nep-ino New Economics Papers
on Innovation
Issue of 2005‒12‒20
seven papers chosen by
Koen Frenken
Universiteit Utrecht

  1. One or Many Knowledge Production Functions? Mapping Innovative Activity Using Microdata By Andrea Conte; Marco Vivarelli
  2. On the Community Patent By Hoernig, Steffen
  3. Human Capital Composition, R&D and the Increasing Role of Services By Reis, Ana Balcao; Sequeira, Tiago Neves
  4. Equilibrium Bias of Technology By Daron Acemoglu
  5. Technology as Problem-Solving Procedures and Technology as Input-Output Relations: Some Perspectives on the Theory of Production By Giovanni Dosi; Marco Grazzi
  6. Technology and Petroleum Exhaustion: Evidence from Two Mega-Oilfields By John M. Gowdy; Roxana Julia
  7. Architectures of Control in Consumer Product Design By Daniel Lockton

  1. By: Andrea Conte (University of Turin and Max Planck Institute of Economics, Jena); Marco Vivarelli (Catholic University of Piacenza, Max Planck Institute of Economics, Jena, CSGR, Warwick University and IZA Bonn)
    Abstract: This paper discusses the determinants of three alternative measures of innovative output by looking at firm’s own formal R&D activities and at the acquisition of external technology (TA) in its embodied and disembodied components. These input-output relationships are also discussed by distinguishing between small and large firms and those belonging to low-tech and high-tech sectors. The empirical analysis focuses on the Italian industrial sector over the period 1998-2000, using a subsample of 2,949 firms from the third European Community Innovation Survey (CIS 3). A bivariate probit analysis framework is used to investigate the determinants of product and process innovations, while truncated regressions are used to discuss innovation intensity. This paper also discusses an alternative test procedure that permits an extension of Cragg’s test in the analysis of survey data with weighted observations. Results show that R&D is strictly linked to product innovation, while TA is crucial in fostering process innovation; however, both inputs increase a firm’s innovative intensity. Significant evidence is also found that small firms and firms belonging to low-tech sectors rely more on the acquisition of external technologies and on cooperation agreements, while larger firms in high-tech sectors rely more on their own formal R&D.
    Keywords: R&D, product and process innovation, embodied technical change, CIS 3, bivariate probit, Cragg’s test
    JEL: O31
    Date: 2005–12
  2. By: Hoernig, Steffen
    Abstract: The European Union will be introducing a Europe-wide patent, the so-called Community Patent. Its aim is to foster innovative activity, but strategic effects between firms competing in R&D have not been considered in the official discourse. We show that, even if these are taken into account, the Community Patent will increase innovative activity and welfare. On the other hand, if the decision of participating in R&D is considered, then this increased R&D will be concentrated into fewer firms. Furthermore, we show that existing asymmetries between countries and firms are bound to increase.
    Keywords: Community patent, R&D race, Participation in R&D
    JEL: L52 O34
    Date: 2005
  3. By: Reis, Ana Balcao; Sequeira, Tiago Neves
    Abstract: A growth model with endogenous innovation and accumulation of high-tech and low-tech human capital is developed. The model accounts for a recently established fact about human capital composition, which stated that \the richest countries are investing proportionally less than middle income countries in engineering and technical human capital", due to the consideration of a negative effect of technological development on the accumulation of high-tech human capital. Under this new and reasonable assump- tion, our model also accounts for other previously established stylized facts. Both the evolution of human capital composition and the transition across stages of development are endogenously determined. We relate an increasing R&D activity and a negative relationship between income and the ratio of high to low-tech human capital, both present in developed countries, to the transition to a services economy. Although all growth rates are optimal, we observe under-allocation of high-tech human capital to industry.
    Keywords: human capital composition, high-tech human capital, R&D, Development, structural transition
    JEL: O11 O14 O15 O31 O33
    Date: 2004
  4. By: Daron Acemoglu
