Innovation Job Market Papers 2025 - The Complete List
Where new researchers are looking
This post contains a complete list of innovation-related job market papers that we have identified. To find all these papers, we looked through the titles of over 1,000 economics job market papers. I (Matt) also asked for suggestions in my newsletter on innovation, and from peers. But surely we’ve missed some great papers, and if that’s you, please feel free to send us suggestions (including your own paper) at abundanceandgrowth@coefficientgiving.org.
There’s a few reason to spotlight job market papers. They tell us about the interest of new researchers in this field, and thereby give us signals about directions the field might be going. Moreover, they represent the culmination of several years of work, by researchers who are open to new ideas and frontier methods, and who are trying to impress future employers. And finally, we’re biased, but we think abundance and growth topics are important and understudied, and so we want to direct some attention at people working on these issues.
First we present only titles, so you can quickly skim what’s here. After the titles, we present titles plus abstracts.
Titles Index
Titles are presented in random order. There might be additional authors on these papers - we’ve listed the associated job market candidate only.
Specialization by design: the unequal geographic effects of modular product design by Vishan Gandhi Nigam
Technology M&A and Knowledge Diffusion by Zili Yang
Venture Capital Contracts and Heterogeneous Innovation by Yucheng Wong
Trade, Research Productivity, and Growth: A Dynamic General Equilibrium Approach by Yaming Chang
The Impact of Intellectual Property Rights on Innovation and Follow-on Development: Evidence From the Bayh-Dole Act by Tallon Howie
Innovation through Recombination by Songyuan Teng
Technological Change and the Market for Books, 1450-1550 by Qiyi Charlotte Zhao
Factories of Ideas? Big Business and the Golden Age of American Innovation by Pier Paolo Creanza
Solving Problems of Unknown Difficulty by Nicholas Wu
Quantifying Knowledge Spillovers Using Firm and Product Dynamics by Mohamad Adhami
Beyond the Lab: The Effect of PhD Programs on Innovation by Manfredi Aliberti
The Prestige-Testability Tradeoff in Science by Kurtis A. Hingl
Ownership Structure and Economic Growth by Koki Okumura
Startup Acquisitions and Innovation in the Biopharmaceutical Industry by Hayley Wabiszewski
Extreme Heat and Directed Innovation by Enjie (Jack) Ma
How Does Industry Shape Academic Science? Evidence from “Million Dollar Plants” by Hongyuan Xia
How Network Hiring by Entrepreneurs Shapes Firm Formation and Performance by John F. Bonney
Science, Startups, and the Problem of Value Capture: Thin Acquisition Markets, Weak Outside Options by Roger Masclans
Tenure and research trajectories by Giorgio Tripodi
Spatial Allocation of Inventors, Knowledge Diffusion and Growth by Furkan Kilic
Patents, Innovation, and Imitation in a North-South Model with Increasing Product Variety by Florence Ut Meng Ho
The Innovation Long-Run Risk Component by Fabio Franceschini
Import Competition, Innovation, and the Cost of Protectionism by Deniz Atalar
Financial Development and Endogenous Investment-Specific Technical Change by Daeeun Bae
The Origins of the Nitrogen Revolution by Christopher W. A. Sims
Knowledge Generality, Competition and Growth by Chenchuan Shi
Start-up Financing, Entry and Innovation by Charles Parry
The Role of Training for Technology Diffusion by Carolina Bussotti
Firm Scope and Innovation: The Role of Intangibles by Cagin Keskin
The value of conceptual knowledge by Benjamin Davies
Robust Technology Regulation by Andrew Koh
Technology and the Geography of Industrial Policy by Aditya Bhandari
Sexual Misconduct and Scientific Production by Manuela Collis
Worker Mobility and the Diffusion of Radical Technologies by Stephan Hobler
Patent challenge and generic entry by Xin Zhang
Innovation and Adaptation to Expanding Biological Threats by Shu-Chen Tsao
Titles, Abstracts, and Links to Papers
1. Specialization by design: the unequal geographic effects of modular product design
Vishan Gandhi Nigam
I show that modular design – a revolution in how firms organize innovation – concentrates industrial production in large countries. Modular products follow common rules called design platforms, and thus can share inputs while remaining customized for local needs. Combining six new datasets on global automotive design and trade, within-firm event studies of platform rollouts and mergers, and a model with scale economies in shared input production, I find that design platforms reshape global trade in two phases. First, platform-sharing across destinations increases trade and enables within-firm specialization; for instance, poor countries export engines for affordable car segments. Second, platform-sharing across product segments creates winner-take-all supply chains in which a firm’s largest markets produce most inputs. In both phases, design platforms expand the scope of home-market effects, concentrating input production in large markets for shared platforms rather than individual products. By quantifying the model, I show modular design has unequal effects across countries and shapes the returns to industrial policy: in particular, universal platforms (expected by 2030 for EVs) double American and Chinese input production shares, reduce production by over 80% in most smaller countries, and imply that U.S. input tariffs on China (but not on third countries) have larger reshoring effects.
