nep-ino New Economics Papers
on Innovation
Issue of 2005‒01‒23
five papers chosen by
Koen Frenken
Universiteit Utrecht

  1. Are you experienced? Prior exeprience and the survival of new organizations By Michael S. Dahl; Toke Reichstein
  3. A Matter of Life and Death: Innovation and Firm Survival By Cefis, E.; Marsili, O.
  4. Knowledge Diffusion, Supplier's Technological Effort and Technology Transfer via Vertical Relationships By GOH, Ai-Ting
  5. Science-Technology-Industry Links and the ”European Paradox”: Some Notes on the Dynamics of Scientific and Technological Research in Europe By Giovanni Dosi, Patrick Llerena, Mauro Sylos Labini

  1. By: Michael S. Dahl; Toke Reichstein
    Abstract: This paper investigates the relationship between the level of experience of managers and founders, and the likelihood of survival of their new firms. We take advantage of a comprehensive dataset covering the entire Danish labor market from 1980-2000. This is used to trace the activities of top ranked members of start-ups prior to their founding, and follow the fate of these firms. More specifically, we compare the survival of spin-offs from surviving parents, spin-offs from exiting parents, and other start-ups. Moreover, we investigate whether firms managed and founded by more experienced teams with higher levels of industry-specific experience are more likely to survive. Distinguishing between survivors and firms that have been acquired, we find that spin-offs from a surviving parent company combined with and industry-specific experience, positively affects the likelihood of survival. We also find that spin-offs from parent companies that exit are less likely to survive than either spin-offs from surviving parents or other start-ups. These findings support the theoretical arguments that organizational heritage is important for the survival of new organizations. We found no similar significant results when comparing exits with firms that have been acquired.
    Keywords: Organizational routines; Industry-specific experience; Survival of new firms; Spin-offs
    JEL: L25 M13 L60
    Date: 2005
  2. By: Zulima Fernández; María J. Nieto
    Abstract: Many advantages have been ascribed to the Internet. Although it lacks the necessary elements to be regarded as a strategic resource, the Internet seems to be a useful tool to provide support for business strategies.In this work we discuss how the Internet can be used to support the development of capabilities and define firm boundaries. Using a sample of Spanish firms, empirically analysed, we find positive relationships between the use of the Internet and product differentiation, as well as the introduction of organizational changes. In addition, we present evidence that the Internet reduces both internal coordination costs and transaction costs as a result of the positive relationships found between the use of the Internet, the degree of vertical integration and the establishment of technological agreements with suppliers and customers.
    Date: 2005–01
  3. By: Cefis, E.; Marsili, O. (Erasmus Research Institute of Management (ERIM), Erasmus University Rotterdam)
    Abstract: This paper examines the effects of innovation on the survival of manufacturing firms in the Netherlands. The demographics of firms according to their innovative performance and type of innovation are traced by using the Business Register population of all firms active in the Netherlands and the Community Innovation Survey. Through estimation of a parametric duration model, we observe that firms do benefit of an innovation premium that extends their life expectancy, independent of firm- specific traits such as age and size. Especially process innovation seems to have a distinctive effect on survival. Furthermore, our results confirm that survival chances increase with age and the growth rate of a firm, the latter representing a more crucial factor than the initial size. Finally, sectors at high intensity of technology, that is, science based and specialised suppliers are most favourable environments to the survival of firms.
    Keywords: Firm Survival;Innovation;Firms Exit;Duration models;
    Date: 2005–01–10
  4. By: GOH, Ai-Ting
    Abstract: This paper studies the effect of knowledge diffusion on the incentives for developed countries(DC)' firms to undertake costly technology transfer to their developing countries(LDC)' suppliers whose cost of production varies inversely with their technological effort. When the incumbent supplier's cost of improving efficiency is high, upstream (or, respectively, downstream) diffusion of knowledge to potential input (final output) producers encourages (discourages) technology transfer as it increases upstream (downstream) competition. However, and in sharp contrast to existing literature, when technological effort is less costly, upstream (downstream) knowledge diffusion discourages (encourages) technology transfer by reducing (increasing) the incumbent supplier's technological effort.
    Keywords: technology transfer; technological effort; developing countries; knowledge diffusion; buyer-supplier
    JEL: F23 L13 O14 O19 O32 O33
    Date: 2004–12–01
  5. By: Giovanni Dosi, Patrick Llerena, Mauro Sylos Labini
    Abstract: This paper discusses, first, the properties of scientific and technological knowledge and the institutions supporting its generation and its economic applications. The evidence continues to support the broad interpretation which we call the "Stanford-Yale-Sussex" synthesis. Second, such patterns bear important implications with respect to the so-called "European Paradox", i.e. the conjecture that EU countries play a leading global role in terms of top-level scientific output, but lag behind in the ability of converting this strength into wealth-generating innovations. The bottom line is that European weaknesses reside both in its system of scientific research and in a relatively weak industry. The final part of the work suggests a few normative implications: much less emphasis should be put on various types of "networking" and much more on policy measures aimed to both strengthen "frontier" research and strengthen European corporate actors.
    Keywords: Open Science, European Paradox, Science and Technology Policy.

This nep-ino issue is ©2005 by Koen Frenken. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.