nep-ino New Economics Papers
on Innovation
Issue of 2006‒04‒29
forty-four papers chosen by
Koen Frenken
Universiteit Utrecht

  1. Measuring Informal Innovation: From Non-R&D to On-line Knowledge Production By Marcel Bogers; Stéphane Lhuillery
  2. Product Innovation and Transportation Technology in a Cournot Duopoly. By A. Mantovani
  3. Patents, Research Exemption, and the Incentive for Sequential Innovation By Moschini, GianCarlo; Yerokhin, Oleg
  4. Process and Product Innovation in a Vertically Differentiated Monoply. By L. Lambertini; R. Orsini
  5. The Effects of Innovation on Performance of Korean Firms By Heshmati, Almas; Kim, Yee-Kyoung; Kim, Hyesung
  6. Joint Venture for Product Innovation and Cartel Stability under Vertical Differentiation. By L. Lambertini; C. Iori
  7. How Licensing Resolves Hold-Up: Evidence from a Dynamic Panel Data Model with Unobserved Heterogeneity By Ralph Siebert; Georg von Graevenitz
  8. Exports, university-industry linkages, and innovation challenges in Bangalore, India By D ' Costa, Anthony P.
  9. Complementarity in R&D cooperation strategies By Belderbos René; Carree Martin; Lokshin Boris
  10. Exploring the "Value" of Academic Patents: IP Management Practices in UK Universities and their Implications for Third-Stream Indicators By Martin Meyer; Puay Tang
  11. Endogenous Innovation Waves and Economic Growth. By R. Andergassen; F. Nardini
  12. Technological agglomeration and the emergence of clusters and networks in nanotechnology By Robinson, D.K.R.; Rip, A.; Mangematin, V.
  13. A Tale of Two Literatures: Transaction Cost and Property Rights in Innovation Outsourcing By Nishaal Gooroochurn; Aoife Hanley
  14. Is Europe becoming a knowledge-driven economy? Evidence from EU developed regions By Alessandro STERLACCHINI; Francesco VENTURINI
  15. Expectations, Network Effects and Timing of Technology Adoption: Some Empirical Evidence from a Sample of SMEs in Italy By Nicoletta Corrocher; Roberto Fontana
  16. Can Post-Grant Reviews Improve Patent System Design? A Twin Study of US and European Patents By Stuart J.H. Graham; Dietmar Harhoff
  17. Business Process Innovation using the Process Innovation Laboratory By Møller, Charles
  18. Measuring industry-science links through inventor-author relations: A profiling method By Cassiman, Bruno; Glenisson, Patrick; Van Looy, Bart
  19. The curse of technological race: the red queen effect By Leonardo Costa Ribeiro; Ricardo Machado Ruiz; Américo Tristão Bernardes; Eduardo da Motta e Albuquerque
  20. Managing the ERP implementation journey - change in discourse from classical IT project to technology-driven organisational change initiative By Kræmmergaard, Pernille; Rose, Jeremy
  21. A Generalized Knowledge Production Function By Heshmati, Almas
  22. Firms' Location and R&D Cooperation in an Oligopoly with Spillovers By Isabel Mota; António Brandão
  23. The Monopolist's Optimal R&D Portfolio. By L. Lambertini
  24. Are Co-Active Researchers on Top of their Class? An Exploratory Comparison of Inventor-Authors with their Non-Inventing Peers in Nano-Science and Technology By Martin Meyer
  25. R&D Cooperation: Theory and Evidence. By L. Lambertini; F. Lotti; E. Santarelli
  26. Environmentalism and Technology By Adrian Smith
  27. The Dynamics of the Transfer and Renewal of Patents By Carlos J. Serrano
  28. The Causal Relationship between Capital Structure and Cost of Capital: Evidence from ICT Companies Listed at NASDAQ By Aoun, Dany; Heshmati, Almas
  29. Vertical Integration and Differentiation in an Oligopoly with Process Innovating R&D. By L. Lambertini; G. Rossini
  30. The Productivity of UK Universities By Gustavo Crespi; Aldo Geuna
  31. R&D in transport and comunication in a Cournot duopoly. By L. Lambertini; A. Mantovani; G. Rossini
  32. Endogenous Technology and Tradable Emission Quotas By Michael Hoel; Rolf Golombek
  33. What Determines Technological Spillovers of Foreign Direct Investment: Evidence from China By Galina Hale; Cheryl Long
  34. Inside or Out? Open or Closed? Positioning the Governance of Sustainable Technology. By Adrian Smith; Andy Stirling
  35. Economic Growth with Imperfect Protection of Intellectual Property Rights By Ryo Horii; Tatsuro Iwaisako
  36. The Diffusion of E-commerce at the Firm Level: Theoretical Implications and Empirical Evidence. By E. Santarelli
  37. Estimating Feedback Effect in Technical Change: A Frontier Approach By Vincent M. Otto; Timo Kuosmanen; Ekko C. van Ierland
  38. Contribution of ICT to the Chinese Economic Growth By Heshmati, Almas; Yang, Wanshan
  39. Movement of Star Scientists and Engineers and High-Tech Firm Entry By Lynne G. Zucker; Michael R. Darby
  40. "Selection or Imitation? : Organizational Evolution in the Japanese Cotton Industry, 1905-1935:" By Tetsuji Okazaki
  41. Technological Choice under Organizational Diseconomies of Scale By Dominique Demougin; Anja Schöttner
  42. Peer Review and the Relevance of Science By Alister Scott
  43. Impact of Cultural Differences on Knowledge Transfer in British, Hungarian and Polish Enterprises By Aleksandra Hauke
  44. Path Dependence and Regional Economic Evolution By Ron Martin; Peter Sunley

