nep-cse New Economics Papers
on Economics of Strategic Management
Issue of 2019‒06‒24
eight papers chosen by
João José de Matos Ferreira
Universidade da Beira Interior

  1. Multilevel governance for smart specialisation: basic pillars for its construction By Miren Larrea; Miren Estensoro; Martina Pertoldi
  2. Australian wine industry competitiveness: Why so slow to emerge? By Kym Anderson
  3. The Role of Obstacles to Innovation on Innovative Activities: An Empirical Analysis By Zahler, Andrés; Goya, Daniel; Caamaño, Matías
  4. Networks of international patent citations: pattern of growth, self-organization and change By Jorge Nogueira de Paiva Britto; Leonardo Costa Ribeiro; Eduardo da Motta e Albuquerque
  5. Employment Effect of Innovation By Kancs, d'Artis; Siliverstovs, Boriss
  6. Technology Gaps, Trade and Income By Thomas Sampson
  7. The Changing Structure of American Innovation: Some Cautionary Remarks for Economic Growth By Ashish Arora; Sharon Belenzon; Andrea Patacconi; Jungkyu Suh
  8. Market power and innovation in the intangible economy By de Ridder, Maarten

  1. By: Miren Larrea; Miren Estensoro; Martina Pertoldi (European Commission - JRC)
    Abstract: The aim of this Report is to help policy makers working in different government levels involved in Smart Specialisation (S3) processes to understand how multilevel governance operates in their context and also how they can develop and facilitate its construction in their S3 strategies. The motivation behind this study is the belief that multilevel governance (MLG) can be improved and that S3 can be made more efficient with a win-win approach for different governments involved in the process. In order to begin this reflection, we first define the concept of multilevel governance, connect it to other relevant concepts regarding S3 and explain the place-based and experimental nature of multilevel governance, highlighting its complexity as one of its main characteristics. After describing the government levels that are actually in charge of S3 strategies under the umbrella of the European Commission, the brief focuses on its main contribution: the definition of four pillars for the construction of multilevel governance of place-based S3 strategies. We defined these pillars to help understand how multilevel governance can be built. For each of the pillars, one example linked to the Basque cases is described, together with another example from a different context, i.e. the Six City strategy in Finland, the regions of Flanders in Belgium, Extremadura in Spain, and Baden-Württemberg in Germany.
    Keywords: Multilevel governance, Smart Specialisation, territorial development, innovation policy, local strategies
    Date: 2019–05
  2. By: Kym Anderson
    Abstract: Despite favourable growing conditions, Australia’s production or exports of wine did not become significant until the 1890s. Both grew in the 1920s, but only because of government support. Once that support was removed in the late 1940s, production plateaued and exports diminished: only 2% of wine production was exported during 1975-85. Yet over the next two decades Australia’s wine production quadrupled and the share exported rose to two-thirds – before falling somewhat in the next ten years. This paper explains why it took so long for Australia’s production and competitive advantage in wine to emerge, why it took off spectacularly after the mid-1980s and why it fell in the ten years to 2015. It concludes that despite the recent downturn in the industry’s fortunes, the country’s international competitiveness is now firmly established and commensurate with its ideal wine-growing climate, notwithstanding the likelihood of further boom-slump cycles in the decades ahead.
    Keywords: boom-plateau wine cycles; comparative advantage; wine competitiveness; wine trade specialization
    JEL: D12 F15 L66 N10
    Date: 2018
  3. By: Zahler, Andrés; Goya, Daniel; Caamaño, Matías
    Abstract: We study the effect of different types of barriers to innovation (financial, demand, knowledge, market, cooperation, and regulatory barriers) on firm level innovation inputs and outputs. Using a pooled sample of three Chilean innovation surveys, based on an instrumental variables approach, we find that the probability of generating innovation outcomes is signficantly reduced by demand and financial barriers. Regarding inputs for innovation, we find a clear negative relationship between financial and demand obstacles and the propensity to incur (non-R&D) innovation expenditures, but not with its intensity. We also provide evidence of heterogeneous effects across sectors, finding that knowledge obstacles are relevant for manufacturing and market structure obstacles for services, while demand and financial obstacles appear to matter across the board.
    JEL: O31 O32 D22
    Date: 2019–06
  4. By: Jorge Nogueira de Paiva Britto (Universidade Federal Fluminense); Leonardo Costa Ribeiro (Cedeplar-UFMG); Eduardo da Motta e Albuquerque (Cedeplar-UFMG)
