Publications

Peer-Reviewed Articles

Lanahan, L., D. Armanios and A. Joshi. (Accepted) 'Inappropriateness Penalty, Desirability Premium: What Do More Certifications Actually Signal?,' Organization Science.

Prevailing theory argues that more certifications increase performance. However, emerging empirical evidence implies that obtaining more certifications may actually decrease performance. How do we reconcile this tension? Practically speaking, why would ventures seek additional certifications in light of these recently identified risks? To address this gap between existing theory and recent empirics, we look more closely at ventures’ activities and performance outcomes after they receive their first certification. We posit that different patterns of certification reflect different forms of experimentation. In particular, ventures may be willing to experiment in ways that incur an inappropriateness penalty for the chance to gain a subsequent desirability premium if their experiments succeed. Inappropriateness means that certifications signal divergence from accepted market norms and standards. Desirability means that certifications signal activities that are in the perceived self-interest of the potential audience. We hypothesize that certifications reflecting broad experimentation incur initial inappropriateness penalties; yet when successful, they are more likely to lead to breakthroughs that generate desirability premia. We find support for this idea through an empirical analysis drawing from a sample of 7,440 U.S. ventures that receive one or more Small Business Innovation Research or Small Business Technology Transfer (SBIR/STTR) grants to commercialize new technologies. This study advances institutional theory of certification to better account not only for its benefits but also for its costs.

Graddy-Reed, A., L. Lanahan, and J. D’Agostino. (2021) ‘The Impact of Federal R&D Funding Across the Academy: An Analysis of Early-Career Research Productivity,’ Research Policy, 50 (104224).

This paper measures the impact of external R&D funding on the career trajectory and research productivity of graduate students across the divisions of life sciences, math & physical sciences, engineering, and social sciences & psychology. We contribute to the understanding of the production of science by examining the training regimen for graduate students. We exploit variation between 3,678 awardees and honorable mentions of the U.S. National Science Foundation’s Graduate Research Fellowship Program. We find consistent evidence that the award increases degree completion, placement in a post-doctoral or academic research position, research productivity and impact, and network size. We further explore the role of the graduate advisor in this training process and find the award does not disrupt the apprenticeship model, but instead, increases the student’s interaction with their advisor.

Armanios, D., L. Lanahan and D. Yu. (2020) ‘The State of State Innovation: U.S. State-led Technology Based Economic Development Policies, 1996 – 2015,’ Academy of Management Discoveries, https://doi.org/10.5465/amd.2018.0014

A recent understudied phenomenon has emerged whereby public institutions are collectively taking on an expanded role in technological innovation by offering resource, policy, and infrastructure support even when the trajectories of these technologies are unclear. We term this phenomenon as government experimentation. Scholarship has tended to examine national efforts, yet local governments are in an ideal position to tailor programs to the local market context given their proximity. Nevertheless, we have a limited understanding regarding how local institutions experiment. The aims of this paper are twofold. First, we outline our methodological approach for building a unique dataset that classifies the portfolio of U.S. state government technology-based economic development policies from 2000-2015. We turn to the State Science and Technology Institute as the primary data source. Among the set of 1,659 state-led actions, we classify the context, topic, and lever. Second, we offer descriptive and comparative analysis of this local government experimentation. In considering the spread of each state’s policy portfolio, we highlight four distinct experimental archetypes – hub specialists, public entrepreneurs, industry architects, and ecosystem designers. Finally, we consider theoretical, managerial, policy, and methodological implications that could be derived from our characterization of this phenomenon of local government experimentation.
Data for Replication: https://cms-staging.andrew.cmu.edu/epp-2/stategovexp/

Graddy-Reed, A., L. Lanahan, and J. Eyer. (2019) 'Gender Discrepancies in Publication Productivity of High-Performing Life Science Graduate Students,' Research Policy

Despite equal matriculation into life science graduate programs, the gender gap persists for later-stage professional outcomes. To understand this divergence, we examine graduate training and use the competitive NSF Graduate Research Fellowship Program to identify high-quality life science students that are awardees and honorable mentions. We use a differencing research design to estimate the relative difference of the R&D award across gender on publication trajectory. The results of the triple difference estimation show a negative effect for women compared to men from the award. We investigate the driver of this effect by examining trends within gender and find a large, positive effect of the award for men but fail to find such evidence for female awardees. Our results indicate different signaling effects across gender even though the funding is meritocratic.
Data for Replication: https://dataverse.harvard.edu/dataset.xhtml?persistentId=doi:10.7910/DVN/DHBW3F

Graddy-Reed, A., L. Lanahan, and N. M. V. Ross. (2018), 'The Effect of R&D Investment on Graduate Student Productivity: Evidence from the Life Sciences,' Journal of Policy Analysis and Management, 37(4): 809-834.

