Know the Ropes: From Basic Science to Corporate Innovation

When: 21 Jun 2021, 14:15-15:30
Where: Zoom
Speaker: Luofu Ye

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Meeting ID: 962 9894 9319
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Using novel publication data, I characterize the supply chain of innovation where knowledge generated at universities is converted by firms into patents and products, adding value to firms and leading to externalities and economic growth. The universities are subsidized and have been producing knowledge at a stable rate. However, the rate at which the diffusion eventually reaches the market is slower in firms withdrawing from basic research. I uncover that in the diffusion process, firm scientists are essential to stay abreast of scientific breakthroughs, pick and convert the valuable ones into applied technology. I show firms harvest scientific breakthroughs when they conduct basic research themselves, and enjoy increased patent quantity, patent quality and productivity relative to firms that do not. My findings have policy implications for subsidizing firm basic research to increase knowledge spillover and provide empirical evidence for key assumptions in endogenous growth models.