Review of the SBIR and STTR Programs at the Department of Energy (2020) / Chapter Skim
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Appendix C: Technical Appendix to Chapter 5
Appendix C: Technical Appendix to Chapter 5
Pages 165-174
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From page 165... ...
measured patenting in technologies that DOE was pushing forward through its SBIR/STTR topic announcements, showing that including potential spillovers from firms building on SBIR/STTR awardees' work leads to a substantial reduction in cost of a patent from government-funded research. Myers and Lanahan matched the language used in DOE topic announcements with patent classes.
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From page 166... ...
This allowed them to connect SBIR/STTR awards and patents in the same technology class and ultimately arrive at estimates of the amount of funds needed to stimulate the creation of additional patents. Importantly, the method used to connect grants to patents allowed Myers and Lanahan to look beyond the grant recipients, allowing us to wholly account for spillovers that may occur between firms and inventors (e.g., Jaffe, Trajtenberg, and Henderson, 1993; Audretsch and Feldman, 1996; Bloom, Schankerman, and Van Reenen, 2013)
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From page 167... ...
To connect each topic with the relevant CPC classes, Myers and Lanahan used modern text analysis tools to estimate the textual similarity between each topic description and all of the abstracts from patents granted in the preceding years. This generated a pairwise dataset of all topics announced in the FOAs and all CPC classes, with a similarity score for each pair.
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From page 168... ...
Their cost estimate when looking at the firm-only level of patenting was roughly $1 million, providing confidence in their overall research design. RESEARCH DESIGN Myers and Lanahan followed a traditional approach to estimating production functions based on patent data, and used a Poisson regression model (Griliches, 1998)
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From page 169... ...
These policies were used by Myers and Lanahan to create an instrumental variable. Thus, instead of comparing outcomes for two technology classes that received differing levels of federal DOE SBIR/STTR awards, they compared outcomes for two technology classes that received the same amount of federal investments, but for which one received additional investments from a state program, referring to those estimates as state match "windfalls." SUMMARY STATISTICS Since 2000, the DOE SBIR program has awarded roughly $2.45 billion to 2,064 firms.
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From page 170... ...
Anywhere from 14 to 50 percent of the full set of CPC classes that Myers and Lanahan explored received DOE investments at some point in time. Patenting rates were highly skewed, with standard deviations often an order of magnitude larger than means.
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From page 171... ...
The rows of the table report cost estimates where patents from concentric sets of firms are included in the analysis: 1. "Firm" counts only patents from SBIR/STTR grant recipients; 2.
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From page 172... ...
However, there is a trend that the cost estimates based on the instrumental variables approach tend to be lower for the strict specification but higher for the loose specification. This pattern could plausibly be explained by DOE staff directing more funds to firms and/or topics where it may be more difficult for the grant recipient to patent, but the potentials for spillovers into new technologies are larger.
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From page 173... ...
Table APP-C-5 presents these spillover ratios for three non-concentric regional bands and shows how spillovers propagate across geography, as well as TABLE APP-C-5 Spillover Ratios Patent Group Strict Match Medium Match Loose Match City, excluding firms -0.35 0.14 0.47 State, excluding cities 1.21 2.43 2.82 United States, excluding -0.57 -0.75 -0.77 states Net 0.51 1.82 2.53 NOTE: The firms or regions excluded refer to the regions where firms receiving SBIR/STTR awards were located. For example, if only a single firm in Durham, NC, received an SBIR/STTR award, then "City excluding firms" would include outputs for all other firms in Durham; "State, excluding cities" would include all cities in North Carolina except Durham, and "United States, excluding states" would include all states except North Carolina.
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From page 174... ...
The first two rows indicate that at least within the cities and states where firms receive SBIR/STTR grants to pursue particular technologies, there is almost always a net positive effect: other firms and inventors in that region increase their efforts on the same technologies. The only case demonstrating otherwise is when Myers and Lanahan used the strict specification in the case of the city-band.
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