TY  - JOUR
AU  - Furman,Jeffrey L.
AU  - Stern,Scott
TI  - Climbing Atop the Shoulders of Giants: The Impact of Institutions on Cumulative Research
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 12523
PY  - 2006
Y2  - September 2006
UR  - http://www.nber.org/papers/w12523
L1  - http://www.nber.org/papers/w12523.pdf
N1  - Author contact info:
Jeffrey L. Furman
Boston University - SMG
595 Commonwealth Ave - #653a
Boston, MA 02215
Tel: 617/353-4656
Fax: 617/353-5003
E-Mail: furman@bu.edu

Scott Stern
MIT Sloan School of Management
100 Main Street, E62-476
Cambridge, MA 02142
Tel: 617/253-3053
Fax: 617/253-2660
E-Mail: sstern@mit.edu
AB  - While the cumulative nature of knowledge is recognized as central to economic growth, the microeconomic foundations of cumulativeness are less understood.  This paper investigates the impact of a research-enhancing institution on cumulativeness, highlighting two effects.  First, a selection effect may result in a high correlation between "high-quality" institutions and knowledge of high intrinsic quality.  Second, an institution may have a marginal impact -- an incremental influence on cumulativeness, conditional on the type and quality of knowledge considered.  This paper distinguishes these effects in the context of a specific institution, biological resource centers (BRCs).  BRCs are "living libraries" that authenticate, preserve, and offer independent access to biological materials, such as cells, cultures, and specimens.  BRCs may enhance the cumulativeness of knowledge by reducing the marginal cost to researchers of drawing on prior research efforts.  We exploit three key aspects of the environment in which BRCs operate to evaluate how they affect the cumulativeness of knowledge: (a) the impact of scientific knowledge is reflected in future scientific citations, (b) deposit into BRCs often occurs with a substantial lag after initial research is completed and published, and (c) "lagged" deposits often result from shocks unrelated to the characteristics of the materials themselves.  Employing a difference-in-differences estimator linking specific materials deposits to journal articles, we find evidence for both selection effects and the marginal impact of BRCs on the cumulativeness of knowledge associated with deposited materials.  Moreover, the marginal impact increases with time and varies with the economic and institutional conditions in which deposit occurs.
ER  -