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Director, Program on
Innovation and Creative Industries, Martin Prosperity Institute Research Associate, National Bureau of Economic Research University of Toronto, Rotman
School of Management |
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Refereed
Publications
Restructuring
Research: Communication Costs and the Democratization of University
Innovation – with Avi
Goldfarb, American Economic Review,
2008, Vol. 98(4),
pp. 1578–1590
(for NBER working paper version, see Working
Papers) Abstract: We report evidence indicating that
Bitnet adoption facilitated increased research collaboration between US
universities. However, not all institutions benefited equally. Using panel
data from seven top engineering journals, Bitnet connection records, and a
variety of institution ranking data, we find that medium-ranked universities
were the primary beneficiaries; they benefited largely by increasing their
collaboration with top-ranked schools. Furthermore, we find that the
magnitude of this effect was greatest for co-located pairs. These results
suggest that the most salient effect of lowering communication costs may have
been to facilitate gains from trade through the specialization of research
tasks. Thus, the advent of Bitnet -- and likely subsequent versions,
including the Internet -- seems to have increased the role of second-tier
universities in the national innovation system as producers of new,
high-quality knowledge. University Patenting: Estimating the Diminishing Breadth of
Knowledge Diffusion and Consumption – with Carlos Rosell, Research Policy, forthcoming (for NBER
working paper version, see Working
Papers) Abstract: The rate of university patenting
increased dramatically during the 1980s. To what extent did the knowledge
flow patterns associated with public sector inventions change as university
administrators and faculty seemingly became more commercially oriented? Using
a Herfindahl-type measure of patent assignee concentration and employing a
difference-in-differences estimation to compare university to firm patents
across two time periods, we find that the university diffusion premium (the
degree to which knowledge flows from patented university inventions are more
widely distributed across assignees than those of firms) declined by over
half during the 1980s. In addition, we find that the university diversity
premium (the degree to which knowledge inflows used to develop patented
university inventions are drawn from a less concentrated set of prior art
holders than those used by firms) also declined by over half. Moreover, in
both cases the estimated increase in knowledge flow concentration is largely
driven by universities experienced in patenting, suggesting these phenomena
are not likely to dissipate with experience. How Do
Spatial and Social Proximity Influence Knowledge Flows? Evidence from Patent
Data - with Devesh
Kapur and John
McHale, Journal of Urban Economics,
2008, Vol. 64, pp.258–269 (for NBER working paper
version, see Working
Papers) Abstract: We examine how the spatial and
social proximity of inventors affects knowledge flows, focusing especially on
how the two forms of proximity interact. We develop a knowledge flow
production function (KFPF) as a flexible tool for modeling access to
knowledge and show that the optimal spatial concentration of socially
proximate inventors in a city or nation depends on whether spatial and social
proximity are complements or substitutes in facilitating knowledge flows. We
employ patent citation data, using same-MSA and co-ethnicity as proxies for
spatial and social proximity, respectively, to estimate the key KFPF
parameters. Although co-location and co-ethnicity both predict knowledge
flows, the marginal benefit of co-location is significantly less for
co-ethnic inventors. These results imply that dispersion of socially
proximate individuals is optimal from the perspectives of the city and the
economy. In contrast, for socially proximate individuals themselves, spatial
concentration is preferred - and the only stable equilibrium. International Labor Mobility and Knowledge Flow Externalities
– with Alex Oettl, Journal of International Business Studies,
39, 1242 -
1260 (07 Feb 2008) Abstract: Although
knowledge flows create value, the market often does not price them
accordingly. We examine “unintended” knowledge flows that result from the
cross-border movement of inventors (i.e., flows that result from the move but
do not go to the hiring firm). We find that the inventor’s new country gains
from her arrival above and beyond the knowledge flow benefits enjoyed by the
firm that recruited her (National Learning by Immigration). Furthermore, the
firm that lost the inventor also gains by receiving increased knowledge flows
from that individual’s new country and firm (Firm Learning from the
Diaspora). Surprisingly, the latter effect is only twice as strong when the
mover moves within the same multi-national firm, suggesting that knowledge
flows between inventors do not necessarily follow organizational boundaries,
thus creating opportunities for public policy and firm strategy. Public Sector Science and the Strategy of the
Commons – with Lorenzo
Garlappi, Economics of Innovation
and New Technology, 2007, Vol. 16 (7), pp. 517-539 Abstract: We model the
conditions under which incumbent firms may purposefully create an
intellectual property commons such that no firm has the incentive to invest
in new product development, despite the potential profitability of a public
sector, university invention. The strategy of spoiling incentives to innovate
by eliminating exclusive intellectual property rights—the strategy of the
commons—is motivated by a fear of cannibalization and supported by a credible
threat. We show how the degree of potential cannibalization is related to
this market failure and characterize the subgame perfect equilibrium in which
the strategy of the commons is played. Engaging the Inventor: Exploring Licensing Strategies for University
Inventions and the Role of Latent Knowledge - Strategic Management Journal, January 2006, Vol. 27, Issue 1,
pp. 63-79 Abstract: A significant portion of knowledge generated by
university inventors remains latent (uncodified but codifiable), even though
this information is valuable to firms that have licensed their inventions and
famously strong incentives exist to disseminate academic findings widely.
