IDEAS home Printed from https://ideas.repec.org/p/cpr/ceprdp/16592.html
   My bibliography  Save this paper

The Rise of Scientific Research in Corporate America

Author

Listed:
  • Arora, Ashish
  • Belenzon, Sharon
  • Kosenko, Konstantin
  • Suh, Jungkyu
  • Yafeh, Yishay

Abstract

It is widely believed that university and corporate research are complementary: Companies invest in research in part to develop the capacity to absorb the knowledge emerging from universities. However, as we show in this paper, corporate research in the United States emerged when American universities were behind the world frontier in scientific research. Why, then, did for-profit businesses choose to invest in creating new knowledge, much of which could spill over to rivals, and whose conduct presented many managerial challenges? We argue that corporate research in America arose in the 1920s to compensate for weak university research, not to complement it. Using newly assembled firm-level data from the 1920s and 1930s, we find that companies invested in research because inventions increasingly relied on science, but American universities were unable to meet their needs. Large firms, close to the technological frontier, and operating in concentrated industries were likely to invest in research, especially in scientific disciplines where American universities lagged behind the scientific frontier. Corporate science seems to have paid off, resulting in novel patents and high market valuations for firms engaged in research.

Suggested Citation

  • Arora, Ashish & Belenzon, Sharon & Kosenko, Konstantin & Suh, Jungkyu & Yafeh, Yishay, 2022. "The Rise of Scientific Research in Corporate America," CEPR Discussion Papers 16592, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:16592
    as

    Download full text from publisher

    File URL: https://cepr.org/publications/DP16592
    Download Restriction: CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at subscribers@cepr.org
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Sinuany-Stern, Zilla, 2023. "Foundations of operations research: From linear programming to data envelopment analysis," European Journal of Operational Research, Elsevier, vol. 306(3), pages 1069-1080.
    2. Filippo Mezzanotti & Timothy Simcoe, 2023. "Research and/or Development? Financial Frictions and Innovation Investment," Working Papers 23-39, Center for Economic Studies, U.S. Census Bureau.
    3. Matte Hartog & Andres Gomez-Lievano & Ricardo Hausmann & Frank Neffke, 2024. "Inventing modern invention: the professionalization of technological progress in the US," Papers in Evolutionary Economic Geography (PEEG) 2408, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Apr 2024.

    More about this item

    Keywords

    Innovation; Corporate science; Institutional voids;
    All these keywords.

    JEL classification:

    • L2 - Industrial Organization - - Firm Objectives, Organization, and Behavior
    • N12 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - U.S.; Canada: 1913-
    • 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
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cpr:ceprdp:16592. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: https://www.cepr.org .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.