nep-ino New Economics Papers
on Innovation
Issue of 2006‒01‒29
thirty-two papers chosen by
Koen Frenken
Universiteit Utrecht

  1. Patents and Technological Change - A Review with Focus on the FEPOCI Database By Tuomo Nikulainen; Mika Pajarinen; Christopher Palmberg
  2. Technological Revolutions and Stock Prices By Pástor, Lubos; Veronesi, Pietro
  3. EU Outsourcing to the East, Governance and Innovation Systems in the Baltic Countries - A Three-Stage Approach By Jari Hyvärinen
  4. The Innovation System and Business Environment of Northwest Russia By Sergey Boltramovich; Pavel Filippov; Hannu Hernesniemi
  5. A Dynamic Game of Technology Diffusion under an Emission Trading Regulation: A Pilot Experiment. By Ivana Capozza
  6. When Do More Patents Reduce R&D? By Robert M. Hunt
  7. The Organization of the Innovation Industry: Entrepreneurs, Venture Capitalists and Oligopolists By Norbäck, Pehr-Johan; Persson, Lars
  8. The Circulation of Ideas: Firms Versus Markets By Hellmann, Thomas F; Perotti, Enrico C
  9. Choosing Standards By Otto Toivanen
  10. The Finnish Telecom Sector Facing Next Generation Standards - Indigenous Capabilities Versus R&D Alliances By Christopher Palmberg; Olli Martikainen
  11. Public Funding of R&D and Growth: Firm-level Evidence from Finland By Hannu Piekkola
  12. Impact of Public R&D Financing on Private R&D - Does Financial Constraint Matter? By Jyrki Ali-Yrkkö
  13. Impact of Public R&D Financing on Employment By Jyrki Ali-Yrkkö
  14. Explaining Open Source By Markku Stenborg
  15. Knowledge Capital as the Source of Growth By Hannu Piekkola
  16. Technological Progress and Regress in Pre-Industrial Times By Aiyar, Shekhar; Dalgaard, Carl-Johan; Moav, Omer
  17. Knowledge Integration and Network Formation. By Müge Ozman
  18. Top Research Productivity and its Persistence By Kelchtermans, Stijn; Veugelers, Reinhilde
  19. Cross-country differences in ICT adoption. A consequence of Culture? By Erumban, Abdul Azeez; Jong, Simon B. de
  20. Interpreting an ERP implementation from a stakeholder perspective By Boonstra, Albert
  21. The Global Dispersion of Innovative Activities - The Case of Finnish Multinationals By Christopher Palmberg; Mika Pajarinen
  22. Academic Spin-offs in Finnish Biotechnology. By Antti-Jussi Tahvanainen
  23. Catching up or getting stuck? Europe's troubles to exploit ICT's productivity potential By van Ark, Bart; Inklaar, Robert
  24. ETLA 2004 Survey on the Finnish Biotechnology Industry By Raine Hermans; Martti Kulvik; Antti-Jussi Tahvanainen
  25. Évaluation et expérimentation de logiciels libres pour la petite et moyenne entreprise By Michel Sauvé; Mario Boutin; Robert Gérin-Lajoie; Isabelle Therrien
  26. Initiatives on a Sustainable Development Strategy for Finnish Biotechnology By Raine Hermans; Martti Kulvik
  27. Determinants of Internationalisation through Strategic Alliances - Insights Based on New Data on Large Finnish Firms By Christopher Palmberg; Mika Pajarinen
  28. Alliance Capitalism and the Internationalisation of Finnish Firms By Christopher Palmberg; Mika Pajarinen
  29. Competition with mandatory labeling of genetically modified products By Toolsema, Linda
  30. Diffusion of Digital Mobile Telephony - Are Devoloping Countries Different? By Petri Rouvinen
  31. Clubs and Standards: The Role of Industry Consortia in Standardization of Wirelelss Telecommunications By Aija Leiponen
  32. Analyzing Entrepreneurship with the Finnish Linked Employer-Employee Data (FLEED).Matching and qualitative properties of the data By Mika Maliranta; Satu Nurmi

  1. By: Tuomo Nikulainen; Mika Pajarinen; Christopher Palmberg
    Keywords: patents, citations, innovation, technological change, Finland
    Date: 2005–05–26
  2. By: Pástor, Lubos; Veronesi, Pietro
    Abstract: During technological revolutions, stock prices of innovative firms tend to exhibit high volatility and bubble-like patterns, which are often attributed to investor irrationality. We develop a general equilibrium model that rationalizes the observed price patterns. The high volatility results from high uncertainty about the average productivity of a new technology. Investors learn about this productivity before deciding whether to adopt the technology on a large scale. For technologies that are ultimately adopted, the nature of uncertainty changes from idiosyncratic to systematic as the adoption becomes more likely; as a result, stock prices fall after an initial run-up. This 'bubble' in stock prices is observable ex post but unpredictable ex ante, and it is most pronounced for technologies characterized by high uncertainty and fast adoption. We examine stock prices in the early days of American railroads, and find evidence consistent with a large-scale adoption of the railroad technology by the late 1850s.
