nep-ino New Economics Papers
on Innovation
Issue of 2005‒04‒24
eleven papers chosen by
Koen Frenken
Universiteit Utrecht

  1. Focal Firms as Technological Gatekeeers within Industrial Districts: Knowledge Creation and Dissemination in the Italian Packaging Machinery Industry By Alessandro Malipiero; Federico Munari; Maurizio Sobrero
  2. The Impact of Farmer-Field-Schools on Knowledge and Productivity: A Study of Potato Farmers in the Peruvian Andes By Erin Godtland; Elisabeth Sadoulet; Alain de Janvry; Rinku Murgai; Oscar Ortiz
  3. Internet Retailing as a Marketing Strategy By Maarten C.W. Janssen; Rob van der Noll
  4. Application of Technological Control Measures on Vehicle Pollution: A Cost-Benefit Analysis in China By Paulo Augusto Nunes; Qiang Wu
  5. Key Environmental Innovations By Joseph Huber
  6. R&D Networks Among Unionized Firms By Vincent Vannetelbosch; Ana Mauleon; José Sempere-Monerris
  7. The Dynamics of Carbon and Energy Intensity in a Model of Endogenous Technical Change By Valentina Bosetti; Carlo Carraro; Marzio Galeotti
  8. The Allure of Technology: How France and California Promoted Electric Vehicles to Reduce Urban Air Pollution By David Calef; Robert Goble
  9. Institutional Origin and Resource Endowments to Science-Based Entrepreneurial Firms: A European Exploration By N. MORAY; B. CLARYSSE
  10. How do Early Stage High Technology Investors Select Their Investments? By B. CLARYSSE; M. KNOCKAERT; A. LOCKETT
  11. India and the Challenge of New Technology By Rahul Amolak Shastri

  1. By: Alessandro Malipiero; Federico Munari; Maurizio Sobrero
    Abstract: Despite the diffusion of communication tools and boundary spanning technologies, knowledge flows in innovation processes retain a distinct localized nature in many industries and geographical clusters emerge as critical areas to foster technological diffusion. In this paper we focus on the role of focal firms in industrial clusters as “gatekeepers” introducing external technological novelties in the cluster and enacting new useful knowledge production locally, thus enhancing international competitive capabilities of all firms in the cluster. We analyze a longitudinal dataset of 720 patents granted by USPTO between 1990 and 2003 to firms in the automatic packaging machinery industrial district of Emilia-Romagna in Northern Italy, and a matched-sample to control for the uneven geographical distribution of R&D and patenting activities. Our results show that firms within the cluster use local knowledge to a greater extent and more rapidly than knowledge from the outside than it would be expected given the geographic distribution of innovative activity in the industry. Moreover, focal firms use external knowledge to a greater extent than other firms operating in the cluster, and other (non focal) firms within the cluster use knowledge from focal firms to a greater extent than would be expected given the geographic distribution of innovative activity in the industry. Implications for research on the geographical distribution of innovation activities are discussed.
    Keywords: Innovation processes; Knowledge flows; Geographical clusters
    JEL: O18 O31 D83
    Date: 2005
  2. By: Erin Godtland (U.S. General Accounting Office); Elisabeth Sadoulet (University of California, Berkeley); Alain de Janvry (University of California, Berkeley); Rinku Murgai (Development Economics Research Group, The World Bank); Oscar Ortiz (International Potato Center, Consultative Group on Agricultural Research)
    Abstract: Using survey-data from Peru, this paper evaluates the impact of a pilot farmer-field-school (FFS) program on farmers' knowledge of integrated pest management(IPM) practices related to potato cultivation. We use both regression analysis controlling for participation and a propensity score matching approach to create a comparison group similar to the FFS participants in observable characteristics. Results are robust across the two approaches as well as with different matching methods. We find that farmers who participate in the program have significantly more knowledge about IPM practices than those in the non-participant comparison group. We also find that improved knowledge about IPM practices has a significant impact on productivity in potato production.
