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Academic freedom, private-sector focus, and the process of innovation

Aghion, P.; Dewatripont, M.; Stein, J.C.; (2005) Academic freedom, private-sector focus, and the process of innovation. (NBER Working Papers 11542). National Bureau of Economic Research: Cambridge, US. Green open access

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We develop a model that clarifies the respective advantages and disadvantages of academic and private-sector research. Our model assumes full protection of intellectual property rights at all stages of the development process, and hence does not rely on lack of appropriability or spillovers to generate a rationale for academic research. Instead, we focus on control-rights considerations, and argue that the fundamental tradeoff between academia and the private sector is one of creative control versus focus. By serving as a precommitment mechanism that allows scientists to freely pursue their own interests, academia can be indispensable for early-stage research. At the same time, the private sector’s ability to direct scientists towards higher-payoff activities makes it more attractive for later-stage research.

Type: Working / discussion paper
Title: Academic freedom, private-sector focus, and the process of innovation
Open access status: An open access version is available from UCL Discovery
Publisher version: http://www.nber.org/papers/w11542
Language: English
Additional information: Please see http://eprints.ucl.ac.uk/17736/ a version published in The RAND Journal of Economics
UCL classification: UCL > Provost and Vice Provost Offices > UCL SLASH > Faculty of S&HS > Dept of Economics
URI: https://discovery.ucl.ac.uk/id/eprint/17776
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