    Keywords: bubble; innovation; railroads; technology
    JEL: G1
    Date: 2006–01
  3. By: Jari Hyvärinen
    Keywords: outsourcing, innovation system, institutions, governance, EU enlargement
    Date: 2004–10–05
  4. By: Sergey Boltramovich; Pavel Filippov; Hannu Hernesniemi
    Keywords: Northwest Russia, innovation system, business environment, international cooperation
    Date: 2004–12–08
  5. By: Ivana Capozza (Dipartimento di Scienze Economiche, Università degli Studi di Bari, Via Camillo Rosalba 53, BARI)
    Abstract: In this paper we investigate how the interaction between the product and the emission permit markets may affect firms' propensity to adopt cleaner technologies. The adoption of a cleaner technology has the direct effect of reducing the compliance cost of the firm, but it also involves a strategic decision, if the industry is not perfectly competitive. We look at this problem from both a theoretical and an experimental point of view. We develop a model of duopoly, in which two firms engage in quantity competition in the output market and behave as price takers in the permit market. Firms have the possibility of investing in a cleaner production technology, which is available on the market at some cost. We set up a dynamic game over an infinite horizon in order to investigate firms' investment decisions: in each period, each firm decides whether to invest in the new technology or not. The stationary equilibria to this game crucially depend on both the cost of switching to the cleanest technology and the emission cap. Technology diffusion is one of the possible equilibria of the game. In order to test the predictions of the theory, we design and implement an "innovation experiment" that replicates the "innovation game". The results of our pilot experiment suggest that firms' behaviour will eventually lead to innovation diffusion.
    Keywords: tradable permits, technology adoption, oligopoly, laboratory experiments
    JEL: C91 L13 Q28
  6. By: Robert M. Hunt
    Date: 2006–01–24
  7. By: Norbäck, Pehr-Johan; Persson, Lars
    Abstract: Exit of venture-backed firms often takes place through sales to large incumbent firms. We show that in such an environment, venture-backed firms have a stronger incentive to develop basic innovations into commercialized innovations than incumbent firms, due to strategic product market effects. This will increase the price for basic innovations, thereby triggering more such innovations by entrepreneurs. Consequently, a venture capital market implies that more innovations are created, and that these become better developed. Moreover, we show that to exist in equilibrium, venture capitalist must be substantially more efficient, otherwise incumbents will preempt venture capitalists entering the market by acquiring basic innovations
    Keywords: acquisitions; entrepreneurship; innovation; venture capital
    JEL: G24 L1 L2 M13 O3
    Date: 2006–01
  8. By: Hellmann, Thomas F; Perotti, Enrico C
    Abstract: We describe new ideas as incomplete concepts for which the innovator needs feedback from agents with complementary skills. Once shared, ideas may be stolen. We compare how different contractual environments support invention and implementation. Markets, as open exchange systems, are good for circulation and thus elaboration, but may fail to reward idea generation. Firms, as controlled idea exchange systems, can reward idea generation but can do so only by restricting their circulation. This identifies a basic trade-off between protecting the rights of invention and the best implementation of ideas. An environment that allows ideas to cross firm boundaries enhances the rate of innovation and creates a symbiotic relationship between markets and firms.
    Keywords: firms; ideas; innovation
    JEL: D83 L22 M13 O31
    Date: 2006–01
  9. By: Otto Toivanen
    Keywords: mobile technology standars, telecommunications, diffusion
    Date: 2004–10–13
  10. By: Christopher Palmberg; Olli Martikainen
    Keywords: standards, Finnish telecom, diversification, R&D alliances
    Date: 2004–11–18
  11. By: Hannu Piekkola
    Keywords: R&D, public expenditure, endogenous growth, linked employee data
    JEL: O30 O32 O52 R11
    Date: 2005–12–20
  12. By: Jyrki Ali-Yrkkö
    Keywords: public finance, R&D, research and development, substitute, financial constraint
    Date: 2004–11–03
  13. By: Jyrki Ali-Yrkkö
    Keywords: Public finance, R&D, employment, research and development, substitute, endogeneity
    Date: 2005–05–26
  14. By: Markku Stenborg
    Keywords: open source software, incentives, licensing choice, coordination, empirical evidence
    JEL: L86 L31 H41
    Date: 2004–11–17
  15. By: Hannu Piekkola
    Keywords: regional growth, endogenous growth, catching-up, technology transfer
    JEL: O30 O40 O52 R11
    Date: 2005–03–18
  16. By: Aiyar, Shekhar; Dalgaard, Carl-Johan; Moav, Omer
    Abstract: This paper offers micro-foundations for the dynamic relationship between technology and population in the pre-industrial world, accounting for both technological progress and the hitherto neglected but common phenomenon of technological regress. A growing population engenders the endogenous adoption of new techniques that increase the division of labour. Conversely, technological progress supports an increasing population in the Malthusian environment. A transient shock to population or productivity, however, induces the neglect of some techniques rendered temporarily unprofitable, which are therefore not transmitted to the next generation. When the shock passes, the division of labour remains constrained by the smaller stock of knowledge, and technology has thereby regressed. A slow process of rediscovery is required for the economy to reach its previous level of technological sophistication and population size.
