of the model, correcting such misallocation could generate welfare gains of 7%. |
| Date: | 2026–04–01 |
| URL: | https://d.repec.org/n?u=RePEc:cwl:cwldpp:2515 |
| By: | E. Marrocu; R. Paci; L. Serafini |
| Abstract: | This paper investigates the determinants of interfirm agreement formation in the context of the twin digital and green transition. We focus on strategic alliances and joint ventures involving at least one Italian firm, using SDC Platinum data on agreements announced between 2000 and 2025. Digital and green agreements are identified through a keyword-based classification of deal synopses. The empirical analysis is conducted at the dyadic level by comparing realised agreements with potential firm pairs within the framework of rare event logit models, focusing on the role of geographical, technological and relational proximity. The results show that technological proximity is the strongest predictor of agreement formation. Firms operating in connected industrial domains are substantially more likely to collaborate, suggesting that compatible knowledge bases and absorptive capacity are central to partner selection. Geographical proximity also matters, mainly through coordination and interaction costs rather than administrative co-location. The comparison between digital and green agreements shows that both domains require technological compatibility, but they rely on different forms of proximity and complementarity. Digital agreements are especially sensitive to broad network-based technological proximity, consistent with the modular and cross-sectoral nature of digital technologies. Green agreements combine compatible but differentiated capabilities with a stronger spatial and implementation-related component, reflecting their connection to infrastructures, regulation, and local coordination conditions. Prior relational proximity increases the probability of agreement formation in the full sample, while network effects are more exploratory in the digital and green subsamples. The paper contributes to the literature on alliances, proximity, and transition-oriented innovation by showing that twin-transition collaboration is shaped by multiple and partially distinct proximity mechanisms. |
| Keywords: | twin transition, strategic alliances, joint ventures, proximities, networks, rare events |
| JEL: | C25 L14 O31 O33 R12 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:cns:cnscwp:202610 |
| By: | Erik CANTON (European Commission) |
| Abstract: | Portfolio approaches are increasingly used in research and innovation policy to balance multiple objectives when allocating resources across competing opportunities. In practice, however, constructing such portfolios is challenging because the number of feasible combinations grows rapidly with the size of the candidate set. This paper proposes a practical method for constructing multi-criteria portfolios when only a limited number of items can be selected. The approach formulates portfolio construction as a compromise optimisation problem that identifies the feasible portfolio closest to a reference point defined by the best attainable performance on each criterion in normalised criterion space. To address the resulting combinatorial problem, the paper introduces a computationally efficient heuristic search procedure. The method enables the systematic construction of balanced portfolios, improves transparency relative to ranking-based approaches, and provides information on the robustness of portfolio choices. The framework is flexible and can be extended to incorporate weighted criteria, budget constraints, and logical dependencies between items. |
| Keywords: | Multi-criteria decision-making, portfolio optimisation, heuristic algorithms, research and innovation policy, technology selection |
| JEL: | O38 C61 D81 O32 |
| Date: | 2026–06 |
| URL: | https://d.repec.org/n?u=RePEc:eug:wpaper:ki-01-26-094-en-n |
| By: | Ugo Fratesi; Pietro Vicari |
| Abstract: | The concept of ecosystem has gained significant traction, both in academic and policy domains, however, most of the literature adopts given spatial scales, mostly regional statistical units, and then investigates the extent to which those places exhibit ecosystem features. To contribute overcoming this limit, this paper proposes a bottom-up methodology to identify “potential ecosystems†, i.e. clusters of local labour systems aggregated on the basis of firm interactions and territorial networks. The methodology is illustrated and validated with Italian data where identified “ potential ecosystems†are shown to exhibit several of the features that are expected in actual ecosystems. This methodological innovation could provide a support to evidence-based regional policy, e.g. better targeting areas for innovation measures. |
| Keywords: | Ecosystems, Firm Networks, Cluster Identification, Regional Development |
| JEL: | R12 R58 L26 |
| Date: | 2026–07 |
| URL: | https://d.repec.org/n?u=RePEc:egu:wpaper:2612 |
| By: | Hvide, Hans K.; Meling, Tom G. |
| Abstract: | We study how entrepreneurs respond to investment opportunities created by new technologies. Using the staggered rollout of broadband internet in Norway as a natural experiment, we find that access to the new technology increases startup rates by about 25% without reducing their quality. The effects are strongest in ICT-intensive industries, and treated entrepreneurs are more likely to invest in complementary assets such as computers. Consistent with existing literature, established firms show a more muted response to the new technology. Our findings suggest that entrepreneurs play a key role in adapting the economy to technological change. |
| Keywords: | Broadband; entrepreneurship; Technology adoption; Technology diffusion |
| JEL: | D21 D24 J23 L11 L25 G39 |
| Date: | 2026–02 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:21200 |
| By: | Sébastien Houde; Wenjun Wang |
| Abstract: | This paper investigates the relationship between AI adoption and carbon emission intensity. Using micro-level data from Chinese firms, we find that carbon intensity decreases following the adoption of AI. The effect is particularly pronounced among large firms, those headquartered in AI hubs, and those in high-carbon intensity sectors. We investigate several mechanisms and find that AI adoption is also associated with increases in energy management processes, green innovation, inventory efficiency, overall productivity, and the share of specialized labor. We find that AI-induced carbon reductions are subject to a large rebound effect of approximately 70%. |
| Keywords: | artificial intelligence, carbon emissions, energy intensity, green innovation |
| JEL: | D22 L11 O33 Q54 Q55 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12803 |
| By: | Costas Arkolakis; Sun Kyoung Lee; Michael Peters |
| Abstract: | Between 1880 and 1920, more than 20 million immigrants settled in the United States. We study how this migration wave affected innovation and growth. Using a newly constructed dataset linking individual census records to historical immigration records and the universe of US patents, we highlight a new channel through which immigrants contributed to growth: they disproportionately settled in urban innovation hubs. To quantify the aggregate and regional effects of this mass migration episode, we develop a new spatial growth model in which skilled workers have a comparative advantage in innovation and sort endogenously across space. We find that international arrivals after 1880 raised US income per capita by 8.2% by 1940. Removing the subsequent immigration restrictions of the 1920s would have raised income per capita by a further 1.7% by 2000. Immigrants' skill composition and their concentration in urban hubs are key drivers of these effects. |
| JEL: | N91 O11 O30 R13 |
| Date: | 2026–06 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:35392 |