    Keywords: agricultural innovations, agricultural productivity, integrated pest management, potato cultivation,
    Date: 2003–11–01
  3. By: Maarten C.W. Janssen (Faculty of Economics, Erasmus Universiteit Rotterdam); Rob van der Noll (Faculty of Economics, Erasmus Universiteit Rotterdam, and CPB Netherlands Bureau for Economic Policy Analysis, The Hague)
    Abstract: We analyze the incentives for incumbent bricks-and-mortar firms and new entrants to start an online retail channel in a differentiated goods market. To this end we set up a two-stage model where firms first decide whether or not to build the infrastructure necessary to start an online retail channel and then compete in prices using the channels they have opened up. Consumers trade-off the convenience of online shopping and the ease to compare prices, with online uncertainties. Without a threat of entry by a third pure online player we find that for most parameter constellations firms' dominant strategy is not to open an online retail channel as this cannibalizes too much on their conventional sales. As the cannibalization effect is not present for a pure Internet player, we show that these firms will start online retail channels under a much wider range of parameter constellations. The threat of entry may force incumbent bricks-and-mortar firms to deter entry by starting up an Internet retail channel themselves. We also show that a low cost of building up an online retail channel or online shopping conveniences may not be to the benefit of online shopping as the strategic interaction between firms may be such that no online retail channel is built when the circumstances seem to be more favourable.
    Keywords: E-Commerce; Internet; multichannel competition; online uncertainty; online shopping convenience
    JEL: D43 M30
    Date: 2005–04–11
  4. By: Paulo Augusto Nunes (University Ca' Foscari of Venice); Qiang Wu (Bologna Center, SAIS and Johns Hopkins University)
    Abstract: For the past two decades, China has experienced strong, continuous economic growth. At the same time, the number of motor vehicles in China has rapidly increased. As a direct result of such a phenomenon, China has been registering significant increases in air pollution. In spite of recent advances in air pollution control, it remains a serious problem for China’s major cities, and constitutes an important issue in the agenda of its policy makers. The object of this paper is to explore the use of cost-benefit analysis (CBA) to evaluate and rank alternative policy scenarios regarding the control of air pollution emitted by motor vehicles. The empirical analysis carried out relates specifically to the Chinese context, over a twenty year period, from 2001 to 2020, and focuses on emission changes of the following three principal pollutants: CO, HC and NOx.
    Keywords: Vehicle, Pollution, CO, HC, NOx, Scenario, Standard, Cost, Benefit, China
    JEL: O33 O53
    Date: 2005–01
  5. By: Joseph Huber (Martin-Luther-University)
    Abstract: This paper is based on empirical research on a taxonomy of technological environmental innovations. It draws on a databank with over 500 examples of new technologies (materials, products, processes and practices) which come with benign environmental effects. The approaches applied to interpreting the datasets are innovation life cycle analysis, and product chain analysis. Main results include the following: 1. Innovations merely aimed at eco-efficienc y do in most cases not represent significant contributions to improving the properties of the industrial metabolism. This can better be achieved by technologies that fulfill the criteria of eco-consistency (metabolic consistency), also called eco-effectiveness. 2. Ecological pressure of a technology is basically determined by its conceptual make-up and design. Most promising thus are technologies in earlier rather than later stages of their life cycle (i.e. during R&D and customisation in growing numbers), because it is during the stages before reaching the inflection point and maturity in a learning curve where technological environmental innovations can best contribute to improving ecological consistency of the industrial metabolism while at the same time delivering their maximum increase in efficiency as well.3. Moreover, environmental action needs to focus on early steps in the vertical manufacturing chain rather than on those in the end. Most of the ecological pressure of a technology is no rmally not caused end-of-chain in use or consumption, but in the more basic steps of the manufacturing chain (with the exception of products the use of which consumes energy, e.g. vehicles, appliances). There are conclusions to be drawn for refocusing attention from downstream to upstream in life cycles and product chains, and for a shift of emphasis in environmental policy from regulation to innovation. Ambitious environmental standards, though, continue to be an important regulative precondition of ecologically benign technological innovation.
