|
on Innovation |
| By: | Moschini, GianCarlo; Lapan, Harvey E. |
| Abstract: | We review some of the most significant issues and results on the economic effects of genetically modified (GM) product innovation, with emphasis on the question of GM labeling and the need for costly segregation and identity preservation activities. The analysis is organized around an explicit model that can accommodate the features of both first-generation and second-generation GM products. The model accounts for the proprietary nature of GM innovations and for the critical role of consumer preferences vis-à-vis GM products, as well as for the impacts of segregation and identity preservation and the effects of a mandatory GM labeling regulation. We also investigate briefly a novel question in this setting, the choice of “research direction” when both cost-reducing and quality-enhancing GM innovations are feasible. |
| Date: | 2005–04–13 |
| URL: | http://d.repec.org/n?u=RePEc:isu:genres:12280&r=ino |
| By: | Paul A. David (All Souls College, Oxford & Stanford University) |
| Abstract: | Radical legal innovations in intellectual property protection have been introduced by the little noticed European Database Directive of March 1996. This initiative, part of the larger institutional transformations initiated in response to the economic ramifications of rapid progress in digital information technologies, poses numerous contentious issues in law and economics. These are likely to create ambiguities for business and non-profit activities in this area for years to come, and the terms on which those issues are resolved will materially affect the costs and organizational feasibility of scientific projects that are of global reach and significance. This is the case especially in fields such as geology, oceanography and climatology, which depend heavily upon the collection, management and analysis of large volumes of observational data that cannot be regenerated. More generally the conduct of open, collaborative science – along with many of the benefits that flow from it for the developed and the developing economies alike – may be seriously jeopardized by the consequences of the new database protections. This raises the spectre of a new and different “tragedy of the commons,” one created by continuing the unbalanced pressure to extract greater economic rents by means of controlling access to information. “Over-fencing,” which is to say, the erection of artificial cost barriers to the production of reliable public knowledge by means of reliable public knowledge, threatens the future of “the public knowledge commons” that historically has proved critically important for rapid advance in science and technology. The paper sets out the economic case for the effectiveness of open, collaborative research, and the forces behind the recent, countervailing rush to strengthen and expand the scope of intellectual property rights protection. Focusing upon innovations in copyright law and the sui generis protection of hitherto unprotected content, it documents the genesis and analyzes the economic implications of the EC’s Database Directive, and related legislative proposals (H.R. 3125, H.R. 354 and H.R. 1858) in the US. The discussion concludes by advancing a number of modest remedial proposals that are intended to promoted greater efforts to arrive at satisfactory policy solutions for this aspect of “the digital dilemma.” |
| Keywords: | intellectual property rights, copyright, sui generis protection of expressive material, economics of information-goods, open science, “fair use,” scientific databases. |
| JEL: | O P |
| Date: | 2005–02–10 |
| URL: | http://d.repec.org/n?u=RePEc:wpa:wuwpdc:0502010&r=ino |
| By: | Xiang Ao (University of Nebraska); Lilyan E. Fulginiti (University of Nebraska) |
| Abstract: | Young (1995) estimated Total Factor Productivity (TFP) growth for Hong Kong, Taiwan, Singapore and South Korea. He reported moderate growth rates for these four regions. This means that rapid growth of GDP in these four economies is due mainly to fast increase of inputs. Young (2000) also estimated the TFP growth rate of China to be 1.4% per year during the period of 1978 to 1998. Similar to his claim for the four 'Asian Tigers', he concluded that 'the productivity performance of the non-agricultural economy (of China) during the reform period is respectable, but not outstanding.' China's real GDP grew at about 9% every year during that period. Is this extraordinary growth rate only due to factor accumulation? Or is it to a large degree due to improved efficiency and innovations? To answer this question, this study uses a panel dataset of real GDP, capital stock, and labor force for 30 provinces for 1978 to 1998 to estimate the TFP for the Chinese economy. Two approaches are used to estimate the aggregate production technology: a fixed-effects model and a stochastic frontier model. Our results are consistent across models indicating a TFP growth rate of 4.9% and 3.3% respectively. Both estimates are higher than Young's 1.9%. Our estimates also indicate that national average of TFP's contribution to GDP growth amount to 41.3% and 38.7%, respectively. Other results of interest indicate that capital has contributed more than labor to GDP growth and that technological change has been labor using. |
| Keywords: | Productivity growth, China, provinces, stochastic frontier, TFP, technical change, efficiency change |
| JEL: | O47 O53 |
| Date: | 2005–02–28 |
| URL: | http://d.repec.org/n?u=RePEc:wpa:wuwpdc:0502024&r=ino |
| By: | Bettina Peters (ZEW Centre for European Economic Research) |
| Abstract: | Using a recently developed model which allows to separate a few well- established employment effects of product and process innovations, this paper reports new results on the relationship between innovation and employment growth in Germany. The model is tailor-made for analysing firm-level employment effects of innovations using specific information provided by CIS data. It establishes a theoretical link between employment growth and innovation output. The econometric analysis confirms that product innovations have a positive impact on employment. In contrast to previous studies, this effect is independent of the novelty degree. Moreover, different employment effects between manufacturing and service firms regarding process innovations were found. Finally, from a cross country perspective the results for Germany are similar to those found for Spain and the UK. |
