nep-tid New Economics Papers
on Technology and Industrial Dynamics
Issue of 2005‒05‒23
seven papers chosen by
Francesco Lissoni
Universita degli Studi di Brescia

  1. The Determinants of Faculty Patenting Behavior: Demographics or Opportunities? By Pierre Azoulay; Waverly Ding; Toby Stuart
  2. The economics of ideas and intellectual property By Michele Boldrin; David K. Levine
  3. Intellectual property and market size By Michele Boldrin; David K. Levine
  4. The Effects on Firm Profits of the Stock of Intellectual Property Rights By William E. Griffiths; Paul H. Jensen; Elizabeth Webster
  5. Patent Application Outcomes across the Trilateral Patent Offices By Paul H. Jensen; Alfons Palangkaraya; Elizabeth Webster
  6. The Burden of Knowledge and the 'Death of the Renaissance Man': Is Innovation Getting Harder? By Benjamin F. Jones
  7. A Gap for Me: Entrepreneurs and Entry By Volker Nocke

  1. By: Pierre Azoulay; Waverly Ding; Toby Stuart
    Abstract: We examine the individual, contextual, and institutional determinants of faculty patenting behavior in a panel dataset spanning the careers of 3,884 academic life scientists. Using a combination of discrete time hazard rate models and fixed effects logistic models, we find that patenting events are preceded by a flurry of publications, even holding constant time-invariant scientific talent and the latent patentability of a scientist's research. Moreover, the magnitude of the effect of this flurry is influenced by context --- such as the presence of coauthors who patent and the patent stock of the scientist's university. Whereas previous research emphasized that academic patenters are more accomplished on average than their non-patenting counterparts, our findings suggest that patenting behavior is also a function of scientific opportunities. This result has important implications for the public policy debate surrounding academic patenting.
    JEL: O31 O32 O33
    Date: 2005–05
  2. By: Michele Boldrin; David K. Levine
    Abstract: Innovation and the adoption of new ideas are fundamental to economic progress. Here we examine the underlying economics of the market for ideas. From a positive perspective, we examine how such markets function with and without government intervention. From a normative perspective, we examine the pitfalls of existing institutions, and how they might be improved. We highlight recent research by ourselves and others challenging the notion that government awards of monopoly through patents and copyright are “the way” to provide appropriate incentives for innovation.
    Date: 2005
  3. By: Michele Boldrin; David K. Levine
    Abstract: Intellectual property protection involves a trade-off between the undesirability of monopoly and the desirable encouragement of creation and innovation. As the scale of the market increases, due either to economic and population growth or to the expansion of trade through treaties such as the World Trade Organization, this trade-off changes. We show that, generally speaking, the socially optimal amount of protection decreases as the scale of the market increases. We also provide simple empirical estimates of how much it should decrease.
    Date: 2005
  4. By: William E. Griffiths (Centre for Microeconometrics, Department of Economics, The University of Melbourne); Paul H. Jensen (Melbourne Institute of Applied Economic and Social Research, and Intellectual Property Research Institute of Australia, The University of Melbourne); Elizabeth Webster (Melbourne Institute of Applied Economic and Social Research, and Intellectual Property Research Institute of Australia, The University of Melbourne)
    Abstract: The effects of innovation on firm performance is conventionally analysed using R&D or patent applications as measures for innovation capital and market value as the measure of firm performance. We argue that such studies fall short in three important respects. First, the proxies used for innovation capital are flows not stocks as the theory suggests. Secondly, while they are derived from the theory of intangible capital, their estimations ignore other important intangible capital such as organisational and marketing capital; and thirdly, by using market value, the studies heroically assume that stock markets work efficiently. In this paper, we develop a model of the effects of intangible capital, including, but not limiting to, innovation capital, on firm profits, using new measures for the former. Our results indicate that profits vary, ceteris paribus, according to the type of IP rights held by the firm, the age of the firm, the size of the firm, and the lifespan of the IP right.
    Date: 2005–04
  5. By: Paul H. Jensen (Melbourne Institute of Applied Economic and Social Research, and Intellectual Property Research Institute of Australia, The University of Melbourne); Alfons Palangkaraya (Melbourne Institute of Applied Economic and Social Research, and Intellectual Property Research Institute of Australia, The University of Melbourne); Elizabeth Webster (Melbourne Institute of Applied Economic and Social Research, and Intellectual Property Research Institute of Australia, The University of Melbourne)
    Abstract: While most developed countries apply the same criteria to determine whether an invention is eligible to be protected by a patent, there are substantial procedural differences in the way in which different patent offices examine a patent application. This means that a patent application may be granted in one jurisdiction but rejected in others, which raises welfare concerns about the ability of patents to provide an ex ante incentive for investment. In this article, we analyze whether there are systematic differences in patent application outcomes across the trilateral patent offices. In order to determine how much “disharmony” exists, we examine whether the patent offices make consistent decisions for a given invention using a dataset of 70,000 patent applications that have been granted in the US and submitted in Japan and Europe and have a single, common priority application. Specifically, we model the patent application outcomes using a multinomial logit to see how the decisions made by the patent offices vary across different patent characteristics such as technology area, non-obviousness of the invention and priority country.
    Date: 2005–04
  6. By: Benjamin F. Jones
    Abstract: This paper investigates, theoretically and empirically, a possibly fundamental aspect of technological progress. If knowledge accumulates as technology progresses, then successive generations of innovators may face an increasing educational burden. Innovators can compensate in their education by seeking narrower expertise, but narrowing expertise will reduce their individual capacities, with implications for the organization of innovative activity - a greater reliance on teamwork - and negative implications for growth. I develop a formal model of this "knowledge burden mechanism" and derive six testable predictions for innovators. Over time, educational attainment will rise while increased specialization and teamwork follow from a sufficiently rapid increase in the burden of knowledge. In cross-section, the model predicts that specialization and teamwork will be greater in deeper areas of knowledge while, surprisingly, educational attainment will not vary across fields. I test these six predictions using a micro-data set of individual inventors and find evidence consistent with each prediction. The model thus provides a parsimonious explanation for a range of empirical patterns of inventive activity. Upward trends in academic collaboration and lengthening doctorates, which have been noted in other research, can also be explained by the model, as can much-debated trends relating productivity growth and patent output to aggregate inventive effort. The knowledge burden mechanism suggests that the nature of innovation is changing, with negative implications for long-run economic growth.
    JEL: O3 O4 J2 I2
    Date: 2005–05
  7. By: Volker Nocke (Department of Economics, University of Pennsylvania)
    Abstract: We present a theory of entrepreneurial entry and exit decisions. Knowing their own managerial talent, entrepreneurs decide which market to enter, where markets differ in size. We obtain a striking sorting result: each entrant in a large market is more efficient than any entrepreneur in a smaller market. The result obtains since competition is endogenously more intense in larger markets. The sorting and price competition effects imply that the number of entrants (and hence product variety) may actually be smaller in larger markets. In the stochastic dynamic extension of the model, we show that the churning rate of entrepreneurs is higher in larger markets.
    Keywords: entrepreneurship, entry, exit, firm turnover, industry dynamics
    JEL: L11 L13 M13
    Date: 2003–06–30

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