CREAT: Census Research Exploration and Analysis Tool

Does Goliath Help David? Anchor Firms and Startup Clusters

May 2020

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  February 2020

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• Working Paper

  
  
  Import Competition and Firms' Internal Networks
  

  September 2021

  Authors: Vladimir Smirnyagin, Jay Hyun, Ziho Park

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• Working Paper

  
  
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  U.S. universities, which are important producers of new knowledge, have experienced a shift in research funding away from federal and towards private industry sources. This paper compares the effects of federal and private university research funding, using data from 22 universities that include individual-level payments for everyone employed on all grants for each university year and that are linked to patent and Census data, including IRS W-2 records. We instrument for an individual's source of funding with government-wide R&D expenditure shocks within a narrow field of study. We find that a higher share of federal funding causes fewer but more general patents, more high-tech entrepreneurship, a higher likelihood of remaining employed in academia, and a lower likelihood of joining an incumbent firm. Increasing the private share of funding has opposite effects for most outcomes. It appears that private funding leads to greater appropriation of intellectual property by incumbent firms.
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