Abstract not found

We examine the influence of faculty patenting activity on the rate, quality, and content of public research outputs in a panel dataset spanning the careers of 3,862 academic life scientists. Using inverse probability of treatment weights (IPTW) to account for the dynamics of self-selection into patenting, we find that patenting has a positive effect on the rate of publication of journal articles, but no effect on the quality of these publications. Using several measures of the “patentability ” of the content of research papers, we also find that patenters may be shifting their research focus to questions of commercial interest. We conclude that the often-voiced concern that patenting in academe has a nefarious effect on public research output is, at least in its simplest form, misplaced.

Abstract This paper argues that openness of upstream research does not simply encourage higher levels of downstream exploitation, it also raises the incentives for additional upstream research by encouraging the establishment of entirely new research directions. We test this hypothesis by examining a "natural experiment" in openness within the academic community: NIH agreements signed during the late 1990s that limited the IP restrictions imposed on academics regarding certain genetically engineered mice. Using a sample of engineered mice that are linked to specific scientific papers (some affected by the NIH agreements and some not), we implement a differences-in-differences estimator to evaluate how the level and type of follow-on research using these mice changes after the NIH-induced increase in openness. We find a significant increase in the level of follow-on research. Moreover, this reflects increased exploration of more diverse research paths. Overall, our findings highlight a neglected cost of IP: reductions in the diversity of experimentation that follows from a single idea.

We analyze how contractibility affects the design of contracts. Our empirical application is biotechnology research. A major concern in the design of research agreements is that researchers use their funding to subsidize other projects. We show that, when research activities are not contractible, an option contract is optimal. The financing firm obtains the option to terminate the research agreement and, in case of termination, broad property rights. The threat of termination deters the researchers from cross-subsidization, and the cost of exercising the termination option deters the financing firm from opportunistic termination. We test this prediction using a new data set of 580 biotechnology research agreements. We find that contracts with a termination option are more common when research is non-contractible. We also analyze how the contractual design varies with the research firm’s financial constraints and address the role of uncertainty and asymmetric information about the project quality or research abilities.

Abstract not found

Making links between micro and macro levels has been problematic in the social sciences, and the literature in strategic management and organization theory is no exception. The purpose of this chapter is to raise theoretical issues in developing micro-foundations for strategic management and organizational analysis. We discuss more general problems with collectivism in the social sciences by focusing on specific problems in extant organizational analysis. We introduce microfoundations to the literature by explicating the underlying theoretical foundations of the origins of individual action and interaction. We highlight opportunities for future research, specifically emphasizing the need for a rational choice program in management research. 1

Innovation in the U.S. economy is about employing and rewarding highly talented workers to produce new products. Using unique longitudinal matched employer-employee data, this paper makes a key connection between talent and firms in markets with risky product innovations. We show that software firms that operate in product markets with highly skewed returns to innovation, or high variance payoffs, are more likely to attract and pay for star workers. Thus, firms in high variance product markets pay more up-front—in starting salaries— to attract and motivate star employees, because if these star workers produce home-run innovations, the firm’s winnings will be huge. However, we also find these same firms pay highly for loyalty: star workers that stay with a firm have much higher earnings in firms with high variance product market payoffs. The large effects on earnings are robust to the inclusion of a wide range of controls for both workers and firm characteristics. One key control is that we also show that in firms that have actually hit home runs, with high revenues, the rewards for star talent are even greater. We also find that the dispersion of earnings is higher within firms with high variance product payoffs.

Schumpeter’s canonical depiction of the entrepreneur as an agent of social and economic change implies that entrepreneurs are especially sensitive to the social environment. We use an organizing framework based on institutional economics, in combination with lessons from cross-cultural psychology, to consider the social dimensions of entrepreneurship. The level and modes of entrepreneurial activity are affected by the surrounding culture and by legal rules. Entrepreneurs may partially overcome institutional deficiencies by relying on social networks that facilitate reputational bonding as a means for resource-sharing.

Abstract: It is typically assumed that people engage in entrepreneurship because there are profits to be made. In contrast to this view, this paper argues that entrepreneurship is more adequately characterized as a non-profit-seeking activity. Evidence from a broad range of authors and academic fields is discussed showing that entrepreneurship does quite generally not pay in monetary terms. Being an entrepreneur seems to be rather rewarding because it entails substantial non-monetary benefits, like greater autonomy, broader skill utilization, and the possibility to pursue one’s own ideas. It is shown how incorporating these non-monetary benefits into economic models of entrepreneurship can lead to a better understanding of the phenomenon.

Abstract not found