Science and the Market for Technology
Well functioning Markets for Technology (MFT) allow inventors to sell their inventions to others that may derive more value from them. We argue that the growing reliance on science in inventions enhances MFT. In addition to higher quality inventions, reliance on science may enhance gains from trade and reduce the transfer cost of knowledge and other transaction costs. Using large scale data, we show that patents citing science are more likely to be traded, especially for novel patents and for smaller inventors. Leveraging the fall of the Berlin Wall as a source of exogenous variation in the relevant scientific knowledge to technological fields, we confirm reliance on science increases the likelihood that the invention will be traded
We would like to thank Victor Bennett, Aaron Chatterji, Wesley Cohen, Alfonso Gambardella, Sharique Hasan, Mark Schankerman, Carlos Serrano and seminar participants at the University of California San Diego and Hebrew University of Jerusalem for their helpful comments. All remaining errors are ours. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research.
Ashish Arora & Sharon Belenzon & Jungkyu Suh, 2022. "Science and the Market for Technology," Management Science, vol 68(10), pages 7176-7201.