This study examines the role of graduate training and R&D investments on research productivity by focusing on the effect of federal funding for early career graduate students. We employ a difference-in-differences research design drawing upon a sample of high quality life science graduate students that either are award recipients or honorable mentions of the prestigious U.S. National Science Foundation’s Graduate Research Fellowship Program. We find that a $91,000 grant over three years has a limited, yet positive impact on the awardee’s productivity. These effects are driven by the sample of graduate students without publications prior to applying for the fellowship.
Data for Replication: doi:10.7910/DVN/SUISTL

L. Lanahan and D. Armanios. (2018), 'Does repeat certification always benefit a venture?' Organization Science, 9(5): 931-947.

An implicit assumption in institutional theory is that more certifications improve a venture’s likelihood for success. However, under certain conditions, we argue more certifications may be detrimental to the venture’s performance. We advance this notion by examining both who is doing the certification and, in turn, what information is revealed to others through the certification. Our study advances two new constructs based on varying instances of follow-on certification: certification broadening where the initial and follow-on certifiers are different institutions, and certification redundancy where the initial and follow-on certifiers are the same institution. Through studying sequences of certification in the U.S. Small Business Innovation Research (SBIR) federal and state programs, we find that certification broadening generally increases a firm’s ability to acquire private resources, while certification redundancy generally decreases a firm’s ability to acquire private resources. This study advances a more dynamic view of certification within institutional theory, namely when we disaggregate sequences of certifications, we are able to better ascertain when certification helps a venture and when it does not.

Lanahan, L., and M.P. Feldman. (2017), 'Approximating Exogenous Variation in R&D: Evidence from the Kentucky and North Carolina SBIR State Match Programs,' The Review of Economics and Statistics. doi.org/10.1162/REST_a_00681

The theoretical rationale for government investment in R&D is well established, but empirical studies clarifying the most effective means of investment are lacking. There is considerable research on the effect of government investment at the firm level; however, this paper takes a narrower look to consider the effect of government investment in R&D projects. This paper examines the differential effect of Small Business Innovation Research (SBIR) State Match programs that reward successful federal Phase I projects on securing the larger follow on Phase II award. I use a difference-in-difference (DD) research design, identifying projects from comparable neighboring states without the program. I also estimate the marginal effect of the matching funds on Phase II success rates by considering variations in size of the state match. Results suggest that the state match has an impact for projects proposed by firms with less previous SBIR success. These results offer compelling policy implications: rather than continuing with the current policy practice of providing an equal amount of state matching funds to the entire pool of SBIR Phase I recipients, states ought to consider channeling funds to firms with less experience in the federal program.
Data for Replication: doi:10.7910/DVN/UC2ENJ

Graddy-Reed, A., L. Lanahan, and N. M. V. Ross. (2017), ‘Influences of Academic Institutional Factors on R&D Funding for Graduate Students,' Science and Public Policy. doi: 10.1093/scipol/scx017

We examine the effect of academic institutional characteristics on research funding grant success for graduate students. This paper draws upon the US National Science Foundation’s Graduate Research Fellowship Program (GRFP). We match a set of graduate students to their graduate programs to examine whether higher education institutional factors mediate funding assignment to award or honorable mention. We find evidence that a series of leadership, peer, programmatic, and university characteristics are associated with grant funding outcomes. Notably, faculty research and peer quality are associated with award success, while the signal of being at a public institution decreases the likelihood of award receipt. Moreover, while we find that larger programs are more likely to have graduate students that receive awards, the larger, lower-ranked programs exhibit inefficiencies in scaling the activity. This implies these programs may face coordination costs that are detrimental to the rate of graduate student success.
Data for Replication: doi:10.7910/DVN/THMLXE

L. Lanahan, A. Graddy-Reed, and M.P. Feldman. (2016) 'The Domino Effects of Federal Research Funding,' Plos ONE, 11(6): e0157325. doi:10.1371/ journal.pone.0157325