  1. By: Marcel Bogers (Chaire en Economie et Management de l'Innovation, Ecole Polytechnique Fédérale de Lausanne); Stéphane Lhuillery (Chaire en Economie et Management de l'Innovation, Ecole Polytechnique Fédérale de Lausanne)
    Abstract: In this paper we explore the concept of informal innovation by investigating it both on the input (activities) and output (impact) side of the innovation process. Informal innovation is defined as innovation that is not explicitly planned and budgeted and therefore remains largely hidden in (aggregate) innovation data. We take a statistical approach to reveal the significant potential of informal innovation. We furthermore conceptualize and operationalize informal innovation as an activity taking place without R&D (in non-R&D firms). In general, on the input side, we show that around half of the innovative firms in our sample (of innovative firms in the Swiss Innovation Survey of 2002) develop innovations without any R&D. Moreover, on the output side, over one third of the innovative sales and production cost reductions can be attributed to informal innovation. Although the results appear to be rather pervasive, they are strongest for small firms, low-tech firms and firms in service industries. This leads us to conclude that informal innovation is not just an important complement to formal innovation – as scarcely acknowledged in literature – but that is largely takes place next to and as a substitute for formal innovation as well – which is largely neglected in literature to date. We furthermore explore the possible attributes of the process of informal innovation and develop a preliminary framework that needs to be investigated into further detail by future research. In particular, we argue that ‘on-line’ activities are a crucial part of the innovation process, although it has been largely neglected to date. It becomes clear that the literature on learning-by-doing and learning-by-using needs to be expanded by more explicitly focusing on the processes that are at the heart of the (informal) innovation process in order to clearly show the sources of innovation. In order to do this, we indicate some possible avenues for future research to improve the measurement of (informal) innovation.
    Date: 2006–03
  2. By: A. Mantovani
  3. By: Moschini, GianCarlo; Yerokhin, Oleg
    Abstract: We develop a dynamic duopoly model of R&D competition to improve the quality of a final good. The innovation process is sequential and cumulative, and takes place alongside production in an infinite-horizon setting. In this context we study the R&D incentive impacts resulting from a “research exemption” or “experimental use” provision. We specify and solve the innovation and production model under two distinct IPR regimes, essentially a patent system with and without a research exemption. The model applies closely to the question of the optimal mode of intellectual property right (IPR) protection for plants, where traditional plant breeder’s rights allow for a well-defined research exemption, whereas standard utility patents do not. We characterize the properties of the relevant Markov perfect equilibria and investigate the profit and welfare effects of the research exemption. We find that firms, ex ante, always prefer full patent protection. The welfare ranking of the two IPR regimes, on the other hand, depends on the relative magnitudes of the costs of initial innovation and improvements. In particular, a research exemption is most likely to provide inadequate R&D incentives when there is a large cost to establish the initial research program.
    Keywords: Cumulative innovation; Experimental use exemption; Intellectual property rights; Markov perfect equilibrium; Patents; Stochastic games.
    JEL: O3 C72 L0
    Date: 2006–04–26
  4. By: L. Lambertini; R. Orsini
  5. By: Heshmati, Almas (Ratio); Kim, Yee-Kyoung (Seoul National University); Kim, Hyesung (Seoul National University)
    Abstract: This study empirically examines the relationship between knowledge capital and performance heterogeneity at the firm level. The model is based on a knowledge production function comprising of four interdependent equations linking innovativeness to innovation input, innovation output and productivity. The empirical part is based on Korean firm level innovation data. The model is estimated using advanced econometric methods. We investigate whether innovation is a significant and contributing determinant of performance heterogeneity among firms. In examining the relationship between innovation and productivity we correct for selectivity and simultaneity biases. The results show that there is a two-way causal relationship between knowledge capital and labor productivity. Firm-specific effects positively contribute to innovation output but they are negatively related to productivity. Industry heterogeneity does not affect innovation output or productivity.
    Keywords: Innovation Input; Innovation Output; Productivity; Korea
    JEL: C33 E22 L60 O32
    Date: 2006–04–25
  6. By: L. Lambertini; C. Iori
  7. By: Ralph Siebert (Purdue University, Department of Economics, Krannert School of Management, 403 West State Street, West Lafayette, IN 47907-2056.; Georg von Graevenitz (Ludwig Maximilians University, Munich School of Management, INNO-tec, Kaulbachstraße 45, D-80539,Munich.
