TY - JOUR AU - Lamoreaux, Naomi R AU - Sokoloff, Kenneth L AU - Sutthiphisal, Dhanoos TI - The Reorganization of Inventive Activity in the United States during the Early Twentieth Century JF - National Bureau of Economic Research Working Paper Series VL - No. 15440 PY - 2009 Y2 - October 2009 DO - 10.3386/w15440 UR - http://www.nber.org/papers/w15440 L1 - http://www.nber.org/papers/w15440.pdf N1 - Author contact info: Naomi R. Lamoreaux Department of Economics Yale University 27 Hillhouse Ave., Rm. 39 Box 208269 New Haven, CT 06520-8269 Tel: 203-432-3625 Fax: 203-432-3635 E-Mail: naomi.lamoreaux@yale.edu Kenneth L. Sokoloff Department of Economics UCLA 405 Hilgard Avenue Los Angeles, CA 90095-1477 Tel: 310/825-4249 Fax: 310/825-9528 E-Mail: N/A user is deceased Dhanoos Sutthiphisal Department of Business Economics Assumption University Bangna Trad Road, Km 26 Bang Sao Tong, Samut Prakan 10540 Thailand Tel: +66 (0) 2723-5137 E-Mail: dhanoos.sutthiphisal@gmail.com M1 - published as Naomi R. Lamoreaux, Kenneth L. Sokoloff, Dhanoos Sutthiphisal. "The Reorganization of Inventive Activity in the United States during the Early Twentieth Century," in Dora L. Costa and Naomi R. Lamoreaux, editors, "Understanding Long-Run Economic Growth: Geography, Institutions, and the Knowledge Economy" University of Chicago Press (2011) M3 - presented at "Understanding Long-Run Economic Growth", November 7-8, 2008 AB - The standard view of U.S. technological history is that the locus of invention shifted during the early twentieth century to large firms whose in-house research laboratories were superior sites for advancing the complex technologies of the second industrial revolution. In recent years this view has been subject to increasing criticism. At the same time, new research on equity markets during the early twentieth century suggests that smaller, more entrepreneurial enterprises were finding it easier to gain financial backing for technological discovery. We use data on the assignment (sale or transfer) of patents to explore the extent to which, and how, inventive activity was reorganized during this period. We find that two alternative modes of technological discovery developed in parallel during the early twentieth century. The first, concentrated in the Middle Atlantic region, centered on large firms with in-house R&D labs and superior access to the region's rapidly growing equity markets. The other, located mainly in the East North Central region, consisted of smaller, more entrepreneurial enterprises that drew primarily on local sources of funds. Both modes seem to have made roughly equivalent contributions to technological change through the 1920s. The subsequent dominance of large firms seems to have been propelled by a differential access to capital during the Great Depression that was subsequently reinforced by the regulatory and military procurement policies of the federal government. ER -