Innovation Networks and Business-Stealing

Abstract

We use the universe of US Patent and Trademark Office (USPTO) data on patents and inventors from 1976 to 2017 to look at how inventors potential concern for business-stealing affects coauthorship on patents. First, we find an inverted-U shape in the fraction of coauthors that an inventor has per year who are new as a function number of other inventors also working in an inventor’s field. Second, we find that after a breakthrough invention, an inventor brings in persistently fewer than usual new coauthors. Third, a higher potential concern for business stealing—as measured either by the number of others working or the average price markups by firms in the area—leads to a higher drop in the fraction of new co-authors per patent after a breakthrough. We show how these patterns can be explained via a simple model in which inventors trade off gains from collaboration against threats of business stealing.

Keywords: Innovation, Business Stealing, Collaboration, Knowledge Networks, Coauthorship

JEL Classification: D85, L14