    Abstract: In a patent thicket licensing provides a mechanism to either avoid or resolve hold-up. Firms’ R&D incentives will differ depending on how licensing is used. In this paper we study the choice between ex ante licensing to avoid hold-up and ex post licensing to resolve it. Building on a theoretical model of a patent portfolio race, firms’ choices of licensing contracts are modelled. We derive several hypotheses from the model and find support for these using data from the semiconductor industry. The empirical results show that firms’ relationships in product markets and technology space jointly determine the type of licensing contract chosen. Implications for the regulation of licensing are discussed. We estimate a dynamic panel data model with unobserved heterogeneity and a lagged dependent variable. A method suggested by Wooldridge (2005) is employed to estimate a random effects probit model using conditional maximum likelihood.
    Keywords: Hold-Up Problem, Licensing, Innovation, Patent Race, Patent Thicket
    JEL: L13 L49 L63
    Date: 2006–04
  8. By: D ' Costa, Anthony P.
    Abstract: The success of the Indian software industry is now internationally recognized. Consequently, scholars, policymakers, and indus try officials everywhere generally anticipate the increasing competitiveness of India in high technology activities. Using a structural framework, the author argues that Bangalore ' s (and India ' s) information technology (IT) industry is predicated on an Indian business model which does not encourage thick institutional linkages such as those encapsulated by the triple helix model. Under this institutional arrangement there is cross-fertilization of new ideas and new modes of institutional interaction between industry, academia, and government. Though there are several hundred IT businesses in a milieu of numerous engineering and science colleges and high-end public sector research institutes, the supposed thick institutional architecture is in reality quite thin. This is due to a particular type of an export-oriented model which is based on off-shore development of software services, targeted mainly to the United States. Neither domestic market nor non-U.S. markets such as East Asia are pursued aggressively by Indian firms, which offer alternative forms of learning. Consequently, Bangalore ' s dynamism in the IT industry stems from linear and extensive growth rather than nonlinear and intensive growth. The author argues that Bangalore has serious innovation challenges with weak university-industry linkages, lack of inter-firm collaboration, and the absence of cross-fertilization between the knowledge-intensive defense/public sector and the commercial IT industry. To strengthen Bangalore ' s and India ' s innovation system, the Indian business model must be reformed by diversifying geographical and product markets, stemming international and internal brain drain, and contributing to urban infrastructure.
    Keywords: ICT Policy and Strategies,Technology Industry,Tertiary Education,Information Techno logy,Educational Technology and Distance Education
    Date: 2006–04–01
  9. By: Belderbos René; Carree Martin; Lokshin Boris (METEOR)
    Abstract: This paper assesses the performance effects of simultaneous engagement in R&D cooperation with different partners (competitors, clients, suppliers, and universities and research institutes). We test whether these different types of R&D cooperation are complements in improving productivity. The results suggest that the joint adoption of cooperation strategies could be either beneficial or detrimental to firm performance, depending on firm size and specific strategy combinations. Customer cooperation helps to increase market acceptance and diffusion of product innovations and enhances the impact ofcompetitor and university cooperation. On the other hand, smaller firms also face diseconomies in pursuing multiple R&D cooperation strategies, which may stem from higher costs and complexity of simultaneously managing multiple partnerships with different innovation objectives.
    Keywords: management and organization theory ;
    Date: 2006
  10. By: Martin Meyer (SPRU, University of Sussex); Puay Tang (SPRU, University of Sussex)
    Abstract: Third-Stream activities have become increasingly important in the UK. However, valuing them in a meaningful way still poses a challenge to science and technology analysts and policy makers alike. This paper reviews the general literature on "patent value" and assesses the extent to which these established measures, including patent citation, patent family, renewal and litigation data, can be applied to the university context. Our study examines indicators of patent value for short and mid-term evaluation purposes, rather than indicators that suffer from long time lags. We also explore the extent to which differences in IP management practices at universities may have an impact on the validity and robustness of possible indicators. Our observations from four UK universities indicate that there are considerable differences between universities as to how they approach the IP management process, which in turn has implications for valuing patents and how they track activity in this area. In their current form, data as collected by universities are not sufficiently robust to serve as the basis for evaluation or resource allocation.
    Keywords: intellectual property management, patenting, United Kingdom universitities, technology transfer, third stream, performance indicators
    JEL: O34
    Date: 2006–04–11
  11. By: R. Andergassen; F. Nardini
  12. By: Robinson, D.K.R.; Rip, A.; Mangematin, V.
    Abstract: Based on the analysis of two clusters in nanotechnologies (MESA+ in the Netherlands and Minatec in Grenoble in France), the paper examines the emergence and effects of technological agglomeration. The social and technical arrangements of a regional centre for nanotechnology both enable and constrain the ongoing activities and research lines that can be followed. Technology platforms and their co-location are a pre-requisite for nanotechnology research and agglomeration of such platforms are both a means and outcome for institutional entrepreneurs to mobilise resources, build networks and construct regional centres of excellence in nanotechnology. Technological agglomeration shapes the networks that evolve and leads to the convergence of scientific disciplines.
    JEL: M13
    Date: 2006
  13. By: Nishaal Gooroochurn (Nottingham University Business School); Aoife Hanley (Nottingham University Business School)
    Abstract: This paper investigates the relative importance of property rights (PR) and transactions cost (TC) factors in driving the decision of firms to outsource innovation. The TC literature explains a small part of outsourcing decisions (cost saving motives) while the PR literature deals with revenue maximisation. Using data for over 8,000 firms from the UK Community Innovation Survey, we find that PR variables dominate over TC variables. Our results suggest that the decision to outsource innovation is mostly driven by the ability of firms to control information leakages, less so by cost motives.