However, the licensee may access and exploit this latent knowledge by
engaging the inventor during the development phase. This paper examines the
hypothesis that licensing strategies that directly engage the inventor
increase the likelihood and degree of commercialization success. While this
may seem somewhat apparent, firms in the sample under investigation vary
substantially in the degree to which they engage the inventor: one third of
the sample does not engage the inventor at all. On the other hand, the
hypothesis might seem surprising given the norms of open science under which
university labs are expected to operate. Regression analyses based on a
unique dataset of 124 license agreements associated with inventions from MIT
support the hypothesis and generate results that are robust to a variety of
controls. Gone But Not Forgotten: Knowledge
Flows, Labor Mobility, and Enduring Social Relationships – with Iain Cockburn and John
McHale, Journal of Economic
Geography, September 2006, 6, pp. 571-591 Abstract: We
examine the role of social relationships in facilitating knowledge flows by
estimating the flow premium captured by a mobile inventor’s previous
location. Once an inventor has moved, they are gone—but are they forgotten?
We find that knowledge flows to an inventor’s prior location are
approximately 50% greater than if they had never lived there, suggesting that
social relationships, not just physical proximity, are important for determining
flow patterns. Furthermore, we find that a large portion of this social
effect is mediated by institutional links; however, this is not the result of
corporate knowledge management systems but rather of personal relationships
formed through co-location within an institutional context that endure over
time, space, and organizational boundaries. Moreover, we find the effect is
nearly twice as large for knowledge flows across as compared to within
fields, suggesting that co-location may substitute for communities of
practice in determining flow patterns. The Anchor Tenant Hypothesis:
Exploring the Role of Large, Local, R&D-Intensive Firms in Regional
Innovation Systems - with Iain Cockburn, International Journal of Industrial
Organization, 21 (2003): 1227-1253 Abstract: We examine the geographic
co-location of university research and industrial R&D in three technology
areas. While we find strong evidence of co-location of these vertically
connected activities, regional economies appear to vary markedly in their
ability to convert local academic research into local commercial innovation.
We develop and test the hypothesis that the presence of a large, local,
R&D-intensive firm—an anchor tenant—enhances the regional innovation
system such that local university research is more likely to be absorbed by
and to stimulate local industrial R&D. Putting Patents in
Context: Exploring Knowledge Transfer from MIT - with Rebecca Henderson, Management Science, Vol. 48,
No. 1, January 2002 Abstract: In
this paper we explore the degree to which patents are representative of the
magnitude, direction, and impact of the knowledge spilling out of the
university by focusing on the Massachusetts Institute of Technology (MIT),
and in particular, on the Departments of Mechanical and Electrical
Engineering. Drawing on both qualitative and quantitative data, we show that
patenting is a minority activity: a majority of the faculty in our sample
never patent, and publication rates far outstrip patenting rates. Most
faculty members estimate that patents account for less than 10% of the
knowledge that transfers from their labs. Our results also suggest that in
two important ways patenting is not representative of the patterns of
knowledge generation and transfer from MIT: patent volume does not predict
publication volume, and those firms that cite MIT papers are in general not
the same firms as those that cite MIT patents. However, patent volume is
positively correlated with paper citations, suggesting that patent counts may
be reasonable measures of research impact. We close by speculating on the
implications of our results for the difficult but important question of
whether, in this setting, patenting acts as a substitute or a complement to
the process of fundamental research. University-to-Industry Knowledge Transfer: Framework of
Existing Literature and Future Questions - International Journal of Management
Reviews, December 2001 Abstract:
This paper reviews the economic literature concerning university-to-industry
knowledge transfer. Papers on this topic are divided into four categories.
