Knowledge disclosure plays a central role in models of economic growth. In this paper, we provide a theoretical model that evaluates the conditions supporting disclosures of privately funded knowledge through scientific publication, patenting, or both. Our analysis is grounded in the conflicting incentives facing researchers and their funders: scientists have incentives to disclose discoveries through scientific publication while firms have incentives to protect their ideas through patenting or secrecy. We focus on the strategic interaction between researchers and firms bargaining over whether (and how) knowledge will be disclosed. We evaluate four different disclosure strategies: secrecy, commercial science (patenting), open science (scientific publication) and patent-paper pairs (disclosure along both dimensions). Our model then derives the conditions under which each of these outcomes emerges and offers insights into the determinants of the disclosure strategy of a firm. Importantly, we find that patents and publications are complementary instruments in facilitating the disclosure of scientific knowledge; thereby providing a microeconomic unpinning of assumptions commonly made in endogenous growth models as well as a framework for understanding the impact of patent protection on the openness of science.
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