    Keywords: transaction cost, property rights, innovation
    JEL: L2 O3
    Date: 2006–04–18
  14. By: Alessandro STERLACCHINI (Universita' Politecnica delle Marche, Dipartimento di Management ed Organizzazione Aziendale); Francesco VENTURINI (Universita' Politecnica delle Marche, Dipartimento di Economia)
    Abstract: In this paper, a set of knowledge base indicators are used as explanatory variables of the 1995-2002 growth performances of 150 NUTSII regions belonging to ten countries of the former EU15. Their impact is estimated by controlling for the initial levels of the dependent variables, the structural features of the regions and the presence of spatial correlation. The results show that GDP per capita growth is positively affected by the intensity of R&D and the share of adults with tertiary education. The R&D intensity is particularly effective in explaining the growth of labour productivity while that of occupation ratio is significantly influenced by the intensity of higher education. Thus, although structural characteristics and starting levels of economic performances have differently shaped the rates of economic growth across regions, our findings strongly support the Lisbon strategy as they indicate that, also within the EU, a sustained investment in R&D, knowledge and education is rewarding.
    Keywords: knowledge innovation education endowment, regional economic growth
    JEL: O18 O33 R11
    Date: 2006–03
  15. By: Nicoletta Corrocher (CESPRI, Bocconi University); Roberto Fontana (University of Pavia and CESPRI)
    Abstract: We provide evidence on the influence of expectations and network effects on the timing of technological adoption. By considering a sample of SMEs operating in Italy we focus on the determinants of their decision to adopt Fast Ethernet, a communication standard for Local Area Networks (LANs). We find that both expectations and network effects significantly affect the timing of adoption. In particular, price expectations generally tend to delay adoption and (indirect) network effects in the form of backward compatibility as well as informational spillovers tend to foster adoption. Firm size also matters.
    Keywords: diffusion, network effects, expectations, LAN equipment, SMEs
    JEL: O33 L63
    Date: 2006–04–19
  16. By: Stuart J.H. Graham (Georgia Institute of Technology); Dietmar Harhoff (University of Munich, CEPR and ZEW)
    Abstract: This paper assesses the impact of adopting a post-grant review institution in the US patent system by comparing the “opposition careers” of European Patent Office (EPO) equivalents of litigated US patents to those of a control group of EPO patents. We demonstrate several novel methods of "twinning" US and European patents and investigate the implications of employing these different methods in our data analysis. We find that EPO equivalents of US litigated patent applications are more likely to be awarded EPO patent protection than are equivalents of unlitigated patents, and the opposition rate for EPO equivalents of US litigated patents is about three times higher than for equivalents of unlitigated patents. Patents attacked under European opposition are shown to be either revoked completely or narrowed in about 70 percent of all cases. For EPO equivalents of US litigated patents, the appeal rate against opposition outcomes is considerably higher than for control-group patents. Based on our estimates, we calculate a range of net welfare benefits that would accrue from adopting a post-grant review system. Our results provide strong evidence that the United States could benefit substantially from adopting an administrative post-grant patent review, provided that the post-grant mechanism is not too costly.
    Keywords: patent system, post-grant review, opposition, litigation
    JEL: K41 K11 L10
    Date: 2006–04
  17. By: Møller, Charles (Department of Business Studies)
    Abstract: Most organizations today are required not only to establish effective business processes but they are required to accommodate for changing business conditions at an increasing rate. Many business processes extend beyond the boundary of the enterprise into the supply chain and the information infrastructure therefore is critical. Today nearly every business relies on their Enterprise System (ES) for process integration and the future generations of enterprise systems will increasingly be driven by business process models. Consequently process modeling and improvement will become vital for business process innovation (BPI) in future organizations. <p> There is a significant body of knowledge on various aspect of process innovation, e.g. on conceptual modeling, business processes, supply chains and enterprise systems. Still an overall comprehensive and consistent theoretical framework with guidelines for practical applications has not been identified. <p> The aim of this paper is to establish a conceptual framework for business process innovation in the supply chain based on advanced enterprise systems. The main approach to business process innovation in this context is to create a new methodology for exploring process models and patterns of applications. <p> The paper thus presents a new concept for business process innovation called the process innovation laboratory a.k.a. the Ð-Lab. The Ð-Lab is a comprehensive framework for BPI using advanced enterprise systems. The Ð-Lab is a collaborative workspace for experimenting with process models and an explorative approach to study integrated modeling in a controlled environment. The Ð-Lab facilitates innovation by using an integrated action learning approach to process modeling including contemporary technological, organizational and business perspectives
    Keywords: No; keywords
    Date: 2006–04–25
  18. By: Cassiman, Bruno (IESE Business School); Glenisson, Patrick (KU Leuven and Business & Decision Benelux); Van Looy, Bart (KU Leuven and Steunpunt O&O Statistieken)
    Abstract: In this pilot study we examine the performance of text-based profiling in recovering a set of validated inventor-author links. In a first step we match patents and publications solely based on their similarity in content. Next, we compare inventor and author names on the highest ranked matches for the occurrence of name matches. Finally, we compare these candidate matches with the names listed in a validated set of inventor-author names. Our text-based profile methodology performs significantly better than a random matching of patents and publications, suggesting that text-based profiling is a valuable complementary tool to the name searches used in previous studies.