2. Technology M&A and Knowledge Diffusion
Zili Yang
This paper examines how technology mergers and acquisitions (tech M&As) affect the diffusion of target firms’ pre-acquisition innovations in the United States. Using US patent and M&A data from 1980 to 2021. This study employs a difference-in-differences approach comparing successful acquisitions with exogenously failed deals; it finds that tech M&As significantly increase external diffusion of targets’ technologies, as measured by patent citations, with effects concentrated within the acquirer’s industry. Tech M&As do not diminish young firms’ ability to cite and build upon acquired targets’ patents, contradicting concerns about innovation foreclosure. To interpret these findings and quantify aggregate implications, I develop an idea flow model where firms improve productivity by choosing innovation intensity based on potential targets’ technologies, with acquisitions affecting both the innovation step size in learning from targets and the cost of accessing them. The model, calibrated to the empirical estimates and US innovation data, reveals that doubling the 2015 tech M&A rate would increase annual productivity growth by five hundredths of a percentage point, with the diffusion channel contributing 40% of this increase. Surprisingly, relaxing restrictions on post-acquisition knowledge appropriation yields negligible growth effects: reduced spillovers from acquired targets are offset by increased innovation using independent technologies as acquisition values rise. These findings underscore the importance of incorporating diffusion effects and general equilibrium forces into antitrust policy for tech M&As.
3. Venture Capital Contracts and Heterogeneous Innovation
Yucheng Wong
This paper studies how venture capital (VC) reshapes startups’ innovation choices by insuring against default risk, and explores the macroeconomic implications of this mechanism. I develop a dynamic general equilibrium model in which startups choose between conservative (low-risk, low-return) and aggressive (high-risk, high-return) innovation while endogenously selecting their financing mode. Debt financing features state uncontingent repayments and exposes startups to default. By contrast, VC financing is a state-contingent dynamic contract with one-sided limited commitment from startup. Evidence from a new dataset linking VC deals, balance sheets, and patents supports the model predictions: VC-backed startups begin with higher leverage, show greater post-financing profit dispersion, and generate more high-quality patents. Calibrated to financing and innovation data, eliminating VC reduces the aggregate output by 5 percent and the mass of large firms by 11 percent, despite only 0.2 percent of startups ever receiving VC.
4. Trade, Research Productivity, and Growth: A Dynamic General Equilibrium Approach
Yaming Chang
Exporting exposes firms to foreign buyers and rivals, providing knowledge that makes innovation more effective. How much does this mechanism raise innovation efficiency, and how does it affect long-run growth? I develop and estimate an endogenous growth model in which foreign-market exposure enhances firms’ innovation efficiency, the exporting–innovation efficiency (EIE) channel, while broader product scope dilutes managerial attention and lowers marginal returns. The model predicts that innovation efficiency rises with export intensity but declines with product scope and firm size. Using firm-level data on Chinese manufacturers, I document patterns consistent with these predictions and estimate that export exposure increases the effective knowledge available for innovation by about 9% at the product level. Although firm-level gains are modest, the aggregate effect is economically meaningful: eliminating the EIE channel reduces the long-run growth rate by about 1.3 percentage points (around 10 percent of observed growth). With the EIE channel active, trade liberalization disproportionately benefits firms with broad export portfolios, boosting their innovation efficiency and growth and accelerating the exit of low-productivity firms. The result is a more right-skewed productivity distribution and greater market concentration.
5. The Impact of Intellectual Property Rights on Innovation and Follow-on Development: Evidence From the Bayh-Dole Act
Tallon Howie
Intellectual property rights (IPR) are thought to promote innovation, but inhibit follow-on development by restricting the dissemination of new ideas across firms. Exploiting a change in patent policy for U.S. government-sponsored inventions (1980 Bayh-Dole Act), I find that strengthening IPR increases innovation, follow-on development, and cross-firm diffusion of ideas. I use these estimates to calibrate a general equilibrium growth model featuring a two-stage R&D process and endogenous knowledge diffusion. IPR raises R&D intensity by strengthening appropriation and increases knowledge diffusion by enabling innovators to shield licensees from competition. A quantitative analysis suggests that IPR increase aggregate welfare, although a compulsory licensing policy sometimes better balances innovation incentives with broader diffusion. These results highlight trade-offs in patent policy and the government’s ability to leverage R&D funding to promote dissemination and development of ideas.
6. Innovation through Recombination
Songyuan Teng
New ideas often recombine existing ones; this insight is emphasized in recent economic growth theories, but evidence on its empirical relevance is scarce. This paper takes combinatorial growth to measurement by studying the pharmaceutical industry, where the distinction between novelty (discovering new building blocks) and recombination (assembling building blocks into products) is transparent. I uncover the substantial and rising importance of recombination, the firm life-cycle from knowledge accumulation to recombination, and the value premia for novelty. Motivated by these facts, I develop a theory of firm dynamics that distinguishes firm knowledge stocks from product portfolios. Innovation operates along two distinct yet intertwined margins: novel innovation expands knowledge, while combinatorial innovation deploys that knowledge to create new products. The calibrated model captures salient empirical patterns, implies sustained growth through rising recombination, and highlights sharp policy trade-offs: subsidizing novelty boosts short-run growth, while subsidizing recombination raises long-run growth with heterogeneous effects across firms.
