nep-ino New Economics Papers
on Innovation
Issue of 2005‒03‒13
fourteen papers chosen by
Koen Frenken
Universiteit Utrecht

  1. Inappropriate technology and innovation systems at the periphery: notes on Celso Furtado's contributions for a dialogue between evolutionists and structuralists By Eduardo da Motta e Albuquerque
  2. Agglomeration economies and entrepreneurship: testing for spatial externalities in the Dutch ICT industry By Erik Stam; Frank G. van Oort
  3. How special is the special relationship? Using the impact of US R&D spillovers on UK forms as a test of technology sourcing By Rachel Griffith; Rupert Harrison; ; John Van Reenen
  4. What is the Impact of Software Patent Shifts?: Evidence from Lotus v. Borland By Josh Lerner; Feng Zhu
  5. Measurement and Explanation of the Intensity of Co-publication in Scientific Research: An Analysis at the Laboratory Level By Jacques Mairesse; Laure Turner
  6. Consolidation, Scale Economies and Technological Change in Japanese Banking By Solomon Tadesse
  7. Financial Development and Technology By Solomon Tadesse
  9. Internet Entrepreneurship: Networks and Performance of Internet Ventures In China By BAT BATJARGAL
  10. The role of R&D technology in asymmetric research joint ventures By Sami Dakhlia; Flavio M. Menezes; Akram Temimi
  11. A note on duplication of R&D and R&D subsidies By Sami Dakhlia; Flavio M. Menezes; Akram Temimi
  12. R&D and M&A : Are cross-border M&A different ? An investigation on OECD countries By Olivier Bertrand; Pluvia Zuniga
  13. Technology Transfer through Backward Linkages : The Case of the Spanish Manufacturing Industry By Liza Jabbour; Jean-Louis Mucchielli
  14. Is innovation persistent at the firm Level . An econometric examination comparing the propensity score and regression methods By Emmanuel Duguet; Stéphanie Monjon

  1. By: Eduardo da Motta e Albuquerque (Cedeplar-UFMG)
    Abstract: This paper focuses on "inappropriate technology" as formulated by Celso Furtado. The concept of "inappropriate technology" may be, on the one hand, an enlightening assessment of the technological condition of underdevelopment and, on the other hand, a helpful "focusing device" for an agenda on innovation systems at the periphery. Furtado's approach on inappropriate technology may uncover the social roots of the well know "low-growth trap" of less-developed economies. Celso Furtado explains how inappropriate technology is related to the polarization "modernization-marginalization" that characterizes economies with immature systems of innovation, as the Brazilian economy. This concept also highlights how difficult it is to overcome the complex interplay among unequal income distribution, localized and blocked technical progress and unsustainable economic growth. To overcome the inappropriate technology a dual institutional building seems to be necessary: the innovation systems might co-evolve with welfare systems.
    Keywords: Celso Furtado, evolutionary theory, innovation systems, welfare systems, catching up process
    JEL: O30 B29
    Date: 2005–03
  2. By: Erik Stam; Frank G. van Oort
    Abstract: Although there is growing evidence on the role of agglomeration economies in the formation and growth of firms, both the concepts of agglomeration economies and entrepreneurship tend to be ambiguously defined and measured in the literature. In this study, we aim to improve the conceptualisations and measures of agglomeration economies and entrepreneurship. Indicators of agglomeration economies are analysed in clearly defined urban regimes on three spatial scales in the Netherlands - national zoning, labour market connectedness, and urban size. This is done in order to uncover their effect on two entrepreneurial phases in the firm life cycle - new firm formation and the growth of incumbent firms in the relatively new ICT industry in the Netherlands. In comparison with new firm formation, the growth of incumbent firms is not so much related to spatial clustering of the ICT industry and other localized sources of knowledge economies associated with urban density. Instead, knowledge as an input for growth of incumbent firms is associated with more endogenous (firm internal) learning aspects, reflected by a significant correlate with R&D-investments. Also the effect of local ICT firm competition differs between the two types of firms: a positive effect on new firm formation, but a negative effect on incumbent firm growth. In general, agglomeration economies have stronger effects on the formation of ICT firms than on the growth of ICT firms.
    Keywords: agglomeration economies, spatial externalities, entrepreneurship, location, urban regimes, ICT industry
    JEL: D21 L25 L63 L86 M13 O18 R12 R30
  3. By: Rachel Griffith (Institute for Fiscal Studies); Rupert Harrison (Institute for Fiscal Studies); ; John Van Reenen
    Abstract: How much does US-based R&D benefit other countries and through what mechanisms? We test the 'technology sourcing' hypothesis that foreign research labs located on US soil tap into US R&D spillovers and improve home country productivity. Using panels of UK and US firms matched to patent data we show that UK firms who had established a high proportion of US-based inventors by 1990 benefited disproportionately from the growth of the US R&D stock over the next 10 years. We estimate that UK firms’ Total Factor Productivity would have been at least 5% lower in 2000 (about $14bn) in the absence of the US R&D growth in the 1990s. We also find that technology sourcing is more important for countries and industries who have 'most to learn'. Within the UK, the benefits of technology sourcing were larger in industries whose TFP gap with the US was greater. Between countries, the growth of the UK R&D stock did not appear to have a major benefit for US firms who located R&D labs in the UK. The 'special relationship' between the UK and the US appears distinctly asymmetric.
