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Climbing Atop the Shoulders of Giants: The Impact of Institutions on Cumulative Research

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  • Jeffrey L. Furman
  • Scott Stern
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    Abstract

    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.

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    Bibliographic Info

    Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 12523.

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    Date of creation: Sep 2006
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    Handle: RePEc:nbr:nberwo:12523

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    Cited by:
    1. L. Rachel Ngai & Roberto M. Samaniego, 2006. "An R&D-based model of multi-sector growth," LSE Research Online Documents on Economics 3527, London School of Economics and Political Science, LSE Library.
    2. Fiona Murray & Philippe Aghion & Mathias Dewatripont & Julian Kolev & Scott Stern, 2009. "Of Mice and Academics: Examining the Effect of Openness on Innovation," NBER Working Papers 14819, National Bureau of Economic Research, Inc.
    3. Huang, Kenneth G. & Murray, Fiona E., 2010. "Entrepreneurial experiments in science policy: Analyzing the Human Genome Project," Research Policy, Elsevier, vol. 39(5), pages 567-582, June.
    4. Rachel L. Ngai, 2007. "An R&D-based Model of Multi-sector Growth," 2007 Meeting Papers 349, Society for Economic Dynamics.
    5. Mukherjee, Arijit & Stern, Scott, 2009. "Disclosure or secrecy? The dynamics of Open Science," International Journal of Industrial Organization, Elsevier, vol. 27(3), pages 449-462, May.

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