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on Technology and Industrial Dynamics |
| By: | Seula Kim; Jane Olmstead-Rumsey; Honghao Wang |
| Abstract: | Teams of inventors now produce over 80 percent of U.S. patents, up from just 45 percent in 1976. Over the same period, inventor employment has become increasingly concentrated in large firms, rising six times more than overall employment concentration. To explain these trends, we develop a new model of endogenous team formation within firms and embed it in a general equilibrium model of the inventor labor market. Teams increase firms’ returns to scale by increasing the likelihood of productive matches between inventors. The value of these matches rises over time, possibly driven by increasing knowledge specialization. This causes large firms to expand and small firms to shrink in equilibrium, accounting for the observed increase in inventor employment concentration. Because firms do not internalize knowledge spillovers, there is misallocation of inventors across firms. The rise of team production amplifies this misallocation by a factor of six by reallocating inventors away from small firms that generate disproportionately large knowledge spillovers. |
| Keywords: | innovation; R&D teams; inventor allocation; firm dynamics; economic growth |
| JEL: | E23 E24 O31 O32 O33 |
| Date: | 2026–09–22 |
| URL: | https://d.repec.org/n?u=RePEc:fip:fedpwp:103815 |
| By: | Matcham, William; Schankerman, Mark |
| Abstract: | We develop a dynamic structural model of patent screening incorporating incentives, intrinsic motivation, and multi-round negotiation. We use natural language processing to create a new measure of patent distance, which, together with detailed data on examiner decisions, enables us to estimate the model and study strategic decisions by applicants and examiners. Using the estimated model, we quantify the effectiveness of the U.S. Patent Office and evaluate counterfactual policy reforms. We find that patent screening is moderately effective, given the existing standards for patentability. Examiners exhibit substantial intrinsic motivation that strongly improves screening quality. We quantify the annual social costs of patent screening at $15.38bn, equivalent to 5% of total private sector R&D in the U.S. and show that reforms limiting the number of negotiation rounds significantly reduce social costs. |
| Keywords: | patents;innovation;incentives;screening;intrinsic motivation |
| JEL: | D73 L32 O31 O34 O38 |
| Date: | 2026–09–01 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:137489 |
| By: | Saverio Barabuffi; Jacopo Cricchio; Alberto Di Minin; Guido Pialli |
| Abstract: | Knowledge spillovers have largely been studied as unintended externalities diffusing through geographic proximity, while deliberate interregional networks have been examined mostly through co-inventor ties rather than the scientific layer carried by co-authored publications. This study asks whether spillovers from interregional AI-related co-publications increase regional AI patenting, and whether the ownership composition of regional R&D shapes the capacity to capitalize on them. Using a network-econometric approach across 26 Chinese provincial-level regions from 2006 to 2020, we find that co-publication spillovers foster AI patenting, but the returns concentrate almost entirely in regions where privately owned enterprises dominate R&D, reinforcing regional divergence. |
| Date: | 2026–09 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2609.26604 |
| By: | Xinru Chen; Mara Faccio; Stefano Manfredonia; Jin Xu |
| Abstract: | We investigate how limiting interest deductibility under the 2017 TCJA shapes corporate innovation. Using alternative identification strategies, we show that, relative to unaffected firms, affected firms experience significant declines in patenting and narrow the technological scope of their patent portfolios. This contraction is concentrated in exploitative patents, the type of innovation most naturally supported by debt financing. By weakening firms’ ability to finance innovation with long-term debt, interest limitations reveal a novel channel linking taxation to innovation, with the debt tax shield serving as an implicit subsidy. Cross-country evidence from the staggered implementation of interest limitation rules confirms negative effects. |
| JEL: | G3 G31 H25 |
| Date: | 2026–09 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:35775 |
| By: | Renzullo, Elena; Scotti, Francesco |
| Abstract: | We examine whether incentive-based policies reduce 2 emissions among beneficiary Italian firms, using project-level data from European cohesion policy. Exploiting quasi-random variation in the timing of EU-funded projects, we apply a staggered difference-in-differences design. We find robust evidence that EU climate-related incentives lower firm emissions. Recipient firms reduce 2 emissions per unit of assets by 4.6% relative to non-recipient firms, while a 1% increase in EU funds per unit of assets leads to a 1.1% reduction in emissions. The effects are larger in less developed and transition regions, where policy resources are more concentrated, and among energy-sector firms. We further show that emission reductions are mainly driven by increased R&D activity: firms receiving green EU funds raise patenting by 3.0%–3.6%, with no significant effects on employment or tangible assets. These findings highlight the potential of incentive-based climate policy. |
| Keywords: | carbon abatement;CO2 emissions;EU cohesion policy;green transition;incentive-based policies |
| JEL: | Q58 Q56 |
| Date: | 2026–09–24 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:141132 |
| By: | Jakub Growiec; Klaus Prettner; Maciej Szkr\'obka |
| Abstract: | After the arrival of transformative artificial intelligence (TAI), broad-based automation is expected to decrease the labor share and increase income and wealth inequality. Although economic growth is likely to accelerate, most of its gains may accrue to a narrow group of individuals and firms. Hence, if unmitigated by redistributive policy, income and wealth inequality may rise to levels unseen in the industrial economy. Using a unifying theoretical framework, we survey the redistributive policies proposed for the era of TAI, such as universal basic income (UBI), universal basic capital (UBC), state-issued compute and robot permits, and taxes on capital, compute, robots, tokens, land, energy, consumption, and wealth. We argue that policies that are able to broadly distribute rents from capital including compute and robots - such as UBC or UBI financed through capital taxes - are most likely to achieve lasting reductions in inequality in a world with human-aligned transformative AI. |
| Date: | 2026–09 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2609.14750 |