Working Paper: NBER ID: w28534
Authors: Ashish Arora; Sharon Belenzon; Jungkyu Suh
Abstract: Well functioning Markets for Technology (MFT) allow inventors to sell their inventions to others that may derive more value from them. We argue that the growing reliance on science in inventions enhances MFT. In addition to higher quality inventions, reliance on science may enhance gains from trade and reduce the transfer cost of knowledge and other transaction costs. Using large scale data, we show that patents citing science are more likely to be traded, especially for novel patents and for smaller inventors. Leveraging the fall of the Berlin Wall as a source of exogenous variation in the relevant scientific knowledge to technological fields, we confirm reliance on science increases the likelihood that the invention will be traded
Keywords: No keywords provided
JEL Codes: L24; O3; O31; O33; O34; O36
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| reliance on science (C90) | market for technology (MFT) (O33) |
| reliance on science (C90) | transaction costs (D23) |
| reliance on science (C90) | gains from trade (F11) |
| increase in scientific output (O47) | higher share of science-based patents (O34) |
| higher share of science-based patents (O34) | greater likelihood of trade (F19) |
| reliance on science (C90) | market for technology (MFT) for small firms (L17) |
| reliance on recent scientific research (C90) | patent trade (O34) |