Incentives and Invention in Universities

Saul Lach and Mark Schankerman

CEP Discussion Papers from Centre for Economic Performance, LSE

Abstract: Using data on U.S. universities, we show that universities that give higher royalty shares to faculty scientists generate greater license income, controlling for university size, academic quality, research funding and other factors. We use pre-sample data on university patenting to control for the potential endogeneity of royalty shares. We find that scientists respond both to cash royalties and to royalties used to support their research labs, suggesting both pecuniary and intrinsic (research) motivations. The incentive effects appear to be larger in private universities than in public ones, and we provide survey evidence indicating this may be related to differences in the use of performance pay, government constraints, and local development objectives of technology license offices. Royalty incentives work both by raising faculty effort and sorting scientists across universities. The effect of incentives works primarily by increasing the quality (value) rather than the quantity of inventions.

Keywords: royalty incentives; invention; technology licensing (search for similar items in EconPapers)
JEL-codes: L2 L3 O31 O34 (search for similar items in EconPapers)
Date: 2006-06
New Economics Papers: this item is included in nep-edu, nep-ino, nep-lab, nep-pbe and nep-sog
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://cep.lse.ac.uk/pubs/download/dp0729.pdf (application/pdf)

Related works:
Journal Article: Incentives and invention in universities (2008)
Working Paper: Incentives and invention in universities (2008)
Working Paper: Incentives and invention in universities (2007)
Working Paper: Incentives and invention in universities (2007)
Working Paper: Incentives and Invention in Universities (2004)
Working Paper: Incentives and invention in universities (2004)
Journal Article: Incentives and invention in universities (2003)
Working Paper: Incentives and Invention in Universities (2003)
Working Paper: Incentives and Invention in Universities (2003)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cep:cepdps:dp0729

Access Statistics for this paper

More papers in CEP Discussion Papers from Centre for Economic Performance, LSE
Bibliographic data for series maintained by ().