High on Creativity: The Impact of Social Liberalization Policies on Innovation

Abstract

This study investigates the impact of the social context on the rate and direction of innovation. We propose that social liberal environments increase the rate of innovation of incumbent inventors by lowering the cost of social interactions. We examine 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 patenting. We find that inventors residing in regions that implement social liberal policies are more likely to form new collaborations and increase patenting. Patents filed after social liberal policies are more likely to become breakthrough innovations and be built upon novel technological recombinations. Social liberalization policies increase the rate of entrance into inventorship but do not attract top inventors from other regions.