7. Technological Change and the Market for Books, 1450-1550
Qiyi Charlotte Zhao
Conventional views consider printing a cost-reducing technology. This paper examines unusually granular product- and firm-level data and proposes a new framework for understanding this technology’s economic impact. I show that relative to its predecessor, manuscript production (i.e., hand-copying), printing introduced new incentives and constraints that altered both the product’s nature and the market’s structure. First, printing’s business model encouraged the production of shorter and simpler books targeting a poorer and less educated audience. Second, its cost structure led to product differentiation and prolific trade rather than direct competition and localized production, making available a greater variety of products offering diverse information and perspectives. Rather than making medieval books cheaper, printing’s core contribution to economic development might lie in fostering popular demand for literacy through a variety of simpler products that lacked an economic basis under manuscript production.
8. Factories of Ideas? Big Business and the Golden Age of American Innovation
Pier Paolo Creanza
This paper studies the Great Merger Wave (GMW) of 1895–1904—the largest consolidation event in U.S. history—to identify how Big Business affected American innovation. Between 1880 and 1940, the U.S. experienced a golden age of breakthrough discoveries in chemistry, electronics, and telecommunications that established its technological leadership. Using newly constructed data linking firms, patents, and inventors, I show that consolidation substantially increased innovation. Among firms already innovating before the GMW, consolidation led to an increase of 6 patents and 0.6 breakthroughs per year—roughly four-fold and six-fold increases, respectively. Firms with no prior patents were more likely to begin innovating. The establishment of corporate R&D laboratories served as a key mechanism driving these gains. Building a matched inventor–firm panel, I show that lab-owning firms enjoyed a productivity premium not due to inventor sorting, robust within size and technology classes. To assess whether firm-level effects translated into broader technological progress, I examine total patenting within technological domains. Overall, the GMW increased breakthroughs by 13% between 1905 and 1940, with the largest gains in science-based fields (30% increase).
9. Solving Problems of Unknown Difficulty
Nicholas Wu
This paper studies how uncertainty about problem difficulty shapes problem-solving strategies. I develop a dynamic model where an agent solves a problem by brainstorming approaches of unknown quality and allocating a fixed effort budget among them. Success arrives from spending effort pursuing good approaches, at a rate determined by the unknown problem difficulty. The agent balances costly exploration (expanding the set of approaches) with exploitation (pursuing existing approaches). Failures could signal either a bad idea or a hard problem, and this ambiguity generates novel dynamics: optimal search alternates between trying new approaches and revisiting previously abandoned ones. I then examine a principal–agent environment, where moral hazard arises on the intensive margin: how the agent explores. Dynamic commitment leads contracts to frontload incentives, which can be counteracted by the presence of learning. The framework reflects scientific discovery, product development, and other creative work, providing insights into innovation and organizational design.
10. Quantifying Knowledge Spillovers Using Firm and Product Dynamics
Mohamad Adhami
Knowledge spillovers are a common rationale for government support of innovation, yet evidence on their magnitude remains limited. In this paper, I quantify the wedge that spillovers create between social and private rates of return to innovation. To do so, I build a novel semi-endogenous growth model featuring multiproduct firms and endogenous exit of products. In equilibrium, product exit exhibits negative selection and is preceded by a gradual decline in market share, consistent with facts I document using barcode-level data. Through the lens of the model, these dynamics of product exit are informative about spillovers: by accelerating growth in the quality of new products, stronger spillovers increase the rate at which incumbent products lose market share and exit. Since comprehensive datasets track firms rather than products, I leverage the model to infer the wedge created by spillovers from data on firm exit by age. Across U.S. private nonfarm employer businesses, I infer spillovers that drive a 16 percentage point wedge between the social and private rates of return to innovation.
11. Beyond the Lab: The Effect of PhD Programs on Innovation
Manfredi Aliberti
This paper estimates the causal impact of PhD programs, designed to train individuals to advance the frontier of knowledge, on innovation. I exploit the centrally planned and staggered rollout of doctoral programs across Italian universities and construct a new dataset linking program openings to local patenting activity. The introduction of PhD programs increased patenting by 21% between 1986 and 2001. Using admission exam scores in a regression discontinuity design, I show that about 22% of this effect is direct and driven by the increased patenting of program graduates, while most of the remainder reflects spillovers to local firms. These findings indicate that PhD programs stimulate technological progress both by increasing graduates’ inventive output and by strengthening the surrounding innovation ecosystem. A cost–benefit analysis based on patent valuations suggests that the social return to these programs exceeds total costs by at least 46%. Finally, I estimate that PhD programs raised Italy’s GDP by 0.6% to 4.7% over the same period.
