University Innovation and the Professor's Privilege

Hans Hvide, Benjamin F. Jones

Research output: Contribution to journalArticlepeer-review

58 Citations (Scopus)


National policies take varied approaches to encouraging university-based innovation. This paper studies a natural experiment: the end of the "professor's privilege" in Norway, where university researchers previously enjoyed full rights to their innovations. Upon the reform, Norway moved toward the typical US model, where the university holds majority rights. Using comprehensive data on Norwegian workers, firms, and patents, we find a 50 percent decline in both entrepreneurship and patenting rates by university researchers after the reform. Quality measures for university start-ups and patents also decline. Applications to literature on university technology transfer, innovation incentives, and taxes and entrepreneurship are considered.
Original languageEnglish
Pages (from-to)1860-1898
Number of pages39
JournalAmerican Economic Review
Issue number7
Publication statusPublished - 1 Jul 2018

Bibliographical note

*Hvide: University of Bergen, Box 7802, 5007 Bergen, Norway, and CEPR (email:; Jones: Kellogg School of Management, Northwestern University, 2211 Campus Drive, Evanston, IL 60208, and NBER (email: This paper was accepted to the AER under the guidance of Marianne Bertrand, Coeditor. We thank seminar participants at Bergen, Carlos III, Duke, Haugesund, Harvard, MIT, Oslo, Stavanger, Trondheim (NTNU), Wharton, conference participants at ZEW, HEC, and NBER, Jin Li,
Michael Powell, Magnus Gulbrandsen, and our discussants Andy Toole, Serguey Braguinsky, and Fiona Murray for helpful comments. We are grateful to the Nordic Institute for Studies in Innovation, Research and Education, to Bjarne Kvam and the Norwegian Patent Bureau, and Stefano Breschi for supplying data. Tom Meling, Rainer Widmann, and Linyi Zhang provided excellent research assistance. All errors are our own. The authors declare that they have no relevant or material financial interests that relate to the research described in this paper.
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