Science and the Market for Technology
Journal Article (Journal Article)
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.
Full Text
Duke Authors
Cited Authors
- Arora, A; Belenzon, S; Suh, J
Published Date
- October 1, 2022
Published In
Volume / Issue
- 68 / 10
Start / End Page
- 7176 - 7201
Electronic International Standard Serial Number (EISSN)
- 1526-5501
International Standard Serial Number (ISSN)
- 0025-1909
Digital Object Identifier (DOI)
- 10.1287/mnsc.2021.4268
Citation Source
- Scopus