| Keywords: | Innovation, employment, applied econometrics, manufacturing, services |
| JEL: | O33 J23 C21 O32 L60 |
| Date: | 2005–04–11 |
| URL: | http://d.repec.org/n?u=RePEc:wpa:wuwpdc:0504002&r=ino |
| By: | Paul A. David (All Souls College & Stanford University); Gavin Wright (All Souls College & Stanford University) |
| Abstract: | Presented to the International Symposium on ECONOMIC CHALLENGES OF THE 21ST CENTURY IN HISTORICAL PERSPECTIVE, Oxford, England, 2nd-4th July, 1999 Celebrating the Scholarly Career of Charles H. Feinstein, FBA. Re- examination of early twentieth century American productivity growth experience sheds light on the general phenomenon of recurring prolonged swings in total factor productivity (TFP) growth rate experienced in the advanced industrial economies. After a “productivity slowdown” lasting more than a quarter of a century (during which TFP for in the manufacturing sector grew at less than 1 percent per annum, industrial TFP surged to average 6 percent per annum during 1919-29. This contributed substantially to the absolute and relative rise of the US domestic economy’s TFP residual, and in many respects it may be seen as the opening of the high-growth era that persisted into the 1970s. The productivity surge marked the culminating phase in the diffusion of “the dynamo” as a general purpose technology (GPT); that saw a shift in the underlying technological regime brought about by the implementation of critical engineering and organizational advances originating in some two decades earlier. Closer analysis reveals the significant concurrence of the factory electrification movement in this period with important structural changes that were taking place in US labor markets; in addition, there were significant complementarities between managerial and organizational innovations and the new dynamo-based factory technology, on the one hand, and, and the reinforcement of both kinds of innovation by the macroeconomic conditions of the 1920s. This more complicated, historical view of the dynamics of GPT diffusion is supported by comparisons of the US experience of factory electrification with the developments taking place in Japanese industry during the 1920’s, and in the UK manufacturing sector during the 1930’s. Concluding sections of the paper reflect on the analogies and contrasts between the historical case of a socio-economic regime transition involving the electric dynamo and the modern experience of the information and communications technology (ICT) revolution. Our formulation the GPT concept in explicitly historical terms contributes to explaining the paradoxical phenomenon of the late twentieth century productivity slowdown in the US. It also points to some contemporary portents of a future phase of more rapid ICT-based growth in total factor productivity. |
| JEL: | N |
| Date: | 2005–02–10 |
| URL: | http://d.repec.org/n?u=RePEc:wpa:wuwpeh:0502002&r=ino |
| By: | Klaus CONRAD (University of Mannheim Department of Economics) |
| Abstract: | The objective of our approach is to develop a model which captures horizontal product differentiation under environmental awareness, product innovation under network effects, and price competition whereby environmentally friendly products are costlier to produce. As an example, we refer to automobile producers, offering cars with a gasoline powered engine and one with a natural gas powered engine. The network of petrol stations provide the complementary good. The fulfilled expectation equilibrium could be either one with the firm offering the conventional engine as the only producer, one with the firm offering the new technology as the only producer, or one in which both firms share the market. Which equilibrium will emerge depends on the cost of producing energy efficient engines and on environmental awareness of the consumers. Due to the latter aspect the innovative firm has a chance to enter the market. We use a two stage game in prices and characteristics to analyse the respective market structure. We show that if environmental awareness is strong, the firm with the conventional technology will improve energy efficiency of its product. If the network effect is weak, both firms will be in the market. Prices and profits will decline if the role of the network effect becomes important. In order to find out whether private decision on the type of engine coincides with a socially optimal product differentiation, we determine the position of the two types of engine by a welfare maximizing authority. |
| Keywords: | Price competition; Quality competition; Environmental awareness; Network effects; Automobiles. |
| JEL: | L Q H L |
| Date: | 2005–02–07 |
| URL: | http://d.repec.org/n?u=RePEc:wpa:wuwpio:0502002&r=ino |
| By: | Ana Aizcorbe (Bureau of Economic Analysis) |
| Abstract: | In the mid-1990s, a pickup in measured productivity growth for the semiconductor industry coincided with an economy-wide acceleration in labor productivity growth. The pickup in semiconductor markets reflected an increase in the growth of real output that was generated by what Dale Jorgenson (2001) called an “inflection point” in the price indexes for the semiconductor industry. Jorgenson hypothesized that the inflection point reflected increases in the rate of product innovation made possible by an increase in Moore’s Law, a stylized description of technology that currently states that the number of electrical components on a chip will double every eighteen months. Within semiconductors, microprocessors (MPUs) produced by Intel—the world’s largest producer of the chips that serve as a computer’s central processing unit—were the primary contributor to the inflection point in the semiconductor index. The inflection point in the price index coincided with two changes in the price contours for Intel’s chips. First, price contours for Intel’s chips became steeper around 1995. Because most price index formulae boil down to functions of weighted averages of price change, steeper price contours translate directly into more rapidly declining price indexes. At the same time, the product lifecycle for MPUs—the length of time chips are sold in the market—shortened and Intel began to introduce chips more frequently. What caused these changes in pricing and product cycles? This paper provides a simple framework to help gain some intuition on these issues. The model provides a set of conditions under which an increase in Moore’s Law is consistent with both of these stylized facts. In the model, an increase in Moore’s Law raises the quality of future chips relative to today’s chips. If consumers view these chips as substitutes, then increases in the quality of tomorrow’s chips push down the prices for today’s chips and can, under certain conditions, generate an inflection point in the price index. However, the framework also suggests that changes in the attributes of contemporaneous substitutes can have the same effects. Thus, the model suggests that increases in the quality of competitor’s chips can generate an inflection point through the same channel. This is an important possibility to consider because Intel faced increasing competition from AMD beginning in the mid-1990s, about when the inflection point occurred. |
