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Grassroots Design Meets Grassroots Innovation: Rural Design Orientation and Firm Performance
March 2024
Working Paper Number:
CES-24-17
The study of grassroots design'applying structured, creative processes to the usability or aesthetics of a product without input from professional design consultancies'remains under investigated. If design comprises a mediation between people and technology whereby technologies are made more accessible or more likely to delight, then the process by which new grassroots inventions are transformed into innovations valued in markets cannot be fully understood. This paper uses U.S. data on the design orientation of respondents in the 2014 Rural Establishment Innovation Survey linked to longitudinal data on the same firms to examine the association between design, innovation, and employment and payroll growth. Findings from the research will inform questions to be investigated in the recently collected 2022 Annual Business Survey (ABS) that for the first time contains a Design module.
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Patents, Innovation, and Market Entry
September 2023
Working Paper Number:
CES-23-45
Do patents facilitate market entry and job creation? Using a 2014 Supreme Court decision that limited patent eligibility and natural language processing methods to identify invalid patents, I find that large treated firms reduce job creation and create fewer new establishments in response, with no effect on new firm entry. Moreover, companies shift toward innovation aimed at improving existing products consistent with the view that patents incentivize creative destruction.
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Research and/or Development? Financial Frictions and Innovation Investment
August 2023
Working Paper Number:
CES-23-39
U.S. firms have reduced their investment in scientific research ('R') compared to product development ('D'), raising questions about the returns to each type of investment, and about the reasons for this shift. We use Census data that disaggregates 'R' from 'D' to study how US firms adjust their innovation investments in response to an external increase in funding cost. Companies with greater demand for refinancing during the 2008 financial crisis, made larger cuts to R&D investment. This reduction in R&D is achieved almost entirely by reducing investment in research. Development remains essentially unchanged. If other firms patenting similar technologies must refinance, however, then Development investment declines. We interpret the latter result as evidence of technological competition: firms are reluctant to cut Development expenditures when that could place them at a disadvantage compared to potential rivals.
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Registered Report: Exploratory Analysis of Ownership Diversity and Innovation in the Annual Business Survey
March 2023
Working Paper Number:
CES-23-11
A lack of transparency in specification testing is a major contributor to the replicability crisis that has eroded the credibility of findings for informing policy. How diversity is associated with outcomes of interest is particularly susceptible to the production of nonreplicable findings given the very large number of alternative measures applied to several policy relevant attributes such as race, ethnicity, gender, or foreign-born status. The very large number of alternative measures substantially increases the probability of false discovery where nominally significant parameter estimates'selected through numerous though unreported specification tests'may not be representative of true associations in the population. The purpose of this registered report is to: 1) select a single measure of ownership diversity that satisfies explicit, requisite axioms; 2) split the Annual Business Survey (ABS) into an exploratory sample (35%) used in this analysis and a confirmatory sample (65%) that will be accessed only after the publication of this report; 3) regress self-reported new-to-market innovation on the diversity measure along with industry and firm-size controls; 4) pass through those variables meeting precision and magnitude criteria for hypothesis testing using the confirmatory sample; and 5) document the full set of hypotheses to be tested in the final analysis along with a discussion of the false discovery and family-wise error rate corrections to be applied. The discussion concludes with the added value of implementing split sample designs within the Federal Statistical Research Data Center system where access to data is strictly controlled.
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An Examination of the Informational Value of Self-Reported Innovation Questions
October 2022
Working Paper Number:
CES-22-46
Self-reported innovation measures provide an alternative means for examining the economic performance of firms or regions. While European researchers have been exploiting the data from the Community Innovation Survey for over two decades, uptake of US innovation data has been much slower. This paper uses a restricted innovation survey designed to differentiate incremental innovators from more far-ranging innovators and compares it to responses in the Annual Survey of Entrepreneurs (ASE) and the Business R&D and Innovation Survey (BRDIS) to examine the informational value of these positive innovation measures. The analysis begins by examining the association between the incremental innovation measure in the Rural Establishment Innovation Survey (REIS) and a measure of the inter-industry buying and selling complexity. A parallel analysis using BRDIS and ASE reveals such an association may vary among surveys, providing additional insight on the informational value of various innovation profiles available in self-reported innovation surveys.
