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How Do Social Liberalization Policies Impact Innovation?

Keyvan Vakili, London Business School
Laurina Zhang, Georgia Institute of Technology
Research Questions Addressed
How do social liberalization policies impact the rate and direction of innovation?

Do social liberalization policies attract top inventors to a region?

Do social liberalization policies change the diversity of collaborators?
Primary Findings
The study explores the impact of two social liberalization policies (legalization of same-sex civil unions and medical marijuana) and one anti-liberalization policy (passage of abortion restrictions) on innovation in the United States. The results of the study show that liberalization policies increase state-level patenting, while the anti-liberalization policy reduces patenting.

We do not find evidence that social liberalization policies attract top inventors to a region. However, we do find evidence that social liberalization policies on the state level lead to more diverse collaboration among existing inventors in the region, which results in a higher level of innovative performance (in terms of rate, novelty, and impact). The research points to yet another benefit of such policies: Diverse interactions between individuals result in faster circulation of knowledge within a state.