Research

This paper examines the effect of the expiry of recording copyright on the supply of music—in the form of rereleases, availability on streaming platforms, and concert performances—by artists popular in the United Kingdom in the 1960s. We find that recording copyright expiry has different effects on a song’s availability in different distribution channels. The lapsing of copyright leads to a large increase in the number of rereleases in physical formats, holding constant artist, age, and year fixed effects. However, when a song’s original recording copyright expires, it becomes less likely to be performed in concert. Moreover, copyright status is not associated with differences in availability on the digital streaming platform Spotify. These results show that copyright expiry has nuanced effects on availability and can lead to different and even opposite effects on availability of a product across different distribution channels. They also show that within the context of digital distribution, the impact of copyright on availability differs based on the business model of a platform.

Canada’s slow productivity growth rate relative to peer countries has been the focus of considerable attention among academics and policymakers. In contrast to the relatively flat trajectory for total factor productivity, Canada’s production of patents has grown considerably in the last three decades. In this article, we examine changes in Canadian patenting over the past 30 years, with a view to understanding this “patent productivity paradox”: slower productivity growth than might be expected given significant increases in patenting. We draw on recent literature on patents as a measure of innovation as well as literature on the relationship between patents and productivity to study this paradox. We propose several explanations for the disconnect between TFP growth and patenting and examine the evidence. We find that the weaker relationship between productivity and patenting in Canada is not explained by the relative rate of invention in information and communications technology, nor by lower invention quality. However, we find suggestive evidence that foreign ownership of patents and inventor migration help to explain the weaker relationship between productivity and patenting in Canada.

The market for buying and selling companies provides an important channel through which technologies and know-how are transferred to new owners. Such trading activity is, however, increasingly constrained by national security restrictions on cross-border deals. This study investigates whether U.S. national security restrictions, which reduce acquisition market “thickness” in certain sectors but not others, alter the upstream R&D investments of potential targets. To do so, we exploit a shift in the stringency of U.S. national security screening practices introduced by the Foreign Investment and National Security Act of 2007, or “FINSA.” FINSA provides a sector-level source of variation in acquisition market thickness and allows us to study the potentially overlooked implications of increased national security restrictions on innovation incentives. We analyze the impact of FINSA’s passage in 2007 on R&D investments using a triple difference research design. In line with prior work, we find that FINSA disproportionately reduces acquisition activity by foreign acquirers in the treated sectors. We also find a significant and deleterious effect of FINSA on the R&D investments of potential targets, with steeper reductions among firms with a high relative likelihood of being acquired. The results remain robust to multiple acquisition-likelihood cutoffs and are not explained by the financial crisis of the late 2000s or managerial entrenchment. The study provides new evidence that fluidity in the market to acquire technology companies is consequential for upstream R&D investment incentives and reveals a possible unintended link between national security policies and innovative activity.

This paper studies how startup acquisitions impact the positioning of rival startups. On one hand, the acquisition of a startup may put rivals at a competitive disadvantage, incentivizing positioning away from the acquired firm. On the other hand, a startup acquisition may send positive signals of future demand on the acquisition or product market, incentivizing rivals to position closer to the acquired firm. I compile a novel dataset of historical snapshots of startup websites over time and construct a measure of distance between startups’ positions on the product market. Applying a matched difference-in-differences framework, I find that following the acquisition of a rival, startups move away from the acquired rival (differentiate themselves), on average. The effect is stronger for startups that have not raised venture capital funding and in older markets. These findings highlight the role of the M&A market in shaping the direction of entrepreneurial innovation, with implications for entrepreneurial strategy and antitrust policy.

Should organizations concentrate scarce resources among a few knowledge workers or distribute them more broadly? The answer to this question depends on whether additional resources enable more ambitious work or simply allow lower-priority projects to move forward. We examine how the direction of innovative output changes as resource constraints are relaxed in the context of high-performance computing (HPC), a critical input to modern scientific research. Using data from XSEDE, an NSF-funded program that allocates supercomputing resources to researchers, we leverage system-wide capacity constraints to identify the causal impact of variation in resource constraints on scientific output. We find that relaxing constraints increases the number of publications and shifts the direction of research. Scientists pursue less popular and newer topics, explore areas beyond their prior expertise, and broaden the scope of their work. However, these directional shifts are associated with fewer citations, suggesting a trade-off between frontier-expanding innovation and impact. Our findings show that allocation strategies shape not just the volume but the trajectory of innovation, with direct implications for R&D managers and policymakers supporting innovation under resource constraints.

Many pharmaceutical products are protected by a substantial number of patents, with some issued late in the clinical trial process or even after the drug is launched. These so-called secondary patents are controversial, with some suggesting that they delay generic entry and consumer access to new medicines, and others arguing that they protect valuable inventions and are relatively weak in any case. We shed light on this debate by estimating the value of secondary patents to their owners. To do so, we combine data from stock market event studies with a model of the drug development process that allows us to account for the importance of clinical uncertainty and delay. We find that even for drugs protected by 70 or more patents, over 60 percent of portfolio value is derived from a handful of the earliest ones. We also use our model to explore several dimensions of pharmaceutical patenting strategy, such as formulation and new-use patents. While these findings will not resolve the policy debate, they do point to the continued importance of early patents on active ingredients, and suggest that policies to limit some uses of secondary patents would have a limited impact on ex ante innovation incentives.