Data and Code for: Radical and Incremental Innovation: The Roles of Firms, Managers, and Innovators

This is the data and code for "Radical and Incremental Innovation: The Roles of Firms, Managers, and Innovators".<br><br>Abstract: This paper investigates the determinants of radical (“creative”) innovations – innovations that break new ground in terms of knowledge creation. After presenting a motivating model focusing on the choice between incremental and radical innovation, and on how managers of different ages and human capital are sorted across different types of firms, we provide firm-level and patent-level evidence that firms that are more open to hiring younger managers (those that are more “open to disruption”) are significantly more likely to engage in radical innovation. Our measures of radical innovations proxy for innovation quality (average number of citations per patent) and creativity (fraction of superstar innovators, the likelihood of a very high number of citations, and generality of patents). We present robust evidence that firms that have a comparative advantage in new innovations (e.g., because they are more open to disruption) generate more creative innovations, but we also show that once the effect of the sorting of young managers to such firms is factored in, the (causal) impact of manager age on creative innovations, though positive, is small.