nep-ino New Economics Papers
on Innovation
Issue of 2005‒10‒04
seventeen papers chosen by
Koen Frenken
Universiteit Utrecht

  1. Comparing the Innovation Performance in Canadian, French and German Manufacturing Enterprises By Pierre Mohnen; Pierre Therrien
  2. Mapping National Innovation Systems in the OECD Area By Markus Balzat; Andreas Pyka
  3. Innovation in Enterprise Clusters:Evidence from Dutch Manufacturing By Bert Diederen; Pierre Mohnen; Franz Palm; Wladimir Raymond; Sybrand Schim van der Loeff
  4. What drives productivity growth in the new EU member states? The case of Poland By Marcin Kolasa
  5. The Dragon vs the Elephant: Comparative analysis of innovation capability in the telecommunications equipment industry in China and India By Sunil Mani
  6. The Division of Labour, Worker Organisation, and Technological Change By Borghans,Lex; Weel,Bas,ter
  7. Human capital development in a complex learning system: the virt uous interaction between individuals, organizations and communiti es By Luciano PILOTTI; Silvia Rita SEDITA
  8. Technological capability of foreign and West German investors in East Germany By Jutta Günther
  9. Vertical Integration and Technology: Theory and Evidence By Acemoglu, Daron; Aghion, Philippe; Griffith, Rachel; Zilibotti, Fabrizio
  10. Universities and the Knowledge Economy By Cowan,Robin
  11. Research Policy. The case of the Social sciences and the Humanities (In French) By Philippe JEANNIN (LEREPS-GRES)
  12. Which Firms Benefit More From Inward Foreign Direct Investment? By Priit Vahter
  13. China’s Integration in East Asia: Production Sharing, FDI & High-Tech Trade By Guillaume Gaulier; Francoise Lemoine; Deniz Unal-Kesenci
  14. Factor substitution and factor augmenting technical progress in the US - a normalized supply-side system approach By Rainer Klump; Peter McAdam; Alpo Willman
  15. Technology spillovers from external investors in East Germany: no overall effects in favor of domestic firms By Harald Lehmann; Jutta Günther
  16. Merit, Approbation and the Evolution of Social Structure By Cowan ,Robin; Jonard ,Nicolas
  17. Firm-Specific Determinants of Productivity Gaps between East and West German Industrial Branches By Johannes Stephan; Karin Szalai

  1. By: Pierre Mohnen; Pierre Therrien
    Abstract: This paper compares pairwise the innovation performance of Canada with France and Germany, respectively. The comparison is based on two ordered probit models with sample selection, one where innovation is measured by the introduction of new-to-the firm products and one where it is measured by the introduction of new-to-the market products. The econometric analysis attempts to explain part of the country differences as the result of the sectoral composition of output, and the effects of size, environment conditions (proximity to basic research and competition) and innovation activities (internal R&D, the number of innovation activities, cooperation and government support). The Canadian firms benefit from being larger and more numerous in receiving government support, but suffer from a lack of competition and internal R&D. These structural effects combined, while informative, are not enough to explain a lot of the basic pattern of innovation revealed by the raw data. If we take the stronger measure of first-to-market innovation as a yardstick of innovation, the observed pairwise country differences are less strong, and our model explains a little bit more of the observed differences. <P>Cette étude compare les performances d’innovation entre le Canada et la France d’une part, et entre le Canada et l’Allemagne d’autre part. La comparaison repose sur deux modèles de probit ordonné avec sélection. Le premier mesure l’innovation par l’introduction sur le marché de produits nouveaux pour la firme, le second par l’introduction de produits nouveaux pour le marché. L’analyse économétrique essaye d’expliquer une partie des différences nationales d’innovation par la composition sectorielle de la production, l’effet taille, les conditions environnementales (proximité de la recherche de base et concurrence) et les activités d’innovation (R-D interne, nombre d’activités innovantes, coopération et support gouvernemental). Les firmes canadiennes tirent avantage de leur plus grande taille et sont plus nombreuses à recevoir du support gouvernemental. Par contre, elles souffrent du manque de concurrence et de R-D interne. Au total, la prise en compte de ces effets structurels est certes révélatrice, mais n’explique qu’une faible partie des différences bilatérales dans les processus d’innovation. La mesure plus forte d’innovation par l’introduction de produits nouveaux pour le marché réduit les différences observées et les explique un peu mieux.
