with Andreas Lichter, Max Löffler, Ingo Isphording, Thu-Van Nguyen and Sebastian Siegloch
Filling the Gap: The Consequences of Collaborator Loss in Corporate R&D
R&R at Management Science Discussion PaperHere (SSRN)
with Fabian Gaessler, Karin Hoisl, Dietmar Harhoff and Matthias Dorner
(Older version entitled ‘Filling the Gap - Firm Strategies for Human Capital Loss’: AOM Best Paper)
Abstract We examine how collaborator loss affects knowledge workers in corporate R&D. We argue that such a loss affects the remaining collaborators not only by reducing their team-specific capital (as argued in the prior literature) but also by increasing their bargaining power over the employer, who is in need of filling the gap left by the lost collaborator to ensure the continuation of R&D projects. This shift in bargaining power may, in turn, lead to benefits, such as additional resources or more attractive working conditions. These benefits can partially compensate for the negative effect of reduced team-specific capital on productivity and influence the career trajectories of the remaining collaborators. We empirically investigate the consequences of collaborator loss by exploiting 845 unexpected deaths of active inventors. We find that inventor death has a moderate negative effect on the productivity of the remaining collaborators. This negative effect disappears when we focus on the remaining collaborators who work for the same employer as the deceased inventor. Moreover, this group is more likely to be promoted and less likely to leave their current employer.
Valuing Pharmaceutical Patent Thickets
with John McKeon and Timothy Simcoe
Abstract (Preliminary) Policymakers have expressed concerns about strategic use of the patent system by pharmaceutical companies. Motivated by those concerns, we study the valuation of patents throughout the drug development life cycle. We propose a simple model of patent value that highlights the resolution of scientific uncertainty as well as the impact of new patents on market exclusivity. Using data on patenting throughout the drug development process, we find that stock market event studies indicate that patents issued later in the drug-development process are more valuable, even though these "secondary" patents are generally viewed as weaker than the more highly cited patents covering a new molecule. In regressions that control for uncertainty, we find that additional exclusivity, continuation status, and new use classification remain important factors to explain patenting and patent value.
Competing for Talent: Large Firms’ Hiring and Startup Performance
with James Bessen
Abstract (Preliminary) In this paper, we aim to shed light on the relationship between labor market competition and startup growth, focusing on the impact of large firms on the hiring and performance of startups. While competition can be beneficial in rewarding critical skills, it can also have negative effects on startups, which are crucial for driving productivity growth. We analyze data from Crunchbase matched to ad postings and provide evidence of "crowding out" in labor markets. Specifically, we show that hiring by large firms increases the startup wage premium, which comes at a cost to the performance of startups in terms of scaling, funding, and exits. We also find that the negative effect is linked to occupation proximity, while business proximity to large incumbents exerts positive spillovers. Our findings are robust to a shift-share instrumental variable strategy. Our study underscores the importance of considering the complex interplay between local labor market conditions and startup growth and highlights the need for policies that promote entrepreneurship and address the challenges posed by the "talent war."