Innovation Job Market Papers 2025 (1/2)
Dozens of papers from new PhDs about Innovation
Announcements:
The Institute for Progress is hosting the third iteration of its free online PhD short-course: The Economics of Ideas, Science, and Innovation. If you’ve completed the equivalent of a first year economics PhD, apply by January 9. I’m giving the lecture on the returns to R&D!
I have a new blog! It’s a group blog by the team at The Abundance and Growth Fund (where I’m the program director). My plan is to return to writing more often in 2026, with the hope that I will finally have time now that the Abundance and Growth Fund has finished hiring. But reflecting changes in my job, I plan to write about more than just innovation this year. My tentative plan is to cross-post things I write about innovation here, but not the rest.
Speaking of writing that’s about more than innovation, check out my first post over at the Abundance and Growth Blog: 28 Thoughts About Abundance and Growth.
Also on the Abundance and Growth Blog, we are going to publish a series on job market papers related to abundance and growth in early 2026. Send your economics job market papers on housing, energy, infrastructure, clinical trials, state capacity, and high skilled immigration to abundanceandgrowth@coefficienctgiving.org! And subscribe if you want those posts in your inbox.
The Alfred P. Sloan Foundation is hiring for an Economics Program Associate.
Merry Christmas Eve to those who celebrate!
In this special annual edition of What’s New Under the Sun, we have a big bundle of the titles, abstracts, and links to innovation-related PhD job market papers from 2025. Some were sent my way following my request in the last newsletter, but to find the majority of these, I manually looked at the titles of ~1,300 job market papers. Even so, I’m sure I missed some great papers. If that’s you, email me and I’ll add you to the posts.
I’ve split this post into two to make it a bit easier to navigate. This is the first post.
Special thanks to Nisha Austin for helping me put these posts together!
Titles Index
Titles are presented in random order. There might be additional authors on these papers - we’ve listed the associated job market candidate only.
Specialization by design: the unequal geographic effects of modular product design by Vishan Gandhi Nigam
Technology M&A and Knowledge Diffusion by Zili Yang
Venture Capital Contracts and Heterogeneous Innovation by Yucheng Wong
Trade, Research Productivity, and Growth: A Dynamic General Equilibrium Approach by Yaming Chang
The Impact of Intellectual Property Rights on Innovation and Follow-on Development: Evidence From the Bayh-Dole Act by Tallon Howie
Innovation through Recombination by Songyuan Teng
Technological Change and the Market for Books, 1450-1550 by Qiyi Charlotte Zhao
Factories of Ideas? Big Business and the Golden Age of American Innovation by Pier Paolo Creanza
Solving Problems of Unknown Difficulty by Nicholas Wu
Quantifying Knowledge Spillovers Using Firm and Product Dynamics by Mohamad Adhami
Beyond the Lab: The Effect of PhD Programs on Innovation by Manfredi Aliberti
The Prestige-Testability Tradeoff in Science by Kurtis A. Hingl
Ownership Structure and Economic Growth by Koki Okumura
Startup Acquisitions and Innovation in the Biopharmaceutical Industry by Hayley Wabiszewski
Extreme Heat and Directed Innovation by Enjie (Jack) Ma
How Does Industry Shape Academic Science? Evidence from “Million Dollar Plants” by Hongyuan Xia
How Network Hiring by Entrepreneurs Shapes Firm Formation and Performance by John F. Bonney
Science, Startups, and the Problem of Value Capture: Thin Acquisition Markets, Weak Outside Options by Roger Masclans
Titles, Abstracts, and Links to Papers
1. Specialization by design: the unequal geographic effects of modular product design
Vishan Gandhi Nigam
I show that modular design – a revolution in how firms organize innovation – concentrates industrial production in large countries. Modular products follow common rules called design platforms, and thus can share inputs while remaining customized for local needs. Combining six new datasets on global automotive design and trade, within-firm event studies of platform rollouts and mergers, and a model with scale economies in shared input production, I find that design platforms reshape global trade in two phases. First, platform-sharing across destinations increases trade and enables within-firm specialization; for instance, poor countries export engines for affordable car segments. Second, platform-sharing across product segments creates winner-take-all supply chains in which a firm’s largest markets produce most inputs. In both phases, design platforms expand the scope of home-market effects, concentrating input production in large markets for shared platforms rather than individual products. By quantifying the model, I show modular design has unequal effects across countries and shapes the returns to industrial policy: in particular, universal platforms (expected by 2030 for EVs) double American and Chinese input production shares, reduce production by over 80% in most smaller countries, and imply that U.S. input tariffs on China (but not on third countries) have larger reshoring effects.