    Abstract: The study of the bias of new technologies is important both as part of the analysis of the nature of technology adoption and the direction of technological change, and to understand the distributional implications of new technologies. In this paper, I analyze the equilibrium bias of technology. I distinguish between the relative bias of technology, which concerns how the marginal product of a factor changes relative to that of another following the introduction of new technology, and the absolute bias, which looks only at the effect of new technology on the marginal product of a factor. The first part of the paper generalizes a number of existing results in the literature regarding the relative bias of technology. In particular, I show that when the menu of technological possibilities only allows for factor-augmenting technologies, the increase in the supply of a factor always induces technological change (or technology adoption) relatively biased towards that factor. This force can be strong enough to make the relative marginal product of a factor increasing in response to an increase in its supply, thus leading to an upward-sloping relative demand curve. However, I also show that the results about relative bias do not generalize when more general menus of technological possibilities are considered. In the second part of the paper, I show that there are much more general results about absolute bias. I prove that under fairly mild assumptions, an increase in the supply of a factor always induces changes in technology that are absolutely biased towards that factor, and these results hold both for small changes and large changes in supplies. Most importantly, I also determine the conditions under which the induced-technology response will be strong enough so that the price (marginal product) of a factor increases in response to an increase in its supply. These conditions correspond to a form of failure of joint concavity of the aggregate production function of the economy in factors and technology. This type of failure of joint concavity is quite possible in economies where equilibrium factor demands and technologies are decided by different agents.
    JEL: O30 O31 O33 C65
    Date: 2005–12
  5. By: Giovanni Dosi; Marco Grazzi
    Abstract: In this work, inspired by Winter [2006], in fact of vintage 1968, we discuss the relation between three dierent levels of analysis of technologies, namely as (i) bodies of problem-solving knowledge, (ii) organizational procedures, and (iii) input-output relations. We begin by arguing that the "primitive" levels of investigation, "where the action is", are those which concern knowledge and organizational procedures, while in most respects the I/O representation is just an ex post, derived, one. Next, we outline what we consider to be important advances in the understanding of productive knowledge and of the nature and behaviors of business organizations which to a good extent embody such a knowledge. Finally, we explore some implications of such "procedural" view of technologies in terms of input-output relations (of which standard production functions are a particular instantiation). We do that with the help of some pieces of evidence, drawing both upon incumbent literature and our own elaboration on micro longitudinal data on the Italian industry.
    Keywords: Theory of Production, Organizational Routines, Problem-solving Knowledge, Production Function, Micro-heterogeneity
    Date: 2005–12–13
  6. By: John M. Gowdy (Department of Economics, Rensselaer Polytechnic Institute, Troy NY 12180-3590, USA); Roxana Julia (Department of Economics, Rensselaer Polytechnic Institute, Troy NY 12180-3590, USA)
    Abstract: . In this paper we use results from the Hotelling model of non-renewable resources to examine the hypothesis that technology may increase petroleum reserves. We present empirical evidence from two well-documented mega-oilfields: the Forties in the North Sea and the Yates in West Texas. Patterns of depletion in these two fields suggest that when a resource is finite, technological improvements do increase supply temporarily. But in these two fields, the effect of new technology was to increase the rate of depletion without altering the fields' ultimate recovery - in line with Hotelling's predictions. Our results imply that temporary low prices may be misleading indicators of future resource scarcity and call into question the future ability of current mega-oilfields to meet a sharp increase in oil demand.
    JEL: O13 Q41
    Date: 2005–12
  7. By: Daniel Lockton (Judge Institute of Management, Cambridge)
    Abstract: The idea of architectures of control is introduced through examples ranging from urban planning to digital rights management, and the intentions behind their use in consumer products are examined, with reference to case studies of printer cartridges and proposed ‘optimum lifetime products.’ The reactions of the technical community and consumers themselves are also explored, along with some wider implications.
    Keywords: design, architectures of control, product design, engineering, technology, digital rights management, DRM, control, poka-yoke, code
    JEL: P Q Z
    Date: 2005–12–13

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