nep-ino New Economics Papers
on Innovation
Issue of 2005‒10‒22
thirteen papers chosen by
Koen Frenken
Universiteit Utrecht

  1. Outward R&D and Knowledge Spillovers: Evidence Using Patent Citations By Ioana Popovici
  2. Job-Hopping in Silicon Valley: Some Evidence Concerning the Micro-Foundations of a High Technology Cluster By Bruce Fallick; Charles A. Fleischman; James B. Rebitzer
  3. Product Market Competition, R&D Effort and Economic Growth By Alberto Bucci
  4. The Knowledge Spillover Theory of Entrepreneurship By Zoltan J. Acs; David B. Audretsch; Pontus Braunerhjelm; Bo Carlsson
  5. Traditional Knowledge, Biodiversity, Benefit-Sharing and the Patent System: Romantics v. Economics? By Hanns Ullrich
  6. Science, social networks and spillovers By O. Sorenson; J. Singh; L. Fleming
  7. If Star Scientist do no Patent: an Event History Analysis of Scientific Eminence and the Decision to Patent in the Academic World By Mario Calderini; Chiara Franzoni; Andrea Vezzulli
  8. Open Source Software Development Projects: Determinants of Project Popularity By Ravi
  9. Is technological change really skill biased? Evidence from the introduction of ICTs on the textile sector (1980-2000) By Alberto Baccini; Martina Cioni
  10. Relating the Knowledge Production Function to Total Factor productivity: An Endogenous Growth Puzzle By Y. Abdih; Frederick Joutz
  11. Knowledge Society and Transition Economies The Bulgarian Challenge By BOURDEAU-LEPAGE, Lise; KOLAROVA,Desislava
  12. Technology Diffusion, Services, and Endogenous Growth in Europe. Is the Lisbon Strategy Useful? By Paolo Guerrieri; Bernardo Maggi; Valentina Meliciani; Pier Carlo Padoan
  13. A Strategic Analysis of Competition Between Open Source and Proprietary Software By Ravi Sen

  1. By: Ioana Popovici (Department of Economics, Florida International University)
    Abstract: FDI is believed to be a conduit of new technologies between countries. Many have studied the cross-border knowledge diffusion due to outward FDI, but this paper is the first to study the advantages of outward FDI for the home country of multinationals conducting R&D abroad. To address this issue, we use patent citations as a proxy for technology spillovers and we bring empirical evidence that supports the hypothesis that a US subsidiary conducting R&D overseas facilitates the flow of knowledge between its host and home countries.
    Keywords: patents, spillovers, R&D, FDI
    JEL: O30 O34 F23
    Date: 2005–10
  2. By: Bruce Fallick (Federal Reserve Board of Governors); Charles A. Fleischman (Federal Reserve Board of Governors); James B. Rebitzer (Case Western Reserve University, Levy Institute, NBER and IZA Bonn)
    Abstract: In Silicon Valley's computer cluster, skilled employees are reported to move rapidly between competing firms. This job-hopping facilitates the reallocation of resources towards firms with superior innovations, but it also creates human capital externalities that reduce incentives to invest in new knowledge. Using a formal model of innovation we identify conditions where the innovation benefits of job-hopping exceed the costs from reduced incentives to invest in human capital. These conditions likely hold for computers, but not in most other settings. Features of state law also favor high rates of inter-firm mobility in California. Outside of California, employers can use non-compete agreements to inhibit mobility, but these agreements are unenforceable in California. Using new data on labor mobility we find higher rates of job-hopping for college-educated men in Silicon Valley's computer industry than in computer clusters located out of the state. Mobility rates in other California computer clusters are similar to Silicon Valley's, suggesting some role for state laws restricting non-compete agreements. Consistent with our model of innovation, we also find that outside of the computer industry, California’s mobility rates are no higher than elsewhere.