2. Technology M&A and Knowledge Diffusion
Zili Yang
This paper examines how technology mergers and acquisitions (tech M&As) affect the diffusion of target firms’ pre-acquisition innovations in the United States. Using US patent and M&A data from 1980 to 2021. This study employs a difference-in-differences approach comparing successful acquisitions with exogenously failed deals; it finds that tech M&As significantly increase external diffusion of targets’ technologies, as measured by patent citations, with effects concentrated within the acquirer’s industry. Tech M&As do not diminish young firms’ ability to cite and build upon acquired targets’ patents, contradicting concerns about innovation foreclosure. To interpret these findings and quantify aggregate implications, I develop an idea flow model where firms improve productivity by choosing innovation intensity based on potential targets’ technologies, with acquisitions affecting both the innovation step size in learning from targets and the cost of accessing them. The model, calibrated to the empirical estimates and US innovation data, reveals that doubling the 2015 tech M&A rate would increase annual productivity growth by five hundredths of a percentage point, with the diffusion channel contributing 40% of this increase. Surprisingly, relaxing restrictions on post-acquisition knowledge appropriation yields negligible growth effects: reduced spillovers from acquired targets are offset by increased innovation using independent technologies as acquisition values rise. These findings underscore the importance of incorporating diffusion effects and general equilibrium forces into antitrust policy for tech M&As.
3. Venture Capital Contracts and Heterogeneous Innovation
Yucheng Wong
This paper studies how venture capital (VC) reshapes startups’ innovation choices by insuring against default risk, and explores the macroeconomic implications of this mechanism. I develop a dynamic general equilibrium model in which startups choose between conservative (low-risk, low-return) and aggressive (high-risk, high-return) innovation while endogenously selecting their financing mode. Debt financing features state uncontingent repayments and exposes startups to default. By contrast, VC financing is a state-contingent dynamic contract with one-sided limited commitment from startup. Evidence from a new dataset linking VC deals, balance sheets, and patents supports the model predictions: VC-backed startups begin with higher leverage, show greater post-financing profit dispersion, and generate more high-quality patents. Calibrated to financing and innovation data, eliminating VC reduces the aggregate output by 5 percent and the mass of large firms by 11 percent, despite only 0.2 percent of startups ever receiving VC.
4. Trade, Research Productivity, and Growth: A Dynamic General Equilibrium Approach
Yaming Chang
Exporting exposes firms to foreign buyers and rivals, providing knowledge that makes innovation more effective. How much does this mechanism raise innovation efficiency, and how does it affect long-run growth? I develop and estimate an endogenous growth model in which foreign-market exposure enhances firms’ innovation efficiency, the exporting–innovation efficiency (EIE) channel, while broader product scope dilutes managerial attention and lowers marginal returns. The model predicts that innovation efficiency rises with export intensity but declines with product scope and firm size. Using firm-level data on Chinese manufacturers, I document patterns consistent with these predictions and estimate that export exposure increases the effective knowledge available for innovation by about 9% at the product level. Although firm-level gains are modest, the aggregate effect is economically meaningful: eliminating the EIE channel reduces the long-run growth rate by about 1.3 percentage points (around 10 percent of observed growth). With the EIE channel active, trade liberalization disproportionately benefits firms with broad export portfolios, boosting their innovation efficiency and growth and accelerating the exit of low-productivity firms. The result is a more right-skewed productivity distribution and greater market concentration.
5. The Impact of Intellectual Property Rights on Innovation and Follow-on Development: Evidence From the Bayh-Dole Act
Tallon Howie
Intellectual property rights (IPR) are thought to promote innovation, but inhibit follow-on development by restricting the dissemination of new ideas across firms. Exploiting a change in patent policy for U.S. government-sponsored inventions (1980 Bayh-Dole Act), I find that strengthening IPR increases innovation, follow-on development, and cross-firm diffusion of ideas. I use these estimates to calibrate a general equilibrium growth model featuring a two-stage R&D process and endogenous knowledge diffusion. IPR raises R&D intensity by strengthening appropriation and increases knowledge diffusion by enabling innovators to shield licensees from competition. A quantitative analysis suggests that IPR increase aggregate welfare, although a compulsory licensing policy sometimes better balances innovation incentives with broader diffusion. These results highlight trade-offs in patent policy and the government’s ability to leverage R&D funding to promote dissemination and development of ideas.
