🚀I am on the #EconJobMarket! My JMP asks a classic question: Do large, dominant firms foster or hinder innovation? To study this, I turn to the Great Merger Wave (1895–1904), when >2,600 U.S. firms combined into corporate giants like U.S. Steel and DuPont. A JMP 🧵👇 (1/13)

Econ 101 will not teach you that. Economists hold a remarkably diverse range of political views. It’s true that, on average, they tend to have a more favorable attitude toward markets and trade than the typical person—but that hardly implies a strong political bias within the

In case you missed it last week, here's my JMP 🧵👇

Kenneth Arrow was my dad’s advisor and I had some funny intersections with him. Just for fun I will tell some. For one thing, Arrow did so much stuff that I ended up citing him in *my* papers even though I’m not an economist.

Reading lists for the overwhelming majority of Harvard economics courses open to both undergraduates and graduate students in 1920-21. Even better, every item has been linked! Economics in the Rear-view Mirror takes you there. https://t.co/nqG4ePgnUc

🚨New working paper: "When Ideas Become Mainstream?" Here's a puzzle that's bothered me: Why do some paradigms sweep through academia while others fade? Why does the "credibility revolution" now dominate economics while "structural econometrics" - once dominant - has declined?

When Zillow shut down its iBuying program in 2021, questions arose about the viability of instant home buying. New research from So Hye Yoon (Princeton job market candidate) examines a key challenge: information asymmetry. @CloGarnache hosts this @OxfordFORE Property Pod 👇

Very important paper on a very important and current topic. It’s not easy to conduct good competition policy! 👇

Econ seminar culture is built on the assumption that the audience knows something that the speaker doesn't, and that the speaker values that information. A very important thing the audience knows and the speaker doesn't: Is the speaker making any sense at all? If nobody has any

Thanks for reading! 📄 Full paper 👉 [ https://t.co/OBCcPf6EfN] 📧 pcreanza@princeton.edu 👨🏻‍💻 Website 👉 https://t.co/NMuSa6fPs3 #EconTwitter #EconJobMarket #Innovation #EconHist (13/13)

TL;DR 🧠 💡The Great Merger Wave turned America’s firms into Factories of Ideas. 💡 It provides the first quantitative study of the GMW’s impact. Innovation effects were large but uneven—especially strong in science-based fields requiring major R&D investment. (12/13)

This helps explain how the U.S. entered its Golden Age of Innovation (1900–1940), and why corporate labs like DuPont’s and Bell’s became national assets. It also offers nuanced perspective for today’s debates on Big Tech and innovation. 💻🤖 (11/13)

👉🏻Big firms can push the frontier but may crowd out others in well-trodden fields. NB: Before WW2, public science was weak: federal R&D funding minimal, universities lagged Europe. Big firms were often the only institutions able to sustain long-term R&D. (10/13)

Did these firm-level gains translate into overall progress? Yes, but unevenly. 📈 📉 Across technological domains (1905–1940): 🔹 Breakthroughs ↑ 13 % overall 🔹 Science-based fields (chemistry, electronics, telecom) ↑ 30 % 🔹 Non-science-based fields ↓ 7 % (9/13)

I find that: 1️⃣ Firm effects matter greatly in explaining inventive productivity 2️⃣ Lab firms perform better, net of sorting and size/field controls 3️⃣ Joining a lab raises within-inventor productivity 4️⃣ Opening a lab raises firm productivity (8/13)

Why these surges? Because mergers gave firms resources to organize research systematically. 🔬 R&D labs spread rapidly after consolidation. Lab-owning firms were substantially more innovative than others. I use an inventor–firm panel and AKM framework to dig deeper. (7/13)

🚩 Main finding #1: Consolidation strongly raised innovation. Among firms that were already patenting before 1895: 🔹 + 6 patents per year (≈ 4× increase) 🔹 + 0.6 breakthroughs per year (≈ 6× increase) Firms that had never patented became 23 pp more likely to start. (6/13)

My analysis combines three approaches: 1️⃣ Firm-level DiD → effect of consolidation on innovation 2️⃣ Inventor–firm AKM model → mechanism through R&D labs 3️⃣ Technology-level DiD → aggregate impact across fields (5/13)

To study the GMW, I digitized merger records from Ralph Nelson (1959) and disambiguated firms and inventors in the patent data (1875–1955). This new dataset links 137,000 firm patent assignees, and 1 million inventors—the first inventor–firm panel before 1940. (4/13)

Why is this question so hard to answer? Because firms rarely become big for reasons unrelated to innovation. But here, mergers were driven by a deflationary Depression and a legal loophole. Corporate R&D was only nascent. → Firms merged to survive, not to innovate. (3/13)

The largest M&A event in US history opened an era of bigness in American industry 🏭 At the same time, the US entered a golden age of technological innovation 💡 Were these two developments connected? Many influential narratives argue they were, from Chandler to @delong. (2/13)