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Measuring the Characteristics and Employment Dynamics of U.S. Inventors
September 2022
Working Paper Number:
CES-22-43
Innovation is a key driver of long run economic growth. Studying innovation requires a clear view of the characteristics and behavior of the individuals that create new ideas. A general lack of rich, large-scale data has constrained such analyses. We address this by introducing a new dataset linking patent inventors to survey, census, and administrative microdata at the U.S. Census Bureau. We use this data to provide a first look at the demographic characteristics, employer characteristics, earnings, and employment dynamics of inventors. These linkages, which will be available to researchers with approved access, dramatically increases the scope of what can be learned about inventors and innovative activity.
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R&D or R vs. D?
Firm Innovation Strategy and Equity Ownership
April 2020
Working Paper Number:
CES-20-14
We analyze a unique dataset that separately reports research and development expenditures
for a large panel of public and private firms. Definitions of 'research' and 'development' in this dataset, respectively, correspond to definitions of knowledge 'exploration' and 'exploitation' in the innovation theory literature. We can thus test theories of how equity ownership status relates to innovation strategy. We find that public firms have greater research intensity than private firms, inconsistent with theories asserting private ownership is more conducive to exploration. We also find public firms invest more intensely in innovation of all sorts. These results suggest relaxed financing constraints enjoyed by public firms, as well as their diversified shareholder bases, make them more conducive to investing in all types of innovation. Reconciling several seemingly conflicting results in prior research, we find private-equity-owned firms, though not less innovative overall than other private firms, skew their innovation strategies toward development and away from research.
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Why the Economics Profession Must Actively Participate in the Privacy Protection Debate
March 2019
Working Paper Number:
CES-19-09
When Google or the U.S. Census Bureau publish detailed statistics on browsing habits or neighborhood characteristics, some privacy is lost for everybody while supplying public information. To date, economists have not focused on the privacy loss inherent in data publication. In their stead, these issues have been advanced almost exclusively by computer scientists who are primarily interested in technical problems associated with protecting privacy. Economists should join the discussion, first, to determine where to balance privacy protection against data quality; a social choice problem. Furthermore, economists must ensure new privacy models preserve the validity of public data for economic research.
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Disclosure Avoidance Techniques Used for the 1970 through 2010 Decennial Censuses of Population and Housing
November 2018
Working Paper Number:
CES-18-47
The U.S. Census Bureau conducts the decennial censuses under Title 13 of the U. S. Code with the Section 9 mandate to not 'use the information furnished under the provisions of this title for any purpose other than the statistical purposes for which it is supplied; or make any publication whereby the data furnished by any particular establishment or individual under this title can be identified; or permit anyone other than the sworn officers and employees of the Department or bureau or agency thereof to examine the individual reports (13 U.S.C. ' 9 (2007)).' The Census Bureau applies disclosure avoidance techniques to its publicly released statistical products in order to protect the confidentiality of its respondents and their data.
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The Need to Account for Complex Sampling Features when Analyzing Establishment Survey Data: An Illustration using the 2013 Business Research and Development and Innovation Survey (BRDIS)
January 2017
Working Paper Number:
CES-17-62
The importance of correctly accounting for complex sampling features when generating finite population inferences based on complex sample survey data sets has now been clearly established in a variety of fields, including those in both statistical and non statistical domains. Unfortunately, recent studies of analytic error have suggested that many secondary analysts of survey data do not ultimately account for these sampling features when analyzing their data, for a variety of possible reasons (e.g., poor documentation, or a data producer may not provide the information in a publicuse data set). The research in this area has focused exclusively on analyses of household survey data, and individual respondents. No research to date has considered how analysts are approaching the data collected in establishment surveys, and whether published articles advancing science based on analyses of establishment behaviors and outcomes are correctly accounting for complex sampling features. This article presents alternative analyses of real data from the 2013 Business Research and Development and Innovation Survey (BRDIS), and shows that a failure to account for the complex design features of the sample underlying these data can lead to substantial differences in inferences about the target population of establishments for the BRDIS.
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