Heuristics, not plumage: A response to Osterloh and Frey's discussion paper on ‘Borrowed plumes’

Hiring new PhDs allows firms to access recent scientific advances. We develop new measures based on correlated topic models to estimate the similarity of patents and dissertations, and apply these measures to PhD-invented firm patents in the German laser industry. Patents are more exploratory for the firm if the underlying dissertation work is less similar to the firm’s prior knowledge stock. Patents filed prior to dissertation submission are...