Working Paper: NBER ID: w20902
Authors: Ashish Arora; Sharon Belenzon; Andrea Patacconi
Abstract: Scientific knowledge is believed to be the wellspring of innovation. Historically, firms have also invested in research to fuel innovation and growth. In this paper, we document a shift away from scientific research by large corporations between 1980 and 2007. We find that publications by company scientists have declined over time in a range of industries. We also find that the value attributable to scientific research has dropped, whereas the value attributable to technical knowledge (as measured by patents) has remained stable. These effects appear to be associated with globalization and narrower firm scope, rather than changes in publication practices or a decline in the usefulness of science as an input into innovation. Large firms appear to value the golden eggs of science (as reflected in patents) but not the golden goose itself (the scientific capabilities). These findings have important implications for both public policy and management.
Keywords: Corporate R&D; Scientific Research; Innovation; Globalization; Patent Value
JEL Codes: O31; O32
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| decline in publications by large American firms (G32) | decline in investment in scientific capability (H54) |
| narrowing firm scope (L25) | decline in publications by large American firms (G32) |
| decline in market value of scientific publications (O34) | decline in implied value of scientific capability (O39) |
| post-acquisition (G34) | diminished publication activity by scientists from acquired firms (G34) |
| shift in corporate focus from long-term scientific investment (G38) | increased focus on short-term patentable innovations (O39) |
| increased competition from Chinese imports (F69) | decline in number of publications (A14) |
| increased competition from Chinese imports (F69) | reduced investments in science (H54) |