Monday, June 1st: Lauren Lanahan

Research Subsidy Spillovers, Two Ways (pdf)

by Lauren Lanahan (Oregon) and Kyle Myers (Harvard)


We study how the products of research spill over technological and geographic space in the context of the U.S. Small Business Innovation Research pro- gram. We infer input-output links using text analyses and identify the marginal costs of producing patents using noncompetitive grant matching policies. Due to technological spillovers, the cost of spurring patents related to specific technologies are much larger than the costs of spurring any kind of patent. Due to geographic spillovers, roughly 80% of the net patents produced by the program are ultimately due to inventors that do not directly receive grants. These large spillovers imply that the cost effectiveness of research subsidies can vary widely depending on their objectives. We also identify which regions of the U.S. are likely responsible for these spillovers which reveals a pattern that suggests the government must trade off its ability to influence either the rate or direction of invention.