The extent to which federal investment in research crowds out or decreases incentives for investment from other funding sources remains an open question. Scholarship on research funding has focused on the relationship between federal and industry or, more comprehensively, non-federal funding without disentangling the other sources of research support that include nonprofit organizations and state and local governments. This paper extends our understanding of academic research support by considering the relationships between federal and non-federal funding sources provided by the National Science Foundation Higher Education Research and Development Survey. We examine whether federal research investment serves as a complement or substitute for state and local government, nonprofit, and industry research investment using the population of research-active academic science fields at U.S. doctoral granting institutions. We use a system of two equations that instruments with prior levels of both federal and non-federal funding sources and accounts for time-invariant academic institution-field effects through first differencing. We estimate that a 1% increase in federal research funding is associated with a 0.411% increase in nonprofit research funding, a 0.217% increase in state and local research funding, and a 0.468% increase in industry research funding, respectively. Results indicate that federal funding plays a fundamental role in inducing complementary investments from other funding sources, with impacts varying across academic division, research capacity, and institutional control.
Data for Replication: doi:10.7264/N3W957G6

Moulton, J. G., A. Graddy-Reed, and L. Lanahan. (2016) ‘Beyond the EITC: The Effect Of Reducing The Earned Income Tax Credit On Labor Force Participation,’ National Tax Journal, 69(2), 261-284. DOI/10.17310/ntj.2016.2.01 (author's contributed equally)

The authors exploit variation in the Earned Income Tax Credit (EITC) program based on exit, specifically when households lose eligibility based on children aging out of the program. Placed within the larger context of the EITC, this offers a framework for assessing if the aims of the program – in terms of incentivizing work – extend beyond the EITC tenure. They estimate the impact of reducing the EITC on mothers’ labor force participation (LFP) using a combination of difference-in-differences and household fixed effects models with the NLSY79 data. The results indicate that some of those most eligible for the EITC (unmarried, less educated mothers) leave the workforce when they lose eligibility for the EITC.

Feldman, M.P., T. Hadjimichael, L. Lanahan, and T. Kemeny. (2016) ‘The Logic of Economic Development: A Definition and Model for Investment,’ Environment and Planning C: Government and Policy, 34: 5-21. doi: 10.1177/0263774X15614653

Despite significant public resources devoted to promoting innovation and entrepreneurship, there is little agreement about how to measure outcomes toward achieving the larger objectives of economic development. This paper starts by defining economic development and then considers the role of government, arguing that public policy should focus on building capacities that are beyond the ability of the market to provide. This shifts the debate toward a neutral role of government as a builder of capacities that enable economic agents, individuals, firms, or communities to realize their potential.

Lanahan, L. (2016) 'Multilevel Funding for Small Business Innovation: A Critical Review of U.S. State SBIR Match Programs,' The Journal of Technology Transfer, 41(2), 220-249. DOI 10.1007/s10961-015-9407-x

U.S. State governments invest in early-stage innovative activity as an economic development strategy. Nevertheless, attention directed at the public sector’s role in this capacity has been placed on federal policy actions overlooking the growing role of states. The primary aims of this paper are two-fold: (i) to articulate the motivations for multilevel public support for small business innovative activity, placing emphasis on state level incentives directed towards entrepreneurial activity; and (ii) to empirically evaluate the State Match Phase I (SMP-I) program. The SMP-I program is a diffuse state level policy designed to complement the federal Small Business Innovation Research (SBIR) program by offering noncompetitive matching funds to the state’s successful SBIR Phase I recipients. This offers an opportunity to examine the marginal impact of public R&D given the state intervention. This paper employs a state and year fixed effects model and considers two outcome variables – Phase II success rates and Phase I application activity. To account for industrial heterogeneity, the data are stratified by the federal mission agencies. Results from the empirical analysis indicate that the state match increases the Phase II success rates for firms participating in the National Science Foundation (NSF) SBIR program.

Lanahan, L. and M. P. Feldman. (2015) ‘Multilevel Innovation Policy Mix: A Closer Look at State Policies that Augment the Federal SBIR Program,’ Research Policy, 44: 1387-1402. DOI 10.1016/j.respol.2015.04.002

This paper examines nested, multilevel innovation policies paying particular attention to U.S. federal and state small business innovation research programs. With 45 states offering a range of SBIR Outreach and SBIR Match programs specifically designed to enhance the federal SBIR program, such programs provide a useful lens for examining the nature of the multilevel innovation policy mix. The contributions of this paper are twofold. First, the paper provides theoretical motivation for multilevel innovation policy responses placing emphasis on positive policy responses in which state policies enhance federal policies. Second, the paper provides an empirical analysis examining the multilevel factors associated with a state government response that augments the federal SBIR program. The results from this analysis indicate these state policy actions are associated with a confluence of multilevel factors driven not only from top-down federal actions, but also from bottom-up, internal state political and economic factors as well as from lateral pressures from peer states.

