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

66 Pages Posted: 6 Aug 2015 Last revised: 11 Nov 2022

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 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 firms with different degrees of openness to disruption, we provide firm-level, patent level and cross-country 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 the age of the manager - 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 firm, patent and country level, we present robust evidence that openness to disruption is associated with more creative innovations, but we also show that once the effect of the sorting of young managers to firms that are more open to disruption is factored in, the (causal) impact of manager age on creative innovations is small.

Suggested Citation

Acemoglu, Daron and Akcigit, Ufuk and Celik, Murat Alp, Young, Restless and Creative: Openness to Disruption and Creative Innovations (February 2014). NBER Working Paper No. w19894, Available at SSRN: https://ssrn.com/abstract=2639957

Daron Acemoglu (Contact Author)

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Ufuk Akcigit

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Murat Alp Celik

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

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