TY  - JOUR
AU  - Lach,Saul
AU  - Schankerman,Mark
TI  - Incentives and Invention in Universities
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 9727
PY  - 2003
Y2  - May 2003
UR  - http://www.nber.org/papers/w9727
L1  - http://www.nber.org/papers/w9727.pdf
N1  - Author contact info:
Saul Lach
Department of Economics
Hebrew University
Jerusalem, 91905
ISRAEL
Tel: 972-2-5883253
Fax: 972-2-5816071
E-Mail: saul.lach@huji.ac.il

Mark Schankerman
Department of Economics, R.516
London School of Economics
Houghton Street
London WC2A 2AE
UK
Tel: 442079557518
E-Mail: M.Schankerman@lse.ac.uk
AB  - We show that economic incentives affect the number and commercial value of inventions generated in universities. Using panel data for 102 U.S. universities during the period 1991-1999, we find that universities which give higher royalty shares to academic scientists generate more inventions and higher license income, controlling for other factors including university size, quality, research funding and technology licensing inputs. The incentive effects are much larger in private universities than in public ones. For private institutions there is a Laffer curve effect: raising the inventor's royalty share increases the license income retained by the university. The incentive effect appears to work both through the level of effort and sorting of academic scientists.
ER  -