    Keywords: innovation; industry-science links; text-based profiling;
    Date: 2006–03–27
  19. By: Leonardo Costa Ribeiro (UFMG); Ricardo Machado Ruiz (Cedeplar-UFMG); Américo Tristão Bernardes (UFOP); Eduardo da Motta e Albuquerque (Cedeplar-UFMG)
    Abstract: Economic prosperity is tied to scientific development, i.e., there is a strong correlation between science, technology and the wealth of nations. We collected data from scientific and technological production of 183 countries of the last thirty years (1974 to 2003) and applied a super-paramagnetic clustering technique on them, finding nations divided in three regimes, distinguished by the interactions between the agents of their National Systems of Innovation (NSI). The identification of these groups allows us to define the dynamical behavior of the thresholds, that grow exponentially and whose growth rate we have calculated. We show that for the period 1974-2003 the threshold between the immature and the developed NSIs increases by an annual rate of 6.6% (per capita). We identify clearly a "Red Queen Effect". Finally we show that the transitions between the regimes are discontinuous, represented by a structural breakthrough. Therefore, the prerequisite to move from regime I to regime II, and then to regime III are structural changes within NSIs.
    Keywords: national systems of innovation; super-paramagnetic clustering technique; moving thresholds
    JEL: O0
    Date: 2006–04
  20. By: Kræmmergaard, Pernille (Department of Business Studies); Rose, Jeremy (Department of Computer Science)
    Abstract: In the implementation of an ERP system in a large Danish production company (here referred to as Omega), discourse surrounding the project changed appreciably during the course of the project. Drawing on recent adaptations of discourse theory, we provide a theoretical model which relates technological discourse to actions and outcomes. The model provides a theoretical explanation for how one dominant technological discourse in an organisation can be replaced by another. The ERP implementation at Omega was originally cast as a classical IT project (reflecting the dominant ways of thinking about system development and project management both in industry and academia); however, the experience of the project clearly changed the sense-making of the participants and the implementation later came to be regarded as an technology-driven organisational change initiative. The new technological discourse helped the organisational actors to perceive value in what they were doing. However, it also has many implications for practice in large IT implementations, and some of these are elaborated
    Keywords: No keywords;
    Date: 2006–04–25
  21. By: Heshmati, Almas (Ratio)
    Abstract: This paper presents a generalized production model based on the knowledge production function. The model allows the relationships between corporate competitiveness strategy, innovation, efficiency, productivity growth and outsourcing to be investigated at the firm level in a number of steps. First, in reviewing recent developments of researches on the above relationships, provide discussion on data and the methods of measuring these variables. Second, depending on availability of information, different measures are transferred into single multidimensional index of corporate strategy using principal component analysis. Third, stochastic frontier production function and factor productivity analysis are used to estimate the efficiency and factor productivity growth at the firm level. Fourth, the causal relationships between the five variables of interest are established and modelled. Finally, given the direction of causality, the implications of the findings for estimation of the relationship are discussed. For the empirical analysis we use Swedish firm-level innovation survey data covering both manufacturing and service sectors.
    Keywords: Competition; innovation; outsourcing; productivity; efficiency; causality; firm
    JEL: C31 C52 D24 L10 L60 L80 O31
    Date: 2006–04–25
  22. By: Isabel Mota (CETE, Faculdade de Economia, Universidade do Porto); António Brandão (CETE, Faculdade de Economia, Universidade do Porto)
    Abstract: This paper aims at explaining if firms's decision about location revises when firms cooperate or compete in R&D. For that purpose, it is proposed a three-stage game amongst three firms where each firm decides about location, R&D and output. Firms' decision about location determines a R&D spillover, which is inversely related to the distance between firms. R&D output is assumed to be cost-reducing and exhibit diminishing returns. Cooperation is only allowed in the R&D stage. Our results allow us to conclude that there is a positive relationship between R&D output equilibrium and the distance between firms when firms acts independently. When firms cooperate in R&D, the R&D output for a cooperating firm increases with the degree of information sharing between them, as well as with a reduction of the distance between cooperating firms. Firms' decision about location is also affected by R&D activities: if R&D activities run independently, the clustering of firms only occurs for a convex spillover function; if R&D activities run cooperatively, clustering is always observed if there is an increased information sharing between firms.
    Keywords: Location, R&D cooperation, R&D spillovers
    JEL: R30 O31 L13
    Date: 2004–10
  23. By: L. Lambertini
  24. By: Martin Meyer (SPRU, University of Sussex)
    Abstract: This paper explores the relationship between scientific publication and patenting activity. More specifically, this research examines for the field of nanoscience and nanotechnology whether researchers who both publish and patent are more productive and more highly cited than their peers who concentrate on scholarly publication in communicating their research results. This study is based on an analysis of the nanoscience publications and nanotechnology patents of a small set of European countries. While only a very small number of nanoscientists appear to hold patents in nanotechnology, a considerable number of nano-inventors seem to be actively publishing nanoscience research. Overall, the patenting scientists appear to outperform their solely publishing, non-inventing peers in terms of publication counts and citation frequency. However, a closer examination of the highly active and cited nano-authors points to a slightly different situation. While still over-represented among the highly cited authors, inventor-authors appear not to be among the most highly cited authors in that category with one notable exception. A policy-relevant conclusion is that, generally speaking, patenting activity does not appear to have an adverse impact on the publication and citation performance of researchers.
