Events

Moderated by Moritz Suttner

Max Planck Institute for Innovation and Competiton, room E 10

Max Planck Institute for Innovation and Competition, Munich, Room 313

Professional bibliometrics is characterized by using field-normalized indicators for research evaluation. Citation rates differ by field (independently of the papers’ quality) and these differences should be considered in cross-field comparisons (e.g. of universities). In the first part of the presentation, the standard field-normalization approaches are explained. Several examples are presented of how field-normalized scores can be used for research evaluation. In the second part of the presentation, some current research projects and recently developed tools in the area of bibliometrics are shown.

Full paper

Contact Person: Dr. Fabian Gaessler

Max Planck Institute for Innovation and Competition, Munich, Room 313

This paper studies how early stage entrepreneurs learn about the quality of their ventures. I assess the effect of negative feedback on abandonment using application and judging data from 87 new venture competitions, 34 of which privately informed founders of their relative rank. I use a difference-in-differences design and matching estimators to compare lower and higher ranked losers, across competitions in which they did and did not observe their standing. Receiving negative feedback increased venture abandonment by about 13 percent. The effect occurs quickly, doubles among women founders, and increases with signal precision. It decreases with venture maturity and riskiness.

Contact Person: Dr. Fabian Gaessler

Max Planck Institute for Innovation and Competition, Munich, Room 313

Max Planck Institute for Innovation and Competition, Munich, Room 313

This paper focuses on the relationship between therapeutic value and different measures of market rewards (the number of patents, price, market share, and total revenues) of a new treatment. Using an assessment of therapeutic value provided by the French Haute Authorité de Santé (HAS), I find a weak relationship between most measures of rewards and this assessment of therapeutic value, suggesting that the returns to developing a “me-too” product are not very different from developing treatments with greater therapeutic effects. One interpretation is that the HAS score is a poor assessment of therapeutic value, in which case the use of similar health technology assessments by governments and other payers should be re-examined. Alternatively, if the HAS score is informative, the results suggest countries are spending too much on less innovative products, and that a re-balancing of innovation incentives may be worth considering if therapeutic value is highly related to social welfare.

Contact Person: Zhaoxin Pu

Max Planck Institute for Innovation and Competition, Munich, Room 313

Abstract
Entrepreneurs learn from a variety of sources. One particularly important channel is learning from fellow entrepreneurs. In this study we examine the influence of close geographic proximity on new (to the entrepreneur) technology adoption decisions at one of the largest technology coworking hubs in the United States. To deal with endogenous geographic clustering, we rely on the random assignment of office space to the hub’s 266 startups. Using floorpans to measure geographic distance, we find that close proximity greatly influences the likelihood of adopting an upstream (production) technology also used by a peer firm. This effect, however, quickly decays with distance where startup firms that are more than 25 meters away are no longer influenced by each other. This proximity premium is largest for small firms and when startups are in different industries. Conversely, the distance discount disappears for startups in the same industry and for female-founder startups suggesting these startups rely on alternate mechanisms to overcome the negative effects of distance. We discuss the implications of the balance between concentration and diversity in promoting the diffusion of ideas within a fast-changing entrepreneurial ecosystem.

Contact Person: Fabian Gaessler

Max Planck Institute for Innovation and Competiton, room E 10

Max Planck Institute for Innovation and Competition, Munich, Room 313

Researchers’ scientific excellence determines much of the academic reward system including publication output, career promotion and research funding. In this article, we compare different measures of scientific excellence, adding to the discussion on measuring scientific quality and research performance. We construct several author-author text similarity indicators between a stratified sample of scientists and ‘frontier scientists’, which we identify through academic prizes and prestigious third-party funding (ERC grants). We address the question whether high (low) scientists’ similarity (or distance) to the frontier of knowledge provides a valid measure of scientific excellence in comparison to citation counts.

Contact Person: Dr. Fabian Gaessler

Max Planck Institute for Innovation and Competition, Munich, Room 313

Are the social norms of basic science and the formal rules of the patent system complementary, or conflicting regulations for innovation? In view of the advancing implementation of innovation as the third mission of public basic science, my study investigates scientists’ motivations to patent, as well as their perception of patent-related research impediments. It does so by means of semi-structured interviews among scientists in German public basic research institutes. The reported motives correspond to strategic motives found in industry, but relate to science-specific incentives. Furthermore, the results indicate that while social norms in science compensate potential research impediments created by existing patents, secrecy caused by the intention to patent can create friction with academic norms for cooperation and knowledge sharing. These results are interpreted to indicate that patent functions and effects are not defined by the patent system itself, but at the multiple levels of governance of the socioeconomic system which utilizes patents.

Contact Person: Dr. Fabian Gaessler

Max Planck Institute for Innovation and Competition, Munich, Room 313

Staged financing of start-ups can be achieved with different investor constellations. One is that companies obtain funding from different investors at different stages. Another is that a deep pocketed investor continues investing in the company across multiple stages, usually as part of a syndicate. The valuation of start-ups is influenced by investor constellations, in particular strategic interactions between outside investors and deep-pocketed insiders. Our theory models the investment choices and valuations of start-ups, deriving advantages and disadvantages of deep pocketed investors. The analysis explains the significance of pro-rata investments, and the role of pre-emptive rights.

Contact person: Felix Pöge