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Why are researchers paid bonuses? On technology spillovers and market rivalry

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  • d’Andria, Diego

Abstract

A temporary change in pay to employed inventors around the time of patent application has been documented. A theoretical model is here developed to provide an explanation to said findings based on the idea that inventors may be able to use the knowledge previously generated while working in a firm, in a rival company. The model features firms who hire workers in R&D functions to make product innovations. The innovation process consists of distinct phases each with different access to information about the innovation value for firms. Firms compete to attract workers, and workers can transfer part of the generated new knowledge to a new employer. Results suggest that the capital intensity of R&D investments, and the type and size of knowledge spillovers, may affect the probability to observe bonus pay at the time of a patent application.

Suggested Citation

  • d’Andria, Diego, 2016. "Why are researchers paid bonuses? On technology spillovers and market rivalry," Research Policy, Elsevier, vol. 45(10), pages 2105-2112.
    • Handle: RePEc:eee:respol:v:45:y:2016:i:10:p:2105-2112
    DOI: 10.1016/j.respol.2016.08.006
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    More about this item

    Keywords

    Innovation; Policy; Employed inventors; Tax incentives for R&D; Subsidies for R&D; Bonus pay; Labor mobility;
    All these keywords.

    JEL classification:

    • H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies
    • J6 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers
    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory

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