    Keywords: Technological innovation, Environmental innovation, Life cycle analysis, Sustainability strategies, Environmental policy
    JEL: O33 Q00
    Date: 2005–03
  6. By: Vincent Vannetelbosch (FNRS and CORE, Université Catholique de Louvain); Ana Mauleon (FNRS and CEREC, Facultés Universitaires Saint-Louis); José Sempere-Monerris (University of Valencia)
    Abstract: We develop a model of strategic networks in order to analyze how trade unions will affect the stability and efficiency of R&D collaboration networks in an oligopolistic industry with three firms. Whenever firms settle wages, the complete network is always pairwise stable and the partially connected network is stable if and only if spillovers are large enough. If spillovers are small, the complete network is the efficient network; otherwise, the efficient network is the partially connected network. Thus, a conflict between stability and efficiency may occur: efficient networks are pairwise stable, but the reverse is not true. Strong stability even reinforces this conflict. However, once unions settle wages such conflict disappears: the complete network is the unique pairwise and strongly stable network and is the efficient network whatever the spillovers.
    Keywords: Networks, R&D collaboration, Oligopoly, Unions
    JEL: C70 L13 L20 J50 J52
    Date: 2005–04
  7. By: Valentina Bosetti (Fondazione Eni Enrico Mattei); Carlo Carraro (Università di Venezia and Fondazione Eni Enrico Mattei); Marzio Galeotti (Università di Milano and Fondazione Eni Enrico Mattei)
    Abstract: In recent years, a large number of papers have explored different attempts to endogenise technical change in climate models. The obvious reason is that technical change is widely considered the main route to achieving a significant reduction in global GHG emissions. This recent literature has emphasized that four factors – two inputs and two outputs – should play a major role when modelling technical change in climate models. The two inputs are R&D investments and Learning by Doing, the two outputs are energy-saving and fuel switching. Indeed, R&D investments and Learning by Doing are the main drivers of a climate-friendly technical change that eventually affect both energy intensity and fuel-mix. In this paper, we present and discuss an extension of the FEEM-RICE model in which these four factors are explicitly accounted for. In our new specification of endogenous technical change, an index of technical progress depends on both Learning by Researching and Learning by Doing. This index enters the equations defining energy intensity (i.e. the amount of carbon energy required to produce one unit of output) and carbon intensity (i.e. the level of carbonization of primarily used fuels). This new specification is embodied in the RICE 99 integrated assessment climate model and then used to generate a business as usual scenario and to analyze the relationship between climate policy and technical change. Sensitivity analysis is performed on different key parameters of the energy module in order to obtain crucial insights into the relative importance of the main channels through which technological changes affects the impact of human activities on climate. In addition, the effectiveness of different possible ways of combining Learning by Researching and Learning by Doing is also investigated.
    Keywords: Climate Policy, Environmental Modelling, Integrated Assessment, Technical Change
    JEL: H0 H2 H3
    Date: 2005–01
  8. By: David Calef (Fondazione Eni Enrico Mattei); Robert Goble (George Perkins Marsh Institute, Clark University)
    Abstract: All advanced industrialized societies face the problem of air pollution produced by motor vehicles. In spite of striking improvements in internal combustion engine technology, air pollution in most urban areas is still measured at levels determined to be harmful to human health. Throughout the 1990s and beyond, California and France both chose to improve air quality by means of technological innovation, adopting legislation that promoted clean vehicles, prominently among them, electric vehicles (EVs). In California, policymakers chose a technology-forcing approach, setting ambitious goals (e.g., zero emission vehicles), establishing strict deadlines and issuing penalties for non-compliance. The policy process in California called for substantial participation from the public, the media, the academic community and the interest groups affected by the regulation. The automobile and oil industries bitterly contested the regulation, in public and in the courts. In contrast, in France the policy process was non-adversarial, with minimal public participation and negligible debate in academic circles. We argue that California's stringent regulation spurred the development of innovative hybrid and fuel cell vehicles more effectively than the French approach. However, in spite of the differences, both California and France have been unable to put a substantial number of EVs on the road. Our comparison offers some broad lessons about how policy developments within a culture influence both the development of technology and the impact of humans on the environment.