| Keywords: | Semiconductor Industry, Price Measurement,product cycles |
| JEL: | L |
| Date: | 2005–02–08 |
| URL: | http://d.repec.org/n?u=RePEc:wpa:wuwpio:0502003&r=ino |
| By: | Ana Aizcorbe (Bureau of Economic Analysis) |
| Abstract: | The semiconductor industry is credited with one of the fastest rates of product innovation and technical change within manufacturing, as chipmakers generate wave after wave of ever more powerful chips at prices not much higher than those of existing chips. This industry has undoubtedly been an important driver of productivity growth as advances in semiconductors paved the way for co-invention in downstream industries that, taken together, provide firms with more efficient ways to do business and the ability to provide new goods and services that ultimately increase consumer welfare. In the mid-1990s, measured productivity growth for the industry shows a pickup that coincided with an economy-wide pickup in labor productivity growth. The acceleration in the semiconductor market stems from an increase in the growth of real output that was, in turn, generated by what Jorgenson (2001) calls an “inflection point” in price indexes for the semiconductor industry. Within semiconductors, microprocessors (MPUs) produced by Intel were the primary contributor to both the trend and inflection point in this price index. This paper explores movements in the price index for MPU chips over the 1990s to better understand sources of the pickup in measured productivity growth. Three major developments in MPU markets that roughly coincided with the measured increase in productivity are reviewed: 1) the introduction of more sophisticated lithography equipment that could have allowed Intel to increase its rate of product innovation; 2) an increase in competitive pressure from AMD; and 3) a pickup in the rate of product introductions at Intel. A stylized framework for decision-making at Intel is developed and used to show that the increase in the rate of product introductions at Intel could have been a profit-maximizing response to increased competition from AMD. The model is then used to explore the implications for price measurement. |
| Keywords: | Semiconductor industry, price measurement, product cycles |
| JEL: | L |
| Date: | 2005–02–08 |
| URL: | http://d.repec.org/n?u=RePEc:wpa:wuwpio:0502004&r=ino |
| By: | Jean-Michel Dalle (Université Pierre et Marie Curie); P. A. David (Stanford University); Rishab A. Ghosh (University of Maastricht-MERIT); W. E. Steinmueller (University of Sussex-SPRU) |
| Abstract: | Early contributions to the academic literature on free/libre and open source software (F/LOSS) movements have been directed primarily at identifying the motivations that account for the sustained and often intensive involvement of many people in this non-contractual and unremunerated productive activity. This issue has been particularly prominent in economists’ contributions to the literature, and it reflects a view that widespread voluntary participation in the creation of economically valuable goods that is to be distributed without charge constitutes a significant behavioral anomaly. Undoubtedly, the motivations of F/LOSS developers deserve to be studied more intensively, but not because their behaviors are unique, or historically unprecedented. In this essay we argue that other aspects of the “open source” phenomenon are just as intriguing, if not more so, and possibly are also more consequential topics for economic analysis. We describe the re-focusing and re-direction of empirical and theoretical research in an integrated international project (based at Stanford University/SIEPR) that aims at better understanding a set of less widely discussed topics: the modes of organization, governance and performance of F/LOSS development -- viewed as a collective distributed mode of production.. We discuss of the significance of tackling those questions in order to assess the potentialities of the “open source way of working” as a paradigm for a broader class of knowledge and information- goods production, and conclude with proposals for the trajectory of future research along that line. |
| JEL: | L |
| Date: | 2005–02–09 |
| URL: | http://d.repec.org/n?u=RePEc:wpa:wuwpio:0502007&r=ino |
| By: | Ana Aizcorbe (Bureau of Economic Analysis) |
| Abstract: | Some items in a household’s market basket, notably durable goods, are purchased only occasionally. In contrast, standard price measures implicitly assume that consumers purchase some amount of every available good in every period. The occasional purchase of an existing good by a new buyer generates a “new buyer” problem that is similar to the traditional “new goods” problem generated by the entry of new goods. This paper uses an idea introduced by Fisher and Griliches (1995) and Griliches and Cockburn (1995) to develop price indexes for goods that are not purchased in each period. A comparison of the resulting price indexes with those calculated under the standard assumption suggests that the sharp declines typically exhibited by price indexes for many high technology goods may be overstated. However, it is impossible to make any definitive statements about the numerical magnitude of this potential problem. These preliminary findings simply underscore the importance of further research to study this problem for high tech goods and to explore the possibility that similar problems may arise for other durable goods. |
| Keywords: | Price Indexes, durable goods demand, consumer heterogeneity |
| JEL: | L |
| Date: | 2005–02–09 |
| URL: | http://d.repec.org/n?u=RePEc:wpa:wuwpio:0502009&r=ino |
| By: | Paul A. David (Stanford University) |