    Keywords: international spillovers; technology sourcing; productivity;
    JEL: O32 O33 F23
    Date: 2004–12
  4. By: Josh Lerner; Feng Zhu
    Abstract: Economists have debated the extent to which strengthening patent protection spurs or detracts from technological innovation. In this paper, we examine the reduction of software copyright protection in the Lotus v. Borland decision. If patent and copyright protections are substitutes, then weakening of one form of protection should be associated with an increasing reliance on the other. We find that the firms affected by the diminution of copyright protection disproportionately accelerated their patenting in subsequent years. But little evidence can be found for harmful effects: in fact, the increased reliance on patents is correlated with some positive outcomes for firms.
    JEL: O3
    Date: 2005–03
  5. By: Jacques Mairesse; Laure Turner
    Abstract: In order to study networks of collaboration between researchers, we propose a simple measure of the intensity of collaboration, which can be easily interpreted in terms of relative probability and directly aggregated at the laboratory level. We use this measure to characterize the relations of collaboration, as defined in terms of co-publication, between the physicists the French %u201CCentre National de la Recherche Scientifique%u201D (CNRS), in the field of condensed-matter, between 1992 and 1997, and to investigate how they vary with regards to various factors: mainly the geographical distance between laboratories, but also their specialization and size, their productivity and the quality of their publications, and their international openness. We find that the average intensity of co-publication within laboratories is about 40 times higher than the intensity between laboratories but within towns, and 100 times higher than the intensity between laboratories and between towns. Yet, geographical distance does not have a significant impact, or a very weak one, on the existence and intensity of co-publication of researchers located in different towns. We also find that the productivity laboratories, their size and proximity in specialization profiles are significant factors of collaboration.
    JEL: D29 O39
    Date: 2005–03
  6. By: Solomon Tadesse
    Abstract: The paper examines the technological structure of the Japanese banking sector before the onset of the banking crisis and structural reforms of the 90s in order to shade light on the logic of the recent trend to consolidation in the industry. While diseconomies of scale are shown to be pervasive in the large banks, defying the rationale for consolidation, the paper presents evidence of an underlying technological progress that operates to significantly increase the industry’s efficient minimum size, generating economies at larger banks, thus justifying the ongoing trend in consolidation. The results suggest that, to the extent that consumers can benefit from lower costs of bank production, policies that promote a more concentrated banking structure might be consistent with public interest.
    Keywords: Scale Economies; Technical Change; Banking
    JEL: G21 D24 O3
    Date: 2005–02–01
  7. By: Solomon Tadesse
    Abstract: Research in development economics reveals that the bulk of cross-country differences in economic growth is attributable to differences in productivity. By some accounts, productivity contributes to more than 60 percent of countries’ growth in per capita GDP. I examine a particular channel through which financial development could explain cross-country and crossindustry differences in realized productivity. I argue that financial development induces technological innovations – a major stimulus of productivity - through facilitating capital mobilization and risk sharing. In a panel of industries across thirty eight countries, I find that financial development explains the cross-country differences in industry rates of technological progress, rates of real cost reduction and rates of productivity growth. I find that the effect of financial development on productivity and technological progress is heterogeneous across industrial sectors that differ in their needs for financing innovation. In particular, industries whose younger firms depend more on external finance realize faster rate of technological change in countries with more developed banking sector.
    Keywords: Financial Development, Productivity Growth, Technological Progress, Innovation
    JEL: G1 G21 G32 E44 O14 O31 O34 O4
    Date: 2005–02–01
    Abstract: This study examines the impact of entrepreneurs’ network structure and knowledge homogeneity/heterogeneity of their network members on product development, and revenue growth of software ventures in China and Russia. The empirical data are composed of structured interviews with 159 software entrepreneurs in Beijing and Moscow. The study found that structural holes and knowledge heterogeneity affect positively product diversity in interactive ways. The study also found that knowledge homogeneity accelerates product development. Product development speed enhances revenue growth in the long term. However, the combination of speed with dense and homogeneous networks harms revenue growth over time. The effects of structural holes and knowledge heterogeneity on product diversity and revenue growth over time are more salient in Russia due to the unique institutional, social, and cultural conditions present in the country.
    Keywords: networks, knowledge, entrepreneurs, software, China, Russia.