12. The Prestige-Testability Tradeoff in Science
Kurtis A. Hingl
Where ideas are difficult to test directly, does the scientific community rely more on prestige markers to evaluate them? In this paper, I adopt the cultural evolutionary concept of “prestige,” translate it into economics through a simple reputation model, and propose this hypothesis of a prestige-testability tradeoff: scientific fields that are less testable rely more on prestige markers, manifesting a higher concentration. I present empirical evidence of this prestige-testability tradeoff in two ways. Firstly, in bibliographic data of the corpus of scientific research from 1900 to 2015, I find that the concentration of author prestige markers—citations and h-indexes—is consistently negatively associated with a straightforward measure of testability—the incidence of the word “test” in the titles—across nineteen fields and across subfields within each field. Secondly, I use the occurrence of a paradigm shift toward more testability in the mid-1990s as an event study: the “credibility revolution” in microeconomics. Though not truly exogenous, this paradigm shift reflects a testability shock that is suitably uncovered by a staggered event-study design. I find that the credibility revolution administers a leveling effect on its adopters, based on various citation metrics and share of papers in top-five journals: authors below-median pre-adoption on these prestige markers see clear and persistent increases in their prestige markers, while their above-median peers do not, which I interpret as evidence for the prestige-testability tradeoff. I argue that this prestige-testability tradeoff framework is an important lens for viewing the organization of science, an important factor in a number of science policy decisions, and likely a feature of other social learning environments.
13. Ownership Structure and Economic Growth
Koki Okumura
This paper examines how the rise of common ownership affects economic growth and social welfare. We develop an endogenous growth model that incorporates three inter-firm networks: ownership, product-market rivalry, and innovation. In the model, a large number of oligopolistic firms make forward-looking R&D investment decisions, internalizing externalities on commonly owned firms arising from product-market competition and technological spillovers. We estimate the model using data on over 700 publicly traded U.S. firms with patents. Our counterfactual analysis shows that the observed increase in common ownership between 1999 and 2017 reduced the annual growth rate by 0.12 percentage points and social welfare by 0.6%. This finding suggests that, under common ownership, the internalization of the negative externality from innovation that reduces competitors’ market shares dominates the internalization of the positive externality associated with technological spillovers.
14. Startup Acquisitions and Innovation in the Biopharmaceutical Industry
Hayley Wabiszewski
Regulators have expressed growing concern that acquisitions of biotechnology startups by big pharmaceutical firms may stifle innovation by removing potential competitors. This paper quantifies the dynamic equilibrium effects of such acquisitions on innovation, entry, and market structure in the biopharmaceutical industry. I construct a novel project-level dataset linking comprehensive pharmaceutical R&D data with acquisition and sales information from 2000 to 2018, which enables tracking of projects across phases of development. Descriptive evidence shows that acquired projects have lower transition rates than non-acquired startups in early phases but higher rates in later stages, with the pattern differing significantly between oncology and non-oncology markets. To separate selection on project quality into acquisition from the causal effects of economies and diseconomies of scale, I estimate a dynamic oligopoly model with endogenous drug development, startup acquisitions, and entry decisions by startups and big firms. Firms select on unobserved project quality at each phase of R&D and into acquisition, allowing higher quality projects to reach later phases of R&D and for both positive and negative selection into acquisition. The model recovers both the average treatment effect of acquisition and the average treatment effect on the treated. Counterfactual simulations of an acquisition ban show that project approvals would rise by 8–9% in small and medium non-oncology markets but fall by 5–9% in large nononcology and oncology markets. The results highlight that regulators should adopt market-size- and therapeutic-category-specific policies when evaluating or limiting startup acquisitions.
15. Extreme Heat and Directed Innovation
Enjie (Jack) Ma
Can directed innovation mitigate climate damages? I provide systematic evidence outside agriculture that firms adapt to extreme heat through directed technological change. Linking firm-level production data to patent records for nine EU countries (2000–2020), I establish three results. First, extreme heat acts as a labor-biased productivity shock: labor-intensive firms experience larger losses and lose market share to capital-intensive rivals. Second, firms shift toward capital and redirect innovation toward labor-saving technologies, especially in heat-exposed, labor-intensive industries. Third, this endogenous innovation response is economically significant—labor-saving patents filed in response to heat offset 26 percent of aggregate productivity losses over the period. Overall, the results show that innovation is not merely a driver of growth but also an active margin of climate adaptation.
16. How Does Industry Shape Academic Science? Evidence from “Million Dollar Plants”
Hongyuan Xia
Firms rely on academic science and actively participate in the production of scientific knowledge. However, the impact of industry on academic science remains unclear. This study utilizes the site selection decisions of “Million Dollar Plants” (MDPs) to estimate the causal effects of industry on academic science. I compare the responses of scientists in counties that successfully attracted MDPs (”winners”) with those in counties that narrowly missed out on these MDPs (”runners-up”). The arrival of an MDP in a “winner” county shifts research of local scientists toward topics relevant to the firm, but not at the expense of either the quantity or quality of their work. This shift in research direction is not primarily driven by direct funding or collaboration. Instead, it occurs immediately after the announcement but before the physical establishment of these plants and is more likely to affect scientists without prior experience in commercialization. These findings indicate that scientists are refocusing their attention toward more applied and firm-relevant research.
17. How Network Hiring by Entrepreneurs Shapes Firm Formation and Performance
John F. Bonney
Many entrepreneurs rely on their personal networks to hire their first employees. How important is this practice for the formation and performance of new firms? I study this question using Norwegian administrative data that allow me to link entrepreneurs to their firms, employees, and former coworkers. To identify causal effects, I develop an instrumental variables framework that jointly models entry and network hiring, allowing for endogenous selection on both margins. The results reveal three main findings. First, each ex-coworker hired in the firm’s first year raises annual revenues in the following four years by over $250K and crowds in other hires, without reducing average productivity. Second, without the ability to hire ex-coworkers, a quarter of network-hiring entrepreneurs would not have started their firms at all. Third, counterfactual simulations show that, compared to entry subsidies, networks enable entry of entrepreneurs who create substantially more jobs, survive longer, and achieve higher value added per worker. Interpreted through the lens of a simple model, the data suggest that private information about coworker quality is a key driver of network hiring. Taken together, the results show that access to human capital through networks is an important determinant of entrepreneurial entry and success.