| Abstract: | Increasing access charges and transactions costs arising from monopoly rights in data and information adversely affect the conduct of science, especially exploratory research programs. The latter are widely acknowledged to be critical for the sustained growth of knowledge-driven economies, but are most efficiently pursued in the “open science” mode. In some fields, informal cooperative norms of behavior among researchers– in regard to the sharing of timely access to raw data- steams and documented database resources – are being undermined by legal institutional innovations that accommodate the further privatising of the public domain in information. A variety of corrective measures are needed to restore proper balance to the IPR. |
| JEL: | L |
| Date: | 2005–02–10 |
| URL: | http://d.repec.org/n?u=RePEc:wpa:wuwpio:0502010&r=ino |
| By: | Jean-Michel Dalle (Université Paris VI & IMRI-Université Paris Dauphine); Paul David (Stanford University & Oxford Internet- Institute) |
| Abstract: | This paper aims to develop a stochastic simulation structure capable of describing the decentralized, micro-level decisions that allocate programming resources both within and among open source/free software (OS/FS) projects, and that thereby generate an array of OS/FS system products each of which possesses particular qualitative attributes. The core or behavioral kernel of simulation tool presented here represents the effects of the reputational reward structure of OS/FS communities (as characterized by Raymond 1998) to be the key mechanism governing the probabilistic allocation of agents’ individual contributions among the constituent components of an evolving software system. In this regard, our approach follows the institutional analysis approach associated with studies of academic researchers in “open science” communities. For the purposes of this first step, the focus of the analysis is confined to showing the ways in which the specific norms of the reward system and organizational rules can shape emergent properties of successive releases of code for a given project, such as its range of functions and reliability. The global performance of the OS/FS mode, in matching the functional and other characteristics of the variety of software systems that are produced with the needs of users in various sectors of the economy and polity, obviously, is a matter of considerable importance that will bear upon the long-term viability and growth of this mode of organizing production and distribution. Our larger objective, therefore, is to arrive at a parsimonious characterization of the workings of OS/FS communities engaged across a number of projects, and their collective productive performance in dimensions that are amenable to “social welfare” evaluation. Seeking that goal will pose further new and interesting problems for study, a number of which are identified in the essay’s conclusion. Yet, it is argued that that these too will be found to be tractable within the framework provided by refining and elaborating on the core (“proof of concept”) model that is presented in this paper. |
| JEL: | L |
| Date: | 2005–02–10 |
| URL: | http://d.repec.org/n?u=RePEc:wpa:wuwpio:0502011&r=ino |
| By: | Paul A. David (All Souls College, Oxford & Stanford University) |
| Abstract: | The technology of “the Internet” is not static. Although its “end-to- end” architecture has made this “connection-less” communications system readily “extensible,” and highly encouraging to innovation both in hardware and software applications, there are strong pressures for engineering changes. Some of these are wanted to support novel transport services (e.g. voice telephony, real-time video); others would address drawbacks that appeared with opening of the Internet to public and commercial traffic - e.g., the difficulties of blocking delivery of offensive content, suppressing malicious actions (e.g. “denial of service” attacks), pricing bandwidth usage to reduce congestion. The expected gains from making “improvements” in the core of the network should be weighed against the loss of the social and economic benefits that derive from the “end-to-end” architectural design. Even where technological “fixes” can be placed at the networks’ edges, the option remains to search for alternative, institutional mechanisms of governing conduct in cyberspace. |
| JEL: | L |
| Date: | 2005–02–10 |
| URL: | http://d.repec.org/n?u=RePEc:wpa:wuwpio:0502012&r=ino |
| By: | Michele CINCERA (Université Libre de Bruxelles-DULBEA-CERT & CEPR) |
| Abstract: | The second chapter of this Study analyses the results of the last two surveys (2000 and 2002). These surveys cover a period of rapid expansion of R&D-activities in the Flemish economy. The BERD has grown on average with nearly 13% yearly between 1998 and 2001. The most important characteristic of Flemish business R&D is the very strong concentration of R&Dexpenditures in a few big firms (the top 5 stands for 63% of the expenditures of all permanent R&D players) and in a few sectors (66% in the chemical ICT sector). This concentration has been increasing even further during this period of expansion and re-inforced tendencies of outsourcing (up to 23%), the capital intensity of research, as well as in a shift from research to development (the latter from 70 tot 77%). Another characteristic is the predominance of foreign decision power: nearly 90% of R&D expenditures are performed in foreign controlled enterprises. But those firms are well integrated in the Flemish innovation system. R&D cooperations have been executed for the larger part (45%) with Flemish partners, and they receive the larger majority of R&D outsourcing. R&D is mostly product oriented (62%, vs. 24% process oriented); 56% of R&D actors have introduced new or technologically improved products and 40% new or technologically improved processes during 2000-2001. |
| Keywords: | R&D activities private sector Flanders 3% |
| JEL: | L |
| Date: | 2005–03–12 |
| URL: | http://d.repec.org/n?u=RePEc:wpa:wuwpio:0503003&r=ino |
| By: | Georg von Graevenitz (INNO-tec, Munich School of Management) |
| Abstract: | This paper considers the integration of competition policy and innovation policy in the context of R&D cooperation. An explicit comparison of the welfare losses under ex-ante and ex-post R&D cooperation reveals differing incentives to undertake R&D in both regimes. The strength of these incentives is related to the degree of product market competition. We show that there is a clear relationship between the degree of competition in the product market and the relative performance of firms under ex-ante and ex-post cooperation. We derive implications for the design of competition policy rules. |
