Intermediaries in the U.S. Market for Technology, 1870-1920

60 Pages Posted: 21 Jun 2002 Last revised: 2 Mar 2015

See all articles by Naomi R. Lamoreaux

Naomi R. Lamoreaux

Yale University; National Bureau of Economic Research (NBER)

Kenneth L. Sokoloff

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

Date Written: June 2002

Abstract

We argue that the emergence of a well-developed market for patented technologies over the late nineteenth and early twentieth centuries facilitated the emergence of a group of highly specialized and productive inventors by making it possible for them to transfer to others responsibility for developing and commercializing their inventions. The most basic of the institutional supports that made this market possible was, of course, the patent system, which created secure and tradable property rights in invention. But trade was also facilitated by the emergence of intermediaries who economized on the information costs associated with assessing the value of inventions and helped to match sellers and buyers of patent rights. Patent agents and lawyers were particularly well placed to provide these kinds of services, because they were linked to similar attorneys in other parts of the country and because, in the course of their regular business activities, they accumulated information about participants on both sides of the market for technology. Our quantitative analysis of assignment contracts demonstrates that patentees whose assignments were handled by these specialists produced more patents over their careers, assigned a greater fraction of their patents, and also were able to find buyers for their inventions much more quickly than other patentees. In other words, the development of institutions supporting market trade in patented technology seems to have made it possible for creative individuals to specialize more fully in inventive work -- that is, it seems to have set in motion the kind of Smithian processes that have generally been associated with higher rates of productivity growth.

Suggested Citation

Lamoreaux, Naomi R. and Sokoloff, Kenneth L., Intermediaries in the U.S. Market for Technology, 1870-1920 (June 2002). NBER Working Paper No. w9017. Available at SSRN: https://ssrn.com/abstract=316796

Naomi R. Lamoreaux (Contact Author)

Yale University ( email )

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HOME PAGE: http://www.econ.yale.edu/faculty1/lamoreaux.htm

National Bureau of Economic Research (NBER)

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Kenneth L. Sokoloff

University of California, Los Angeles (UCLA) - Department of Economics ( email )

Box 951477
Los Angeles, CA 90095-1477
United States
310-825-4249,310-825-1011 (Phone)
310-825-9528 (Fax)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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