18. Science, Startups, and the Problem of Value Capture: Thin Acquisition Markets, Weak Outside Options
Roger Masclans
Startups commercializing science-based innovations are crucial for tackling pressing challenges, yet, in critical sectors such as energy, industrials, and materials, entrepreneurial activity remains limited. This paper investigates whether weak value capture at exit constrains these ventures. I estimate value creation and capture in startup acquisitions by combining acquisition prices with acquirer stock returns, adjusting for market noise to isolate the economic signal attributable to the acquisition. Science-based startups capture 46 cents per dollar of acquisition-induced surplus, compared to 61 cents for non-science startups—a 24% penalty. Conversely, they create 20% more joint surplus, consistent with continued entry despite the capture penalty. To explain these patterns, I examine a central mechanism: the structure of a startup’s exit conditions. I argue that science-based startups face thinner, more concentrated acquisition markets and limited ability to scale independently, features that weaken the startup’s bargaining power. Indeed, I find that science-based startups face up to 40% fewer potential acquirers, who are 53% larger on average, and that their value capture is more sensitive to acquirer concentration. Concentrated markets have a dual effect: large incumbents enable greater surplus creation, but also shift bargaining power away from startups, allowing acquirers to ex tract most of the gains from innovation. Finally, I find that the capture penalty diminishes when startups can scale commercialization independently. The results suggest that constrained exit environments limit returns to science-based entrepreneurship, highlighting the importance of competitive acquisition markets, markets for technologies, and alternative commercialization pathways in incentivizing upstream innovation.
19. Tenure and research trajectories
Giorgio Tripodi
Tenure is a cornerstone of the US academic system, yet its relationship to faculty research trajectories remains poorly understood. Conceptually, tenure systems may act as a selection mechanism, screening in high-output researchers; a dynamic incentive mechanism, encouraging high output prior to tenure but low output after tenure; and a creative search mechanism, encouraging tenured individuals to undertake high-risk work. Here, we integrate data from seven different sources to trace US tenure-line faculty and their research outputs at a remarkable scale and scope, covering over 12,000 researchers across 15 disciplines. Our analysis reveals that faculty publication rates typically increase sharply during the tenure track and peak just before obtaining tenure. Post-tenure trends, however, vary across disciplines: In lab-based fields, such as biology and chemistry, research output typically remains high post-tenure, whereas in non-lab-based fields, such as mathematics and sociology, research output typically declines substantially post-tenure. Turning to creative search, faculty increasingly produce novel, high-risk research after securing tenure. However, this shift toward novelty and risk-taking comes with a decline in impact, with post-tenure research yielding fewer highly cited papers. Comparing outcomes across common career ages but different tenure years or comparing research trajectories in tenure-based and non-tenure-based research settings underscores that breaks in the research trajectories are sharply tied to the individual’s tenure year. Overall, these findings provide an empirical basis for understanding the tenure system, individual research trajectories, and the shape of scientific output.
20. Spatial Allocation of Inventors, Knowledge Diffusion and Growth
Furkan Kilic
Where does innovation truly thrive? Inventive activity in the US is strikingly concentrated in a handful of hubs. This raises compelling questions: Does further agglomeration drive innovation, or could a more dispersed approach better leverage regional spillovers? To investigate, I exploit variation in patent citation lags across US states and develop a novel endogenous growth model with mobile inventors and workers. The model integrates an exogenous knowledge network that facilitates the dynamic exchange of ideas—laying the foundation for future inventions—between locations, revealing that inventors do not internalize how their location choice influences broader knowledge diffusion. These knowledge spillovers call for a targeted, place-based R&D subsidy to unlock latent innovation potential. Calibrating the model to data on inventor and worker allocations—and estimating the knowledge diffusion network from patent citations—I find that optimal policy would further concentrate inventors in established hubs, enhancing welfare by 1.8 percent in consumption-equivalent terms and boosting the economy’s long-run growth rate by 0.14 percentage points.
21. Patents, Innovation, and Imitation in a North-South Model with Increasing Product Variety
Florence Ut Meng Ho
To understand the relationship between patent protection and technology transfer across countries and to equip policymakers with insights to balance innovation promotion and technology dissemination, this paper investigates the cross-country effects of patent protection on relative wages, innovation, technology transfer, and welfare in a North-South model with variety expansion. In this dynamic general equilibrium model, firms in the North perform innovative R&D, while firms in the South perform imitative R&D for technology transfer. Innovation occurs through the invention of new varieties of goods, and IPR protection is modeled in the form of patent breadth. We find that strengthening patent protection in the North permanently raises the relative wage between the North and the South, permanently decreases the rate of technology transfer, and temporarily increases the northern innovation rate. Conversely, strengthening patent protection in the South permanently reduces the relative wage, permanently increases the rate of technology transfer, and temporarily boosts the northern innovation rate. Calibrating this model to US-China data, our quantitative analysis reveals that when a country unilaterally strengthens patent protection, its domestic welfare increases. However, when both countries strengthen patent protection bilaterally, the South experiences a welfare gain while the North suffers a welfare loss.