| Keywords: | Competition Policy, Innovation Policy, R&D Cooperation, Licensing, Research Joint Venture, Oligopolistic R&D |
| JEL: | O31 |
| Date: | 2005–03–15 |
| URL: | http://d.repec.org/n?u=RePEc:wpa:wuwpio:0503006&r=ino |
| By: | Georg von Graevenitz (INNO-tec, Munich School of Management) |
| Abstract: | We analyse economic welfare in R&D intensive industries under varying assumptions on the spillover process. The focus lies on spillover processes with complementary R&D investments such as those modelling absorptive capacity. There spillovers give rise to both negative and positive externalities. We show that the rationale for public policy intervention is strengthened where spillovers also have positive effects. This conclusion is based on the supermodularity of the spillover process and the investment game. We characterise a large class of spillover processes with similar implications for public policy. We show that results of much empirical work on absorptive capacity extend to this class of models. |
| Keywords: | spillovers, complementarity, absorptive capacity, supermodularity, oligopolistic R&D |
| JEL: | O31 |
| Date: | 2005–03–15 |
| URL: | http://d.repec.org/n?u=RePEc:wpa:wuwpio:0503007&r=ino |
| By: | K.S. Sujit (Alemaya University , Dire dawa); Badshah Mukherjee (ICFAI University, India) |
| Abstract: | In the recent year, technological progress through research and development (R&D) has been widely recognized as a key factor contributing to economic growth and competitiveness of the economy. In the traditional industrial organization (IO) literature R&D activities was considered to be an important conduct variable that can affect performance of the industry. Industrial organization (IO) literature stresses that the R&D behaviour is linked to industry structure and has the ability to create barriers to entry. On the other hand subsequent studies have stressed on the strategic groups within an industry as the main driving force behind the R&D behaviour of firms. However, the resource based view stresses on the internal capability of the firm as the main driving force. They also emphasized that the behaviour of the firm is path dependent. This study is an attempt to measure the effects of industry, group, and firm on R&D behaviour of the firm and their interaction. The study uses both continuous and categorical variables in an ANCOVA setting. The sample consists of data about Indian companies across 29 industries during 1995-2003. The findings show that though the effects of the industry and the firm are important, the most significant contributor is the effect of the interaction between the groups and the industry. |
| Keywords: | R&D decisions , business groups |
| JEL: | L |
| Date: | 2005–03–17 |
| URL: | http://d.repec.org/n?u=RePEc:wpa:wuwpio:0503008&r=ino |
| By: | Kai-Lung Hui (National University of Singapore); Qiu-Hong Wang (National University of Singapore) |
| Abstract: | We investigate the incentives of a monopolistic seller to delay the introduction of a new and improved version of his product. By analyzing a three-period model, we show that the seller may prefer to delay introducing a new product, even though the enabling technologies for the product are already available. The underlying motivation is analogous to that found in the durable goods monopolist literature – the seller suffers from a time inconsistency problem that causes his old and new products to cannibalize each other. Without the ability to remove existing stock of the old product from the market, shorten product durability, or pace research and development (R&D), he may respond by selling the new product later. We characterize the equilibria with delayed introduction, and study their changes with respect to market and product parameters. In particular, we show that delayed introduction could occur regardless of whether the seller can offer upgrade discounts to consumers, that instead, it is related to quality improvement brought about by the new product, durabilities, and discount factors. Further, we show that contrary to previous studies, delayed introduction could bring socially efficient outcomes as well. Based on the insights of the model, we provide practical suggestions on pricing and policies. |
| Keywords: | delayed introduction, durable goods monopolist, cannibalization, durability, time inconsistency, upgrade, product innovation, three-period model |
| JEL: | L |
| Date: | 2005–03–27 |
| URL: | http://d.repec.org/n?u=RePEc:wpa:wuwpio:0503011&r=ino |
| By: | Gianfranco Enrico Atzeni (University of Sassari & CRENoS); Oliviero Antonio Carboni (University of Sassari & CRENoS) |
| Abstract: | This work attempts to shed light on the “information technology productivity paradox”. Employing a large data set of Italian manufacturing firms we compute ICT marginal productivity across different cluster of firms and the impact of information and communication technology (ICT) on output growth. Following Yorukoglu’s (1998) vintage capital idea, in which ICT is associated with consistent learning-by-doing effect, we explore whether firm capital replacement/introduction behaviour and firm’s technological investment aptitude have any role in explaining ICT productivity. We find that low capital replacement (high capital introduction) yields to sensibly greater ICT marginal revenues compared to high replacement (low capital introduction). However, what really matters in explaining ICT productivity is the level of innovation the new capital embodies. In fact, for non-innovative firms the ICT paradox is far less consistent. This strongly suggests the existence of learning by doing effects. In terms of growth contribution we find that ICT have an impact disproportionately wide compared to the share in total investment they represent |
| Keywords: | Growth, investment behaviour, information and communication technologies, productivity, replacement |
| JEL: | D21 D24 L2 O3 |
| Date: | 2005–03–27 |
| URL: | http://d.repec.org/n?u=RePEc:wpa:wuwpio:0503012&r=ino |
| By: | Alexandre Gaudeul (University of East Anglia - Norwich and ESRC-CCP); Bruno Jullien (IDEI - GREMAQ - University of Toulouse) |