    JEL: M13 D85 L14 L25 P27
    Date: 2005–02–01
    Abstract: This article examines the contingent value of entrepreneurs' networks to survival likelihood of Internet ventures, and the dynamics of entrepreneurs' networks over time. The empirical data are composed of the longitudinal surveys of 94 Internet ventures in Beijing, China. The study found the positive and the negative contingent effects of structural holes on the survival likelihood of new firms. The study found that networking skills of entrepreneurs are associated positively with the changes in networks over time. Improved social skills lead to greater firm legitimacy.
    Keywords: Structural holes, human capital, Internet, entrepreneurship, China
    JEL: M13 D85 L14 L25 P27
    Date: 2005–02–01
  10. By: Sami Dakhlia (C&BA et CERMSEM); Flavio M. Menezes (EPGE/FGV); Akram Temimi (C&BA)
    Abstract: We characterize asymmetric equilibria in two-stage process innovation games and show that they are prevalent in the different models of R&D technology considered in the literature. This leads to a reassessment of the potential benefits of research cooperative agreements. Indeed, cooperation in R&D may be accompanied by high concentration in the product market. We show that while such an increase may be profitable, it may be socially inefficient.
    Keywords: Research and development; research joint ventures; process innovation games
    JEL: D43 L1 O32
    Date: 2004–06
  11. By: Sami Dakhlia (C&BA et CERMSEM); Flavio M. Menezes (EPGE/FGV); Akram Temimi (C&BA)
    Abstract: We show that the presumed incompatibility of uncoordinated R&D and competition is not fudamental, but hinges on the nature of R&D spillovers. As a consequence, R&D subsidies may be more effective than previously thought.
    Keywords: Research and development; subsidies; process innovation games
    JEL: D43 L1 O32
    Date: 2004–06
  12. By: Olivier Bertrand (TEAM); Pluvia Zuniga (TEAM)
    Abstract: This paper investigates the incidence of national and cross-border M&A on industrial R&D investment in OECD countries over the period 1990-1999. We use generalized method of moments (GMM) estimation techniques for dynamic panel data and control for market-related and technological determinants of R&D production. Our findings show that the last M&A wave contributed to expand domestic R&D activities, especially in high-technology intensive industries. However, further evidence suggests that cross-border M&A (particularly outward M&A), and not domestic ones, have stimulated more significantly R&D spending. This result gives evidence that anti-competition effects are more likely to affect negatively R&D activities with a domestic M&A. Reversely, efficiency gains might be higher in a cross-border operation, encouraging merging firms to raise their R&D investments.
    Keywords: M&A; Industrial restructuring; R&D, technology
    JEL: O30 L10 F23
    Date: 2004–07
  13. By: Liza Jabbour (TEAM); Jean-Louis Mucchielli (TEAM)
    Abstract: The aim of this paper is to examine technology transfer through backward linkages between multinational entreprises and local suppliers. This issue is of great interest for several reasons. First of all, the new theory of economic growth suggests that technological innovations are becoming an increasingly important contributor to economic growth. Secondly, an obvious policy issue for governments is whether or not incentives should be offered to multinational firms in order to attract them. The econometric analysis presented here is based on a firm level database from Spain for the period 1990-2000. We use the Olley and Pakes method to estimate the total factor productivity of the firms and measure the effect of downstream FDI on local firm productivity and find positive evidence on the existence of technology transfer through backward linkages. Our results show strong evidence on technology spillovers through backward linkages, especially in the case of export-oriented affiliates and fully-owned affiliates.
    Keywords: Technology spillovers; Backward linkages; foreign direct investment
    JEL: F23
    Date: 2004–07
  14. By: Emmanuel Duguet (Université de Bretagne et EUREQua); Stéphanie Monjon (EUREQua)
    Abstract: At the macroeconomic level, the persistence of technological change allows sustainable growth. But do the innovations come from the same set of firms or from a continous renewal of innovators ? On this point, the assumptions underlying the endogenous growth models differ and innovation persistence at the macroeconomic level can be supported by different firm-level behavioral assumptions. The aim of this article is threefold. Firstly, we evaluate a measure of the degree of innovation persistence at the firm level. Secondly, we analyze the factors underpinning the innovation persistence by testing the theoretical explanations that have been proposed in the literature. Lastly, we examine the robustness of the standard econometric methods used in innovation economics. We show that the persistence of innovation is strong at the firm level and that the right theoretical modeling depends on the size of the firm. While the smallfirms reveals strong learning-by-doing effects in the production of innovation, the persistence of innovation in the large firms relies on the persistence of formal research and development investments.
    Keywords: Community innovation surveys; creative destruction; innovation; learning-by-doing; matching; persistence; propensity score; research and development
    JEL: C14 O31 O32
    Date: 2004–07

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