    Keywords: nanotechnology, inventors, bibliometrics, patenting activity, publications
    JEL: O34
    Date: 2006–04–11
  25. By: L. Lambertini; F. Lotti; E. Santarelli
  26. By: Adrian Smith (SPRU, University of Sussex)
    Abstract: The environment movement often targets technology. It switches between enthusiasm for some technologies (like wind energy) and resistance to others (like nuclear power). And yet theory regarding the way social movements engage with technology is little developed. Environment groups are simply assumed to contribute to the 'selection pressures' under which technologies evolve. This paper seeks to develop theory by bridging a gap between social movement research and the sociology of technology. It will move between the two literatures and use examples to illustrate how the environment movement's enthusiasm and resistance to technologies penetrate their networks of development.
    Keywords: environment movement, resistance to technologies, sociology of technology
    JEL: Q55 Q58
    Date: 2006–04–11
  27. By: Carlos J. Serrano
    Abstract: This paper explores a new dataset of transfers of patents recorded at the United States Patent and Trademark Office. The aim of the paper is twofold. First, a number of patterns are presented. For instance, the probability of a patent being traded monotonically decreases as a function of its age except at the renewal dates. Immediately after renewal, this probability discontinuously increases. Among patents of the same age, the probability of being traded and the probability of being renewed is increasing in the total number of citations received. Moreover, previously traded patents, and especially the recently traded, are more likely to be traded and less likely to be allowed to expire than patents not previously traded. Second, the paper extends Pakes and Schankerman\\\'s patent renewal framework in order to develop a model of the transfer and renewal of patents. Two new key features of the model are motivated by the patterns documented: gains from reallocating patents to more productive firms and costs of adopting technology.
    JEL: O3 L1
  28. By: Aoun, Dany (Seoul National University); Heshmati, Almas (Ratio)
    Abstract: In this study, we intend to examine the Information and Communication Technology (ICT) firms, from a financial perspective. The causal relationship between capital structure and cost of capital is investigated in a simultaneous equation framework. On the one hand, we relate international diversification to the firm’s capital structure, and on the other, we test their individual and collective inferences on the combined debt and equity cost of capital. Even though ICT companies are subject to the same market forces as other firms, the rapid development of the industry, complexity of their technologies and presence of the network effect may have valuable implications in determining their financing patterns. Using information pertaining to ICT and non-ICT firms listed on the NASDAQ stock exchange, we expect a negative correlation between international diversification and higher total and long-term debt ratios, and a reduction in the overall cost of capital. Results suggest significant heterogeneity among ICT and non-ICT firms and within each group by a number of firm characteristics.
    Keywords: International diversification; Capital structure; Cost of capital; Debt; ICT; NASDAQ
    JEL: C33 D21 G32
    Date: 2006–04–25
  29. By: L. Lambertini; G. Rossini
  30. By: Gustavo Crespi (SPRU, University of Sussex); Aldo Geuna (SPRU, University of Sussex)
    Abstract: There is increasing recognition in the UK and other OECD countries of the importance of scientific research in providing the foundations for both innovation and competitiveness. This has resulted in increased public funding for research in the UK and elsewhere. At the same time, there is a lack of systematic evidence on how such investments can lead to increasing levels of scientific output and, ultimately, to better economic performance. Much of the available literature concentrates on the effects of public funding of basic research on either firms' innovative activities (see among others COHEN, NELSON AND WALSH [2002]; KLEVORICK, LEVIN, NELSON AND WINTER [1995]; JAFFE [1989]; NARIN, HAMILTON AND OLIVASTRO [1997]) or firm performance (Adams [1990]), bypassing the question of how to measure scientific output. The reasons for this are the difficulty of identifying a stable causal relationship between the resources spent on the science budget and 'intermediate' scientific outputs. This difficulty originates from the dynamic nature of this relationship. There is a persistent and therefore recursive feedback between inputs and outputs, which is exacerbated by lack of appropriate information for analysis. Among the few studies that have attempted to address the problem, are ADAMS AND GRILICHES [1996] and JOHNES AND JOHNES [1995]. This study is based on and further develops Adams and Griliches's methodology.
    Keywords: bibliometrics, university graduate students, national science budget, research funding, economic performance, scientific output
    JEL: O3 I2
    Date: 2006–04–11
  31. By: L. Lambertini; A. Mantovani; G. Rossini
  32. By: Michael Hoel (University of Oslo); Rolf Golombek (Frisch Centre)
    Abstract: We study an international climate agreement that assigns emission quotas to each participating country. Unlike the simplest models in the literature, we assume that abatement costs are affected by R&D activities undertaken in all firms in all countries, i.e. abatement technologies are endogenous. In line with the Kyoto agreement we assume that the international climate agreement does not include R&D policies. We show that for a second-best agreement, marginal costs of abatement should exceed the Pigovian level. Moreover, marginal costs of abatement differ across countries in the second-best quota agreement with heterogeneous countries. In other words, the second-best outcome cannot be achieved if emission quotas are tradable.
