nep-cse New Economics Papers
on Economics of Strategic Management
Issue of 2022‒10‒10
two papers chosen by
João José de Matos Ferreira
Universidade da Beira Interior

  1. The Role of Non-R&D Expenditures in Promoting Innovation in Europe By Leogrande, Angelo; Costantiello, Alberto; Laureti, Lucio
  2. Factors that affect the technological transition of firms toward the industry 4.0 technologies By Seung Hwan Kim; Jeong hwan Jeon; Anwar Aridi; Bogang Jun

  1. By: Leogrande, Angelo; Costantiello, Alberto; Laureti, Lucio
    Abstract: In this article we estimate the value of “Non-R&D Innovation Expenditures” in Europe. We use data from the European Innovation Scoreboard-EIS of the European Commission from the period 2010-2019. We test data with the following econometric models i.e.: Pooled OLS, Dynamic Panel, Panel Data with Fixed Effects, Panel Data with Random Effects, WLS. We found that “Non-R&D Innovation Expenditures” is positively associated among others to “Innovation Index” and “Firm Investments” and negatively associated among others to “Human Resources” and “Government Procurement of Advanced Technology Products”. We use the k-Means algorithm with either the Silhouette Coefficient and the Elbow Method in a confrontation with the network analysis optimized with the Distance of Manhattan and we find that the optimal number of clusters is four. Furthermore, we propose a confrontation among eight machine learning algorithms to predict the level of “Non-R&D Innovation Expenditures” either with Original Data-OD either with Augmented Data-AD. We found that Gradient Boost Trees Regression is the best predictor for OD while Tree Ensemble Regression is the best Predictor for AD. Finally, we verify that the prediction with AD is more efficient of that with OD with a reduction in the average value of statistical errors equal to 40,50%.
    Keywords: Innovation, and Invention: Processes and Incentives; Management of Technological Innovation and R&D; Diffusion Processes; Open Innovation.
    JEL: O30 O31 O32 O33 O34
    Date: 2022–09–11
  2. By: Seung Hwan Kim; Jeong hwan Jeon; Anwar Aridi; Bogang Jun
    Abstract: This research aims to identify factors that affect the technological transition of firms toward industry 4.0 technologies (I4Ts) focusing on firm capabilities and policy impact using relatedness and complexity measures. For the analysis, a unique dataset of Korean manufacturing firms' patent and their financial and market information was used. Following the Principle of Relatedness, which is a recently shaped empirical principle in the field of economic complexity, economic geography, and regional studies, we build a technology space and then trace each firm's footprint on the space. Using the technology space of firms, we can identify firms that successfully develop a new industry 4.0 technology and examine whether their accumulated capabilities in their previous technology domains positively affect their technological diversification and which factors play a critical role in their transition towards industry 4.0. In addition, by combining data on whether the firms received government support for R&D activities, we further analyzed the role of government policy in supporting firms' knowledge activity in new industry 4.0 technologies. We found that firms with higher related technologies and more government support are more likely to enter new I4Ts. We expect our research to inform policymakers who aim to diversify firms' technological capabilities into I4Ts.
    Date: 2022–09

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