22. The Innovation Long-Run Risk Component
Fabio Franceschini
This paper provides robust empirical evidence that shocks to aggregate Research and Development (R&D) have persistent effects on macroeconomic dynamics and represent a significant risk for investors, as predicted by the “long-run risk” literature. The analysis focuses on a single variable, “effective R&D”, which captures the entire contribution of R&D to productivity growth, flexibly accounting for knowledge spillovers and product proliferation effects. Deviations of effective R&D from its equilibrium level can be empirically identified leveraging the error correction term in the cointegration relationship among R&D, total factor productivity, and the labor force. In US data, structural effective R&D shocks affect productivity and consumption growth rates beyond business cycle horizons and are associated with a significant risk premium in a cross section of stock and bond portfolios (around 2% annually), with cash-flow sensitivities proving a key determinant.
23. Import Competition, Innovation, and the Cost of Protectionism
Deniz Atalar
How does import protectionism affect catch-up innovation and welfare? I develop a small open-economy model in which trade costs shape buyer–supplier relationships, and suppliers’ incentives to innovate. When trade costs rise, domestic buyers become more inclined to shift sourcing from foreign to domestic suppliers. The possibility of this shift triggers heterogeneous innovation responses among domestic suppliers: those suppliers that are less technologically advanced than their foreign competitors increase their innovation, while other, more advanced suppliers reduce it. I verify and quantify the buyers’ shift in sourcing as well as the suppliers’ heterogeneous innovation responses to this shift using novel Turkish firm–product-level data on firm-to-firm transactions, imports, production, and innovation expenditures. I build on these firm level responses to assess the impact of import protectionism on welfare. If domestic suppliers in the aggregate respond to a rise in trade costs by increasing innovation, the welfare losses of such a policy are partially mitigated. If, on the other hand, they respond by decreasing innovation, the welfare losses are amplified. Calibrating the model to Turkish microdata, I find that a 10 percent rise in trade costs in Turkiye triggers an increase in aggregate innovation, which mitigates roughly one-quarter of the welfare loss relative to a no-innovation benchmark.
24. Financial Development and Endogenous Investment-Specific Technical Change
Daeeun Bae
I show that financial development is a key determinant of cross-country variation in the rate of investment-specific technical change. Using a large cross-country dataset, I document that countries with more developed financial markets exhibit higher rates of investment-specific technical change, and that investment goods production is more intensive in value added from high-R&D industries than consumption goods production. To explain these findings, I develop a multi-industry endogenous growth model with credit constraints on R&D expenditures. In the model, R&D drives productivity growth, and financial development disproportionately benefits the productivity growth of high-R&D industries because they are more dependent on external financing. Taken together with the different industrial composition of final goods production, financial development endogenously generates faster productivity growth in investment goods production. The quantitative analysis shows that this endogenous channel accounts for approximately 40% of the observed cross-country relationship between financial development and investment-specific technical change.
25. The Origins of the Nitrogen Revolution
Christopher W. A. Sims
Many technologies raise productivity in locations constrained by their natural endowments yet diminish specialization across space. We show that the first commercial nitrogen fertilizers in history were one such “converging” technology. Leveraging natural variation in soil nitrogen deficiency and the sudden introduction of Peruvian guano and nitrates to 19th-century England, we provide two main empirical findings. First, locations specialized on the basis of their natural endowments before the introduction of fertilizer: nitrogen-deficient places devoted less land to nitrogen-intensive crops. Second, combining newly-digitized data and a difference-in-differences design, we show that these nitrogen-deficient places substantially reallocated toward nitrogen-intensive crops after fertilizer was introduced, indicating convergence across space. To quantify the welfare impact of this “converging” technology, we embed fertilizer into a quantitative spatial model of the English agricultural sector with realistic geography. The welfare gains from fertilizer were equivalent to two decades of annual productivity growth in agriculture. However, convergence implies a reduction in the gains from trade, which offsets up to 10% of these welfare gains under plausible trade cost regimes.
26. Knowledge Generality, Competition and Growth
Chenchuan Shi
This paper studies how the generality of knowledge—its applicability across technologies and industries—shapes firms’ innovation strategies, market structure, and aggregate growth. I build an endogenous growth model in which firms choose between general and firm-specific R&D while competing for market leadership. General innovations enhance firms’ capacity to absorb and apply outside knowledge, creating spillovers within and across industries, whereas firm-specific innovations yield mainly private gains. The model predicts, and the data confirm, that (1) leaders favor firm-specific R&D while followers rely on general innovations to catch up, and (2) the gap in innovation generality between them follows a U-shaped pattern with market concentration. Leveraging variation in the enforceability of non-compete agreements across U.S. states, I provide empirical evidence consistent with the model’s spillover mechanisms. The findings point to a novel growth policy: encouraging general R&D, particularly among leading firms, can improve knowledge diffusion and sustain long-run growth.