    Keywords: job mobility, industrial clusters, Silicon Valley, innovation, knowledge spillovers, non-compete agreements
    JEL: R12 L63 O3 J63 J48
    Date: 2005–10
  3. By: Alberto Bucci
    Abstract: Using an integrated model of purposive R&D activity and human capital accumulation, this paper analyses the joint impact that product market competition may exert on the sectoral distribution of skills and economic growth. In a framework where innovation takes place through an R&D technology combining with constant returns to scale human capital and the existing stock of disembodied knowledge and where individuals may increase their own level of skills without employing technological capital, we find that economic growth is solely driven by human capital accumulation and is independent of knowledge spillovers from innovative activity. Product market power always positively affects R&D effort, whereas its impact on growth can be either positive or lacking depending on the way the structure of the economy is modelled. Accordingly, the paper accounts for the empirical evidence of a rising amount of resources invested in R&D and a simultaneous approximate constancy of per capita growth in the U.S. and other major industrialised countries in the second half of the last century.
    Keywords: endogenous growth, R&D investment, human capital, product market competition,
    Date: 2005–08–26
  4. By: Zoltan J. Acs; David B. Audretsch; Pontus Braunerhjelm; Bo Carlsson
    Abstract: Contemporary theories of entrepreneurship generally focus on the decision-making context of the individual. The recognition of opportunities and the decision to commercialize them is the focal concern. While the prevalent view in the entrepreneurship literature is that opportunities are exogenous, the most prevalent theory of innovation in the economics literature suggests that opportunities are endogenous. This paper bridges the gap between the entrepreneurship and economic literature on opportunity by developing a knowledge spillover theory of entrepreneurship. The basic argument is that knowledge created endogenously via R&D results in knowledge spillovers. Such spillovers give rise to opportunities to be identified and exploited by entrepreneurs. Our results show that there is a strong relationship between knowledge spillovers and new venture creation.
    Keywords: Opportunity, knowledge, entrepreneurship, management science
    JEL: O3 R1 J24 M13
    Date: 2005–10
  5. By: Hanns Ullrich
    Abstract: Since the nineties of the last century two opposite trends have marked the development of international intellectual property protection. On the one hand, world trade negotiations have resulted in the establishment of a globally uniform system of adequate protection of intellectual property by the GATT/WTO Agreement on Trade Related Aspects of Intellectual Property Rights. It basically enshrines the market-oriented principles of protection of industrially developed countries. On the other, efforts to protect traditional and local knowledge have found specific support in the Convention on Biological Diversity which, in addition to providing, in the interest of environment protection, for mechanisms for the control of access to genetic resources, seeks to promote the condition of developing countries by subjecting such access to principles of prior informed consent and of participation in the benefit enterprises may obtain on the basis of patent protected inventions and innovations embodying or using genetic resources and associated traditional knowledge. The paper first examines the various ways in which biodiversity-related traditional knowledge may be passively or actively defended or protected, but concludes that, with the exception of a defence against misuses of the intellectual property system, little is to be expected from either reliance on existing forms of protecting intellectual property or from the development of more or less analogous forms of sui generis protection, the main reason being that intellectual property protection is a market-oriented mechanism, not a measure of knowledge conservation. In a second part the conflicts are analysed which arise when, as under the Biodiversity Convention, the market-oriented system of protection is put at the service of regulatory schemes aiming at non-market goals, in particular when the acquisition of patents is subject to additional and not directly related disclosure requirements, and when the exploitation of patents is conditioned on “equitable benefit sharing”. The main conclusion is that such burdening of patent protected innovation with specific environmental and developmental charges will result in negative synergies. These may have a counterproductive impact first, on the attainment of the regulatory objectives of protecting biodiversity and of promoting development and, second, on the technological neutrality of patent protection as an incentive mechanism for innovation in general. Additional problems of the legitimacy of using intellectual property as a support of objective-specific regulation suggest to implement the Convention on Biodiversity on the basis of a clearer separation between protection of biodiversity, promotion of development and stimulation of innovation, since this would bring it more in accordance with principles of proportionality regarding the selection and the use of regulatory instruments.“
    Keywords: economic law; international trade; pharmaceutical industry; Uruguay round; environmental policy; trade policy; international relations; WTO; knowledge
    Date: 2005–05–01
  6. By: O. Sorenson; J. Singh; L. Fleming
    Abstract: Previous empirical research has established that science appears to stimulate the widespread diffusion of knowledge. The exact mechanism through which science catalyzes knowledge flow, however, remains somewhat ambiguous. This paper investigates whether the observed knowledge diffusion associated with science-based innovation genuinely stems from the norm of openness and incentives for publication, or whether it arises as an artifact of scientists having more dispersed social networks that facilitate the dissemination of tacit knowledge. Our findings support the former possibility: We use patent citation patterns to track knowledge flows, and find that science-based innovations diffuse more widely even after controlling for the underlying social networks of researchers as measured using data on prior collaborations.