6. Innovation through Recombination
Songyuan Teng
New ideas often recombine existing ones; this insight is emphasized in recent economic growth theories, but evidence on its empirical relevance is scarce. This paper takes combinatorial growth to measurement by studying the pharmaceutical industry, where the distinction between novelty (discovering new building blocks) and recombination (assembling building blocks into products) is transparent. I uncover the substantial and rising importance of recombination, the firm life-cycle from knowledge accumulation to recombination, and the value premia for novelty. Motivated by these facts, I develop a theory of firm dynamics that distinguishes firm knowledge stocks from product portfolios. Innovation operates along two distinct yet intertwined margins: novel innovation expands knowledge, while combinatorial innovation deploys that knowledge to create new products. The calibrated model captures salient empirical patterns, implies sustained growth through rising recombination, and highlights sharp policy trade-offs: subsidizing novelty boosts short-run growth, while subsidizing recombination raises long-run growth with heterogeneous effects across firms.
7. Technological Change and the Market for Books, 1450-1550
Qiyi Charlotte Zhao
Conventional views consider printing a cost-reducing technology. This paper examines unusually granular product- and firm-level data and proposes a new framework for understanding this technology’s economic impact. I show that relative to its predecessor, manuscript production (i.e., hand-copying), printing introduced new incentives and constraints that altered both the product’s nature and the market’s structure. First, printing’s business model encouraged the production of shorter and simpler books targeting a poorer and less educated audience. Second, its cost structure led to product differentiation and prolific trade rather than direct competition and localized production, making available a greater variety of products offering diverse information and perspectives. Rather than making medieval books cheaper, printing’s core contribution to economic development might lie in fostering popular demand for literacy through a variety of simpler products that lacked an economic basis under manuscript production.
8. Factories of Ideas? Big Business and the Golden Age of American Innovation
Pier Paolo Creanza
This paper studies the Great Merger Wave (GMW) of 1895–1904—the largest consolidation event in U.S. history—to identify how Big Business affected American innovation. Between 1880 and 1940, the U.S. experienced a golden age of breakthrough discoveries in chemistry, electronics, and telecommunications that established its technological leadership. Using newly constructed data linking firms, patents, and inventors, I show that consolidation substantially increased innovation. Among firms already innovating before the GMW, consolidation led to an increase of 6 patents and 0.6 breakthroughs per year—roughly four-fold and six-fold increases, respectively. Firms with no prior patents were more likely to begin innovating. The establishment of corporate R&D laboratories served as a key mechanism driving these gains. Building a matched inventor–firm panel, I show that lab-owning firms enjoyed a productivity premium not due to inventor sorting, robust within size and technology classes. To assess whether firm-level effects translated into broader technological progress, I examine total patenting within technological domains. Overall, the GMW increased breakthroughs by 13% between 1905 and 1940, with the largest gains in science-based fields (30% increase).
9. Solving Problems of Unknown Difficulty
Nicholas Wu
This paper studies how uncertainty about problem difficulty shapes problem-solving strategies. I develop a dynamic model where an agent solves a problem by brainstorming approaches of unknown quality and allocating a fixed effort budget among them. Success arrives from spending effort pursuing good approaches, at a rate determined by the unknown problem difficulty. The agent balances costly exploration (expanding the set of approaches) with exploitation (pursuing existing approaches). Failures could signal either a bad idea or a hard problem, and this ambiguity generates novel dynamics: optimal search alternates between trying new approaches and revisiting previously abandoned ones. I then examine a principal–agent environment, where moral hazard arises on the intensive margin: how the agent explores. Dynamic commitment leads contracts to frontload incentives, which can be counteracted by the presence of learning. The framework reflects scientific discovery, product development, and other creative work, providing insights into innovation and organizational design.
10. Quantifying Knowledge Spillovers Using Firm and Product Dynamics
Mohamad Adhami
Knowledge spillovers are a common rationale for government support of innovation, yet evidence on their magnitude remains limited. In this paper, I quantify the wedge that spillovers create between social and private rates of return to innovation. To do so, I build a novel semi-endogenous growth model featuring multiproduct firms and endogenous exit of products. In equilibrium, product exit exhibits negative selection and is preceded by a gradual decline in market share, consistent with facts I document using barcode-level data. Through the lens of the model, these dynamics of product exit are informative about spillovers: by accelerating growth in the quality of new products, stronger spillovers increase the rate at which incumbent products lose market share and exit. Since comprehensive datasets track firms rather than products, I leverage the model to infer the wedge created by spillovers from data on firm exit by age. Across U.S. private nonfarm employer businesses, I infer spillovers that drive a 16 percentage point wedge between the social and private rates of return to innovation.