27. Start-up Financing, Entry and Innovation
Charles Parry
Venture capital (VC) is the key source of financing for high-growth start-ups, but with few alternatives, limited access can leave viable projects unfunded and constrain innovation. I develop and estimate an equilibrium model of the VC market to quantify these distortions in the US, explain cross-country differences in VC activity, and diagnose VC’s sectoral concentration. In the model, entrepreneurs and VCs meet in a frictional matching market and VCs endogenously stage capital injections over time to limit losses from hidden failure by entrepreneurs; however, reliance on follow-on funding exposes the start-up to premature closure if funding does not materialise. The model maps directly to observed funding histories, enabling estimation and policy counterfactuals. For US start-ups first funded in 2005–2015, my estimates suggest that 40% shut down despite having positive continuation value; with continued funding, half would reach an acquisition or IPO. I then estimate the model on UK microdata and find that financing conditions and acquisition opportunities, not project quality, drive US–UK differences; financing conditions account for two-thirds of the entry gap. Because UK start-ups struggle to reach late-stage rounds, retargeting existing support towards late-stage start-ups improves outcomes. Finally, the theory offers an explanation for VC’s concentration in software and services: frictions are least severe for short-horizon projects with ample acquisition opportunities. Absent frictions, the share of VC-backed software and services start-ups falls from 61% to 53%, offset by gains in science-based sectors.
28. The Role of Training for Technology Diffusion
Carolina Bussotti
We study a dynamic model of new technology adoption in a labor market with search frictions, where worker training boosts the productivity gains from adopting the technology. Once trained, workers acquire general skills that can be used by any firm operating the new technology. As a result, firms can free-ride on the training investments of others, which inefficiently delays technology adoption and workforce training. We apply the model to the diffusion of Enterprise Resource Planning (ERP) systems in Portugal—a leading software technology currently used by 43% of European firms—whose adoption requires training workers in transferable skills. Using matched employer–employee data, we show that as the technology diffuses, firms train fewer workers upon adoption, consistent with the model’s free-riding mechanism. The calibrated model implies a 14% present-value loss in net output due to underinvestment in adoption and training. Finally, policy counterfactual analysis shows that training subsidies introduced at the onset of the diffusion process are about 10% more effective than those enacted ten years later.
29. Firm Scope and Innovation: The Role of Intangibles
Cagin Keskin
Horizontal expansion through an increasing product portfolio lies at the core of modern endogenous growth literature. Yet evidence remains limited on how diversification across industries influences a firm’s trade-off between generating social surplus and capturing private returns. To investigate this, I categorize intangible assets by their spillovers: transferable intangibles (patents, software) generate social surplus, whereas embedded intangibles (organizational capital, brand value) primarily yield private returns. I document that diversified firms reallocate investment toward embedded intangibles, a strategic shift accompanied by declining markups and productivity, together with reduced innovation by their rivals. Motivated by this evidence, I extend a canonical endogenous-growth framework to endogenize firms’ allocation between transferable and embedded intangibles, allowing for both horizontal and vertical expansion. A key prediction of the model is that embedded intangibles are the primary driver of a firm’s ability to expand across industries, which also raises entry barriers for competitors and decreases social return rather than promoting long-run growth. Thus, a shift in innovative effort ultimately sacrifices economy-wide growth for firm-level market advantages, and quantitative analysis indicates that size-dependent taxes can substantially improve welfare.
30. The value of conceptual knowledge
Benjamin Davies
We study the instrumental value of conceptual knowledge when making statistical decisions. Such knowledge tells agents how unknown, payoff-relevant states relate. It is distinct from the statistical knowledge gained from observing signals of those states. We formalize this distinction in a tractable framework used by economists and statisticians. Conceptual knowledge is valuable because it empowers agents to design more informative signals. It is more valuable when states are more “reducible”: when they can be explained with fewer common concepts. Its value is non-monotone in the number of signals and vanishes when agents have infinitely many signals. Agents who know more concepts can attain the same payoffs with fewer signals. This is especially true when states are highly reducible.
31. Robust Technology Regulation
Andrew Koh
We analyze how uncertain technologies should be robustly regulated and how regulation should evolve with new information. An adaptive sandbox comprising a zero marginal tax up to an evolving quantity limit is (i) robust: it delivers optimal payoff guarantees when the agent’s learning process and/or preferences are chosen adversarially; (ii) dominant: it outperforms other robust and regular mechanisms across all agent learning processes and preferences; (iii) time-consistent: it is the only robust mechanism that can be implemented without commitment. Robustness is important: absent robust regulation, worst-case pay-offs can be arbitrarily poor and are induced by weak but growing optimism that encourages excessive risk-taking. Our results offer optimality foundations for existing policy and speak directly to current debates around managing emerging technologies.
