Public R&D Investments and Private-Sector Patenting: Evidence from NIH Funding Rules

113 Pages Posted: 27 Jan 2015 Last revised: 7 Mar 2015

See all articles by Pierre Azoulay

Pierre Azoulay

Massachusetts Institute of Technology (MIT) - Sloan School of Management; National Bureau of Economic Research (NBER)

Joshua Graff Zivin

University of California, San Diego (UCSD) - Graduate School of International Relations and Pacific Studies (IRPS); National Bureau of Economic Research (NBER)

Danielle Li

Massachusetts Institute of Technology (MIT) - Sloan School of Management

Danielle Li

Harvard University - Business School (HBS)

Bhaven N. Sampat

Columbia University - Mailman School of Public Health

Date Written: January 2015

Abstract

We quantify the impact of scientific grant funding at the National Institutes of Health (NIH) on patenting by pharmaceutical and biotechnology firms. Our paper makes two contributions. First, we use newly constructed bibliometric data to develop a method for flexibly linking specific grant expenditures to private-sector innovations. Second, we take advantage of idiosyncratic rigidities in the rules governing NIH peer review to generate exogenous variation in funding across research areas. Our results show that NIH funding spurs the development of private-sector patents: a $10 million boost in NIH funding leads to a net increase of 2.3 patents. Though valuing patents is difficult, we report a range of estimates for the private value of these patents using different approaches.

Suggested Citation

Azoulay, Pierre and Graff Zivin, Joshua and Li, Danielle and Li, Danielle and Sampat, Bhaven N., Public R&D Investments and Private-Sector Patenting: Evidence from NIH Funding Rules (January 2015). NBER Working Paper No. w20889. Available at SSRN: https://ssrn.com/abstract=2555429

Pierre Azoulay (Contact Author)

Massachusetts Institute of Technology (MIT) - Sloan School of Management ( email )

100 Main Street
E62-416
Cambridge, MA 02142
United States

HOME PAGE: http://scripts.mit.edu/~pazoulay/

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Joshua Graff Zivin

University of California, San Diego (UCSD) - Graduate School of International Relations and Pacific Studies (IRPS) ( email )

9500 Gilman Drive
La Jolla, CA 92093-0519
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Danielle Li

Massachusetts Institute of Technology (MIT) - Sloan School of Management ( email )

100 Main Street
E62-416
Cambridge, MA 02142
United States

Danielle Li

Harvard University - Business School (HBS) ( email )

Soldiers Field Road
Morgan 270C
Boston, MA 02163
United States

Bhaven N. Sampat

Columbia University - Mailman School of Public Health ( email )

600 West 168th St. 6th Floor
New York, NY 10032
United States

Register to save articles to
your library

Register

Paper statistics

Downloads
37
Abstract Views
537
PlumX Metrics