    Keywords: innovation, international comparisons, innovation, comparaison internationale
    JEL: O31 O51 O52
    Date: 2005–09–01
  2. By: Markus Balzat (University of Augsburg, Department of Economics); Andreas Pyka (University of Augsburg, Department of Economics)
    Abstract: The purpose of this paper is to present new findings about the structure and the organization of innovative activities in selected OECD countries. By using the approach of national sys-tems of innovation as a conceptual framework and by applying multivariate data analysis techniques, this paper aims to add new insights into the specific structures of the eighteen national systems of innovation under study. A central result from this comparative study is a categorisation of national systems of innovation into different clusters, with each cluster rep-resenting distinctive cross-national structural similarities. By accounting for sectoral specif-ics, the commonly taken perspective on national innovation systems is extended. Thereby, a more precise picture of the structural composition of the analyzed national innovation sys-tems accrues. Also, a new linkage between the two approaches of national and sectoral inno-vation systems is created.
    Keywords: national innovation systems, comparative study, classification
    JEL: C33 O11 O31 P51
    Date: 2005–09
  3. By: Bert Diederen; Pierre Mohnen; Franz Palm; Wladimir Raymond; Sybrand Schim van der Loeff
    Abstract: This paper explores the aggregation problem and illustrates its relevance using data for the Netherlands from the third Community Innovation Survey (CIS3), and production and financial statistics. It compares the results of an innovation output equation that was estimated using data on enterprises (bedrijfseenheid), domestic enterprise clusters (onderneming), and those enterprise clusters with foreign inward or outward investments. <P>Cette étude aborde et illustre un problème d’agrégation qui peut se poser dans les études d’innovation. Les données utilisées sont celles de la troisième enquête innovation aux Pays-Bas, qui sont jumelées aux statistiques de la production et aux données financières des sociétés. Nous comparons les résultats de l’estimation d’une équation d’innovation, obtenus tour à tour à partir de données au niveau des entreprises (bedrijfseenheid), des grappes d’entreprises domestiques (onderneming), et des grappes d’entreprises ayant des filiales à l’étranger ou contenant des filiales de firmes étrangères installées aux Pays-Bas.
    Keywords: innovation, aggregation, innovation, agrégation
    JEL: D21 O33 O52
    Date: 2005–09–01
  4. By: Marcin Kolasa (National Bank of Poland, Warsaw, Poland)
    Abstract: This paper considers productivity developments in the new EU member states and provides evidence on factors driving productivity growth in these countries, focusing on a panel of Polish manufacturing industries. Companies in Poland seem to benefit significantly from transfer of technologies that have been accumulated in more developed economies. By contrast, no strong evidence is found on immediate technology transfer. Another result is a significant effect of domestic innovation activity. There are signs that market reforms also boosted efficiency, whereas the role of reallocation of production factors towards more productive activities was marginal. Bearing in mind all methodological and data-related caveats, as well as cross-country diversity, caution is required while interpreting the findings and extrapolating them to other new member states. However, the results obtained provide some policy implications and make the case for taking into account domestic innovation activity while constructing endogenous growth models for the EU catching-up economies.
    Keywords: Multi-factor productivity; innovation; convergence; new member states; manufacturing.