32. Technology and the Geography of Industrial Policy
Aditya Bhandari
Industrial policy around the world is increasingly targeting sectors heterogeneously across regions to account for sectoral agglomeration externalities. This paper provides a theoretical framework to study when such spatial targeting is optimal. I demonstrate that the optimal policy across regions depends on the underlying productivity structure: whether agglomeration affects Hicks-neutral (input-neutral) or Harrod-neutral (labor-augmenting) productivity, the two dominant formulations in spatial economics. When productivity is Hicks-neutral , optimal industrial subsidies increase with regional sector size. However, when productivity is Harrod-neutral, the optimal industrial subsidy is a constant ad-valorem wage subsidy across all regions. I apply this framework to manufacturing in England using data on 153 regions, where I estimate the productivity structure and the agglomeration elasticity. In the Hicks-neutral case, place-based policies raise welfare by 5.1% versus 2% for uniform subsidies. In the Harrod-neutral case, uniform subsidies raise welfare by 3.1%, while place-based ones reduce welfare by 0.7%. The estimation reveals predominantly Hicks-neutral technology, supporting place-based over uniform policies for manufacturing in England.
33. Sexual Misconduct and Scientific Production
Manuela Collis
While sexual misconduct in the workplace has complex and lasting consequences for directly affected individuals, its broader organizational implications remain less well understood. Using a novel dataset of over 1,000 documented sexual misconduct cases across U.S. universities, I examine how these publicly reported incidents affect departmental scientific productivity. Using the benefit of hindsight, I record the year sexual misconduct occurs and the year it becomes public. I employ coarsened exact matching and a staggered difference-in-differences design to compare control departments with those that experienced subsequently publicized misconduct incidents. Sexual misconduct shows no discernible effect on departmental productivity when it occurs, but public reporting reduces publications by 0.1 per faculty member annually — equivalent to nine fewer publications over five years for a median department of 18 members. These findings reveal that organizational costs arise specifically from public disclosure rather than from the misconduct itself. This distinction between occurrence and disclosure effects suggests that protecting victims and maintaining productivity may require differentiated policy approaches as institutions navigate competing demands from legal frameworks, ethical obligations, and performance concerns. These dynamics help explain both why social pressures transform misconduct from HR concerns into strategic organizational challenges and why firms may prioritize confidentiality strategies.
34. Worker Mobility and the Diffusion of Radical Technologies
Stephan Hobler
The spread of new, transformative technologies often relies on specialized knowledge among workers and managers. When the required expertise is scarce, human capital and worker mobility can become bottlenecks to technology diffusion. To study these dynamics, I develop a theory in which firms and workers accumulate technology-specific expertise through mutual learning, and worker mobility is subject to search frictions. I calibrate the model to the diffusion of predictive AI among U.S. firms, matching empirical patterns of technology adoption and worker flows using comprehensive microdata from LinkedIn. Worker mobility emerges as a key driver of diffusion. When a new technology is introduced, adoption is initially slow due to the lack of experienced workers and concentrated only among the most productive firm-worker pairs. Diffusion then accelerates through the poaching of workers from early adopters, generating an S-shaped diffusion curve. Aggregate output follows a J curve, with productivity gains taking time to materialize. A counterfactual matched to European-style labor markets with low mobility and long job tenures reveals a trade-off: the European economy delivers modestly higher steady-state output, but slows adoption by two-thirds and reduces welfare gains from the new technology by one-third—potentially contributing to transatlantic productivity gaps in technology-intensive sectors.
35. Patent challenge and generic entry
Xin Zhang
Pharmaceutical innovation depends on strong primary patents that allow originators to recoup R&D costs. However, drug companies often engage in ever-greening that prolongs patent protection by filing follow-on patents with little therapeutic gain. We study a policy lever that works with market forces to screen out weak follow-on patents: the Hatch-Waxman Act, which incentivizes challenges to ever-greening patents by granting the first successful challenger a period of marketing exclusivity. We investigate how the length of first-filer exclusivity shapes generic firms’ incentives to initiate challenges, which can curb the extra monopoly protection created by ever-greening while preserving incentives for genuine discovery and protecting consumer welfare through earlier generic entry. Using a two-stage structural model that endogenizes challenge and entry decisions, we estimate the fixed costs of generic entry with moment inequalities. We find that the current 180-day exclusivity raises challenge rates by about 4 percentage points. Extending exclusivity primarily activates challenges in markets that would otherwise go unchallenged: a two-year exclusivity increases the challenge rate to 15.38%. Effective exclusivity is highly heterogeneous across therapeutic classes: reaching a 20% challenge rate requires roughly two years for antimicrobials but less than one year for genitourinary drugs.
36. Innovation and Adaptation to Expanding Biological Threats
Shu-Chen Tsao
Developed countries often possess the capacity to innovate technologies that mitigate global biological threats, such as vaccines for infectious diseases, but innovate little when not directly exposed. This paper develops a spatial dynamic game to study endogenous innovation incentives as biological threats expand into developed countries. In the model, all countries can control threats locally, while only a few can innovate. I decompose how two externalities—threat diffusion and technology spillovers—and their interaction shape strategic innovation incentives. Moreover, I show that these analytical results can be empirically estimated using a tractable GMM framework. Using evidence of dengue-transmitting mosquitoes expanding into the U.S., I estimate that endogenous U.S. vaccine innovation could reduce dengue cases in the Americas by 54% relative to a no-innovation scenario and assess the resulting global welfare implications. Finally, I show that greater exposure may fail to spur innovation when sustained eradication through local control is optimal for a class of biological threats.