Working Paper: NBER ID: w24466
Authors: Ufuk Akcigit; Santiago Caicedo; Ernest Miguelez; Stefanie Stantcheva; Valerio Sterzi
Abstract: An inventor's own knowledge is a key input in the innovation process. This knowledge can be built by interacting with and learning from others. This paper uses a new large-scale panel dataset on European inventors matched to their employers and patents. We document key empirical facts on inventors' productivity over the life cycle, inventors' research teams, and interactions with other inventors. Among others, most patents are the result of collaborative work. Interactions with better inventors are very strongly correlated with higher subsequent productivity. These facts motivate the main ingredients of our new innovation-led endogenous growth model, in which innovations are produced by heterogeneous research teams of inventors using inventor knowledge. The evolution of an inventor's knowledge is explained through the lens of a diffusion model in which inventors can learn in two ways: By interacting with others at an endogenously chosen rate; and from an external, age-dependent source that captures alternative learning channels, such as learning-by-doing. Thus, our knowledge diffusion model nests inside the innovation-based endogenous growth model. We estimate the model, which fits the data very closely, and use it to perform several policy exercises, such as quantifying the large importance of interactions for growth, studying the effects of reducing interaction costs (e.g., through IT or infrastructure), and comparing the learning and innovation processes of different countries.
Keywords: Innovation; Knowledge Diffusion; Productivity; Economic Growth
JEL Codes: H25; L16; O31; O33; O41
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| interactions with better inventors (O36) | higher subsequent productivity (J24) |
| formation of research teams (C92) | enhanced productivity (O49) |
| interactions among inventors (O36) | higher subsequent productivity (J24) |
| interactions with better inventors (O36) | higher productivity (O49) |
| age (J14) | higher productivity (O49) |
| learning-by-doing (J24) | productivity growth (O49) |
| interactions and age (J14) | productivity improvements (O49) |