Does More Money Lead to More Innovation? Evidence From the Life Sciences
Marc J. Lerchenmueller
Large sums are often invested into scientific innovation – the creation of new knowledge through scientific research. In this paper, we argue that increasing investments may lead scientists to pursuing average (but more certain) as opposed to higher risk projects, with negative consequences for scientific innovation. Exploiting an exogenous multi-billion dollar shift in the budget of the world’s largest financier of scientific research, the U.S. National Institutes of Health (NIH), we find that the influx of more money led to a significant decrease in scientists’ innovation productivity (about 15% fewer papers published), its significance (about 15% less citations generated), and novelty (about 10% reduction in unprecedented content). These negative effects become more pronounced when we, in addition to the macro level (federal budget), also account for differences in funding at the micro level (project budget). The decrease in scientific innovation is primarily driven by top scientists changing their research strategy with greater funding availability; the data reveal an about 1.5x to 3x larger reduction in scientific innovation for scientists in the top quintile versus scientists in lower quintiles of the capability distribution. We conclude with implications for public policy, corporate strategy, and the allocation of resources in support of scientific innovation.
- Included in the NBER Advancing the Science of Science Funding Workshop
- Nominated for the DRUID Best Paper Award
Status Beliefs and the Effect of Female Mentorship on the Next Generation
Marc J. Lerchenmueller, Karin Hoisl, Leo Schmallenbach
Research councils and funding bodies urge inclusive and effective mentorship, particularly calling for more female mentors who presumably bestow distinct benefits on mentees. Potential benefits notwithstanding, we argue that prevailing dynamics in science cause an overlooked drawback. The status of mentors often serves to evaluate newcomers. Status characteristics theory indicates that women may experience status deficits that impair evaluations of their work relative to men’s. We extend that reasoning and posit that being mentored by a woman relative to a man likely depresses the evaluation of mentees’ work. Identifying mentors of a highly competitive cohort of 4,212 life scientists with early career sponsorship from the National Institutes of Health (NIH) and employing matching techniques, we first document a citation discount of 11% on the average paper published by a female- relative to a male-mentored student. We next exploit newly constructed information on forward citations to uncover underlying mechanisms. Female-mentored work is especially cited less by publications outside of the focal work’s field and only if the focal work is published in journals of lower impact. We argue that these mechanistic insights foreshadow a mounting citation discount for female-mentored students, as science becomes increasingly specialized and competitive.