| Abstract: | Participants in a market, buyers and sellers, may need the service of an intermediary who will put them into contact and give them information about their potential trading partner. The intermediary chooses what price it will charge to each side to have access to its service. It also chooses what information it will reveal, for example to the buyer about the value of the seller’s product. In a market with network externalities, it would be optimal that everybody had access to the other side, as each side wants as many agents from the other side to be present as possible. This is however not feasible as the intermediary must charge positive access prices if it is to make any profit. In a market with asymmetric information, it would be optimal that all information about the buyers’ and sellers’ valuation for the traded product be available, but the intermediary will want to conceal or manipulate that information to increase its profit. The paper examines in the first part how network externalities play out in the intermediary’s access pricing strategies in both a monopoly and a competitive setting. In the second part, the paper shows how the intermediary will strategically manipulate and conceal information to extract the surplus from trade in the market it intermediates. |
| Keywords: | Intermediation, internet, asymmetric information, information goods, network effects, two sided markets, matching. |
| JEL: | D4 L1 |
| Date: | 2005–03–31 |
| URL: | http://d.repec.org/n?u=RePEc:wpa:wuwpio:0503014&r=ino |
| By: | Klaus Kultti (University of Helsinki); Tuomas Takalo (University of Toulouse & Bank of Finland); Juuso Toikka (Helsinki School of Economics) |
| Abstract: | We argue that a patent system makes collusion among innovators more difficult. Our simple argument is based on two properties of the patent system. First, a patent not only protects against infringement but also against retaliation by former collusion members. Second, a deviator has an equal chance with former collusion members to get a patent on new innovations. We show that if a patent system reduces spillovers, it renders collusion impossible. Moreover, it is possible to design a patent system that simultaneously increases knowledge spillovers and eliminates collusion |
| Keywords: | Patens, Collusion, Secrecy, Innovation |
| JEL: | L |
| Date: | 2005–03–31 |
| URL: | http://d.repec.org/n?u=RePEc:wpa:wuwpio:0503015&r=ino |
| By: | Paul A. David (Stanford University &) |
| Abstract: | Both the macroeconomic and the microeconomic evidence from U. S. economy’s experience over the past two centuries leads to a view of technological change (broadly conceived) as having not been “neutral” in its effects upon growth. The specific meaning of “non-neutrality” in this context is that technical and organizational innovation had effects upon the derived demands for factors of production, and these tended to alter the relative prices of the heterogeneous array of productive assets in the economy. By directly and indirectly impinging on relative real rates of remuneration established in the markets for particular types of human labor and skill, and for the services of specific tangible and intangible capital, “technological change” altered key conditions governing the absolute and relative growth rates of the various macroeconomic factors of production. On the other hand, because innovation exhibited strong cumulative features reflecting the influence of “localized learning,” past domestic factor market conditions exerted a persisting influence upon the globally non-neutral trajectory of American technological and organizational development. This essay thus explores two broad and related historical themes. Firstly, the non- neutrality of the impacts of innovations on the demand side of the markets for productive inputs implies that “innovation” should be understood as contributing to complex interactions among all the proximate “sources of growth.” Even though the latter are usually presented by exercises in “growth accounting” as distinct and separate dynamic elements contributing to the rise of labor productivity and per capita real output, the identification of the total factor productivity “residual” as the “contribution” of technological change is mistaken in ignoring the quantitatively important effect of successive capital- deepening “traverses” to the growth of labor productivity. The second theme underscores a fundamental contrast between the twentieth and the nineteenth century growth processes, in regard to the impacts of the predominant “bias” of the direction of innovation: the relative shift away from the accumulation of stocks of tangible reproducible capital and towards the formation of intangible productive assets by in investments in education, training and the search for new scientific and technological knowledge. |
| JEL: | E |
| Date: | 2005–02–09 |
| URL: | http://d.repec.org/n?u=RePEc:wpa:wuwpma:0502019&r=ino |
| By: | Paul David (Stanford University) |
| Abstract: | The three most extensively cited papers by Zvi Griliches deal with the diffusion of innovations, distributed lags and the sources of the growth of measured total factor productivity, respectively. The close economic connections between these dynamic phenomena remained largely unexplored and were at best only implicit in his published writings until late in his career. Yet, from his later reflective writings, it is clear that Griliches not only recognized the existence of those connections, but regarded them to be critically important in understanding the determinants of the pace of economic growth. The present paper proceeds in that spirit. It examines the relationship between Gliches’ pioneering study of the diffusion of hybrid corn and the subsequent development of economic theories explaining diffusion phenomenon. Rather than offering a comprehensive survey of the literature, its aim is to expose the connections with lagged investment in capital-embodied innovations, and formalize of the micro-to macro links between technological diffusion dynamics and the pace of measured productivity growth. The heterodox, “evolutionary economics” aspects of this approach to explaining technological ‘transitions’ may be thought to be a significant yet under-appreciated part of Griliches’ intellectual legacy. |
| JEL: | J |
| Date: | 2005–02–10 |
| URL: | http://d.repec.org/n?u=RePEc:wpa:wuwpla:0502002&r=ino |
| By: | Paul A. David (Stanford University & All Souls College, Oxford) |