    Keywords: division of labour; Malthusian stagnation; technological progress; technological regress
    JEL: J11 O10 O33 O40
    Date: 2006–01
  17. By: Müge Ozman
    Abstract: In this paper, we highlight how inter-firm collaboration networks are influenced by the knowledge composition of goods in an industry. For this purpose, we carry out an agent based simulation study in which firms integrate their competencies under different knowledge base regimes. In this way networks form. The results reveal that, knowledge regime significantly influences the network structure, and interaction among firms is very intensive when the products are specialized but also have common knowledge among them.
    Date: 2006
  18. By: Kelchtermans, Stijn; Veugelers, Reinhilde
    Abstract: The paper contributes to the debate on cumulative advantage effects in academic research by examining top performance in research and its persistence over time, using a panel dataset comprising the publications of biomedical and exact scientists at the KU Leuven in the period 1992-2001. We study the selection of researchers into productivity categories and analyse how they switch between these categories over time. About 25% achieves top performance at least once, while 5% is persistently top. Analysing the hazard to first and subsequent top performance shows strong support for an accumulative process. Rank, gender, hierarchical position and past performance are highly significant explanatory factors.
    Keywords: economics of science; hazard models; research productivity
    JEL: J24 L31 O31 O32
    Date: 2006–01
  19. By: Erumban, Abdul Azeez; Jong, Simon B. de (Groningen University)
    Abstract: The diffusion of information and communication technology (ICT) has witnessed a surge in the recent years; nevertheless, the rate of adoption across countries diverges considerably. This divergence is observed regardless of the income levels of countries. In this paper, we attempt to explain the differences in ICT adoption rates across countries using Hofstede?s cultural framework. The results suggest that national culture does influence the ICT adoption rate of a country. The results are robust even after controlling for levels of education and income.
    Date: 2005
  20. By: Boonstra, Albert (Groningen University)
    Abstract: ERP systems are software packages that enable the integration of transactions oriented data and business processes throughout an organization. ERP implementation can be viewed as an organizational change process: many problems related to ERP implementation are related to a misfit of the system with the characteristics of the organization. This article uses the evidence of a case study to uncover some important dimensions of the organizational change issues related to ERP implementation. The study shows how ERP implementation can impact the interests of stakeholders of the ERP-system and how these groups may react by influencing the course of events, for example by altering the design and implementation in ways that are more consistent with their interests. Understanding the possible impact of ERP on particular interests of stakeholders may help project managers and others to manage ERP implementations more effectively.
    Date: 2005
  21. By: Christopher Palmberg; Mika Pajarinen
    Date: 2004–06–11
  22. By: Antti-Jussi Tahvanainen
    Date: 2004–03–15
  23. By: van Ark, Bart; Inklaar, Robert (Groningen University)
    Abstract: In this paper we extend our previous analysis of the comparative productivity performance of Europe and the U.S. to 2004, thereby covering the latest full business cycle. Our main finding is that the slower contribution of ICT to productivity growth in the EU compared to the U.S. has persisted into the early part of the 21st century. The growth differential even increased since 2000, as the U.S. shows strong labour productivity advances in market services. This may be related to a more productive use of ICT in the U.S.. However, at industry level we find no support for significant TFP (total factor productivity) spillovers from ICT investment, neither in the U.S. nor in European countries. In the 1980s we even find that ICT investment and TFP growth are negatively related, with at best normal returns in the 1970s and 1990s. We speculate that this U-shaped pattern is driven by ?hard savings? from ICT investment that first lead to earning normal returns, followed by a period of experimentation during which ICT and TFP growth are negatively related. Ultimately, ?soft savings? lead to productivity gains from ICT in line with the marginal cost of ICT. We argue that the realization of productivity effects from soft savings is highly dependent on the competitive process that stimulates complementary innovations and weeds out inefficient users of ICT technology. Europe risks getting stuck in an environment where the productivity gains from soft savings from ICT remain unrealized.
