Climbing atop the Shoulders of Giants: The Impact of Institutions on Cumulative Research

While cumulative knowledge production is central to growth, little empirical research investigates how institutions shape whether existing knowledge can be exploited to create new knowledge. This paper assesses the impact of a specific institution, a biological resource center, whose objective is to...

Full description

Bibliographic Details
Main Authors: Stern, Scott, Furman, Jeffrey L.
Other Authors: Sloan School of Management
Format: Article
Language:en_US
Published: American Economic Association 2013
Online Access:http://hdl.handle.net/1721.1/75830
https://orcid.org/0000-0003-2328-3229
Description
Summary:While cumulative knowledge production is central to growth, little empirical research investigates how institutions shape whether existing knowledge can be exploited to create new knowledge. This paper assesses the impact of a specific institution, a biological resource center, whose objective is to certify and disseminate knowledge. We disentangle the marginal impact of this institution on cumulative research from the impact of selection, in which the most important discoveries are endogenously linked to research-enhancing institutions. Exploiting exogenous shifts of biomaterials across institutional settings and employing a difference-in-differences approach, we find that effective institutions amplify the cumulative impact of individual scientific discoveries.