Job Market Talk: "The Distribution of Innovations across Firms," Shaoshuang Yang, University of Southern California

Speaker

Shaoshuang Yang, University of Southern California

Biography

Shaoshuang Yang is a PhD Candidate from the University of Southern California. Prior to attending USC, Shaoshuang received her BA in Finance from Peking University. Her primary research interest is macroeconomics, specifically in growth, innovation, firm dynamics, and labor.

Event Details

Paper: "The Distribution of Innovations Across Firms"

Abstract: This paper builds a macroeconomic framework with heterogeneous firms and heterogeneous inventors to quantitatively understand the allocation of innovations across firms and the implications of innovation tradability. The model characterizes the entire innovation process, including both firms hiring inventors to innovate in-house and trading innovations with each other. The model is calibrated to moments in the United States, for example, the probability of selling innovations, and the distribution of innovations across firms. The model implies that projects whose outcomes are more effort-sensitive are developed by smaller firms. In a counterfactual scenario where firms cannot sell innovations, inventors move to larger firms (the share of innovations in firms with more than 100,000 employees increases by more than 10 percentage points), and growth drops by 0.16 percentage points.