Research in the ‘firm characteristics’ category focuses directly on company
issues, such as internal organization, resource allocation, and partnerships.
In contrast, research in the ‘university characteristics’ stream pays little
attention to the firms that commercialize inventions, but rather focuses on
issues relating to the university, such as licensing strategies, incentives
for professors to patent, and policies such as taking equity in return for
intellectual property. The ‘geography in terms of localized spillovers’
stream of research considers the spatial relationship between firms and
universities relative to performance in terms of knowledge transfer success.
Finally, the ‘channels of knowledge transfer’ literature examines the
relative importance of various transfer pathways between universities and firms,
such as publications, patents, and consulting. Each of these research streams
is discussed and key papers are described highlighting important
methodologies and results. Finally, an outline of topics requiring further
research in each of the four categories is offered. Other Publications Public
Sector Science and the Strategy of the Commons (abridged) - with Lorenzo
Garlappi, Best Paper Proceedings, Abstract: We model the
conditions under which incumbent firms may purposefully create an
intellectual property commons such that no firm has the incentive to invest
in new product development, despite the potential profitability of a public
sector, university invention. The strategy of spoiling incentives to innovate
by eliminating exclusive intellectual property rights—the strategy of the
commons—is motivated by a fear of cannibalization and supported by a credible
threat. We show how the degree of potential cannibalization is related to
this market failure and characterize the subgame perfect equilibrium in which
the strategy of the commons is played. D-Wave: Building a Quantum Computer - with Alan MacCormack and Rebecca Henderson, Abstract: D-Wave Systems is a start-up
seeking to commercialize a quantum computer. Its business model is unique: as
of 2003, it had very few technical resources within the firm. Instead, it
financed a series of projects undertaken at universities and government labs.
In return for partial funding, these organizations gave D-Wave the ownership
of--or exclusive rights to--intellectual property developed in the project.
Geordie Rose, CEO of D-Wave, wonders how long this model is appropriate in
contrast to the alternative of centralizing the research in an in-house
facility, with all the costs this would incur. Patents Versus Other Knowledge Transfer Channels (Summary of
“Putting Patents in Context”) – Technological Innovation and
Intellectual Property Newsletter, Vol. 5, 2003 Abstract: In
this paper we explore the degree to which patents are representative of the
magnitude, direction, and impact of the knowledge spilling out of the
university by focusing on the Massachusetts Institute of Technology (MIT),
and in particular, on the Departments of Mechanical and Electrical
Engineering. Drawing on both qualitative and quantitative data, we show that
patenting is a minority activity: a majority of the faculty in our sample
never patent, and publication rates far outstrip patenting rates. Most
faculty members estimate that patents account for less than 10% of the
knowledge that transfers from their labs. Our results also suggest that in
two important ways patenting is not representative of the patterns of
knowledge generation and transfer from MIT: patent volume does not predict
publication volume, and those firms that cite MIT papers are in general not
the same firms as those that cite MIT patents. However, patent volume is
positively correlated with paper citations, suggesting that patent counts may
be reasonable measures of research impact. We close by speculating on the
implications of our results for the difficult but important question of whether,
in this setting, patenting acts as a substitute or a complement to the
process of fundamental research. Comment on "The Service Economy in
Canada." In Services
Industries and Knowledge-Based Economy. Edited by Richard G. Lipsey
and Alice O. Nakamura. The Industry Abstract: This essay offers some thoughts on the paper “Location Effects, Locational Spillovers, and the
Performance of Canadian Information Technology Firms” by Steven Globerman,
Daniel Shapiro and Aidan Vining. The paper was prepared for the
Micro-Economic Policy Analysis (MEPA) division at Industry Innovation,
Growth Theory, and the Role of Knowledge Spillovers - Statistics Abstract: The
relationship between innovation and economic growth has been well studied. However,
that is not to say that it is well understood. Renowned scholars continue to
work with incredibly simplified models of an incredibly complex economy.
Consequently, empirical results are usually carefully annotated with caveats
noting the limitations of all findings and the great uncertainties that
remain concerning fundamental assumptions in the field. Innovation and the Growth of Cities (book review) - Journal
of Economic Geography, October 2003, Vol. 3, Issue 4 Updated 12 December
2010
© 2001-2011 Ajay Agrawal |
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