    JEL: C23 O31 O47
    Date: 2005–05
  5. By: Sunil Mani (Centre for Development Studies)
    Abstract: China and India have one of the largest telecommunications equipment markets in the world. The paper employs a sectoral system of innovation framework towards understanding the differential outcomes in innovation capability building in the industry achieved by China and India. The countries have pursued widely diverging strategies for developing their domestic innovation capability. India followed a very rigid policy of indigenous development of domestic technologies by establishing a stand-alone public laboratory that developed state-of-the art switching technologies. These were then transferred to manufacturing enterprises in both public and private sectors. The enterprises themselves did not have any in-house R&D capability. The public laboratory was also not given any strategic direction, even though it was technologically speaking, very competent. Consequently the country, despite possessing good quality human resource was unable to keep pace with changes in the technology frontier and the equipment industry has now become essentially dominated by affiliates of MNCs. China, on the contrary, first depended on MNCs for her technology needs in this area. But subsequently encouraged the emergence of three national champions, two of which are erstwhile public laboratories. The country has built up considerable hardware capability in both fixed line and mobile communications technology and has also emerged as a major player in world markets. Although the sectoral system of innovation in both the countries were promoted and nurtured by the state through a variety of instruments, the quality of such interventionist strategy is found to be better in China. The final outcome proves this line of argument.
    Keywords: Innovation capability, China, India, Telecommunications industry, Digital switching systems, Mobile telephony
    JEL: L63 O31 O32 O38
    Date: 2005–07
  6. By: Borghans,Lex; Weel,Bas,ter (ROA rm)
    Abstract: The model developed in this paper explains differences in the division of labour across firmsas a result of computer technology adoption. We find that changes in the division of labourcan result both from reduced production time and from improved communicationpossibilities. The first shifts the division of labour towards a more generic structure, while thelatter enhances specialisation. Although there exists heterogeneity, our estimates for arepresentative sample of Dutch establishments in the period 1990-1996 suggest thatproductivity gains have been the main determinant for shifts in the division of labour withinmost firms. These productivity gains have induced skill upgrading, while in firms gainingmainly from improved communication possibilities specialisation increased and skillrequirements have fallen.
    Keywords: education, training and the labour market;
    Date: 2005
  7. By: Luciano PILOTTI; Silvia Rita SEDITA
    Abstract: The aim of the paper is to find a framework for understanding dyn amics of the learning process at different levels, occurring thro ugh different forms of education. The purpose is to consider the impact of formal, informal, non-formal learning on firms’ perform ance. For sure R&D expenses and market are really important t o foster innovation and drive firms towards better performances, but they need to take place in a learning oriented environment. O ur target of analysis are micro and small firms learning processe s, which we look at using secondary data from different sources. The paper proceeds as follow. Firstly, the main aim of the work a nd research questions are presented, secondly, we focus on the re lationships between human capital and innovation in SMEs. Thirdly , we illustrate what we mean for learning, paying particular atte ntion to the differences between education and learning. Fourthly , we propose our interpretative framework, analysing in details i ts components.
    Keywords: Knowledge, learning, education, human capital, SMEs, LPSs, ICTs
  8. By: Jutta Günther
    Abstract: Foreign direct investment (FDI) plays an important role for countries or regions in the process of economic catching-up since it is assumed – among other things – that FDI brings in new production technology and knowledge. This paper gives an overview about the development of FDI in East Germany based on official data provided by the Federal Bank of Germany. The investigation also includes a comparison of FDI in East Germany to Central East European countries. But the main focus of the paper is an analysis of the technological capability comparing majority foreign and West German owned firms to majority East German owned firms. It shows that foreign and West German subsidiaries in East Germany are indeed characterized by superior technological capability with respect to all indicators looked at (product innovation, research & development, organizational changes etc.).
    Date: 2004–03
  9. By: Acemoglu, Daron; Aghion, Philippe; Griffith, Rachel; Zilibotti, Fabrizio
    Abstract: This paper investigates the determinants of vertical integration. We first derive a number of predictions regarding the relationship between technology intensity and vertical integration from a simple incomplete contracts model. Then, we investigate these predictions using plant-level data for the UK manufacturing sector. Most importantly, and consistent with theory, we find that the technology intensities of downstream (producer) and upstream (supplier) industries have opposite effects on the likelihood of vertical integration. Also consistent with theory, both these effects are stronger when the supplying industry accounts for a large fraction of the producer's costs. These results are generally robust and hold with alternative measures of technology intensity, with alternative estimation strategies, and with or without controlling for a number of firm and industry-level characteristics.