    Keywords: Environmental policy, Electric vehicles, Air pollution, Technology policy, Sustainable transport
    JEL: O33 O57 Q53 K32 L5
    Date: 2005–01
    Abstract: This paper addresses theoretical and empirical gaps in the relationships between the nature of institutional origin, firm resources and growth in the context of spinning off ventures from public research organisations (PROs). Institutional origin is considered a two dimensional construct consisting of the formality of technology transfer and the research specificity of a PRO. In this perspective, these variables are hypothesised to predict the resource endowments of science-based entrepreneurial firms. Additionally, given the widespread attention from academics and policy makers to IP based science-based entrepreneurial firms, the formality of technology transfer is expected to be associated with growth. Empirical tests of hypotheses derived from this view are based on data from 184 science-based entrepreneurial firms, representing 48 public research organisations. Multivariate analysis of variance shows that institutional origin predicts firm resources, showing significance levels for start capital. An ordinal interaction effect shows that companies established with a formal transfer of technology start with higher resource levels, and even more so when started from a PRO with a specific research base. This suggests that specific PROs are more selective in the projects they consider eligible for spin off incubation and creation. Next to this, two-stage regression analysis indicates that the formality of technology transfer has a single direct effect on growth in employees and capital, independent of the start capital of the firm, pointing to the intrinsic advantage of having protected intellectual property formally transferred to the science-based entrepreneurial firm at the onset of the business activities.
    Date: 2005–02
    Abstract: This study examines the selection behaviour of 68 European early stage high tech VCs. In particular, we examine whether or not these VCs exhibit heterogeneity in their selection behaviour. To examine these issues we employ a conjoint analysis methodology. Our results indicate that VCs exhibit substantial heterogeneity in investment selection behaviour. Employing a cluster analysis three types of investors emerge: those who focus on technology, those who focus on finance and those who focus on people. We then examine the drivers of these differences, being the sectoral focus, the sources of funds and the human capital of the investment manager.
    Date: 2005–03
  11. By: Rahul Amolak Shastri (National Akademi of Development)
    Abstract: This paper tries to look at how India should prepare to meet the challenges of the ongoing scientific and technological revolution, and the forces of globalisation that propel it forward. At least three major technological revolutions seem to be ongoing: the bio-tech, the info- tech and the energy revolutions. Whereas the bio-tech revolution holds the promise of curtailing chemical pollution, it can break the delicate ecological balance of nature. It also threatens the employment of farmers who constitute a major part of the work force of India. The info-tech revolution threatens the power of all handlers of information: subordinate executives, bureaucrats, clerks and teachers. Moreover, it can easily pave the way for automation of mechanical work. This too has the potential of disturbing the employability of a large part of India's work force. The ultimate direction of the energy revolution would seem to be renewable sources such as solar and water power. This may crack the contradiction between the unlimited wants of man and the limited capacity of mother earth. All the three technological revolutions come packaged with globalisation. The hegemony of American and European capital over globalisation has led to opposition to the technological race within the developing world in general and within India in particular. This paper argues that India has to join the global race for new technology, in order to survive as a nation. Furthermore, it is suggested that it should join early to gain bargaining power. Finally, joining the technological race can also help protect India's environment. Since new technology and globalisation come together, India has to take both. However, it must globalise with national interests. Two primary features that need to be protected in the process of globalising are protecting national control over information, and promoting employment while globalising the economy. Increases in labour productivity can lead to cut backs in employment. In a labour surplus country like India, such improvements in efficiency can be unnecessary. A 'necessary' or appropriate increase in efficiency may be defined as a productivity improvement that increases production and employment in other organisations more than it cuts back employment within a given organisation. Globalisation must only be permitted with necessary improvements in efficiency. The defense of national interests in the process of globalisation cannot be left to political processes. They have to be supported by a heightened national consciousness of producers and consumers. This will translate into better quality, cost effectiveness, and productivity on the supply side, and a stronger national market on the demand side. The process of raising national consciousness is a necessarily long term and slow device, since social consciousness is a tough nut to crack.
    Keywords: Globalisation, technical revolution, bio-tech revolution, info-tech revolution, technical progress, economic nationalism, efficiency, employment
    JEL: A F1 F2 N
    Date: 2005–04–18

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