American Economic Journal:
Macroeconomics
ISSN 1945-7707 (Print) | ISSN 1945-7715 (Online)
Radical and Incremental Innovation: The Roles of Firms, Managers, and Innovators
American Economic Journal: Macroeconomics
vol. 14,
no. 3, July 2022
(pp. 199–249)
Abstract
We investigate the determinants of radical ("creative") innovations that break new ground in knowledge creation. We develop a model focusing on the choice between incremental and radical innovation and on how managers of different ages and human capital are sorted across firms. Firm- and patent-level evidence reveals that firms that are more "open to disruption" are significantly more likely to engage in radical innovation and hire younger managers and inventors with a comparative advantage in radical innovation. However, once the effect of the sorting is factored in, the (causal) impact of manager age on creative innovations, though positive, is small.Citation
Acemoglu, Daron, Ufuk Akcigit, and Murat Alp Celik. 2022. "Radical and Incremental Innovation: The Roles of Firms, Managers, and Innovators." American Economic Journal: Macroeconomics, 14 (3): 199–249. DOI: 10.1257/mac.20170410Additional Materials
JEL Classification
- D22 Firm Behavior: Empirical Analysis
- L26 Entrepreneurship
- M10 Business Administration: General
- M14 Corporate Culture; Diversity; Social Responsibility
- O31 Innovation and Invention: Processes and Incentives
- O34 Intellectual Property and Intellectual Capital
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