Bank Credit Supply and Firm Innovation Behavior in the Financial Crisis (with Kornelius Kraft), Journal of Banking and Finance, 2020, 121, 105961.

External Financing Constraints and Firm Innovation (with Kornelius Kraft), Journal of Industrial Economics, 2019, 67(1), 91-126.

The Impact of the Financial Crisis on Capital Investments in Innovative Firms (with Kornelius Kraft), Industrial and Corporate Change, 2019, 28(5), 1079-1099.

External Consultants and InnovationAcademy of Management Proceedings, 2020, 1, 13491.

(Among the best accepted papers in the 2020 AOM meeting program)

Is it a good idea to publish during your PhD? Yes, but ..., Nature Behavioural and Social Sciences Community Blog, October 2019.

Digital divide, Knowledge and InnovationsJournal of Information, Information Technology, and Organizations, Vol. 8, 2013, pp. 1-24. 

Patent Enforcement and Subsequent Innovation (Working paper version, revised version available upon request)

How does the enforcement of intellectual property rights affect subsequent innovation? I exploit patent infringement litigation in the United States to analyze the effect of enforcing patents on follow-on innovation. The results imply that subsequent innovations increase after a case has been filed in a court. While there is a strong increase during the litigation period, the relative effect size decreases in the years following the closure of the case. My results indicate that signals about the value of the patent and reductions in asymmetric information are particular drivers of the rise in follow-on innovation. Although there is a general facilitating effect, subsequent innovations have a low degree of quality and follow the same research direction as the litigated patents.

Strategic Non-Disclosure in Patents (with Alexandra Zaby and Diana Heger )   (Working paper version)

Patent law requires the full, clear, and concise disclosure of an invention in exchange for the protection of the intellectual property. This paper presents a theoretical analysis of the strategic motives to limit knowledge disclosure in patents and how this affects follow-on innovation. Using USPTO patent examination data we use Office actions associated with insufficient disclosure to investigate whether and how the modification of a patent specification in the course of examination impacts follow-on innovation. We find that inventors “game the system” using strategic non-disclosure as a means to reduce follow-on innovation.

Financial Constraints for R&D and Innovation: New Evidence from a Survey Experiment   (with Dirk Czarnitzki)    (Working paper version)

We utilize a new survey experiment to evaluate the existence and degree of financial constraints for R&D in the economy. The experiment does not only allow to deduct the presence of financial constraints, but also to evaluate their economic significance. Using data on German companies, we find that financial constraints for R&D exist but that their relevance might have been overestimated in the literature. Most R&D projects that have not been implemented because of financial constraints turn out to have low expected marginal rates of return. While this findings stands in some contrast to other studies, we also find several results that are in line with the literature: young firms are most constrained and the constraints occur at the intensive margin, i.e. our results do not suggest that non-innovative companies are deterred from innovation. Instead, highly innovative companies are restricted by the capital market.

Do Managerial Incentives Facilitate Anti-Competitive Behavior? Evidence from Collusion (with Anja Rösner)   (Available upon request)

We investigate the impact of management incentives on anti-competitive behavior. This is of particular importance as the manager acts on behalf of the owner and determines the firm strategy. Compensation schemes, intended to overcome the principle-agent problem between shareholders and managers, generally determine their managerial actions. Thus, by aligning managers’ interests with those of the firm’s shareholders, the design of their contract could foster their incentive for anti-competitive behavior, like collusion. Within a theoretical framework, we predict that compensation schemes emphasizing long-term remuneration facilitate and stabilize collusion. Our empirical analysis is based on a combination of firm, manager, and cartel data, to identify managers' remuneration schemes and cartels within the United States. We show that a higher degree of managers' long-term incentives indeed facilitates and stabilizes collusion. Further analyzing the remuneration schemes of various management positions, we find that the impact is particularly pronounced for non-CEOs and CFOs. Additional results imply that firms run by overconfident or risk-taking managers are more likely to behave anti-competitive.

Subsidies and Innovation in the Recent Financial Crisis   (with Kornelius Kraft)    (Working paper version, revised version available upon request)

We analyze the impact of subsidies on R&D expenditures in the financial crisis and beyond. The financial crisis has led to considerable turmoil in financing and, as a result, to restrictions of firms' access to external financing. Utilizing this fact, we identify and analyze financing constraints in two ways. First, firm financing constraints are determined via their credit rating and second, restrictions from the supply side are identified via the firm’s main banks capital reserves. The results of our empirical test imply that R&D investments of non-subsidized firms decrease during the crisis. This effect is particularly pronounced for firms that are affected by financing constraints on the firm or bank side. Finally, our results imply that subsidies can at least partially compensate for these negative effects.

Is More Always Better? External Consultants and Firm Innovation in Emerging Markets (Revised version available upon request)

I investigate the relation between hiring external consultants and firm innovation in emerging markets. Firms in these markets face particular problems, which hamper organizational activities like innovation. Results for a sample of firms from 32 countries shows that utilizing external consultants is associated with a higher probability of innovating. More specifically, firms that hire external consultants show a higher probability to carry out product and process innovation, but also innovation in management or marketing. Further results imply that hiring consultants is particularly beneficial to convert innovation inputs to outputs, and exerts positive effects on technology licensing and worker training measures. Determining the impact of the consulting intensity, I show that the relation between the number of interactions with external consultants and innovation is inversely U-shaped. This implies that more is not always better. 

The Impact of a New Workplace Technology on Employees (with Alexander Lammers)   (Available upon request)

We exploit the implementation of a new workplace technology as a source of variation in employee outcomes. Utilizing detailed worker-level data for Germany, we show that the strongest impacts of new technologies arise in the first year of its implementation for overtime, training and perceived productivity. These effects diminish after the introduction period. Finally, we show that changes in worker outcomes depend on the nature of the technology as well as occupational choices. Thus, we find that technologies are particularly affecting workers if their introduction is related to increases in workload and mental stress. In addition, workers in high-paying occupations are affected in all of the worker outcomes examined. Among employees in low- and mid-paying occupations, in contrast, there are only particularly strong impacts on overtime and training. The impact on worker outcomes therefore primarily occurs when the new technology shapes the work environment of the exposed worker.

R&D Investments under Financing Constraints (with Kornelius Kraft)   (Working paper version, revised version available upon request)

This paper tests for the sensitivity of R&D to financing constraints conditional on restrictions in external financing. Financing constraints of firms are identified by an exogenously calculated rating index. Restrictions in external financing are determined by (i) the specific time period (crisis vs. non-crisis) and (ii) the balance sheet strength of the firm’s main bank in terms of bank capital. Results of difference-indifferences estimations utilizing three time periods: 2002-2006 (pre-crisis) 2007-2009 (crisis) and 2010-2012 (post-crisis) support the theoretical prediction that financing constraints affect R&D. Moreover, we find that the effect of firm financing constraints is more intense (i) in times of stress on financial markets and (ii) when the firm faces restrictions in external financing. Additionally, our results indicate that on average the effect does not persist over time.

Selected work in progress

Fiscal Transparency and the Social Benefits of Government Funded Research (preliminary version available upon request)

I investigate the effect of increasing transparency on the social benefits of research. (Among the best accepted papers in the 2022 AOM meeting program)

Who is a successful entrepreneur, and why? (with Anders Sørensen)

Risk and Collusion (with Anja Rösner)

This paper investigates how risk-taking incentives of managers affect collusive behavior of firms. 

Licensing and Innovation

Awareness and Innovation