| Abstract: | Three styles of explanation have been advanced by economists seeking to account for the so-called 'productivity paradox'. The coincidence of a persisting slowdown in the growth of measured total factor productivity (TFP) in the US, since the mid-1970's, with the wave of information technology (It) innovations, is said by some to be an illusion due to the mismeasurement of real output growth; by others to expose the mistaken expectations about the benefits of computerization; and by still others to reflect the amount of time, and the volume of intangible investments in 'learning', and the time required for ancillary innovations that allow the new digital technologies to be applied in ways that are reflected in measured productivity growth. This paper shows that rather than viewing these as competing hypotheses, the dynamics of the transition to a new technological and economic regime based upon a general purpose technology (GPT) should be understood to be likely to give rise to all three 'effects.' It more fully articulates and supports this thesis, which was first advanced in the 'computer and dynamo' papers by David (1990, 1991). The relevance of that historical experience is re-asserted and supported by further evidence rebutting skeptics who have argued that the diffusion of electrification and computerization have little in common. New evidence is produced about the links between IT use, mass customization, and the upward bias of output price deflators arising from the method used to 'chain in' new products prices. The measurement bias due to the exclusion of intangible investments from the scope of the official national product accounts also is examined. Further, it is argued that the development of the general-purpose PC delayed the re-organization of businesses along lines that would have more directly raised task productivity, even though the technologies yielded positive 'revenue productivity' gains for large companies. The paper concludes by indicating the emerging technical and organizational developments that are likely to deliver a sustained surge of measured TFP growth during the decades that lie immediately ahead. |
| JEL: | E |
| Date: | 2005–02–10 |
| URL: | http://d.repec.org/n?u=RePEc:wpa:wuwpma:0502022&r=ino |
| By: | El¿bieta Wojnicka (University of Information Technology & Management in Rzeszów) |
| Abstract: | According to the concept of an innovation system, an innovation system consists of institutions and interactions between them. Thanks to them a given economy is an efficient mechanism of distribution of knowledge for its further recombination. The concept shows how the linear and network- based character of innovation process affects the functioning of an economy, which for growth depends on innovations. The analysis of the impact of the more intense interactions of the Polish enterprises in the innovation process on their innovativeness and competitiveness proves the concept of innovation system to be right. Analysis performed through different methods confirmed the validity of the hypothesis that there is a positive relationship between an interactive way of innovation activity and the effectiveness of innovation process and hence success of firms. |
| Keywords: | innovation process, innovation system, enterprises, networks and interactions |
| JEL: | P Q Z |
| Date: | 2005–03–11 |
| URL: | http://d.repec.org/n?u=RePEc:wpa:wuwpot:0503002&r=ino |
| By: | El¿bieta Wojnicka (The Gdañsk Institute for Market Economics); Przemys³aw Rot (The Gdañsk Institute for Market Economics); Piotr Tamowicz (The Gdañsk Institute for Market Economics); Tomasz Brodzicki (The Gdañsk Institute for Market Economics) |
| Abstract: | The concept of an innovation system stresses the role of interaction and co-operation between different agents creating and distributing knowledge and innovation. In the post-communist countries like Poland, most of the institutions similar to those of mature market economies are already established. However they not yet embedded in the economy. That is one of the reasons why co-operation between agents in the Polish innovation system is very weak, which results in a very low level of innovation throughout the entire economy. In 2001, The Gdansk Institute for Market Economy undertook research into the regional innovation system of one of the Polish regions – the Pomeranian Region. The results of the research showed that the majority of firms in the region do not co-operate in the innovation process, especially on the regional level. Horizontal linkages between firms almost do not exist. Firms perceive other firms mainly as competitors and are afraid of co-operation. They believe co-operation leads to the theft of their ideas and precious workers. If co-operation occurs, it concerns only less risky and costly phases of the innovation process like joint development, joint conferences and exhibitions as well as joint marketing strategy. The Pomeranian firms also have very weak linkages to the public scientific sector. They very rarely co-operate with scientific research institutions or technology transfer institutions. The weak interaction between firms, both among themselves and with those in academia, results in a very low overall and especially business R&D expenditure. The Pomeranian region, similar to the entire country, is mainly a user, not a producer of technology. The majority of the firms’ capital is imported from foreign countries. To sustain the long-run competitiveness of industry it is crucial to enhance the R&D activity of Polish firms, preferably basing this on co-operation with other agents of the innovation system. A policy stimulating interactions in the innovation process could be cheaper than a policy establishing new institutions as co-operation steers resources into a single effort and it has multiple effects. An important source of new knowledge might be the exchange of information and ideas during conferences, exhibitions, co-operation of firms in chambers of commerce, etc. However, the majority of Pomeranian firms belong to different firms’ associations on the domestic level. As co-operation on the regional level might be more effective, regional authorities should induce dialogue between firms and other regional agents. In the Strategy of Development of the Region originating in the year 2000, one of the main priorities is building an effective regional innovation system. However, it is important that all the actions undertaken are based on their usefulness for enterprises, which are the most important agents in the RIS. |
| Keywords: | regional innovation systems, enterprises |
| JEL: | P Q Z |
| Date: | 2005–03–11 |
| URL: | http://d.repec.org/n?u=RePEc:wpa:wuwpot:0503003&r=ino |
| By: | Jon Mikel Zabala Iturriagagoitia (Institute of Innovation & Knowledge Management. INGENIO CSIC-UPV) |
