Science and Innovation

Paper Session

Saturday, Jan. 7, 2017 2:30 PM – 4:30 PM

Swissotel Chicago, Zurich C
Hosted By: American Economic Association
  • Chair: Danielle Li, Harvard Business School

How Do Patents Affect Follow-On Innovation? Evidence From the Human Genome

Bhaven Sampat
,
Columbia University
Heidi Williams
,
Massachusetts Institute of Technology

Abstract

In markets where innovation is cumulative, in the sense that discoveries are inputs into follow-on discover- ies, optimal patent policy in part depends on how patents on existing technologies affect follow-on innovation. In this paper, we investigate whether patents on one specific technology — human genes — have affected follow-on scientific research and product development. Using administrative data on successful and unsuccess- ful patent applications submitted to the US Patent and Trademark Office, we link the exact gene sequences claimed in each patent application with data measuring gene-related scientific research (publications) and com- mercial investments (clinical development). We first document evidence of selection into patenting: in the full sample of human genes, patented genes appear more valuable than non-patented genes prior to being patented based on measures of both scientific and commercial value, thus motivating two quasi-experimental approaches. First, we present a simple comparison of follow-on innovation across genes claimed in successful versus unsuc- cessful patent applications. Second, we use the “leniency” of the assigned patent examiner as an instrumental variable for whether the patent application was granted a patent. Both approaches suggest that on average gene patents have had no effect on follow-on innovation. Our confidence intervals on these estimates are meaning- fully precise: we are able to reject the effect sizes estimated in past papers investigating the effect of non-patent forms of intellectual property on follow-on innovation.

University Innovation and the Professor's Privilege

Hans K. Hvide
,
University of Bergen
Benjamin F. Jones
,
Northwestern University

Abstract

National policies take varied approaches to encouraging university-based innovation. This paper studies a natural experiment: the end of the “professor’s privilege” in Norway, where university researchers previously enjoyed full rights to their innovations. Upon the reform, Norway moved toward the typical U.S. model, where the university holds majority rights. Using comprehensive data on Norwegian workers, firms, and patents, we find a 50% decline in both entrepreneurship and patenting rates by university researchers after the reform. Quality measures for university start-ups and patents also decline. Applications to literatures on university technology transfer, innovation incentives, and taxes and entrepreneurship are considered.

Does Science Advance One Funeral at a Time

Pierre Azoulay
,
Massachusetts Institute of Technology
Christian Fons-Rosen
,
Pompeu Fabra University
Joshua Graff Zivin
,
University of California-San Diego

Abstract

We study the extent to which eminent scientists shape the vitality of their fields by examining entry rates into the fields of 452 academic life scientists who pass away while at the peak of their scientific abilities. Key to our analyses is a novel way to delineate boundaries around scientific fields by appealing solely to intellectual linkages between scientists and their publications, rather than collaboration or co-citation patterns. Consistent with previous research, the flow of articles by collaborators into affected fields decreases precipitously after the death of a star scientist (relative to control fields). In contrast, we find that the flow of articles by non-collaborators increases by 8% on average. These additional contributions are disproportionately likely to be highly cited. They are also more likely to be authored by scientists who were not previously active in the deceased superstar’s field. Overall, these results suggest that outsiders are reluctant to challenge leadership within a field when the star is alive and that a number of barriers may constrain entry even after she is gone. Intellectual, social, and resource barriers all impede entry, with outsiders only entering subfields that offer a less hostile landscape for the support and acceptance of “foreign” ideas.

Effects of Copyright on Science: Evidence From the World War II Book Republication Program

Barbara Biasi
,
Stanford University
Petra Moser
,
New York University-Stern

Abstract

This paper investigates how copyright – through its effects on price – can influence follow-on science. In 1942, the US Book Republication Program (BRP) issued temporary copyright licenses for enemy-owned science books to US publishers, enabling them to sell exact copies of BRP books at a reduced price. We investigate the effects of the BRP on US science, using citations to BRP books from new scientific publications as a proxy for follow-on science. Comparisons of citations to BRP books and Swiss books (which were not available for copyright licensing) reveal a significant differential increase in citations to BRP books after 1942. Intensity estimates imply that a 10-percent reduction in price triggered a 38 percent increase in citations. A simple model of knowledge creation predicts that the impact of book prices is greater for disciplines that depend more on human capital (math) compared with physical capital (chemistry). Citations data confirm this prediction, with a 3.5-fold differential increase. Geographic data on library holdings and the locations of citing authors suggest that reductions in price encouraged follow-on science by facilitating the diffusion of BPR books beyond the Northeastern United States. As libraries in the Midwest, South, and West gained access to BRP books, a new group of scientists began to use and extend knowledge from these books.
JEL Classifications
  • O0 - General
  • O3 - Innovation; Research and Development; Technological Change; Intellectual Property Rights