Abstract
We develop and test a model of the patenting and R&D decisions of an innovating firm whose scientist-employees sometimes quit to join or start a rival. In our model, the innovating firm patents to protect Itself from its employees. We show theoretically that the risk of a scientist's departure reduces the firm's R&D expenditures and raises its propensity to patent an innovation. We find evidence from firm-level panel data that is consistent with this latter result. Our results suggest that scientists ' turnover is associated with cross-industry patenting variation and with recent economy-wide increases in patenting. Scientists' turnover may also partly account for why small firms have high patent-R&D ratios.
Original language | English |
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Pages (from-to) | 298-317 |
Number of pages | 20 |
Journal | RAND Journal of Economics |
Volume | 36 |
Issue number | 2 |
Publication status | Published - 2005 Jun |
Externally published | Yes |
ASJC Scopus subject areas
- Economics and Econometrics