Science and the Market for Technology

Ashish Arora (), Sharon Belenzon () and Jungkyu Suh ()
Additional contact information
Sharon Belenzon: Fuqua School of Business, Duke University, Durham, North Carolina 27708; National Bureau of Economic Research, Cambridge, Massachusetts 02138
Jungkyu Suh: Fuqua School of Business, Duke University, Durham, North Carolina 27708

Management Science, 2022, vol. 68, issue 10, 7176-7201

Abstract: Well-functioning markets for technology (MFT) allow inventors to sell their inventions to others that may derive more value from them. We argue that the growing use of science in inventions enhances MFT. Science-based inventions have higher gains from trade and lower transaction costs. This relationship is amplified in equilibrium because science-based inventions are also likely to feature smaller inventors with a greater propensity to trade. Using large-scale data, we show that patents citing science are more likely to be traded, especially for novel patents and for smaller inventors. We conclude that the growing use of science in invention is beneficial by encouraging the expansion of MFT and supporting a division of innovative labor.

Keywords: science; market for technology; innovation; science-based entrepreneurship (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (8)

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http://dx.doi.org/10.1287/mnsc.2021.4268 (application/pdf)

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Working Paper: Science and the Market for Technology (2021)
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