Feldman, M.P., L. Lanahan, and I. Lendel. (2014), ‘Experiments in the Laboratories of Democracy: State Scientific Capacity Building,’ Economic Development Quarterly, 28(2), 107 - 131.

State initiatives that build innovation capacity by supporting local academic research, attracting eminent scholars, and building research excellence have become prominent among the 50 states over the past 30 years. This paper focuses on three programs: University Research Grants, Eminent Scholars, and Centers of Excellence. We include examples for each of state programs and trace the historical evolution of program attributes. Our objectives is to differentiate program attributes in order to improve understanding of state science initiatives and begin to assess how programs contribute to the ultimate goal of creating economic growth. Our empirical analysis demonstrates evidence of the long-term impact of these three programs in building state innovative capacity. The paper concludes by outlining how these data may be used in future analyses.

Book Chapters

Feldman, M. P. and L. Lanahan (2015), ‘State Science Policy Experiments,’ in A. Jaffe and B. Jones (eds) The Changing Frontier: Rethinking Science and Innovation Policy. University of Chicago Press.

Over the past 30 years, the 50 state governments have experimented with different programs that attempt to leverage academic science to create economic growth. Three broadly diffuse programs are: Eminent Scholars, which attracts scientific talent; Centers of Excellence, which builds research expertise that involves industry; and University Research Grants, which provides funding for research projects. This chapter traces their adoption and estimates the relationship with economic, political and R&D-related conditions for each program. The results indicate that states, in part, use these policy levers to enhance the performance of their R&D capacity workforce and to substitute declines in national trends of extramural funding of research and development. Viewing Eminent Scholars and the University Research Grants as more upstream programs, the authors find that state commitment relies on the strength of the state's R&D capacity and demonstrated commitment to science. By contrast, state adoption of the Centers of Excellence program, which is more downstream, has broader appeal, which is likely due to its design of producing more immediate economic outcomes.

Hardin, J., L. Lanahan, and L. Brun, (2015) 'Assessing State-level Science and Technology Policies: North Carolina's Experience with SBIR State Matching Grants,' in Audretsch, B. D. et al. (eds) Oxford University Handbook of Local Competitiveness. Oxford University Press.

State government research and development (R&D) expenditures play a critical, yet often overlooked, role in supporting innovation in the United States. This chapter discusses the growing role of U.S. state governments in supporting R&D activity, paying particular attention to a small business innovation program in North Carolina designed to complement the federal Small Business Innovation Program (SBIR) program. We organize our discussion by providing an overview of the literature on state science and technology policies that encourage innovation, competitiveness and economic development at the state-level. We then review a range of complementary federal and state government policies aiming to improve the success rate of the SBIR program. We pay particular attention to the One North Carolina Small Business Program, a state program designed to promote early-stage innovation among small businesses. We discuss the objectives of the state policy and provide results of a recently completed program assessment. The results offer evidence that the state matching program meets the objectives of the policy and provides positive spillover effects to North Carolina’s economy, including increased employment, higher Phase II award rates, improved collaboration with universities, and greater follow-on funding for small businesses participating in the program.

Feldman, M. P. and L. Lanahan (2015), ‘Crafting a Comeback: Innovation and Entrepreneurship as an Economic Development Strategy in Mature Regions,’ in J. Bryson et al. (eds) Handbook of Manufacturing Industries in the World Economy. Edward Elgar: Cheltenham.

Older industrial cities that once served as the backbone of the 20th century economy are struggling to redefine themselves. There is little consideration in the literature of the specific process of regional restructuring and how the potential of entrepreneurial firms is influenced by the array of public programs provided. This paper provides an exploratory case study of one mature regional economy in the United States – the Tech Belt. Rather than evaluate a specific program our objective is to consider how innovative firms actually use the array of local and federal programs available to them and to consider how these programs contribute to an innovative ecosystem. We find that an ecosystem of innovation and entrepreneurship is emerging but fragile. Restructuring efforts are complicated by coordination efforts: the levels of government do not reinforce one another to form a cohesive infrastructure but instead appear to operate in silos.

Feldman, M. P., A. Freyer, and L. Lanahan (2012), ‘On the Measurement of University Research Contributions to Economic Growth and Innovation,’ in J. Lane et al. (eds) Universities and Colleges as Economic Drivers: Measuring Higher Education’s Role in Economic Development. Albany, NY: SUNY Press.

