On the Returns to Invention within Firms: Evidence from Finland

Philippe Aghion (1, 2, 3, 4) , Ufuk Akcigit (5) , Ari Hyytinen (6) , Otto Toivanen (7, 8)

1 PSE - Paris School of Economics
2 PJSE - Paris Jourdan Sciences Economiques
3 LSE - London School of Economics and Political Science
4 Collège de France - Chaire Economie des institutions, de l'innovation et de la croissance
5 University of Chicago
6 JYU - University of Jyväskylä
7 Aalto University
8 KU Leuven - Catholic University of Leuven = Katholieke Universiteit Leuven

In this paper we merge individual income data, firm-level data, patenting data, and IQ data in Finland over the period 1988–2012 to analyze the returns to invention for inventors and their coworkers or stakeholders within the same firm. We find that: (i) inventors collect only 8 percent of the total private return from invention; (ii) entrepreneurs get over 44 percent of the total gains; (iii) bluecollar workers get about 26 percent of the gains and the rest goes to white-collar workers. Moreover, entrepreneurs start with significant negative returns prior to the patent application, but their returns subsequently become highly positive.

Domaines: Economies et finances

Philippe Aghion, Ufuk Akcigit, Ari Hyytinen, Otto Toivanen. On the Returns to Invention within Firms: Evidence from Finland. American Economic Review Papers and Proceedings, 2018, 108, pp.208 - 12. ⟨10.1257/pandp.20181108⟩. ⟨halshs-01883564⟩