Research

We live in an era in which innovation and entrepreneurship seem ubiquitous, particularly in regions like Silicon Valley, Boston, and the Research Triangle Park. But many metrics of economic growth, such as productivity growth and business dynamism, have been at best modest in recent years. The resolution of this apparent paradox is dramatic heterogeneity across sectors, with some industries seeing robust innovation and entrepreneurship and others seeing stagnation. By construction, the impact of innovation and entrepreneurship on overall economic performance is the cumulative impact of their effects on individual sectors. Understanding the potential for growth in the aggregate economy depends, therefore, on understanding the sector-by-sector potential for growth. This insight motivates the twelve studies of different sectors that are presented in this volume. Each study identifies specific productivity improvements enabled by innovation and entrepreneurship, for example as a result of new production technologies, increased competition, or new organizational forms. These twelve studies, along with three synthetic chapters, provide new insights on the sectoral patterns and concentration of the contributions of innovation and entrepreneurship to economic growth. 

Working Paper Versions of Chapters and Conference Information

Project Summary from NBER Bulletin on Entrepreneurship

We investigate how establishing a college affects local educational attainment using historical natural experiments in which "runner-up" locations were strongly considered to become college sites but ultimately not chosen for as-good-as-random reasons. While runner-up counties have since had opportunity to establish their own colleges, winners are still more likely to have a college today. Using this variation, we find that winning counties today have college degree attainment rates 58% higher than runner-up counties and have larger shares of employment in high human capital sectors. These effects are not driven primarily by college employees, migration, or local development.

During the Second Industrial Revolution and subsequently, it is widely believed that Black Americans contributed disproportionately little to the economic development of the United States, especially in comparison to European Americans and immigrants from Europe. Yet, Black Americans tended to live in entirely different institutional environments than other Americans, particularly in the South under Jim Crow laws. Using a new database that matches inventors to census records, we find that patenting rates for Black Americans living in the North were very similar to patenting rates for White Americans from 1870 to 1940; in some decades and states, Northern Black patenting rates exceeded the patenting rate for White Americans. In the South, patenting rates were low for both Black and White Americans, while patenting rates for Northern Black residents were far higher than those for Southern White residents. We additionally find that Black Americans from all regions were responsible for more patents than immigrants from all but two countries (Germany and England). In total, we estimate that African Americans invented more than 50,000 patents over the period. Thus, when freed of extreme political oppression, Black Americans demonstrated a level of inventiveness that matched the most inventive groups in U.S. history.

Online Appendix

Data and Replication Package

Final Working Paper Version

Featured on: Brookings Institution Report 

I use narrative historical data on site selection decisions for a subset of U.S. colleges to identify “runner-up” locations that were strongly considered to become the sites of new colleges. Using runner-up counties as counterfactuals in a difference-in-difference model, I find that establishing a college causes 62% more patents per year. Linking patents to novel college yearbook data reveal that only 12% of patents in a college’s county came from that college’s alumni or faculty. I find only small differences in patenting between establishing colleges and establishing other institutions, as well as between colleges with different focuses on technical fields.

Online Appendix

Data and Code Repository

A Detailed Description of the College Site Selection Experiments Used in the Paper

Final Working Paper Version

Featured on: Marginal Revolution, Mother Jones, Brad DeLong's Blog, American Economic Association Research Highlights

Innovation has long been seen as central to long-term regional growth. Due to the absence of comprehensive data on the geography of innovation covering long time periods quantifying long-term innovation-development linkages has been challenging. We use newly available patent data from the United States coded to consistent geographies over 150 years to document changing patterns in the geography of innovation. Our analysis reveals three findings. First, the high levels of spatial concentration of innovation today are similar to those in the decades after the Civil War. Second, changes in share of the top 1% locations' innovation drive national spatial concentration trends after 1945. Third, regional innovation leadership displays persistence, but the strength of persistence appears to have fallen over time. We relate our analysis to recent findings in the literature and suggest promising avenues for future inquiry.

Final Working Paper Version

Featured on:  VoxEU

I provide a primer on six recent large-scale historical patent datasets for use in innovation research. I discuss how each dataset is constructed, the types of patent information included in each, and the quality and completeness of each. Throughout, I emphasize when our knowledge of the history of invention is dependent on the data source used and provide recommendations about which dataset is most likely to be best for different contexts. Overall, these datasets paint a remarkably consistent picture of the history of U.S. invention. When the datasets do disagree, these differences tend to be minor, although I highlight some important exceptions. I further describe several "niche" historical patent datasets that allow researchers to study institutional contexts that cannot be studied using modern patent data. Finally, I discuss features of patent data that are not available for the historical patents but are available for modern patents.

Online Appendix

Final Working Paper Version

Previous versions of this paper circulated with the titles "Comparing Historical Patent Datasets" and "Historical Patent Data: A Primer and Some Pitfalls."

