Social push and the direction of innovation

Einiö, Elias, Feng, Josh and Jaravel, Xavier Laurent ORCID: 0000-0001-9228-2137 (2022) Social push and the direction of innovation. CEP Discussion Papers (CEPDP1861). London School of Economics and Political Science. Centre for Economic Performance, London, UK.

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Abstract

Innovators are intrinsically-motivated individuals who use ideas to create new goods and services. This raises the possibility that their social backgrounds may affect the direction of their innovative activity. Consistent with this "social push" channel, we document that innovators create products that are more likely to be purchased by customers similar to them along observable dimensions including gender, age, and socioeconomic status, both across and within detailed industries. Next, we provide causal evidence that social experience affects the direction of a person's innovative activity. Specifically, being exposed to peers from a lower-income group increases an entrepreneur's propensity to create necessity products, without affecting her rates of entrepreneurship and entrepreneurial income. We incorporate this channel into a general equilibrium model to assess its implications for cost-of-living inequality and long-run growth when there is unequal access to the innovation system.

Item Type:	Monograph (Discussion Paper)
Official URL:	https://cep.lse.ac.uk/_new/publications/discussion...
Additional Information:	© 2022 The Author(s)
Divisions:	Economics
Subjects:	H Social Sciences > HC Economic History and Conditions
JEL classification:	O - Economic Development, Technological Change, and Growth > O3 - Technological Change; Research and Development > O31 - Innovation and Invention: Processes and Incentives
Date Deposited:	19 Jan 2023 11:00
Last Modified:	11 Dec 2024 19:43
URI:	http://eprints.lse.ac.uk/id/eprint/117951

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