Patents, Spillovers, and the Allocation of Talent: Microeconometric Perspectives on the Knowledge

198 Pages·2017·3.02 MB·English

by  Markus Nagler

Patents, Spillovers, and the
Allocation of Talent
Microeconometric Perspectives on the Knowledge Economy
Inaugural-Dissertation
zur Erlangung des Grades
Doctor oeconomiae publicae (Dr. oec. publ.)
an der Ludwig-Maximilians-Universität München
2017
vorgelegt von
Markus Nagler
Referentin: Prof. Dr. Monika Schnitzer
Koreferent: Prof. Dr. Ludger Wößmann
Promotionsabschlussberatung: 31. Januar 2018
Tag der mündlichen Prüfung: 18. Januar 2018
Namen der Berichterstatter: Monika Schnitzer, Ludger Wößmann, Oliver Falck
Für meine Familie.
À minha familia.
Acknowledgements
First and foremost, I would like to thank my supervisor Monika Schnitzer for her con-
tinuous and outstanding support over the past years. Since the very beginning of my
undergraduate studies, she has given me the opportunity to gain insights not only within
economics, but also on a professional and on a personal level. I am indebted to her for
much of what I take away from these years of study. Ludger Wößmann also played a very
important role. He sparked my interest in empirical economics, was pivotal in my research
education, and always wholeheartedly supported me. I am very grateful to both for guid-
ing and supporting me throughout the past years. I would also like to thank Oliver Falck
for completing my dissertation committee. Since my days as an undergraduate student,
he has always been very helpful and supportive.
I am very grateful to Martin Watzinger, without whom this dissertation would never have
been possible. His guidance, his patience with my ideas, and his example inspired me to
push harder, learn more, and think deeper about economics. I also thank Anna Gumpert,
whose thoughtful advice and sincere support were instrumental in many moments during
my studies.
My colleagues at the Munich Graduate School of Economics, at the Evidence-Based Eco-
nomics Program, and especially at the Seminar for Comparative Economics were always
helpful and made the years of graduate school much nicer. Chen Li and Henrike Steimer
were great office mates. Thank you! Natalie Obergruber, Matthias Wilhelm, and Cathrin
Mohr deserve special mention. They helped to make some difficult times less painful and
the good times even better. I would also like to thank Karin Fritsch, Julia Zimmermann,
Dagmar Ehrhardt, and the student assistants at the Seminar for Comparative Economics
for their great help.
Myco-authors(inchronologicalorder)LudgerWößmann, SaschaBecker, MarcPiopiunik,
Martin West, Martin Watzinger, Thomas Fackler, Monika Schnitzer, Lukas Treber, Sarah
Weise, and Jeffrey Furman deserve special credit for this dissertation. I learned a lot from
working with them and would have not been able to realize any of the projects without
the insights I gained from our joint work and the discussions.
While writing this dissertation I was lucky to spend extended periods abroad. I would
like to thank Martin West for making possible my visit to the Program on Education
Policy and Governance at Harvard University, which opened many doors. And I am very
grateful to David Autor and the Department of Economics at MIT for their hospitality
during the past academic year. The friendly and vibrant atmosphere, the open arms with
which I was welcomed, and the rigor of intellectual thought at the department made the
year both very enjoyable and exciting. I learned something new every day. My special
gratitude goes to my friends and colleagues who I met during this year.
The DAAD allowed me to not only spend a year at MIT, but also to study at UCL before
my doctoral studies. I am very grateful for these opportunities. I would also like to
thank the German Science Foundation and the EliteNetwork of Bavaria for their financial
support. This dissertation also benefited from numerous comments and discussions at
conferences and seminars.
Without my good friends, I would not have been able to achieve this. And more impor-
tantly, life would have been much less enjoyable. I am very grateful for having you.
Most of all, I thank my family. Without their endless love and support, none of this would
have been possible.
Markus Nagler
September 2017
Contents
1 Antitrust, Patents, and Cumulative Innovation: Bell Labs and the 1956
Consent Decree 10
1.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
1.2 The Bell System and the Antitrust Lawsuit . . . . . . . . . . . . . . . . . 16
1.2.1 The Bell System was a Vertically Integrated Monopolist . . . . . . 16
1.2.2 The Antitrust Lawsuit . . . . . . . . . . . . . . . . . . . . . . . . . 18
1.2.3 Advantages of the Bell Case for the Empirical Set-up . . . . . . . . 20
1.3 Data and Empirical Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . 21
1.4 Results: Compulsory Licensing Increased Follow-on Innovation . . . . . . . 26
1.4.1 Timing: The Consent Decree Increased Citations of Other Compa-
nies Starting in 1955 . . . . . . . . . . . . . . . . . . . . . . . . . . 26
1.4.2 Magnitude: TheConsentDecreeIncreasedCitationstoBellPatents
by 17% . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
1.4.3 Robustness Check: No Increase in Citations by Untreated Compa-
nies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
1.4.4 Robustness Check: The Decrease in Bell’s Own Patenting is Lower