    Date: 2006
  24. By: Raine Hermans; Martti Kulvik; Antti-Jussi Tahvanainen
    Date: 2005–04–27
  25. By: Michel Sauvé; Mario Boutin; Robert Gérin-Lajoie; Isabelle Therrien
    Abstract: <P>Les logiciels libres, ou Open Source Software, ont connu un très grand succès au cours des dernières années. Les logiciels libres offrent plusieurs avantages à leurs utilisateurs: des coûts plus bas, davantage de flexibilité dans la conduite de leur stratégie informatique ainsi que la réduction de certains risques, tel que la disparition de l’éditeur d’un logiciel.<P> Récemment, plusieurs logiciels d’affaires sont apparus sous licence libre: parmi ceux-ci, certains progiciels de gestion intégrée (PGI, ou ERP) se démarquent, dont Compiere, avec des centaines de milliers de références sur Google et un nombre total de plus de 700 000 téléchargements. Il est raisonnable de croire que les logiciels d’affaires libres offrent aux PME canadiennes l'opportunité de bénéficier des avantages des technologies de l'information à moindre coût.<P> Nous soutenons que l’accès au gain d’efficience promis par ces logiciels à moindre coût pourrait augmenter la compétitivité des entreprises canadiennes. Ce projet est une première étape en vue de vérifier cette hypothèse. Son but est d’identifier les meilleurs logiciels d’affaires libres et d’en faire une évaluation sommaire.<P> Pour mieux nous préparer à la recherche des meilleurs candidats, nous avons d’abord fait la revue des différentes méthodologies de sélection de logiciels, autant dans le domaine du propriétaire que du libre. Par la suite, nous avons établi la liste des différents types de logiciels d’affaires, en prenant comme toile de fond les principes de la réingénierie des processus.<P> Finalement, nous avons appliqué une série de cribles dans le but d'identifier une dizaine de logiciels libres matures. De tous les candidats potentiels, trois ont été retenus pour une évaluation ergonomique et fonctionnelle sommaire.<P> <UL><LI><B>Compiere</B> : présenté comme un ERP, Compiere permet d’automatiser les processus d’achat, de vente, de gestion d’inventaire et les opérations comptables. Il est programmé en Java et son installation est facile. L’évaluation ergonomique s’est avérée satisfaisante. L’offre de services professionnels est déjà importante. L’enthousiasme de la communauté semble donc justifié.<P> <LI> <B> ERP5</B> : choisi parmi les finalistes pour son caractère unique. C’est le seul logiciel de gestion de production. Cependant, il s’est avéré impossible à installer. Il fut aussi impossible d’obtenir du support technique. Pour ces raisons, nous ne recommandons pas ce logiciel pour un site pilote.<P> <LI><B>SQL-Ledger</B> : Essentiellement un logiciel de comptabilité, son installation s’est avérée très facile. Ce logiciel est aussi bien supporté par sa communauté. Cependant, le processus d’évaluation a révélé des déficiences ergonomiques importantes. Nous ne pouvons donc recommander ce logiciel.<P></UL> En conclusion, Compiere se démarque clairement parmi les logiciels d’affaires libres. C’est un logiciel mature qui offre à faible coût des fonctions requises par un très grand nombre de PME.<P> Cette étude n’est pas suffisante pour recommander formellement ces logiciels aux entreprises canadiennes. Une étude plus approfondie, tel un projet pilote en entreprise, sera nécessaire. Nous recommandons que Compiere soit choisi pour ces projets pilotes.
    Date: 2005–02–01
  26. By: Raine Hermans; Martti Kulvik
    Date: 2005–06–22
  27. By: Christopher Palmberg; Mika Pajarinen
    Keywords: internationalisation, large Finnish firms, uncertainty, strategic alliances
    Date: 2005–01–28
  28. By: Christopher Palmberg; Mika Pajarinen
    Keywords: strategic alliances, internationalisation, Finnish firms
    Date: 2005–11–01
  29. By: Toolsema, Linda (Groningen University)
    Abstract: In April 2004, the European Union adopted a new legislative framework for genetically modified (GM) organisms. This framework regulates the placing on the market of GM products, and demands these products to be labeled as such. We present a duopoly model with vertical differentiation and mandatory labeling, where one firm produces the conventional product. We assume the GM product to have lower marginal cost, and lower value to consumers. We analyze the effects of introducing the GM good on output, prices, and welfare. We also study contamination and costly testing of convential goods.
    Date: 2005
  30. By: Petri Rouvinen
    JEL: L96 O30 O10
    Date: 2004–03–15
  31. By: Aija Leiponen
    Keywords: standard setting, wireless telecommunication, cooperative arrangements
    Date: 2005–12–13
  32. By: Mika Maliranta; Satu Nurmi
    JEL: L10 M13
    Date: 2004–08–09

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