Are Inventors or Firms the Engines of Innovation?
Forthcoming, Management Science
48 Pages Posted: 7 Dec 2017 Last revised: 12 Jun 2020
Date Written: December 3, 2017
In this study, we empirically assess the contributions of inventors and firms for innovation using a 37-year panel of U.S. patenting activity. We estimate that inventors’ human capital is 5-10 times more important than firm capabilities for explaining the variance in inventor output. We then examine matching between inventors and firms and find highly talented inventors are attracted to firms that (i) have weak firm-specific invention capabilities, and (ii) employ other talented inventors. A theoretical model that incorporates worker preferences for inventive output rationalizes our empirical findings of negative assortative matching between inventors and firms, and positive assortative matching among inventors.
Keywords: Human Capital, Capabilities, Innovation, Matching, Competitive Advantage
JEL Classification: O30, O31, O32, J24
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