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Incentives and invention in universities

Lach, Saul and Schankerman, Mark (2008) Incentives and invention in universities. EDS Discussion Papers, EDS DP016. EDS Innovation Research Programme, London School of Economics and Political Science, London, UK.

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Identification Number: EDS DP016

Abstract

Using data on U.S. universities, we show that universities that give higher royalty shares to faculty scientists generate greater license income, controlling for university size, academic quality, researchfunding and other factors. We use pre-sample data on university patenting to control for the potential endogeneity of royalty shares. We find that scientists respond both to cash royalties and to royalties used to support their research labs, suggesting both pecuniary and intrinsic (research) motivations. The incentive effects appear to be larger in private universities than in public ones, and we provide survey evidence indicating this may be related to differences in the use of performance pay, government constraints, and local development objectives of technology license offices. Royalty incentives work both by raising faculty effort and sorting scientists across universities. The effect of incentives works primarily by increasing the quality (value) rather than the quantity of inventions.

Item Type: Monograph (Discussion Paper)
Official URL: http://rlab.lse.ac.uk/_new/publications/series.asp...
Additional Information: © 2008 the authors
Subjects: L Education > LB Theory and practice of education > LB2300 Higher Education
K Law > K Law (General)
Sets: Collections > Economists Online
Research centres and groups > Centre for Economic Performance (CEP)
Departments > Economics
Date Deposited: 12 Oct 2009 15:17
Last Modified: 01 Oct 2010 09:27
URI: http://eprints.lse.ac.uk/id/eprint/25475

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