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on Technology and Industrial Dynamics |
| By: | Alex Bell; Raj Chetty; Xavier Jaravel; Neviana Petkova; John Van Reenen |
| Abstract: | Many countries provide financial incentives to spur innovation, ranging from tax incentives to research and development grants. In this paper, we study how such financial incentives affect individuals' decisions to pursue careers in innovation. We _first present empirical evidence on inventors' career trajectories and income distributions using de-identified data on 1.2 million inventors from patent records linked to tax records in the U.S. We find that the private returns to innovation are extremely skewed - with the top 1% of inventors collecting more than 22% of total inventors' income - and are highly correlated with their social impact, as measured by citations. Inventors tend to have their most impactful innovations around age 40 and their incomes rise rapidly just before they have high-impact patents. We then build a stylized model of inventor career choice that matches these facts as well as recent evidence that childhood exposure to innovation plays a critical role in determining whether individuals become inventors. The model predicts that financial incentives, such as top income tax reductions, have limited potential to increase aggregate innovation because they only affect individuals who are exposed to innovation and have no impact on the decisions of star inventors, who matter most for aggregate innovation. Importantly, these results hold regardless of whether the private returns to innovation are known at the time of career choice. In contrast, increasing exposure to innovation (e.g., through mentorship programs) could have substantial impacts on innovation by drawing individuals who produce high-impact inventions into the innovation pipeline. Although we do not present direct evidence supporting these model-based predictions, our results call for a more careful assessment of the impacts of financial incentives and a greater focus on alternative policies to increase the supply of inventors. |
| Keywords: | inventors, innovation, tax policy |
| JEL: | L2 M2 O32 O33 |
| Date: | 2019–01 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp1597&r=all |
| By: | Hong Cheng; Hanbing Fan; Takeo Hoshi; Dezhuang Hu |
| Abstract: | The Chinese government has been using various subsidies to encourage innovations by Chinese firms. This paper examines the allocation and impacts of innovation subsidies, using the data from the China Employer Employee Survey (CEES). We find that the innovation subsidies are preferentially allocated to state owned firms and politically connected firms. Of these two (state ownership and political connection), political connection is more important in determining the allocation. We also find that the firms that receive innovation subsidies file and receive more patents, are more likely to introduce new products, but do not necessarily file and receive more patents abroad. Finally, the firms that receive innovation subsidies do not have higher productivity, more profits, or larger market shares. Overall, the results point to inefficiency of allocation of innovation subsidies and show that the subsidies encourage only incremental innovations and not radical ones. |
| JEL: | O25 O38 P48 |
| Date: | 2019–01 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:25432&r=all |
| By: | Fritsch, Michael; Piontek, Matthias; Titze, Mirko |
| Abstract: | The value of social network analysis is critically dependent on the comprehensive and reliable identification of actors and their relationships. We compare regional knowledge networks based on different types of data sources, namely, co-patents, co-publications, and publicly subsidised collaborative Research and Development projects. Moreover, by combining these three data sources, we construct a multilayer network that provides a comprehensive picture of intraregional interactions. By comparing the networks based on the data sources, we address the problems of coverage and selection bias. We observe that using only one data source leads to a severe underestimation of regional knowledge interactions, especially those of private sector firms and independent researchers. The key role of universities that connect many regional actors is identified in all three types of data. |
| Keywords: | knowledge interactions,social network analysis,regional innovation systems,data sources |
| JEL: | O30 R12 R30 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:iwhdps:12019&r=all |
| By: | M. Grazzi; C. Piccardo; C. Vergari |
| Abstract: | This work investigates the relationship between proxies of innovation activities, such as patents and trademarks, and firm performance in terms of revenues and growth. By resorting to the virtual universe of Italian manufacturing firms we provide a rather complete picture of the innovation activities of Italian firms, in terms of patents and trademarks, and we study whether the two instruments for protecting Intellectual Property (IP) exhibit complementarity or substitutability. In addition, and to our knowledge novel, we propose a measure of concordance (or proximity) between the patents and trademarks owned by the same firm and we then investigate whether such concordance appears to exert any effect on performance. |
| JEL: | O31 O34 L25 |
| Date: | 2019–01 |
| URL: | http://d.repec.org/n?u=RePEc:bol:bodewp:wp1127&r=all |
| By: | Marcel Seip; Carolina Castaldi; Meindert Flikkema; Ard-Pieter de Man |
| Abstract: | Current debates on the social returns of Intellectual Property Right (IPR) systems deal with the presumed negative effects of two practices: IPR bundling and the strong concentration of IPRs in certain firms and industries. These debates are hampered by the lack of empirical evidence on IPR application practices. This study presents unique and comprehensive data about firm-level IPR application practices in the Netherlands. We develop a taxonomy based on the firm-level variety and intensity of IPR applications. We identify five archetypes of IPR applicants: patent rookies, trademark rookies, IPR strategists, IPR specialists and IPR generalists. Our findings show that a few large firms in high-tech industries combine high IPR application variety and high IPR application intensity. However, high variety is also associated with low intensity and low variety with high intensity. For a large majority of the firms, IPR application is equivalent to single trademark application or the ad hoc application of another IPR. We discuss the implications of our findings for current IPR debates and for further research |
| Keywords: | Intellectual property rights; taxonomy; policy |
| Date: | 2019–01–17 |
| URL: | http://d.repec.org/n?u=RePEc:ssa:lemwps:2019/03&r=all |
| By: | Thomas Fackler; Yvonne Giesing; Nadzeya Laurentsyeva |
| Abstract: | Does the emigration of skilled individuals necessarily result in losses for source countries due to the brain drain? Combining industry-level patenting and migration data from 32 European countries, we show that emigration in fact positively contributes to innovation in source countries. We use changes in the labour mobility legislation within Europe as exogenous variation to establish causality. By analysing patent citation data, we further provide evidence that these positive effects are driven by knowledge flows that are triggered by emigrants. While skilled migrants are not inventing in their home country anymore, they contribute to cross-border knowledge and technology diffusion and thus help less advanced countries to catch up to the technology frontier. |
| Keywords: | migration, innovation, knowledge spillovers, patent citations, EU enlargement |
| JEL: | F22 J61 O33 O31 O52 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_7420&r=all |