11. Beyond the Lab: The Effect of PhD Programs on Innovation
Manfredi Aliberti
This paper estimates the causal impact of PhD programs, designed to train individuals to advance the frontier of knowledge, on innovation. I exploit the centrally planned and staggered rollout of doctoral programs across Italian universities and construct a new dataset linking program openings to local patenting activity. The introduction of PhD programs increased patenting by 21% between 1986 and 2001. Using admission exam scores in a regression discontinuity design, I show that about 22% of this effect is direct and driven by the increased patenting of program graduates, while most of the remainder reflects spillovers to local firms. These findings indicate that PhD programs stimulate technological progress both by increasing graduates’ inventive output and by strengthening the surrounding innovation ecosystem. A cost–benefit analysis based on patent valuations suggests that the social return to these programs exceeds total costs by at least 46%. Finally, I estimate that PhD programs raised Italy’s GDP by 0.6% to 4.7% over the same period.
12. The Prestige-Testability Tradeoff in Science
Kurtis A. Hingl
Where ideas are difficult to test directly, does the scientific community rely more on prestige markers to evaluate them? In this paper, I adopt the cultural evolutionary concept of “prestige,” translate it into economics through a simple reputation model, and propose this hypothesis of a prestige-testability tradeoff: scientific fields that are less testable rely more on prestige markers, manifesting a higher concentration. I present empirical evidence of this prestige-testability tradeoff in two ways. Firstly, in bibliographic data of the corpus of scientific research from 1900 to 2015, I find that the concentration of author prestige markers—citations and h-indexes—is consistently negatively associated with a straightforward measure of testability—the incidence of the word “test” in the titles—across nineteen fields and across subfields within each field. Secondly, I use the occurrence of a paradigm shift toward more testability in the mid-1990s as an event study: the “credibility revolution” in microeconomics. Though not truly exogenous, this paradigm shift reflects a testability shock that is suitably uncovered by a staggered event-study design. I find that the credibility revolution administers a leveling effect on its adopters, based on various citation metrics and share of papers in top-five journals: authors below-median pre-adoption on these prestige markers see clear and persistent increases in their prestige markers, while their above-median peers do not, which I interpret as evidence for the prestige-testability tradeoff. I argue that this prestige-testability tradeoff framework is an important lens for viewing the organization of science, an important factor in a number of science policy decisions, and likely a feature of other social learning environments.
13. Ownership Structure and Economic Growth
Koki Okumura
This paper examines how the rise of common ownership affects economic growth and social welfare. We develop an endogenous growth model that incorporates three inter-firm networks: ownership, product-market rivalry, and innovation. In the model, a large number of oligopolistic firms make forward-looking R&D investment decisions, internalizing externalities on commonly owned firms arising from product-market competition and technological spillovers. We estimate the model using data on over 700 publicly traded U.S. firms with patents. Our counterfactual analysis shows that the observed increase in common ownership between 1999 and 2017 reduced the annual growth rate by 0.12 percentage points and social welfare by 0.6%. This finding suggests that, under common ownership, the internalization of the negative externality from innovation that reduces competitors’ market shares dominates the internalization of the positive externality associated with technological spillovers.
14. Startup Acquisitions and Innovation in the Biopharmaceutical Industry
Hayley Wabiszewski
Regulators have expressed growing concern that acquisitions of biotechnology startups by big pharmaceutical firms may stifle innovation by removing potential competitors. This paper quantifies the dynamic equilibrium effects of such acquisitions on innovation, entry, and market structure in the biopharmaceutical industry. I construct a novel project-level dataset linking comprehensive pharmaceutical R&D data with acquisition and sales information from 2000 to 2018, which enables tracking of projects across phases of development. Descriptive evidence shows that acquired projects have lower transition rates than non-acquired startups in early phases but higher rates in later stages, with the pattern differing significantly between oncology and non-oncology markets. To separate selection on project quality into acquisition from the causal effects of economies and diseconomies of scale, I estimate a dynamic oligopoly model with endogenous drug development, startup acquisitions, and entry decisions by startups and big firms. Firms select on unobserved project quality at each phase of R&D and into acquisition, allowing higher quality projects to reach later phases of R&D and for both positive and negative selection into acquisition. The model recovers both the average treatment effect of acquisition and the average treatment effect on the treated. Counterfactual simulations of an acquisition ban show that project approvals would rise by 8–9% in small and medium non-oncology markets but fall by 5–9% in large nononcology and oncology markets. The results highlight that regulators should adopt market-size- and therapeutic-category-specific policies when evaluating or limiting startup acquisitions.