than the Increase in Patenting by Other Companies . . . . . . . . 36
1.4.5 Mechanism: Increase in Citations is Driven by Start-ups . . . . . . 39
1.5 Compulsory Licensing did not End Foreclosure in the Market for Telecom-
munications Equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
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1.6 The Consent Decree Increased U.S. Innovation in the Long Run . . . . . . 47
1.7 Case Study: The Diffusion of the Transistor Technology . . . . . . . . . . 52
1.8 Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
2 Disclosure and Cumulative Innovation: Evidence from the Patent De-
pository Library Program 58
2.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
2.2 The U.S. Patent Depository Library Program . . . . . . . . . . . . . . . . 62
2.3 Data and Empirical Setup . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
2.4 Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
2.4.1 Patent Libraries Increase Local Innovation . . . . . . . . . . . . . . 68
2.4.2 Plausibility and Robustness Checks Confirm the Results . . . . . . 74
2.5 Patent Libraries Change the Structure of Patents . . . . . . . . . . . . . . 76
2.5.1 Patents Cite Geographically More Distant Prior Art . . . . . . . . 77
2.5.2 Patents are Cited by Geographically More Distant Inventors . . . . 78
2.6 Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
3 Labor Mobility and the Productivity of Scientists 81
3.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
3.2 The German System for Hiring Researchers Provides a Natural Experiment 86
3.3 Empirical Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92
3.4 Results: Moving Researchers Become More Productive . . . . . . . . . . . 94
3.4.1 Publications Increase in Response to the Move . . . . . . . . . . . . 94
3.4.2 Quality and Collaboration . . . . . . . . . . . . . . . . . . . . . . . 100
3.4.3 Returns to Tenure? . . . . . . . . . . . . . . . . . . . . . . . . . . . 101
3.4.4 Robustness Checks . . . . . . . . . . . . . . . . . . . . . . . . . . . 105
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3.5 Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108
4 Weak Markets, Strong Teachers: Recession at Career Start and Teacher
Effectiveness 110
4.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110
4.2 A Simple Model of Occupational Choice . . . . . . . . . . . . . . . . . . . 115
4.3 Setting, Data, and Empirical Strategy . . . . . . . . . . . . . . . . . . . . . 118
4.3.1 Supply of Potential Teachers in Florida . . . . . . . . . . . . . . . . 118
4.3.2 Administrative Data from the State of Florida . . . . . . . . . . . . 120
4.3.3 Empirical Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . 122
4.4 Business Cycle Conditions at Career Start and Teacher Effectiveness . . . . 126
4.4.1 Teachers from Recession Entry Cohorts are More Effective in the
Classroom . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 126
4.4.2 Placebo Analyses Support the Identification Assumption . . . . . . 133
4.4.3 Further Robustness Checks . . . . . . . . . . . . . . . . . . . . . . 133
4.4.4 Differential Attrition of Teachers does not Drive Results . . . . . . 140
4.4.5 Discussion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 142
4.5 Policy Implications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 143
4.6 Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 145
Appendices 146
A Appendix to Chapter 1 147
A.1 Appendix to Section 1.4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 148
A.2 Appendix to Section 1.5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 157
B Appendix to Chapter 2 160
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C Appendix to Chapter 3 163
C.1 Matching Researchers to their Scientific Output and Identifying the Treat-
ment Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 163
C.2 Additional Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 165
D Appendix to Chapter 4 167
Bibliography 169
iv
List of Tables
1.1 Summary Statistics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
1.2 The Effect of Compulsory Licensing on Subsequent Citations . . . . . . . . 33
1.3 The Effect of Compulsory Licensing on Subsequent Citations by Company
Type and Field . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
1.4 Patent Applications per Subclass and Year by Company Type and Field . 51
1.5 The Transistor Subsample . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
2.1 Summary Statistics in the Year Before Opening . . . . . . . . . . . . . . . 67
2.2 Patent Libraries and Local Innovation . . . . . . . . . . . . . . . . . . . . 71
2.3 Auxiliary Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
2.4 Impact of Patent Libraries: Backward Citations . . . . . . . . . . . . . . . 77
2.5 Impact of Patent Libraries: Forward Citations . . . . . . . . . . . . . . . . 79
3.1 Descriptive Statistics - Author Level . . . . . . . . . . . . . . . . . . . . . 91
3.2 Excess Publications of Moving Scientists . . . . . . . . . . . . . . . . . . . 98
3.3 Excess Publications of Moving Scientists: Heterogeneity of Effects along
Publication Quality and on Team Size . . . . . . . . . . . . . . . . . . . . 101
3.4 Excess Publications of Moving Scientists: Heterogeneity of Effects along
Position and Team Structure . . . . . . . . . . . . . . . . . . . . . . . . . . 104
3.5 Robustness Analyses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107
v