First-mover Advantage and the Private Value of Public Science

Technical progress increasingly relies on the use of scientific knowledge. But if much of this knowledge is in the public domain, can it be a source of private value? We find that average private returns to using public science are small, especially in crowded technical fields, consistent with the view that the expected profit from an input that others can easily access is low. However, private value is higher when a firm is the first to use science, partly because it can secure broader patents relative to later users. Finally, corporate participation in scientific research is a strong predictor of first use, especially of relevant science. This is consistent with the view that participation in science raises familiarity with relevant scientific advances.