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Academic Freedom, Private-Sector Focus, and the Process of Innovation

Author

Listed:
  • Philippe Aghion
  • Mathias Dewatripont
  • Jeremy C. Stein

Abstract

We develop a model that clarifies the respective advantages and disad- vantages of academic and private-sector research. Our model assumes full protection of intellectual property rights at all stages of the development process, and hence does not rely on lack of appropriability or spillovers to generate a rationale for academic research. Instead, we focus on control- rights considerations, and argue that the fundamental tradeoff between academia and the private sector is one of creative control versus focus. By serving as a precommitment mechanism that allows scientists to freely pursue their own interests, academia can be indispensable for early-stage research. At the same time, the private sector's ability to direct scientists towards higher-payo¤ activities makes it more attractive for later-stage re- search.

Suggested Citation

  • Philippe Aghion & Mathias Dewatripont & Jeremy C. Stein, 2005. "Academic Freedom, Private-Sector Focus, and the Process of Innovation," Harvard Institute of Economic Research Working Papers 2089, Harvard - Institute of Economic Research.
  • Handle: RePEc:fth:harver:2089
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    References listed on IDEAS

    as
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    More about this item

    JEL classification:

    • L33 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Comparison of Public and Private Enterprise and Nonprofit Institutions; Privatization; Contracting Out
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives

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