| Abstract: | The aim of the present thesis proposal is to define a methodology to measure the interactions among the agents involved in a System of Innovation, due to the fact that the literature agrees in a lack of measures in this respect. The conceptualization of Regional Innovation Systems (Cooke and Morgan, 1993) can be understood like an extension and adaptation arisen from the concept of National Innovation Systems defined in the works of Freeman (1987), Nelson (ed., 1993) and Lundvall (ed., 1992) and in the subsequent development of Edquist (ed., 1997). It consist of analyzing the existence of actors (institutions, clusters, universities, industries…) and regional competences, and the interactions into Innovation Networks among them, providing regional authorities with a tool to define policies to increase competitiveness. A first stream work in which relations and flows among the main agents of an Innovation System are shown, is the one made up by the works of Scherer, (1982), Pavitt (1984), Archibugi (1988), Galli and Teubal (1997), DeBresson (ed., 1996). Another is due to Andersen (1992, 1996) on Innovation Systems, using “graph theory” and simulation models (Andersen and Lundvall, 1997). Recently, some different research projects can be found in which relations established among the agents in Innovation Systems are studied (European Planning Studies, Vol. 8, Not. 4, 2000). Besides, diverse simulation models created to measure the characteristics of Innovation Systems in different environments (Simulating Self-Organizing innovation networks” -SEIN-) are also detailed. There is a growing need to elaborate indicators that allow to predict changes in the regional innovation capacity beyond those employed in the linear model. We have also noticed the need to measure other processes such as those related to institutional relations and the creation of networks, in order to evaluate innovation policies (Zenker, 2001; Landabaso, Oughton, Morgan, 2001; Saviotti, 1997; Archibugi, Howells and Michie, eds., 1999). This is supported by the fact that several policies fostering innovation have been defined, such as RIS, RTP, RITTS, etc… In this context, and due to the importance of co-operation practices within Regional Innovation Systems, the present research project tries to contribute with a model as well as an Indicator Scoreboard which helps quantify the interrelations that occur among the agents in an Innovation System. |
| Keywords: | Regional Innovation Systems, Innovation Networks, Measures, Interactions. |
| JEL: | O P |
| Date: | 2005–03–11 |
| URL: | http://d.repec.org/n?u=RePEc:wpa:wuwpdc:0503002&r=ino |
| By: | Jon Mikel Zabala Iturriagagoitia (Institute of Innovation & Knowledge Management, INGENIO, CSIC-UPV) |
| Abstract: | Innovation Systems constitute an analysis framework, which allows comprehending the socio-economic structure of a territory. In this context, and due to the importance of interactions, the present research intends to contribute a methodology and a set of indicators which help to increase the knowledge about these interactions, and their impact on the innovative capacity of the territories. The methodology developed will be tested in a multisectoral industrial sector, the Mondragón Cooperative Corporation (MCC) located in the Basque Country. This way, not only the measures defined but also the differences among the Networks that constitute its different sectors will be observed. |
| Keywords: | Innovation Systems, Interactions, Innovation Networks, Measures, Mondragón Cooperative Corporation. |
| JEL: | O31 O32 R11 |
| Date: | 2005–03–11 |
| URL: | http://d.repec.org/n?u=RePEc:wpa:wuwpur:0503002&r=ino |
| By: | Jon Mikel Zabala Iturriagagoitia (Institute of Innovation & Knowledge Management. INGENIO, CSIC-UPV) |
| Abstract: | Innovation Systems constitute an analysis framework, which allows comprehending the socio-economic structure of a territory. It consists of analyzing the existence of actors such as government institutions, clusters, universities, industries… their main competences, and the interactions into Innovation Networks among them. Thus, authorities (regional, national, local…) are endowed of a tool that allows the creation and development of competitive and efficient Innovation Systems. In this context, and due to the importance of interactions inside Innovation Systems, the present research intends to contribute a methodology which helps us to analyze and measure these interactions produced within Innovation Networks. The methodology developed will be tested in a sector which is present in several European Territories. This way, not only the measures defined but also the differences among the Networks analyzed will be observed and tested. |
| Keywords: | Innovation Systems, Interactions, Innovation Networks, Measures. |
| JEL: | R |
| Date: | 2005–03–11 |
| URL: | http://d.repec.org/n?u=RePEc:wpa:wuwpur:0503003&r=ino |
| By: | Elif Bascavusoglu (TEAM); Maria Pluvia Zuniga (TEAM) |
| Abstract: | Developing countries, and particularly, those with a growing technological capacity, expect foreign technology transfers to increase when strengthening their intellectual property protection (IPR) rights. This paper evaluates empirically the impact of IPR on disembodied knowledge trade. It presents an exploration on Bilateral French Technology Receipts at the industry level for the period 1994-2000. Two main findings stem from our analysis. First, it is found that IPR affects positively international knowledge contracting. Nevertheless, our findings show that the impact of IPR protection differs according to countries' income level and technological capacity. Stronger IPR rights can deter technology contracting in developing economies. Second, the effects of IPR protection are found to differ across industries. Stronger protection is found to be irrelevant to attract knowledge contracting in R&D-intensive industries, contrarily to middle R&D-intensive industries. Lastly, our findings on industries' sensitivity to foreign IPR protection differ from the results reported by survey studies (Mansfield et alii, 1968; Levin et alii, 1987; Cohen et alii, 2000) concerning the relative importance of IPR protection across industries to appropriate innovation. |
| Keywords: | Intellectual property rights, international technology transfer, patent protection. |
| JEL: | O34 K42 F14 O31 |
| Date: | 2005–01 |
| URL: | http://d.repec.org/n?u=RePEc:mse:wpsorb:bla05009&r=ino |