Working Paper: NBER ID: w31899
Authors: Ashish Arora; Sharon Belenzon; Larisa C. Cioaca; Lia Sheer; Hansen Zhang
Abstract: We study the relationships between corporate R&D and three components of public science: knowledge, human capital, and invention. We identify the relationships through firm-specific exposure to changes in federal agency R\\&D budgets that are driven by the political composition of congressional appropriations subcommittees. Our results indicate that R&D by established firms, which account for more than three-quarters of business R&D, is affected by scientific knowledge produced by universities only when the latter is embodied in inventions or PhD scientists. Human capital trained by universities fosters innovation in firms. However, inventions from universities and public research institutes substitute for corporate inventions and reduce the demand for internal research by corporations, perhaps reflecting downstream competition from startups that commercialize university inventions. Moreover, abstract knowledge advances per se elicit little or no response. Our findings question the belief that public science represents a non-rival public good that feeds into corporate R&D through knowledge spillovers.
Keywords: No keywords provided
JEL Codes: O3
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| abstract public knowledge (publications in scientific journals) (D80) | corporate R&D components (O32) |
| relevant university patents (public inventions) (O36) | corporate patents (O34) |
| relevant university patents (public inventions) (O36) | corporate publications (G30) |
| relevant university patents (public inventions) (O36) | employment of AMWS scientists (J68) |
| human capital (measured through PhD dissertations) (J24) | corporate R&D (O32) |