    Date: 2005–10
  7. By: Mario Calderini (DSPEA, Polytechnic of Turin); Chiara Franzoni (University of Bergamo and CERIS (CNR)); Andrea Vezzulli (DEAS, University of Milan)
    Abstract: This paper contributes to the debate upon the trade-off between science and technology by looking at how the scientific performances of a researcher relate ex-ante to his/her attitude to patent, during his/her academic career. We run an event history analysis explaining the hazard for a scientist to become the inventor of a private-company-assigned patent as depending on publications and on personal, institutional and environmental characteristics. A striking result is that, although either productivity or quality, independently taken, are likely to increase the hazard to patent, top performers scientists, i.e. those scientists that publish a lot on highly-rated journals, are at very low risk.
    Keywords: academic patenting, research funding, technology transfer.,
    Date: 2005–04–29
  8. By: Ravi (Sen)
    Abstract: This paper is an initial exploration of the determinants of open source project success as measured by project popularity. We simultaneously model the impact of project-specific characteristics on project popularity, and the impact of intended users and choice of operating system on the choice of end-user license. These models are jointly estimated using Full Information Maximum Likelihood Method. The results show that the software-user license, age of the project, project status, certain types of potential users, and compatibility with certain operating systems have a statistically significant impact on project popularity. An interesting finding is that GPL, the most widely used software license has an adverse impact on the popularity of an open source project.
    Keywords: Open source project, OSS, FLOSS, OSS popularity, OSS success
    JEL: C1 C2 C3 C4 C5 C8
    Date: 2005–10–17
  9. By: Alberto Baccini; Martina Cioni
    Abstract: This paper investigates the effects of the introduction of information and communication technologies (ICTs) on the skills of a workforce. Using micro-data collected from workers in the textile sector, we analyse whether the introduction of ICTs has modified workers’ tasks, so that higher skills and longer training periods than before are necessary. Our survey has shown that ICTs i) have replaced unskilled labour in some cases and skilled labour in others; ii) have changed workers’ tasks in some cases but not in others; and finally, iii) have brought about an increase in skills for only a small number of occupations. This empirical evidence does not confirm the hypothesis that technological change, and in particular change introduced by ICTs, is necessarily skill biased
    Keywords: Technological change, skill bias, textile industry
    JEL: O33 L67
  10. By: Y. Abdih; Frederick Joutz
    Abstract: The knowledge production function is central to R&D-based growth models. This paper empirically investigates the knowledge production function and intertemporal spillover effects using cointegration techniques. Time-series evidence suggests there are two long-run cointegrating relationships. The first captures a long-run knowledge production function; the second captures a long-run positive relationship between TFP and the knowledge stock. The results indicate the presence of strong intertemporal knowledge spillovers and that the long-run impact of the knowledge stock on TFP is small. This evidence is interpreted in light of existing theoretical and empirical evidence on endogenous growth.
