On the Returns to Invention within Firms: Evidence from Finland
AEA Papers and Proceedings
vol. 108,
May 2018
(pp. 208-12)
Abstract
In this paper we merge individual income data, firm-level data, patenting data, and IQ data in Finland over the period 1988–2012 to analyze the returns to invention for inventors and their coworkers or stakeholders within the same firm. We find that: (i) inventors collect only 8 percent of the total private return from invention; (ii) entrepreneurs get over 44 percent of the total gains; (iii) bluecollar workers get about 26 percent of the gains and the rest goes to white-collar workers. Moreover, entrepreneurs start with significant negative returns prior to the patent application, but their returns subsequently become highly positive.Citation
Aghion, Philippe, Ufuk Akcigit, Ari Hyytinen, and Otto Toivanen. 2018. "On the Returns to Invention within Firms: Evidence from Finland." AEA Papers and Proceedings, 108: 208-12. DOI: 10.1257/pandp.20181108Additional Materials
JEL Classification
- D22 Firm Behavior: Empirical Analysis
- G32 Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
- L25 Firm Performance: Size, Diversification, and Scope
- L26 Entrepreneurship
- O31 Innovation and Invention: Processes and Incentives
- O34 Intellectual Property and Intellectual Capital