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Young, Restless and Creative: Openness to Disruption and Creative Innovations

Daron Acemoglu, Ufuk Akcigit () and Murat Celik

No 19894, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: This paper argues that openness to new, unconventional and disruptive ideas has a first-order impact on creative innovations—innovations that break new ground in terms of knowledge creation. After presenting a motivating model focusing on the choice between incremental and radical innovation, and on how managers of different ages and human capital are sorted across different firms with different degrees of openness to disruption, we provide firm-level, patent level and cross-country evidence consistent with this pattern. Our measures of creative innovations proxy for innovation quality (average number of citations per patent) and creativity (fraction of superstar innovators, the likelihood of a very high number of citations, and generality of patents). Our main proxy for openness to disruption is the age of the manager - based on the idea that only companies or societies open to such disruption will allow the young to rise up within the hierarchy. Using this proxy at the firm, patent and country level, we present robust evidence that openness to disruption is associated with more creative innovations, but we also show that once the effect of the sorting of young managers to firms that are more open to disruption is factored in, the (causal) impact of manager age on creative innovations is small.

JEL-codes: O33 O40 O43 P10 P16 Z1 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-ino and nep-sog
Date: 2014-02
Note: EFG PR
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Working Paper: Young, Restless and Creative: Openness to Disruption and Creative Innovations (2014) Downloads
Working Paper: Young, Restless and Creative: Openness to Disruption and Creative Innovations (2014) Downloads
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