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The effect of applied research institutes on invention: evidence from the Fraunhofer centres in Europe

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  • Llanos Paredes, Pedro

Abstract

This study examines the impact of the Fraunhofer Society, Europe’s largest network of applied research institutes, on patent applications. A difference-in-differences strategy was employed exploiting the establishment of five new Fraunhofer centres in the 2000s. The panel includes 65,963 European applicants (both firms and independent inventors) between 1980 and 2019. The results show that establishing a centre increases patent output by at least 13%, robust to using applicants of cities that established a centre by the end of the 2010s as an alternative control group. The effect is driven by an increase in applicants’ productivity and not by agglomeration dynamics.

Suggested Citation

  • Llanos Paredes, Pedro, 2023. "The effect of applied research institutes on invention: evidence from the Fraunhofer centres in Europe," LSE Research Online Documents on Economics 120473, London School of Economics and Political Science, LSE Library.
    • Handle: RePEc:ehl:lserod:120473
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    File URL: http://eprints.lse.ac.uk/120473/
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    References listed on IDEAS

    as
    1. Lingfei Wu & Dashun Wang & James A. Evans, 2019. "Large teams develop and small teams disrupt science and technology," Nature, Nature, vol. 566(7744), pages 378-382, February.
    2. Edward L. Glaeser, 2010. "Introduction to "Agglomeration Economics"," NBER Chapters, in: Agglomeration Economics, pages 1-14, National Bureau of Economic Research, Inc.
    3. Edward L. Glaeser, 2010. "Agglomeration Economics," NBER Books, National Bureau of Economic Research, Inc, number glae08-1.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Europe; innovation and invention; intellectual property and intellectual capital; research and development; research institutions;
    All these keywords.

    JEL classification:

    • J1 - Labor and Demographic Economics - - Demographic Economics
    • R14 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Land Use Patterns
    • J01 - Labor and Demographic Economics - - General - - - Labor Economics: General

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