We assemble a novel dataset linking inventors listed in the Annual Reports of the Commissioner of Patents to Population Census records spanning 1870 to 1940. We find that inventors are not a random subset of the population. They differ in some unsurprising ways in that they tend to be older, whiter, and more likely male. However, these patterns do change over time. The odds ratio relative to the population as a whole of female inventors increases from a low of 0.07 in 1880 to a high of 0.13 in 1940 and that of non-whites ranges from 0.16 in 1880 to 0.34 in 1940. Both populations remain severely underrepresented throughout the timeframe. We find changes in the occupations of inventors with trends away from farming and towards white collar occupations. We also show the increasing importance of foreign born people in patenting. In 1870, the odds of a foreign born person patenting relative to the population as a whole is nearly 1 and increases to over 1.6 by 1940.

Online Appendix

Data and Replication Package

Final Working Paper Version

Featured in: USPTO's Study of Underrepresented Classes Chasing Engineering and Science Success report to Congress

This is an introduction to the volume The Role of Innovation and Entrepreneurship in Economic Growth. The chapters collected in this volume seek to answer the following questions: What is the relationship between innovation/entrepreneurship and economic growth in specific industrial sectors? How has the relationship between innovation/entrepreneurship and economic growth changed over time? How much do policies, programs, and specialized institutions meant to encourage innovation or entrepreneurship ultimately spur economic growth? Does innovation or entrepreneurship affect economic performance and social progress other than through measured productivity and economic growth, and if so, how can these effects be measured? We synthesize the chapters in this volume and present broad conclusions.

To estimate the local effects of establishing land grant colleges, I compare locations that receive a land grant college to "runner-up" locations that were in contention to receive the land grant but did not for as-good-as-random reasons. I find that establishing a land grant college causes an increase in local invention, including in particular agricultural inventions, in college counties relative to the runner-up counties. But land grant college counties see only small and imprecisely estimated improvements in agricultural performance, measured by yield and output, relative to the runner-up counties. I discuss several alternative interpretations of these findings. By comparing the establishment of land grant colleges to non-land grant colleges, I show that land grants appear to cause smaller increases in local invention, population, and agricultural output, but larger increases in agricultural yields and new crop varieties. The effect of land grant colleges on local innovations is largest, even relative to non-land grant colleges, following the passage of legislation that increases funding to agricultural research.

Publisher's Gated Version

A review of Khan's 2020 book, which compares "decentralized" systems of promoting innovation, like patents, with "centralized" or "administered" systems like prizes. Khan argues that the decentralized nature of patent systems make them superior to prizes as a tool to promote innovation, while prize systems often fail to identify and reward the most important innovations. The book draws on historical evidence from several countries, especially the U.S., Britain, and France.

PDF Version

A policy brief summarizing the methodology and conclusions from my paper "Bar Talk: Informal Social Networks, Alcohol Prohibition, and Invention." I show that events that disrupt informal social networks can cause declines in innovative activity, but innovation returns as people rebuild their social networks in the aftermath of the disruption.

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A review of Hintz's 2022 book, which provides a rich description of independent U.S. inventors throughout the 20th century. This is a period of time in which independent inventors are typically overshadowed by corporate innovations in the eyes of historians and the general public.

A review of Urquiola's 2020 book, which argues that the decentralized nature of the U.S. higher education system led to the U.S.'s dominance in university research.

The history of Black people’s contributions to the catalog of inventions that marked the Second Industrial Revolution has been largely muted. This period is considered one of the most innovative eras in world history, seeing the birth of major advances in agriculture, transportation, communications, manufacturing, and electricity that fueled rapid economic growth. With the exception of a few notable inventors who are regularly elevated during Black History Month—e.g., George Washington Carver (peanut products) and Madam C. J. Walker (hair products)—the disregard of many of the era’s Black inventors not only whitewashes the historical record, but biases who we perceive to be innovators in the present. Using a new database of inventors, this report demonstrates that Black contributions to the Industrial Revolution were influenced by the disproportionate number of Black Americans who lived in the U.S. South in the late 19th and early 20th century, where their opportunities to acquire and apply skills were severely limited by oppressive institutions. Black Americans living outside the South invented nearly as frequently as white Americans, and at rates that would be considered extremely high by historic or global standards of invention even today. 

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A short summary of my dissertation.

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I evaluate the importance of informal social interactions for invention by exploiting a massive involuntary disruption of informal networks from U.S. history: alcohol prohibition. State-level prohibition differentially treated counties depending on whether they were wet or dry prior to the state laws. After prohibition, previously wet counties had 13-35% fewer patents per year relative to consistently dry counties. The drop was largest 2-3 years after the imposition of prohibition and then rebounded as individuals reconstructed their informal social networks. I conduct several additional analyses that suggest the observed drop in patenting was driven by the disruption of informal social networks. Using data on inventors’ identities and collaborations, I show that individuals who were successful inventors before prohibition became relatively more likely to struggle to invent in the social network that evolved in response to prohibition, and that the new social network led to a change in the direction of inventive activity.

