Are Ideas Being Fished Out?

This paper examines whether declining research productivity can be explained by fishing out—is the production of new knowledge decreasing in the level of existing knowledge? We estimate the knowledge production function for U.S. firms and find instead that knowledge production is increasing in the knowledge stock. This is reinforced by the observations that maximum research productivity across firms is increasing over time, and that research productivity year effects continue to exhibit a decline after modeling contributions from knowledge and research labor. Given that fishing out appears unable to explain the decline in research productivity, we offer preliminary evidence of contingent factors that might contribute to the decline