    Keywords: Climate Policy, International Climate Agreements, Emission Quotas, Technology Spillovers
    JEL: H23 O30 Q20 Q25 Q28
    Date: 2006–03
  33. By: Galina Hale (Economic Growth Center, Yale University); Cheryl Long (Colgate University)
    Abstract: Using the World Bank survey of 1500 firms in five Chinese cities, we study whether the presence of foreign firms produces technology spillovers on domestic firms operating in the same city and industry. We find positive spillovers for more backward firms. We analyze the channels of such spillovers and find that the transfer of technology occurs through movement of high-skilled workers from FDI firms to domestic firms as well as through network externalities among high-skilled workers. Moreover, these two channels fully account for the spillover effects we find, which demonstrate the importance of well-functioning labor market in facilitating FDI spillovers. Insofar as our results can be generalized to other countries, they reconcile conflicting evidence found in other studies.
    Keywords: Foreign direct investment, technological spillovers, labor mobility, network externalities, China
    JEL: F2 O1 O3 J2 J6
  34. By: Adrian Smith (SPRU, University of Sussex); Andy Stirling (SPRU, University of Sussex)
    Abstract: For good or ill, technology mediates our relationships with one another and with nature. Whether an ox-drawn plough in the hands of a peasant, or remote sensing equipment feeding back data from a satellite, technology informs and shapes our place in our environments. It is therefore unsurprising that technological development occupies a central position in debates about governance for sustainability. Yet a curious tension exists in the literature on the governance of sustainable technologies; one that this paper will highlight and discuss. On the one hand, analysts recognise technology development as a highly social activity (thus opening possibilities for deliberate steering). On the other hand, policy debates treat steering itself as relatively asocial, (thus understating the roles and potentials for negotiation, deliberation and participation). In this paper we consider how this tension relates to the conceptual positioning of governance in relation to technology - whether 'inside' or 'outside', 'open' or 'closed' - and draw practical implications for steering.
    Keywords: environment, governance, sustainability, technological development
    JEL: Q55 Q58 Q56
    Date: 2006–04–11
  35. By: Ryo Horii (Graduate School of Economics, Osaka University); Tatsuro Iwaisako (Faculty of Economics, Ritsumeikan University)
    Abstract: This paper examines the growth effects of intellectual property right (IPR) protection in a quality-ladder model of endogenous growth. Stronger IPR protection, which reduces the imitation probability, increases the reward for innovation. However, stronger protection also gradually reduces the number of competitive sectors, in which innovation is easier than in monopolistic sectors. With free entry to R&D, the number of researchers in each remaining competitive sector increases, but the concentration of R&D activity raises the possibility of unnecessary duplication of innovation, thereby hindering growth. Consequently, imperfect rather than perfect protection maximizes growth. Welfare and scale effects are also examined.
    Keywords: intellectual property rights, endogenous growth, quality ladder, imitation, leapfrogging, duplication.
    JEL: O31 O34 O41
    Date: 2005–08
  36. By: E. Santarelli
  37. By: Vincent M. Otto (Massachusetts Institute of Technology); Timo Kuosmanen (Agrifood Research Finland); Ekko C. van Ierland (Environmental Economics and Natural Resources University)
    Abstract: This study examines whether today’s technical change depends on yesterday’s technical change. We propose to investigate this feedback effect by using the technical-change component of the Malmquist productivity index. This approach can overcome some problems in alternative patent-citation approaches. We apply the approach by estimating the feedback effect from production data of 25 OECD countries for 1980 through 1997. Our model yields evidence on a positive feedback effect with delays up till eight years. These findings are in line with patent-citation studies and bring us closer to a measure of the social returns to R&D.
    Keywords: Cross-country comparisons, Data envelopment analysis (DEA), Feedback effect, Malmquist productivity index, Technical change, Two-stage semiparametric estimation
    JEL: O47 O30 D24
    Date: 2006–02
  38. By: Heshmati, Almas (Ratio); Yang, Wanshan
    Abstract: The view about systematic irrationality of investors and managers in investment with reference to information and communication technology (ICT) with no effects on productivity growth is called productivity paradox. Research suggests that ICT return in developed nations is significant and positive, but not in developing countries. This paper challenges the above conclusion by examining the contribution of ICT to the Chinese economic growth. We investigate the relationship between TFP growth and ICT capital and provide estimation of the returns to ICT investment. The contribution of ICT to economic growth has not been studied earlier for the developing countries like China. The empirical results suggest that China has reaped the benefits of ICT investment. The policy implications for the Chinese ICT investment and development are also discussed. The results add to our understanding of how ICT affects growth in the context of economic development.
