Young, Restless and Creative: Openness to Disruption and Creative Innovations
D. Acemoglu, Ufuk Akcigit and Murat Alp Celik
NBER Working Paper No. 19894
2017
This paper investigates the relationship between openness to disruption and 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 firms with different degrees of openness to disruption, we provide firm-level and patent-level evidence consistent with this pattern. Our measures of creative 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). Using the age of top managers as a proxy, we present robust evidence that openness to disruption is associated with more creative innovations.
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