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Returns to Inventors

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  • Toivanen, Otto
  • Väänänen, Lotta

Abstract

A key input to inventive activity is human capital. Hence it is important to understand the monetary incentives of inventors. We estimate the effect of patented inventions on individual earnings by linking data on U.S. patents and their inventors to Finnish employer-employee data. Returns are heterogeneous: Inventors get a temporary reward of 3% of annual earnings for a patent grant and for highly-cited patents a longer-lasting premium of 30% in earnings three years later. Similar medium-term premia accrue to inventors who initially hold the patent rights, although they forego earnings at the time of the grant.

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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 7744.

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Date of creation: Mar 2010
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Handle: RePEc:cpr:ceprdp:7744

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Keywords: citations; effort; incentives; intellectual property; inventors; patents; performance pay; return; wages;

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References

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Cited by:
  1. Toivanen, Otto & Väänänen, Lotta, 2011. "Education and Invention," CEPR Discussion Papers 8537, C.E.P.R. Discussion Papers.
  2. Claire Bonnard, 2011. "Les incitations à l'innovation dans le secteur privé," Post-Print halshs-00599700, HAL.

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