    Abstract: This paper investigates networks of cross-border patent citations - the patent assignee as a node and an international patent citation as a link. The data (patents and their international citations, selected years between 1991 and 2009) show a network growing over time - more institutions, more links and more countries - and preserving its scale-free properties, a self-organized system with changes in technological specialization. This firm-led network is compared to a network of international colaboration in science - a university-led network. The overlaping of those two international self-organized systems might be a source of an emerging international system of innovation.
    Keywords: Patent Citations; International Knowledge flows; Innovation Systems
    Date: 2019–06
  5. By: Kancs, d'Artis (European Commission – JRC); Siliverstovs, Boriss (KOF Swiss Economic Institute)
    Abstract: We provide a novel evidence about the innovation-employment nexus by decomposing it by R&D intensity in a continuous setup and relaxing the linearity assumption. Using a large international firm-level panel data set for OECD countries and employing a flexible semi-parametric method – the generalised propensity score – allows us to recover the full functional relationship between the R&D-driven innovation and firm employment as well as address important econometric issues, which is not possible in the standard estimation approach used in the previous literature. Our results confirm that the relationship between innovation and employment entails important non-linearities responsible for significant differences in employment response to innovation at different R&D intensity levels.
    Keywords: R&D investment, employment, propensity score, firm-level data
    JEL: C14 C21 F23 J20 J23 O30 O32 O33
    Date: 2019–04
  6. By: Thomas Sampson
    Abstract: This paper studies the origins and consequences of international technology gaps. I develop an endogenous growth model where R&D efficiency varies across countries and productivity differences emerge from firm-level technology investments. The theory characterizes how innovation and learning determine technology gaps, trade and global income inequality. Countries with higher R&D efficiency are richer and have comparative advantage in more innovation-dependent industries where the advantage of backwardness is lower and knowledge spillovers are more localized. I estimate R&D efficiency by country and innovation-dependence by industry from R&D and bilateral trade data. Calibrating the model implies technology gaps, due to cross-country differences in R&D efficiency, account for around one-quarter to one-third of nominal wage variation within the OECD.
    Keywords: technology gaps, trade, technology investment, Ricardian comparative advantage, international income inequality
    JEL: F11 F43 O14 O41
    Date: 2019–06
  7. By: Ashish Arora; Sharon Belenzon; Andrea Patacconi; Jungkyu Suh
    Abstract: A defining feature of modern economic growth is the systematic application of science to advance technology. However, despite sustained progress in scientific knowledge, recent productivity growth in the U.S. has been disappointing. We review major changes in the American innovation ecosystem over the past century. The past three decades have been marked by a growing division of labor between universities focusing on research and large corporations focusing on development. Knowledge produced by universities is not often in a form that can be readily digested and turned into new goods and services. Small firms and university technology transfer offices cannot fully substitute for corporate research, which had integrated multiple disciplines at the scale required to solve significant technical problems. Therefore, whereas the division of innovative labor may have raised the volume of science by universities, it has also slowed, at least for a period of time, the transformation of that knowledge into novel products and processes.
    JEL: O3
    Date: 2019–05
  8. By: de Ridder, Maarten
    Abstract: Productivity growth has stagnated over the past decade. This paper argues that the rise of intangible inputs (such as information technology) can cause a slowdown of growth through the effect it has on production and competition. I hypothesize that intangibles cause a shift from variable costs to endogenous fixed costs, and use a new measure to show that the share of fixed costs in total costs rises when firms increase ICT and software investments. I then develop a quantitative framework in which intangibles reduce marginal costs and endogenously raise fixed costs, which gives firms with low adoption costs a competitive advantage. This advantage can be used to deter other firms from entering new markets and from developing higher quality products. Paradoxically, the presence of firms with high levels of intangibles can therefore reduce the rate of creative destruction and innovation. I calibrate the model using administrative data on the universe of French firms and find that, after initially boosting productivity, the rise of intangibles causes a 0.6 percentage point decline in long-term productivity growth. The model further predicts a decline in business dynamism, a fall in the labor share and an increase in markups, though markups overstate the increase in firm profits.
    Keywords: Business Dynamism; Growth; Intangibles; Productivity; Market Power
    JEL: J1
    Date: 2019–03–29

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