Essays on Corporate Science and Firms’ Interactions with Academia

Abstract

Corporate science plays a critical role in the modern research landscape, with firms making substantial investments in internal research and development and engaging extensively with academic institutions. Understanding the dynamics that drive corporate participation in scientific research is crucial for fostering innovation and technological progress. This dissertation explores the complex factors that shape firms' incentives to invest in science and the outcomes resulting from their engagement with the broader academic community.The first study examines how firms' ability to capture value from their scientific investments influences their incentives to conduct additional research. By exploiting an exogenous reduction in patent protection, I find that firms respond to weaker intellectual property rights by reducing subsequent research in affected areas, particularly in technologies with thinner markets for technology. This suggests that patents and commercialization capabilities act as strategic substitutes. The results imply that stronger patents encourage corporate research but also shift the locus of research from larger to smaller firms and startups.Shifting the focus outside the firm, the second study investigates why firms produce scientific research and share it publicly. Using data on corporate publications between 1990 and 2012, I show that external scientists build upon firms' research, producing findings that firms subsequently incorporate into their own innovations. To account for potential bias arising from the unobserved quality of the underlying science, I develop an instrumental variable based on the quasi-random assignment of manuscripts to journal issues. The results reveal that follow-on research by external scientists drives firms' subsequent scientific investments and patenting outcomes, with benefits being more pronounced for technological leaders, firms with complementary assets, and those in emerging fields. Moreover, follow-on research serves to validate the quality of firms' science, which is particularly valuable when there is greater uncertainty surrounding the research.The third study introduces DISCERN 2.0, a major update and extension of the DISCERN dataset, which tracks the innovative output of U.S. public firms over the past four decades. The new version incorporates several key improvements, including extended coverage to 2021, the adoption of PatentsView and OpenAlex as primary data sources, and the inclusion of pre-grant patent applications and patent reassignment information. These enhancements enable researchers to investigate emerging trends and dynamic effects in corporate research and invention. An analysis of trends using DISCERN 2.0 reveals significant increases in corporate scientific publications related to quantum computing, AI, and robotics, highlighting the growing investments and prominent role of large firms in advancing these science-based technologies.The final chapter focuses on the funding of scientific training in the United States. Using a comprehensive dataset spanning 75 years of doctoral dissertations, I examine the sources of financial support for PhD students, the fields they pursue, and how funding patterns have evolved over time. The analysis reveals significant shifts in funding sources, particularly within the government and private sectors, and highlights the substantial impact of different funding organizations' scale and subject matter priorities on the share of U.S. PhD graduates in specific fields. Notably, government funding plays a crucial role in determining the annual number of scientists produced by the U.S. higher education system, with an average of 80 additional domestic PhD graduates for every 100 dissertations funded.Collectively, these studies contribute to our understanding of the key drivers of corporate scientific research and innovation. They underscore the importance of intellectual property protection, engagement with the broader scientific community, and the role of funding in shaping the scientific workforce. By providing new insights and valuable data resources, this dissertation lays the groundwork for further research on the dynamics of corporate science and its impact on technological progress. Ultimately, the findings presented here have important implications for firms seeking to optimize their R&D strategies and for policymakers aiming to foster an environment conducive to scientific advancement and economic growth.