Political Sentiment and Innovation: Evidence from Patenters

Joseph Engelberg, Runjing Lu, William Mullins and Richard Townsend

The Review of Financial Studies, 2025, vol. 38, issue 9, 22718-2758

Abstract: We document political sentiment effects on U.S. inventors. Democratic inventors are more likely to patent (relative to Republicans) after the 2008 election of Obama but less likely after the 2016 election of Trump. These effects are at least twice as strong among politically active Democrats and are present even within firms and within firm x technology. We also show that partisans tend to cluster in technologies (e.g., Democrats in Biotechnology and Republicans in Weapons), so that sentiment effects aggregate to more patents in the technologies dominated by the winning party.

Date: 2025
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