Where Do Technology Shocks Come From? Public Funding and Private Ownership

Andrea Gazzani, Joseba Martinez, Filippo Natoli and Paolo Surico

No 21745, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: We construct postwar U.S. patent time series by funding source and ownership. In local projections with rich macroeconomic controls, disciplined by external instruments and information-set tests, unanticipated filings serve as source-specific technology-shock proxies. Government-funded but privately owned patents are two percent of filings, yet explain about one-fifth of medium-run fluctuations in TFP and GDP. Responses propagate through private R&D and investment, with model-implied social returns to public R&D about twice those to private R&D. Effects concentrate in science-based patents supported by NIH and NSF or assigned to universities, research institutes, and start-ups. Government-owned patents have weak average effects but a consequential upper tail.

Keywords: Local projections; Technology shocks; Patents; Shock propagation; public R and D; Productivity (search for similar items in EconPapers)
JEL-codes: C32 E32 O47 (search for similar items in EconPapers)
Date: 2026-07
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