|
on Economics of Strategic Management |
| By: | Chen, Yongmin; Jiang, Haiwei; Liang, Yousha; Pan, Shiyuan |
| Abstract: | This paper studies how foreign direct investment (FDI) affects innovation in the host country, using matched firm-level patent data of Chinese firms. The data contain multidimensional information about patent counts and citations which, together with an identification strategy based on Lu et al. (2017), allows us to measure innovation comprehensively and to uncover the causal relationship. Our empirical analysis shows that FDI has positive intra-industry effects on the quantity and quality of innovation by Chinese firms. We show that these positive effects are driven by increases in competition, rather than by knowledge spillover from FDI which is measured by patent citations between domestic firms and foreign invested enterprises (FIEs). We further investigate the inter-industry effects of FDI and find that FDI has positive vertical effects on innovation in upstream sectors. |
| Keywords: | FDI; Innovation; Patent; Competition; Spillover |
| JEL: | F2 L5 O3 |
| Date: | 2021–07–26 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:108902&r= |
| By: | Marc J Melitz (Harvard University); Stephen J Redding (Princeton University, CEPR, NBER) |
| Abstract: | Two central insights from the Schumpeterian approach to innovation and growth are that the pace of innovation is endogenously determined by the expectation of future profits and that growth is inherently a process of creative destruction. As international trade is a key determinant of firm profitability and survival, it is natural to expect it to play a key role in shaping both incentives to innovate and the rate of creative destruction. In this paper, we review the theoretical and empirical literature on trade and innovation. We highlight four key mechanisms through which international trade affects endogenous innovation and growth: (i) market size; (ii) competition; (iii) comparative advantage; (iv) knowledge spillovers. Each of these mechanisms offers a potential source of dynamic welfare gains in addition to the static welfare gains from trade from conventional trade theory. Recent research has suggested that these dynamic welfare gains from trade can be substantial relative to their static counterparts.Discriminating between alternative mechanisms for these dynamic welfare gains and strengthening the evidence on their quantitative magnitude remain exciting areas of ongoing research. |
| JEL: | F13 O31 |
| Date: | 2020–06 |
| URL: | http://d.repec.org/n?u=RePEc:pri:cepsud:288&r= |
| By: | Chang, Sungyong (London Business School); Kim, Hyunseob (Jackson State University); Song, Jaeyong; Lee, Keun |
| Abstract: | We examine the role of latecomers’ optimal resource allocation between innovation and imitation in latecomers’ catch-up under diverse technological regimes. Building on Nelson and Winter (1982), we develop computational models of technological leadership change. The results suggest that one-sided dependency upon either imitation or innovation deters technological leadership change. At an early stage with low-level technologies, latecomers should focus on imitation; then, as the technological gap decreases, they should allocate more R&D resource to innovation. We also examine the role of several variables, such as appropriability, cumulativeness, and cycle time of technologies (CTT), as related to technological regimes. The simulation results show that while low appropriability tends to increase the probability of technological leadership change, it makes imitation a more e˙ective strategy compared to innovation; in addition, while a higher level of cumulativeness tends to reduce the probability of leadership change, it makes imitation a more valuable option because innovation becomes more diÿcult for latecomers. We also find an inverted U-shaped relationship between the CTT and the probability of technological leadership change. When the CTT is short, it makes sense for latecomers to allocate more resources to imitation, especially when their technology level is initially low. |
| Date: | 2021–07–29 |
| URL: | http://d.repec.org/n?u=RePEc:osf:socarx:b8fae&r= |
| By: | Domenico Buccella; Luciano Fanti; Luca Gori |
| Abstract: | This article extends the classical d'Aspremont and Jacquemin's (1988, 1990) cost-reducing R&D model with spill-overs to allow quantity-setting firms (Cournot rivalry) to play the non-cooperative R&D investment decision game with horizontal product differentiation. Unlike Bacchiega et al. (2010), who identify a parametric region – defined by the extent of technological spill-overs and the efficiency of R&D activity – in which the game is a prisoner's dilemma (self-interest and mutual benefit of cost-reducing innovation conflict), this work shows that product differentiation changes the game into a deadlock (self-interest and mutual benefit do not conflict), irrespective of the parameter scale (thus, holding also in the absence of spill-over effects). The social welfare when the degree of product differentiation is high enough and a deadlock characterises investing in cost-reducing R&D is larger than when firms do not invest in R&D, irrespective of the technological spillovers extent and the R&D activity's efficiency. These findings suggest that investing in R&D challenges the improvement of interventions aimed at favouring product differentiation. These results also hold for pricesetting firms (Bertrand rivalry). |
| Keywords: | Process innovation, Nash equilibrium, Social welfare |
| JEL: | D43 L13 O31 |
| Date: | 2021–07–01 |
| URL: | http://d.repec.org/n?u=RePEc:pie:dsedps:2021/278&r= |
| By: | Coad, Alexander; Domnick, Clemens; Flachenecker, Florian; Harasztosi, Peter; Janiri, Mario Lorenzo; Pál, Rozália; Teruel Carrizosa, Mercedes |
| Abstract: | High-Growth Enterprises (HGEs) have a large economic impact, but are notoriously hard to predict. Previous research has linked high-growth episodes to the configuration of lumpy indivisible resources inside firms, such that high capacity utilisation levels might stimulate future growth. We theorize that firms reaching critically high capacity utilisation levels reach a 'trigger point' involving either broad-based investment in further growth, or shrinking back to previous levels. We analyse EIBIS survey data (matched to ORBIS) which features a question on time-varying capacity utilisation. Overcapacity is a transitory state. Firms enter into overcapacity after a period of rapid growth of sales and profits, and the years surrounding overcapacity have higher employment growth rates. Firms operating at overcapacity make incremental investments (e.g. capacity expansion, process improvements, and modern machinery) rather than investing in R&D and new product development. We find support for the 'fork in the road' hypothesis: for some firms, overcapacity is associated with launching into massive investments and subsequent sales growth, while for other firms, overcapacity is negatively related to both investments and sales growth. |
| Keywords: | High-Growth Enterprises (HGEs),firm growth,investment,capacity utilisation,trigger points |
| JEL: | L25 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:eibwps:202108&r= |
| By: | Johannes van der Pol (GREThA - Groupe de Recherche en Economie Théorique et Appliquée - UB - Université de Bordeaux - CNRS - Centre National de la Recherche Scientifique); Jean-Paul Rameshkoumar; Sarah Teulière; Thierry Bazerque |
| Abstract: | In France, Regions do not make their own innovation policies, this is the role of the State. A Region implements national policies and uses grants and subsidies to create and dynamize innovation ecosystems important for its economic development. The Region's role is therefore largely influential. In order to influence one needs to how and when to exert this influence. A precise understanding of an innovation ecosystem is therefore of vital importance. On the occasion of the venue of a Nobel laureate to the French region of Nouvelle-Aquitaine the regional counsel aimed to connect her with the regional innovation ecosystem around her research. The purpose of this paper is to show methods and techniques using patents, scientific publications and non-patent literature citations that can help with the identification of an innovation ecosystem and how to integrate a researcher into this ecosystem . |
| Keywords: | NPL,Technology Intelligence,Patents,innovation networks |
| Date: | 2021–07–16 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-03287981&r= |