Public R&D Investments and Private-sector Patenting: Evidence from NIH Funding Rules

We quantify the impact of scientific grant funding at the National Institutes of Health (NIH) on patenting by pharmaceutical and biotechnology firms. Our article makes two contributions. First, we use newly constructed bibliometric data to develop a method for flexibly linking specific grant expendi...

Full description

Saved in:
Bibliographic Details
Published in:The Review of economic studies 2019-01, Vol.86 (1 (306)), p.117-152
Main Authors: AZOULAY, PIERRE, ZIVIN, JOSHUA S. GRAFF, LI, DANIELLE, SAMPAT, BHAVEN N.
Format: Article
Language:English
Citations: Items that this one cites
Items that cite this one
Online Access:Get full text
Tags: Add Tag
No Tags, Be the first to tag this record!
Description
Summary:We quantify the impact of scientific grant funding at the National Institutes of Health (NIH) on patenting by pharmaceutical and biotechnology firms. Our article makes two contributions. First, we use newly constructed bibliometric data to develop a method for flexibly linking specific grant expenditures to private-sector innovations. Second, we take advantage of idiosyncratic rigidities in the rules governing NIH peer review to generate exogenous variation in funding across research areas. Our results show that NIH funding spurs the development of private-sector patents: a $10 million boost in NIH funding leads to a net increase of 2.7 patents. Though valuing patents is difficult, we report a range of estimates for the private value of these patents using different approaches.
ISSN:0034-6527
1467-937X
DOI:10.1093/restud/rdy034