The increasing complexity of university scientific research and the increasing pressure for accountability in public expenditures creates a challenging environment for the measurement of scientific productivity. Of course, the choices of metrics employed create different incentives for institutional actors at the federal, state, and university levels. This paper uses the example of the Center for Environmentally Responsible Solvents and Processes, an NSF-funded Science and Technology Center over its ten-year span to assess economic impact, research outcomes, and public benefit. First, we conduct an economic impact assessment using the IMPLAN methodology for input-output analysis. Next, we analyze conventional knowledge and technology transfer metrics. Our third analysis attempts to consider the social, cultural, and educational public benefits from the research center. Then we employ an ex post thought experiments to compare the center with other modes of federal research funding. We advocate a broad, holistic, and case-specific approach to the evaluation of multidisciplinary research centers, combining traditional research outcome and knowledge transfer metrics with social, cultural, and educational measures.

Feldman, M. P., L. Lanahan, and J. M. Miller (2011), ‘Inadvertent Infrastructure and Regional Entrepreneurship Policy’, in M. Fritsch et al. (eds.) The Handbook of Research on Entrepreneurship and Regional Development. Edward Elgar: Cheltenham: 216-251.

Policies to promote entrepreneurship have become increasingly common as an economic growth strategy. Formally defined as government initiatives that influence the formation, viability and commercial success of new firms, entrepreneurship policy is particularly relevant at the regional or sub-national level given that entrepreneurs tend not to relocate when starting their firms. Yet local governments must rely on national governments to manage a wide array of macroeconomic and other broad-scale factors. Actions at the national level can have inadvertent consequences at the regional level. These inadvertent consequences become even more evident over time as economies in the developed world transform from large-scale, standardized, national manufacturing and toward a more flexible system of global competition, integrated value-chains and knowledge work. Legacy policies more appropriate for an older historical era can both directly and indirectly influence the strategies available for regional entrepreneurship in unexpected and surprising ways. This chapter considers entrepreneurship policy in a regional context. While evaluations exist for specific programs of initiatives that provide funding or incubator space, there are few attempts to consider the overarching theme of how public policy affects regional entrepreneurship. This chapter begins by describing four case studies of U.S. policies that have inadvertent effects on entrepreneurship. The first case examines the role of enforcing employment covenants not to compete in the development of high-technology clusters. The second case considers the institutional relationship of health insurance to employment and identifies implications for entrepreneurship, especially in the transition to self-employment. The third case evaluates the role of size-based employment regulation in the growth of new firms and creation of quality jobs. The fourth case describes the role of antitrust legislation as a constraint on cooperative research and innovation.

Policy Reports & Other Publications

Feldman, M. P., L. Lanahan, and I. Lendel (2014), 'Focus on State Economic Development Policy,' Economic Development Quarterly, 28(2), 103 - 106.

Feldman, M. P., L. Lanahan, and E. Stokan (2014), 'Stage I: Initial Findings on Metrics and Potential Data Sources Examining the i6 Challenge and the Jobs Innovation Accelerator Challenge (JIAC) Projects,' presented to the Economic Development Administration.

Feldman, M. P., A. Graddy-Reed, L. Lanahan, G. McLaurin, K. Nelson, and A. Reamer (2012), ‘Innovative Data Sources for Regional Economic Analysis’ (Kindle edition)

Feldman, M. P. and L. Lanahan (2010), ‘Silos of Small Beer: A Case Study of the Efficacy of Federal Innovation Programs in a Key Midwest Regional Economy’, Science Progress: Center for American Progress.

Working Papers

L. Lanahan, A. Joshi, and Johnson, E., ‘Do Public R&D Subsidies Produce Jobs? Evidence from the SBIR/STTR Program’
Myers, K. and L. Lanahan. ‘Research Subsidy Spillovers, Two Ways’
Joshi, A., L. Lanahan, O. Hmaddi, and D. Armanios. ‘On the Right Tract? Certification, Arbitrage, and the Performance of High-Tech Ventures in Distressed Neighborhoods’
Clayton, P., L. Lanahan, and A. Nelson. ‘A Tale of Two Origins: Tracing the Diffusion of University versus Firm Inventions’
Gish, J., L. Lanahan, and J. Beck. ‘Economic Inequality and Niche Entrepreneurship: Evidence from the Brewery Industry’