Climbing Atop the Shoulders of Giants

While the cumulative nature of knowledge production has been recognized as central to the process of economic growth, the microeconomic and institutional foundations of cumulativeness are less understood. This paper disentangles two distinct mechanisms-selection and marginal effects-by which institutions impact cumulativeness. The selection effect results from the fact that institutions (e.g., prestigious universities) may be associated with high spillovers because the associated researchers (and the knowledge they discover) are of high intrinsic quality. The marginal impact of institutions is the increment to cumulativeness resulting from association with a specific institution (i.e., research may be more accessible because it is discovered in a university setting). This paper develops and implements an empirical framework distinguishing these effects in the context of a specific institution, biological resource centers (BRCs). BRCs are " living libraries " that authenticate, preserve, and offer independent access to biological materials, such as cells, cultures, and specimens. Relative to a " peer-to-peer " network of informal exchange, BRCs reduce the marginal cost to researchers of building on prior research efforts. The evaluation of how BRCs affects the cumulative impact of knowledge exploits three key features of the environment: (a) the impact of scientific knowledge is reflected in future scientific citations, (b) deposit into BRCs often occur with a lag after initial research is completed and published and (c) these " lagged " deposits are often the result of arguable (and testably) exogenous shocks. Employing a differences-indifferences estimator linking specific materials deposits to journal articles, we find evidence for both selection into and the marginal impact of BRCs. With article-specific fixed effects, the marginal impact of BRC deposit is estimated to increase the citation rate by 81%. Further, the marginal impact of biological resource centers increases with the "vintage" of the knowledge under consideration and has increased during the 1990s. Finally, a rate-of-return analysis suggests that, relative to traditional grant mechanisms, public expenditures towards authentication, preservation and access to research materials offers a threefold gain in fostering the cumulativeness of scientific knowledge. " If I have been able to see further, it was only because I stood on the shoulder of giants. " Isaac Newton, 1676