15. Extreme Heat and Directed Innovation
Enjie (Jack) Ma
Can directed innovation mitigate climate damages? I provide systematic evidence outside agriculture that firms adapt to extreme heat through directed technological change. Linking firm-level production data to patent records for nine EU countries (2000–2020), I establish three results. First, extreme heat acts as a labor-biased productivity shock: labor-intensive firms experience larger losses and lose market share to capital-intensive rivals. Second, firms shift toward capital and redirect innovation toward labor-saving technologies, especially in heat-exposed, labor-intensive industries. Third, this endogenous innovation response is economically significant—labor-saving patents filed in response to heat offset 26 percent of aggregate productivity losses over the period. Overall, the results show that innovation is not merely a driver of growth but also an active margin of climate adaptation.
16. How Does Industry Shape Academic Science? Evidence from “Million Dollar Plants”
Hongyuan Xia
Firms rely on academic science and actively participate in the production of scientific knowledge. However, the impact of industry on academic science remains unclear. This study utilizes the site selection decisions of “Million Dollar Plants” (MDPs) to estimate the causal effects of industry on academic science. I compare the responses of scientists in counties that successfully attracted MDPs (”winners”) with those in counties that narrowly missed out on these MDPs (”runners-up”). The arrival of an MDP in a “winner” county shifts research of local scientists toward topics relevant to the firm, but not at the expense of either the quantity or quality of their work. This shift in research direction is not primarily driven by direct funding or collaboration. Instead, it occurs immediately after the announcement but before the physical establishment of these plants and is more likely to affect scientists without prior experience in commercialization. These findings indicate that scientists are refocusing their attention toward more applied and firm-relevant research.
17. How Network Hiring by Entrepreneurs Shapes Firm Formation and Performance
John F. Bonney
Many entrepreneurs rely on their personal networks to hire their first employees. How important is this practice for the formation and performance of new firms? I study this question using Norwegian administrative data that allow me to link entrepreneurs to their firms, employees, and former coworkers. To identify causal effects, I develop an instrumental variables framework that jointly models entry and network hiring, allowing for endogenous selection on both margins. The results reveal three main findings. First, each ex-coworker hired in the firm’s first year raises annual revenues in the following four years by over $250K and crowds in other hires, without reducing average productivity. Second, without the ability to hire ex-coworkers, a quarter of network-hiring entrepreneurs would not have started their firms at all. Third, counterfactual simulations show that, compared to entry subsidies, networks enable entry of entrepreneurs who create substantially more jobs, survive longer, and achieve higher value added per worker. Interpreted through the lens of a simple model, the data suggest that private information about coworker quality is a key driver of network hiring. Taken together, the results show that access to human capital through networks is an important determinant of entrepreneurial entry and success.
18. Science, Startups, and the Problem of Value Capture: Thin Acquisition Markets, Weak Outside Options
Roger Masclans
Startups commercializing science-based innovations are crucial for tackling pressing challenges, yet, in critical sectors such as energy, industrials, and materials, entrepreneurial activity remains limited. This paper investigates whether weak value capture at exit constrains these ventures. I estimate value creation and capture in startup acquisitions by combining acquisition prices with acquirer stock returns, adjusting for market noise to isolate the economic signal attributable to the acquisition. Science-based startups capture 46 cents per dollar of acquisition-induced surplus, compared to 61 cents for non-science startups—a 24% penalty. Conversely, they create 20% more joint surplus, consistent with continued entry despite the capture penalty. To explain these patterns, I examine a central mechanism: the structure of a startup’s exit conditions. I argue that science-based startups face thinner, more concentrated acquisition markets and limited ability to scale independently, features that weaken the startup’s bargaining power. Indeed, I find that science-based startups face up to 40% fewer potential acquirers, who are 53% larger on average, and that their value capture is more sensitive to acquirer concentration. Concentrated markets have a dual effect: large incumbents enable greater surplus creation, but also shift bargaining power away from startups, allowing acquirers to ex tract most of the gains from innovation. Finally, I find that the capture penalty diminishes when startups can scale commercialization independently. The results suggest that constrained exit environments limit returns to science-based entrepreneurship, highlighting the importance of competitive acquisition markets, markets for technologies, and alternative commercialization pathways in incentivizing upstream innovation.
Innovation Job Market Papers Continues in Part 2!