Lunch Seminar in presence

Building BL26/B – Sala Consiglio (ground floor)
Department of Management, Economics and Industrial Engineering
Via R. Lambruschini, 4/B

David Heller
Max Planck Institute for Innovation and Competition, Germany

Abstract:

Reward structures shape the mobility patterns in the labor market. While employment laws govern the monetary reward of employed inventors, they deliberately give employers leeway in determining marginal compensation per invention. This study explores novel data that combines employer-employee data with patent records in Germany to shed light on inventor returns and mobility patterns in inventor labor markets. Covering the near-population of German employee inventors and their individual employment history, we show that firm and industry, rather than inventor and invention factors, explain more than half of the variation in the marginal income per patent. Between-firm variation in inventive rents is strongly associated with inventor mobility, suggesting that inventors exploit heterogeneity in expected compensation to increase their payouts. Firms that offer above-expected inventor returns, in turn, are able to attract more inventors, leading to subsequent increases in patent quality and quantity in the future. Consistent with theoretical arguments, these results are sensitive to employers’ technological complementarity, industry-level competition, and invention quality. These results resemble endogenous sorting in the market for inventive labor, such that the best inventors move to those employers with the best ability to extract the commercial value of their inventions.

David Heller is a Senior Research Fellow at Max Planck Institute for Innovation and Competition in Munich and a lecturer in Finance at Goethe Business School in Frankfurt. His research interests combine the fields of innovation economics and corporate finance. In particular, his projects cover topics in entrepreneurial finance, intellectual property rights (e.g., IP-backed loans), innovation and science policy. David holds a Ph.D. in Economics from Goethe University Frankfurt (Management and Microeconomics Department) for his dissertation “On the Economics of Innovation and Corporate Finance” (summa cum laude). Previously, he had research visits at Questrom School of Business, Boston University (2023), the Norwegian School of Economics (2022), NYU Stern School of Business (2019), and Deutsche Bundesbank (2017).”

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