Martin Watzinger

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Professor of Economics at the University of Münster

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I am a professor of Economics at the University of Münster and
Affiliate of the CEPR and the CESifo Research Network 


You can find my CV here. 

I am co-organizer of the Munich Innovation Seminar.

Google Scholar Profile



Current Papers

The Breakup of Bell and its Impact on Innovation

In 1984, after a a seven-year lawsuit, the Bell System was broken up, resulting in the largest corporate reorganization in history. The aim was to open up the markets for telecommunications equipment and for long-distance telephone services for competition. In this paper we show that this breakup and the regulatory interventions preceding it had a substantial long-term impact on U.S. innovation. We argue that before the antitrust case, Bell could extend its market power from being the regulated provider of short-distance telephone services to the potentially competitive markets for long-distance services and for telecommunications equipment manufacturing by restricting access to this essential facility, its local network. We discuss how regulation and the breakup changed access to the telecommunications network and why this increased innovation. Our study provides lessons for the evaluation of today’s dominant providers in tech markets.
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Draft coming soon

ICT, Collaboration, and Science-Based Innovation: Evidence from BITNET

with Markus Nagler and Monika Schnitzer
with Kathrin Wernsdorf  and Markus Nagler
Does access to information and communication technologies (ICT) increase innovation? We examine this question by exploiting the staggered adoption of BITNET across U.S. universities in the 1980s. BITNET, an early version of the Internet, enabled e-mail-based knowledge exchange and collaboration among academics. After the adoption of BITNET, university-connected inventors increase patenting substantially. The effects are driven by collaborative patents by new inventor teams. The patents induced by ICT are exclusively science-related and stem from fields where knowledge can be codified easily. In contrast, we neither find an effect on patents not building on science nor on inventors unconnected to universities
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CESifo Working Paper No. 8646

Short-listed for EPIP Young Scholar Award 2020




How do patents influence the spread of General Purpose Technologies (GPT)? To answer this question, we analyze the diffusion of the transistor, one of the most important technologies of our time. After AT&T began licensing the transistor on standardized terms in 1952, the diffusion of the transistor technology and especially cross-technology spillovers increased dramatically. This suggests that patents on GPTs may hinder the positive feedback loop between innovation in upstream and in application sectors, the primary reason why GPTs produce unusually large productivity improvements. Standardized licensing increased innovation and market entry in particular by unrelated inventors in unconcentrated markets.
CEPR Discussion Paper No. 15713 

VoxEU  
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R&R at Journal of Industrial Economics

Patents on General Purpose Technologies: Evidence from the Diffusion of the Transistor 

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Standing on the shoulders of science

with Monika Schnitzer, LMU and Josh Krieger, Harvard
The goal of science is to advance knowledge, yet little is known about its value for marketplace inventions. While important breakthrough technologies could not have been developed without scientific background, skeptics argue that this is the exception rather than the rule, questioning the usefulness of basic research for private sector innovations and the effectiveness of the knowledge transfer from university to industry. We analyze the universe of U.S. patents to establish three new facts about the relationship between science and the value of inventions. First, we show that a patent that directly builds on science is on average 2.9 million U.S. dollars more valuable than a patent in the same technology that is unrelated to science. Based on the analysis of the patent text, we show second that the novelty of patents predicts their value, and third that science-intensive patents are more novel. This documents that science introduces new concepts that are valuable for marketplace inventions. Our study informs the debate on the merits of science for corporate innovation and the origins of breakthrough inventions.
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Download

CEPR Discussion Paper

VoxEu 


Patent novelty data

R&R in
Strategic Management Journal



The Employment Effects of Countercyclical Infrastructure Investments

with Lukas Buchheim, LMU Munich
We estimate the causal impact of a sizable German infrastructure investment program on employment at the county level. The program focused on improving the energy efficiency of school buildings, making it possible to use the number of schools as an instrument for investments. We find that the program was effective, creating one job for one year for each €25’000 of investments. The employment gains reached their peak after nine months and dropped to zero quickly after the program’s completion. The reductions in unemployment amounted to two-thirds of the job creation, and employment grew predominately in the construction and non-tradable industries.
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Download

​Ökonomenstimme
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(non-technical summary in German)


R&R in AEJ: Policy
more research