Online Appendix

Featured on: Atlas Obscura, National Beer Wholesalers Association, Planet Money, New York Times, Marginal Revolution (x2), CBC Tapestry, Penn's Exchange podcast, Reason Magazine 

We propose that collegiate home economics programs in the early 20th century introduced a generation of women to science, especially biology and chemistry. Using college-level data from the 1910 Commissioner of Education report and a collection of historical college yearbooks spanning 1900-1940, we document that a 10 percentage points increase in the share of women in home economics led to a roughly 3 percentage points increase in the share of women majoring in science. We demonstrate that the result is driven by exposure to science in the historical home economics curricula rather than through selection bias or faculty role model effects. By linking colleges to recent educational data, we provide suggestive evidence for the persistent impact of historical curricula decisions on modern day gender gaps in STEM fields.

Online Appendix

Featured On: Marginal Revolution

How can policymakers encourage innovators to disclose information in their patents when innovators have an incentive to strategically withhold this information? We build a duopoly model in which the innovator chooses how much to disclose about their cost-reducing invention before engaging in Cournot competition. More disclosure allows the follower to copy more of the invention, while also signaling that the innovator is a strong competitor. More disclosure also increases the probability that the innovator wins an infringement suit against a follower that copies. We find that policies that increase patent protection have different effects on disclosure depending on whether they change the damages imposed if an innovator wins an infringement suit or change the probability that the innovator wins. If damages increase, all innovator types disclose more, while if the probability of winning increases, high-quality innovators disclose less and low-quality innovators disclose more. To test this prediction, we use the 2016 Halo v. Pulse decision, which increased damages conditional on the inventor winning, and the 2011 Microsoft v. i4i decision, which increased the probability of an inventor winning. We find that the Halo decision increased disclosur efor the entire distribution of patents, while the i4i decision reduced patent disclosure for the highest quality patents and increased disclosure for the lowest quality patents. We conclude that the manner in which patent protection is increased matters for information disclosure, and some pro-patent policies can be counterproductive by reducing disclosure for the highest quality inventions.

How does the presence of a university affect local economic mobility and inequality? Existing work on universities’ role in economic mobility have focused on students but have not examined the effect on local communities. We exploit historical natural experiments to answer these questions, using “runner-up” counties that were strongly considered to become university sites but were not selected for as-good-as-random reasons as counterfactuals for university counties. We find that university establishment causes greater intergenerational income mobility but also increases cross-sectional income inequality. We highlight four channels through which these effects operate: universities “hollow-out” the local labor market and provide greater opportunities to achieve top incomes, both of which increase cross-sectional inequality, while at the same time increasing educational attainment across the income distribution and fostering social interactions to high-socioeconomic status individuals, which both prevent inequality from perpetuating into intergenerational immobility.

Previous versions of this paper circulated with the title "Not the Great Equalizer? Local Economic Mobility and Inequality Effects from the Establishment of U.S. Universities"

How should research resources be allocated across space to have the most beneficial impact on society? Prior studies suggest that scientists are influenced by the local ideas they are exposed to, and hence local conditions shape the direction of science. We investigate this hypothesis in the context of agricultural research, constructing a measure that quantifies the extent to which land grant colleges are located in counties that grow different distributions of crops than the rest of their states, which we call agricultural unrepresentativeness. Consistent with the prior literature, land grant colleges in more agriculturally unrepresentative counties produce research focusing on unrepresentative crops and create more geographically limited productivity spillovers. Because college locations are not determined randomly, these results may reflect endogenous sorting by state policymakers rather than causal effects of local agricultural conditions. We isolate exogenous variation in land grant college’s agricultural unrepresentativeness using historical college site selection natural experiments. When using only this exogenous variation, we find no correlation between land grant counties’ unrepresentativeness and the unrepresentativeness of agricultural research. To understand this null result, we investigate actions land grant colleges can take to overcome the effects of local agricultural conditions and find that colleges exogenously placed in agriculturally unrepresentative counties invest more in extension services to interact with more distant constituents. We conclude that local agricultural conditions need not determine the direction of science so long as researchers can take actions to obtain non-local information.

Featured On: New Things Under the Sun Newsletter 

We estimate how the availability of informal gathering places can facilitate knowledge spillovers that lead to innovation. More specifically, we estimate how the spread of coffee shops increases local inventive activity. To account for endogeneity in the number of coffee shops in an area, we use an instrumental variables approach based on the geographic and time patterns of the opening of Starbucks coffee establishments. As Starbucks opened new establishments, these establishments tended to spread outward from the location of the first Starbucks establishment in Seattle. Using this strategy, we find that 10% faster growth in the number of new Starbucks stores in a county increases patent filings in that county by about 4-6%. Average patent quality also increases in counties that see a faster growth in coffee establishments. Collaborative patenting and patenting by firms both increase, as does collaboration across firms, providing suggestive evidence that coffee shops are especially conducive for cross-firm business meetings. We obtain similar results when using instrumental variables based on the geographic and temporal patterns of the opening of other large coffee chains as well, each of which had their first establishments in different parts of the country.

Featured on: New York Times 

This manuscript describes how locations were selected for a large sample of U.S. colleges and universities. It is designed to serve as an extended historical appendix to Andrews (2022) and describes how the sample was constructed for that project. My hope is that this historical narrative detail on college site selection processes will be of wider interest to historians, education researchers, and other scholars.