Intellectual Capital and the Birth of U.S. Biotechnology Enterprises

68 Pages Posted: 15 Sep 2000 Last revised: 25 Nov 2014

See all articles by Lynne G. Zucker

Lynne G. Zucker

University of California, Los Angeles (UCLA); National Bureau of Economic Research (NBER)

Michael R. Darby

University of California, Los Angeles (UCLA) - Global Economics and Management (GEM) Area; National Bureau of Economic Research (NBER)

Marilynn B. Brewer

Ohio State University (OSU) - Department of Psychology

Date Written: February 1994

Abstract

We examine the relationship between the intellectual capital of scientists making frontier discoveries, the presence of great university bioscience programs, the presence of venture capital firms, other economic variables, and the founding of U.S. biotechnology enterprises during 1976-1989. Using a linked cross-section/time- series panel data set, we find that the timing and location of the birth of biotech enterprises is determined primarily by intellectual capital measures, particularly the local number of highly productive 'star' scientists actively publishing genetic sequence discoveries. Great universities are likely to grow and recruit star scientists, but their effect is separable from the universities. When the intellectual capital measures are included in our poisson regressions, the number of venture capital firms in an area reduces the probability of foundings. At least early in the process, star scientists appear to be the scarce, immobile factors of production. Our focus on intellectual capital is related to knowledge spillovers, but in this case 'natural excludability' permits capture of supranormal returns by scientists. Given this reward structure technology transfer was vigorous without any special intermediating structures. We believe biotechnology may be prototypical of the birth patterns in other innovative industries.

Suggested Citation

Zucker, Lynne G. and Darby, Michael R. and Brewer, Marilynn B., Intellectual Capital and the Birth of U.S. Biotechnology Enterprises (February 1994). NBER Working Paper No. w4653. Available at SSRN: https://ssrn.com/abstract=226949

Lynne G. Zucker (Contact Author)

University of California, Los Angeles (UCLA) ( email )

405 Hilgard Avenue
Box 951361 Departments of Sociology and Policy Studies 2201 Hershey mc 155107
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National Bureau of Economic Research (NBER)

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Michael R. Darby

University of California, Los Angeles (UCLA) - Global Economics and Management (GEM) Area ( email )

110 Westwood Plaza
Box 951481
Los Angeles, CA 90095-1481
United States
310-825-4180 (Phone)
310-454-2748 (Fax)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Marilynn B. Brewer

Ohio State University (OSU) - Department of Psychology

1885 Neil Avenue
Columbus, OH 43210
United States

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