    Keywords: Productivity paradox; ICT; economic development; TFP growth; China
    JEL: D24 E22 O47
    Date: 2006–04–25
  39. By: Lynne G. Zucker; Michael R. Darby
    Abstract: This paper extends the concept of star scientist to all areas of science and technology. We follow 1,838 stars' careers 1981-2004, using their publication history to locate them each year. The number of stars in a U.S. region or in one of the top-25 science and technology countries has a consistently significant and quantitatively large positive effect on the probability of firm entry in the same area of science and technology. Thus the stars themselves rather than their potentially disembodied discoveries play a key role in the formation or transformation of high-tech industries. Other measures of academic knowledge stocks have weaker and less consistent effects. We identify separate economic geography effects in poisson regressions for the 179 BEA-defined U.S. regions, but not for the 25 countries analysis. Stars become more concentrated over time, moving from areas with relatively few peers to those with many in their discipline. A special counter-flow operating on the U.S. versus the other 24 countries is the tendency of foreign-born American stars to return to their homeland when it develops sufficient strength in their area of science and technology. In contrast high impact articles and university articles and patents all tend to diffuse, becoming more equally distributed over time.
    JEL: O31 J61 J44 M13
    Date: 2006–04
  40. By: Tetsuji Okazaki (Faculty of Economics, University of Tokyo)
    Abstract: This paper explores the mechanisms by which the industrial organization of the Japanese cotton spinning industry changed over time, focusing on the rise and fall of the firms that integrated spinning and weaving processes. The basic idea is to decompose the change in the proportion of integrated firms into factors representing "selection" and "imitation" in an evolutionary sense. It was found that the factor which made the largest contribution differed between the growing phase and the declining phase of integrated firms. In the growing phase, imitation, namely the change in the attribute of the incumbent firms, was the major factor in the proportion change. On the other hand, in the declining phase, selection, in particular, birth rate, was the major factor, not only in the case where the proportion is measured in terms of firm number but also in terms of production.
    Date: 2006–04
  41. By: Dominique Demougin; Anja Schöttner
    Abstract: With adverse selection, diseconomies of scale associated with hierarchies may induce the implementation of a second-best technology. This occurs whenever rents to lower tiers of the hierarchy increase faster than total surplus. This is more likely with longer hierarchies.
    Keywords: Adverse Selection, Hierarchies, Technology
    JEL: D82 L23 O33
    Date: 2006–04
  42. By: Alister Scott (SPRU, University of Sussex)
    Abstract: Recent science-policy debates have emphasised a growing role for science in helping to address some of society's most pressing challenges such as global environmental change, caring for the needs of ageing populations, and competitiveness in a global age. Other 'relevance' pressures include drives for public accountability, pressure for the 'democratisation' of science and demands from industry for usable knowledge. Underlying the question of the social relevance of science is the matter of decision-making and quality control in science, usually via the peer-review process. Peer review plays a central role in many of the key moments in science. It is the main form of decision-making around grant selection, academic publishing and the promotion of individual scientists within universities and research institutions. It also underpins methods used to evaluate scientific institutions. Yet peer review as currently practised can be narrowly scientific, to the exclusion of other pressing quality criteria relating to social relevance. It is often also controlled and practised by scientists to the exclusion of wider groups that might bring valuable perspectives. This article sets out to examine peer review through the lens of social relevance. It challenges peer review as currently practised and makes some suggestions for ways forward.
    Keywords: science policy, relevance of science, social relevance, peer review, quality control
    JEL: O3 I0
    Date: 2006–04–11
  43. By: Aleksandra Hauke (University of Economics)
    Abstract: The aim of the article is to verify the hypothesis, that despite the cultural differences existing among Great Britain, Hungary and Poland, all enterprises put much effort to ensure good conditions for knowledge sharing by their employees. It consists of two major parts. In the first one, the theoretical concepts of culture and knowledge are presented. In the second part, the interpretation of results obtained in research on macro and micro level analyses in three European countries are shown. The macro level analysis is based on the differences in cultural dimensions presented by G. Hofstede and R. Gestland while the micro level analysis is conducted based on the results of empirical investigation carried out by International Research Group: Marketing in the XXI century, among companies operating in Great Britain, Hungary and Poland. Results obtained through this survey are compared with cultural dimensions in order to see how significant the distance between the received theory and empirical investigation is.
    Keywords: Cultural Differences, Knowledge Transfer
    JEL: L10
    Date: 2006–04
  44. By: Ron Martin; Peter Sunley
    Abstract: In recent years, economic geographers have seized on the concepts of ‘path dependence’ and ‘lock-in’ as key ingredients in constructing an evolutionary approach to their subject. However, they have tended in to invoke these notions without a proper examination of the ongoing discussion and debate devoted to them within evolutionary economics and elsewhere. Our aim in this paper, therefore, is, first, to highlight some of the unresolved issues surround these concepts, and, second, to explore their usefulness for understanding the regional economic evolution. We argue that in many important aspects, path dependence and lock-in are place-dependent processes, and as such require geographical explanation. At the same time, there has been little discussion of regional path creation: te assumption has been that new technological-economic paths emerge at random or spontaneously across space, an assumption that we find too simplistic. This leads on to the key question as to why some regional economies become locked into development paths that lose dynamism, whilst other regional economies seem able to avoid this danger and in effect are able ‘reinvent’ themselves through successive new paths or phases of development. We conclude that whilst path dependence is an important feature of the economic landscape, the concept requires further elaboration if it is to function as a core concept in an evolutionary economic geography.
    Keywords: path dependence, evolutionary economic geography, regional economic evolution, lock-in
    Date: 2006–03

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