Knowledge that Transforms

We present the results of a field experiment conducted at Harvard Medical School to understand the extent to which search costs affect matching among scientific collaborators. We generated exogenous variation in search costs for pairs of potential collaborators by randomly assigning individuals to 90-minute structured information-sharing sessions as part of a grant funding opportunity. We estimate that the treatment increases the probability of grant co-application of a given pair of researchers by 75%. The findings suggest that matching between scientists is subject to considerable frictions, even in the case of geographically-proximate scientists working in the same institutional context.

Job search is a key choice variable in theories of labor markets but is difficult to measure directly. We develop a job search activity index based on Google search data, the Google Job Search Index (GJSI). We validate the GJSI with both survey- and web-based measures of job search. Unlike those measures, the GJSI is high frequency, geographically precise, and available in real time. We demonstrate the GJSI’s utility by using it to study the effects of unemployment insurance policy changes between 2008 and 2014. We find no evidence of an economically meaningful effect of these changes on aggregate search.

Using data on Indian firms, I provide evidence on how electricity prices affect a firm’s industry choice and productivity growth. I construct an instrument for electricity price as the interaction between coal price and the share of thermal generation in a state’s total electricity generation capacity. I find that in response to an exogenous increase in electricity price, firms switch to less electricity-intensive production processes within narrowly defined industries, reduce their machine intensity, and have lower output and productivity growth rates. Thus, electricity constraints may limit a country’s growth by leading firms to operate in industries with fewer productivity-enhancing opportunities.

Many prior treatments of agglomeration explicitly or implicitly assume that all industries agglomerate for the same reasons. This paper uses U.K. establishment-level coagglomeration data to document substantial heterogeneity across industries in the microfoundations of agglomeration economies. It finds robust evidence of organizational and adaptive agglomeration forces as discussed by Chinitz (1961), Vernon (1960), and Jacobs (1969). These forces interact with the traditional Marshallian (1890) factors of input sharing, labor pooling, and knowledge spillovers, establishing a previously unrecognized complementarity between the approaches of Marshall and Jacobs, as well as others, to the analysis of agglomeration.

We explore how examiner behavior is altered by the time allocated for reviewing patent applications. Insufficient examination time may hamper examiner search and rejection efforts, leaving examiners more inclined to grant invalid applications. To test this prediction, we use application-level data to trace the behavior of individual examiners over the course of a series of promotions that carry with them reductions in examination time allocations. We find evidence demonstrating that such promotions are associated with reductions in examination scrutiny and increases in granting tendencies, as well as evidence that those additional patents being issued on the margin are of below-average quality.

We study gender spillovers in career advancement using eleven years of employer-employee matched data on white-collar workers at over 4, 000 private sector workplaces in Norway. Our data allow us to define seven hierarchical ranks that are consistent across plants and over time and track promotions even for individuals who change employers. We find positive spillovers across ranks (flowing from higher-ranking to lower-ranking women) but negative spillovers within ranks. The finding of narrower gender gaps in promotions for workers with more female bosses suggests that policies that increase female representation in corporate leadership can have spillover benefits to women in lower ranks.

Following the enactment of reforms in the mid-1990s, China's state-owned enterprises (SOEs) became more profitable. Using theoretical insights from Azmat, Manning, and Van Reenen (2012) and Karabarbounis and Neiman (2014) and econometric methods in De Loecker andWarzynski (2012), this paper finds that SOE restructuring was nevertheless limited. This is because SOE profitability gains in part reflect that they were under less political pressure to hire excess labor and also their cost of capital fell and their capital-labor elasticity of substitution generally exceeded unity. Moreover, SOE productivity lagged that of foreign and private firms.

Here, I study the effect of state enactment of the Uniform Trade Secrets Act (UTSA) on R&D among U.S. businesses between 1979 and 1998. Using a new index of the legal protection of trade secrets, I find that the UTSA was associated with higher R&D among larger companies and those in high-tech industries. For the average company in the respective industry, the UTSA was associated with 3.2% more R&D in pharmaceuticals and 3.1% more R&D in computers and office equipment, as contrasted with no significant change in soaps and cleaners, and industrial machinery and equipment.

We conduct a series of field experiments to evaluate the quality of advice provided by life insurance agents in India. Agents overwhelmingly recommend unsuitable, strictly dominated products that provide high commissions to the agent. Agents cater to the beliefs of uninformed consumers, even when those beliefs are wrong. We also find that agents appear to focus on maximizing the amount of premiums (and therefore their commissions) that customers pay, as opposed to focusing on how much insurance coverage customers need. A natural experiment requiring disclosure of commissions for a specific product results in agents recommending alternative products with high commissions but no disclosure requirement. A follow-up agent survey sheds light on the extent to which poor advice reflects both the commission incentives and agents’ limited product knowledge.

In macroeconomic models, the elasticity of substitution between clean and dirty energy inputs within the energy aggregate is a central parameter in assessing the necessary conditions for long-run green growth. Using new sectoral data in a panel of 26 countries, we formulate specifications of nested constant elasticity of substitution production functions that allow estimating this parameter for the first time. We present evidence that it significantly exceeds unity, a favorable condition for promoting green growth.