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Science and the Market for Technology

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  • Ashish Arora
  • Sharon Belenzon
  • Jungkyu Suh

Abstract

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

Suggested Citation

  • Ashish Arora & Sharon Belenzon & Jungkyu Suh, 2021. "Science and the Market for Technology," NBER Working Papers 28534, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:28534
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    Cited by:

    1. Kim, Jinhwan & Valentine, Kristen, 2023. "Public firm disclosures and the market for innovation," Journal of Accounting and Economics, Elsevier, vol. 76(1).

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    More about this item

    JEL classification:

    • L24 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Contracting Out; Joint Ventures
    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • O34 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Intellectual Property and Intellectual Capital
    • O36 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Open Innovation

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