Incentives and Invention in Universities

Saul Lach and Mark Schankerman

No 9727, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We show that economic incentives affect the number and commercial value of inventions generated in universities. Using panel data for 102 U.S. universities during the period 1991-1999, we find that universities which give higher royalty shares to academic scientists generate more inventions and higher license income, controlling for other factors including university size, quality, research funding and technology licensing inputs. The incentive effects are much larger in private universities than in public ones. For private institutions there is a Laffer curve effect: raising the inventor's royalty share increases the license income retained by the university. The incentive effect appears to work both through the level of effort and sorting of academic scientists.

JEL-codes: O31 O34 (search for similar items in EconPapers)
Date: 2003-05
New Economics Papers: this item is included in nep-ino
Note: PR
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Published as Lach, Saul, and Mark Schankerman. "Incentives and Invention in Universities." RAND Journal of Economics 39(2): 403-433, Summer 2008
Published as Saul Lach & Mark Schankerman, 2003. "Incentives and invention in universities," Proceedings, Federal Reserve Bank of San Francisco, issue Nov.

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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 (2006)
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)
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