    Keywords: Production , Productivity , Economic growth , Economic models ,
    Date: 2005–04–21
  11. By: BOURDEAU-LEPAGE, Lise (LEG - CNRS UMR 5118 - Université de Bourgogne); KOLAROVA,Desislava (Université Grenoble II - Espace Europe Institut)
    Abstract: Ce papier évalue la situation bulgare dans l' économie fondée sur la connaissance en Europe. Il s'appuie sur la méthodologie de la banque mondiale (2005). Après avoir présenté le cadre analytique, l' analyse révèle que la Bulgarie se trouve dans une situation très défavorable, résultant de différents facteurs se renforçant les uns aux autres dans un processus cumulatif. Aussi doit-elle s'attacher à améliorer ses règles de gouvernance et sa capacité à mobiliser le capital humain et à coordonner les interactions entre les personnes et les organisations si elle veut aller vers une économie fondée sur la connaissance. / This paper evaluates the Bulgarian positioning in the European knowledge-based economy. The analysis is mainly based on the Knowledge Assessment Methodology of the World Bank (2005). After an analytical framework, the analysis reveals an alarming situation for Bulgaria resulting from several unfavorable factors, which reinforce one another in a cumulative process. Finally, the conclusion underlines that a necessary condition for the Bulgarian economy to become knowledge-based, is to set up good rules of governance but also to be able to mobilize human capital and to coordinate the interactions within citizens and organizations
    Keywords: Bulgaria ; Innovation ; Knowledge-based
    Date: 2005–09
  12. By: Paolo Guerrieri; Bernardo Maggi; Valentina Meliciani; Pier Carlo Padoan
    Abstract: We explore the role of business services in knowledge accumulation and growth and the determinants of knowledge diffusion including the role of distance. A continuous-time model is estimated on several European countries, Japan, and the United States. Policy simulations illustrate the benefits for EU growth of the deepening of the single market, the reduction of regulatory barriers, and the accumulation of technology and human capital. Our results support the basic insights of the Lisbon Agenda. Economic growth in Europe is enhanced to the extent that: trade in services increases, technology accumulation and diffusion increase, regulation becomes both less intensive and more uniform across countries, and human capital accumulation increases in all countries.
    Keywords: Economic growth , Europe , Manufacturing , Economic models , Transition economies ,
    Date: 2005–06–06
  13. By: Ravi Sen (Texas A&M University)
    Abstract: This paper takes an analytical approach to identify the conditions under which freely available open source software (OSS) and/or the commercial version of the same (OSS-SS) will adversely affect the market position of proprietary software (PS), and suggests some strategic steps that the PS vendor can take in order to compete successfully. For example, we find that in software markets characterized by low network benefits and OSS-SS with low usability (relative to PS), open source software will have the dominant market share. Interestingly, in these markets the profitability of PS vendor, when the OSS-SS is also present in the market, is higher than its profitability, when the OSS-SS is absent from the software market. In software markets characterized by low network benefits and OSS-SS with high usability, PS will dominate the market in terms of market share. It can maintain its domination by actively participating in OSS projects and ensuring that OSS is as usable as OSS- SS. In software markets characterized by high network benefits and OSS- SS with low usability (relative to PS), we should expect to see the open source software dominating this market in future. However, PS vendors can effectively compete by ensuring that PS is more usable than OSS-SS and OSS. Finally, in software markets characterized by high network benefits and OSS-SS with high usability, PS faces the maximum threat since open source software will dominate the market in terms of market share. Furthermore, the equilibrium price that the PS can charge will not result in positive profits, thus ensuring the exit of PS vendors from the software markets. However, we have yet to see a commercial version of open source in this software category that is as usable as the PS. Therefore, we have not observed the exit of PS vendors from this software segment.
    Keywords: Open source software, software market, software competition, economics of open source, commercial open source, FLOSS.
    JEL: L
    Date: 2005–10–17

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