    Keywords: hold-up; incomplete contracts; internal organisation of the firm; investment; R&D; residual rights of control; technology; UK manufacturing; vertical integration
    JEL: L22 L23 L24
    Date: 2005–09
  10. By: Cowan,Robin (MERIT)
    Abstract: The simplest rationale for the existence of a publicly funded university is that it provides some form of public good. If all the outputs of a university were privately owned, and privately appropriable, there would be no need for public funding. Either firms would fund the research and training which could be internalized by themselves, or students could fund the teaching through higher future earnings. Consequently, one way to pose the issue of the future role of universities is to ask what public goods they can provide that cannot be provided in other ways.....
    Keywords: Economics of Technology;
    Date: 2005
  11. By: Philippe JEANNIN (LEREPS-GRES)
    Abstract: Research policy in the Humanities and Social Sciences (HSS) is difficult to implement because of the very characteristics of these disciplines (no image, no technology, no patent) and because of requisite public intervention. It is demonstrated that, in each discipline, a market for academic research exists. The necessity to set up “hybrid forums” including both scientists and profanes is underlined. This kind of research policy generates information asymmetries which call for a relevant evaluation. The case of scientific journals as viewed by French scientists is analysed. Solid grounds to carry out research evaluation on a national level are obtained, a required step before reaching a European level.
    Keywords: Research, Social sciences, Humanities, Policy, Evaluation, Journals
    JEL: A
    Date: 2005
  12. By: Priit Vahter
    Abstract: In the study of the effects of foreign direct investment (FDI) on host countries, an interesting question that is highly relevant to government policy concerning FDI is whether the benefits of inward FDI both as \"own-firm\" effects of FDI in foreign subsidiaries and positive spillover effects for other firms are captured to a larger extent by certain types of enterprises in the host economy? Are there particular characteristics (often called absorptive capacity, e.g. by Cohen, Levinthal 1989) that determine whether a firm can benefit from positive spillovers? In this paper I will try to assess these issues based on enterprise level panel data from Estonia. I find that for the total factor productivity effects of FDI at the subsidiary level, characteristics such as export or domestic market orientation of the affiliate may be important. I do not find that selected indicators such as exporting, R&D activity or intensity of technology in the sector are important for benefiting from horizontal spillovers of FDI in Estonia.
    Keywords: foreign direct investment, productivity, spillovers, absorptive capacity
    JEL: F10 F21 F23
  13. By: Guillaume Gaulier; Francoise Lemoine; Deniz Unal-Kesenci
    Abstract: China has taken advantage of the globalisation process and has become a assembly country for firms in Asia which have extended to China their production and trade networks. China’s position in the segmentation of the production processes has fostered its trade in high-technology products. However the rapid technological upgrading of China’s trade is associated with an increasing dependence on foreign capital and technology. The emergence of China has led to the reorganisation of production in Asia and to a triangular trade pattern: firms in advanced Asian economies use China as an export base and instead of exporting finished goods to the US and Europe, now export intermediate goods to their affiliates in China.
    Keywords: technology transfers; international trade; specialization; FDI; globalization; IDPP; specialization; China; east Asia; international production sharing
    JEL: F13 F14 F15 O53
    Date: 2005–06
  14. By: Rainer Klump (Johann Wolfgang Goethe University); Peter McAdam (DG Research, European Central Bank); Alpo Willman (DG Research, European Central Bank)
    Abstract: Using a normalized CES function with factor-augmenting technical progress, we estimate a supply-side system of the US economy from 1953 to 1998. Avoiding potential estimation biases that have occurred in earlier studies and putting a high emphasis on the consistency of the data set, required by the estimated system, we obtain robust results not only for the aggregate elasticity of substitution but also for the parameters of labor and capital augmenting technical change. We find that the elasticity of substitution is significantly below unity and that the growth rates of technical progress show an asymmetrical pattern where the growth of laboraugmenting technical progress is exponential, while that of capital is hyperbolic or logarithmic.
    Keywords: Capital-Labor Substitution, Technological Change, Factor Shares, Normalized CES function, Supply-side system, United States.
