Pier Paolo Creanza

Working papers

Factories of Ideas? Big Business and the Golden Age of American Innovation (JMP) - Draft available soon

This paper uses the Great Merger Wave (GMW) of 1895-1904 as a quasi-experiment to identify the causal effect of ``Big Business'' (large, market-dominant corporations) on American innovation between 1880 and 1940. Using newly constructed data, I show that firms that consolidated during the GMW significantly increased patenting and breakthrough innovations. Among firms that were already innovating before the GMW, consolidation led to an increase of 6 patents and 0.6 breakthroughs per year—a roughly four-fold and six-fold increase, respectively. Firms with no prior patents were more likely to begin innovating. The establishment of corporate R&D laboratories serves as the key mechanism linking increased firm size and market dominance to these innovation gains. Using a matched inventor-firm panel to separate inventor ability from firm productivity, I show that the laboratory premium cannot be explained by labs attracting better inventors. Instead, the evidence suggests that laboratories granted a genuine organizational advantage and drove firm-level innovation gains. To assess whether these firm-level effects translated into broader technological progress, I examine total patenting within entire technological domains. In technological domains where GMW firms had previously been active, breakthrough innovation accelerated for science-based fields but was delayed in non-science-based areas. Overall, I estimate that one in ten breakthroughs between 1905 and 1940 were attributable to the GMW.

'Returning brains':  tax incentives, migration, and scientific productivity - Under review, Updated drafted available soon

This paper investigates how tax incentives for high-skill immigrants affect productivity. I collect data covering 90 percent of Italian faculty between 2000 and 2020 and use it to evaluate a 2004 tax break targeting researchers. First, the program induced substantial migration and positive selection of beneficiaries. Second, higher-productivity hires significantly increase their academic group's average productivity, roughly split between their direct contribution and indirect responses of local faculty. Third, this indirect effect is largely explained by higher-productivity local researchers sorting into the treated group, rather than by productivity spillovers on incumbent researchers.

Work in progress

Industry-Academia Collaborations: Evidence from the GOALI Program
- with Kobi Mizrahi

The changing spatial concentration of innovative activity
- with Pietro Buri

Science Funding: Evidence from Institutional Grants

Publications

Institutions, trade and growth: the ancient Greek case of proxenia [Paper] [Data] - Journal of Economic History, Volume 84, Issue 1 (Lead Article)

Winner of the 2024 Arthur H. Cole prize for the outstanding contribution on JEH.

Recent scholarship contends that ancient Mediterranean economies grew intensively. An explanation is Smithian growth spurred by reductions in transaction costs and increased trade flows. This paper argues that an ancient Greek institution, proxenia, was among the innovations that allowed such growth in the period 500-0 BCE. Proxenia entailed a Greek city-state declaring a foreigner to be its ‘public friend’, a status that conferred both duties and privileges. Arguably, the functions performed by ‘public friends’ could facilitate economic transactions between communities. Accordingly, network and regression analyses establish a strong relation between proxenia grants and trade intensity.