Young, Restless and Creative: Openness to Disruption and Creative Innovations

58 Pages Posted: 5 Feb 2014

See all articles by Daron Acemoglu

Daron Acemoglu

Massachusetts Institute of Technology (MIT) - Department of Economics; Centre for Economic Policy Research (CEPR); National Bureau of Economic Research (NBER)

Ufuk Akcigit

University of Chicago - Department of Economics; National Bureau of Economic Research (NBER); Center for Economic and Policy Research (CEPR)

Murat Alp Celik

University of Toronto - Department of Economics

Multiple version iconThere are 4 versions of this paper

Date Written: February 1, 2014

Abstract

This paper argues that openness to new, unconventional and disruptive ideas has a first-order impact on creative innovations - innovations that break new ground in terms of knowledge creation. After presenting a motivating model focusing on the choice between incremental and radical innovation, and on how managers of different ages and human capital are sorted across different types of firms, we provide cross-country, firm-level and patent-level evidence consistent with this pattern. Our measures of creative innovations proxy for innovation quality (average number of citations per patent) and creativity (fraction of superstar innovators, the likelihood of a very high number of citations, and generality of patents). Our main proxy for openness to disruption is manager age. This variable is based on the idea that only companies or societies open to such disruption will allow the young to rise up within the hierarchy. Using this proxy at the country, firm or patent level, we present robust evidence that openness to disruption is associated with more creative innovations.

Keywords: corporate culture, creative destruction, creativity, economic growth, entrepreneurship, individualism, innovation, openness to disruption

JEL Classification: O40, O43, O33, P10, P16, Z1

Suggested Citation

Acemoglu, Daron and Akcigit, Ufuk and Celik, Murat Alp, Young, Restless and Creative: Openness to Disruption and Creative Innovations (February 1, 2014). PIER Working Paper No. 14-004, Available at SSRN: https://ssrn.com/abstract=2390176 or http://dx.doi.org/10.2139/ssrn.2390176

Daron Acemoglu

Massachusetts Institute of Technology (MIT) - Department of Economics ( email )

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Centre for Economic Policy Research (CEPR)

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National Bureau of Economic Research (NBER)

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Ufuk Akcigit (Contact Author)

University of Chicago - Department of Economics ( email )

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National Bureau of Economic Research (NBER) ( email )

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Center for Economic and Policy Research (CEPR) ( email )

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Murat Alp Celik

University of Toronto - Department of Economics ( email )

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Toronto, ON M5S 3G7
Canada

HOME PAGE: http://muratcelik.faculty.economics.utoronto.ca/

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