Incentives and Invention in Universities
AbstractUsing data on U.S. universities, we show that universities that give higher royalty shares to faculty scientists generate greater license income, controlling for university size, academic quality, research funding and other factors. We use pre-sample data on university patenting to control for the potential endogeneity of royalty shares. We find that scientists respond both to cash royalties and to royalties used to support their research labs, suggesting both pecuniary and intrinsic (research) motivations. The incentive effects appear to be larger in private universities than in public ones, and we provide survey evidence indicating this may be related to differences in the use of performance pay, government constraints, and local development objectives of technology license offices. Royalty incentives work both by raising faculty effort and sorting scientists across universities. The effect of incentives works primarily by increasing the quality (value) rather than the quantity of inventions.
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Bibliographic InfoPaper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 3916.
Date of creation: May 2003
Date of revision:
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Other versions of this item:
- Saul Lach & Mark Schankerman, 2004. "Incentives and Invention in Universities," STICERD - Economics of Industry Papers 33, Suntory and Toyota International Centres for Economics and Related Disciplines, LSE.
- Saul Lach & Mark Schankerman, 2006. "Incentives and Invention in Universities," CEP Discussion Papers dp0729, Centre for Economic Performance, LSE.
- Saul Lach & Mark Schankerman, 2003. "Incentives and Invention in Universities," NBER Working Papers 9727, National Bureau of Economic Research, Inc.
- L30 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - General
- O31 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
- O34 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Intellectual Property and Intellectual Capital
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