    JEL: C22 E23 E25 O30 O51
    Date: 2004–06
  15. By: Harald Lehmann; Jutta Günther
    Abstract: Die Studie setzt sich mit der Frage auseinander, ob externe (ausländische und westdeutsche) Investoren in Ostdeutschland Technologie-Spillovers zugunsten einheimischer Unternehmen induzieren. Die Untersuchung knüpft an eine Reihe ökonometrischer Spilloverstudien an, vor allem an solche für Transformationsländer, die bisher sehr uneinheitliche Ergebnisse liefern. Anders als die vorliegenden Studien verwendet diese Untersuchung eine regionale Aufgliederung bis hin zu Raumordnungsregionen. Ferner wird eine Branchenklassifizierung vorgenommen, die Vorleistungs- und Investitionsgüterverknüpfungen explizit berücksichtigt. Die Regressionsergebnisse zeigen jedoch keinen positiven Zusammenhang zwischen der Anwesenheit externer Investoren und der Produktivität einheimischer Unternehmen, unabhängig davon, welche regionale Betrachtungsebene gewählt wird (Ostdeutschland insgesamt, Bundesländer oder Raumordnungsregionen). Technologie-Spillovers, die in Einzelfällen möglicherweise existieren, sind offensichtlich nicht stark genug, um die Produktivität einheimischer Unternehmen insgesamt zu stärken.
    Date: 2004–12
  16. By: Cowan ,Robin; Jonard ,Nicolas (MERIT)
    Abstract: In this paper we study a society in which individuals gain utility from income and from social approbation. Income is correlated with class. Approbation is given to an unobservable trait, which must be signalled through the agent’s social mobility, i.e. class change. Mobility is driven by a simple mechanism involving inheritance, effort and ability. Thus social structure (class composition) is affected by individuals’ quest for approbation, and we study how that affects the emergence and multiplicity of long run social organizations, including hybrid forms of dynasties and meritocracies. Specifically we observe that even though social mobility is driven purely by a meritocratic mechanism, pure dynasties can emerge. We then introduce a feedback between the size of the upper class and its income value, so that effort levels and social structure are jointly endogenous. We derive results on equilibrium effort levels and stationary (when they exist) social structures. Social organization can converge to a unique steady state, multiple long run equilibria or cycles.
    Keywords: Economics of Technology;
    Date: 2005
  17. By: Johannes Stephan; Karin Szalai
    Abstract: Die Produktivitätsniveaus in den Industrien der früheren sozialistischen Wirtschaften (einschließlich Ostdeutschlands) sind bekanntermaßen wesentlich niedriger als in westlichen Ländern. Ziel der vorliegenden Arbeit ist es, die möglichen Ursachen der niedrigeren Produktivität auf Firmenebene aufzudecken und die firmenspezifischen Determinanten der Produktivitätslücke zu identifizieren. Für die Ursachenuntersuchung entwickeln die Autoren eine Feldstudie, deren Schwerpunkte auf zwei wichtige Zweige der verarbeitenden Industrie - nämlich Maschinenbau und Möbelmanufakturen – als auch dem Baugewerbe gesetzt worden sind. Kandidaten für firmenspezifische Determinanten der Produktivitätslücke wurden zunächst anhand bereits existierender theoretischer und empirischer Forschungen ausgewählt. Grundlage der empirischen Analyse bildete die einfache Version des „matched-pair“ Ansatzes, in dem getestet wird, ob die ausgewählten Determinanten einen signifikanten Einfluss auf die Produktivitätslücke haben. Die Ergebnisse zeigen, dass in allen drei Wirtschaftszweigen vor allem die Qualität des Humankapitals eine wichtige Rolle bei der Erklärung der Produktivitätslücke spielt. In der verarbeiteten Industrie sind weiterhin die Netzwerkaktivitäten sowie die Nutzung von moderner Kommunikationstechnik (E-Mail, Internet, e-business) von großer Bedeutung. Die Intensität der langfristigen, strategischen Planung des oberen Managements stellt nur im Maschinenbau eine wichtige Determinante dar.
    Date: 2003–11

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