nep-ino New Economics Papers
on Innovation
Issue of 2006‒05‒20
nine papers chosen by
Koen Frenken
Universiteit Utrecht

  1. Persistence of innovation, technological change and quality-adjusted patents in the US pharmaceutical industry. By Gautier Duflos
  2. Sequential Innovation, Patents, and Innovation By James Bessen; Eric Maskin
  3. The Pharmacia Story of Entrepreneurship and as a Creative Technical University - An Experiment in Innovation, Organizational Break Up and Industrial Renaissance By Eliasson, Gunnar; Eliasson, Åsa
  4. Multinational Enterprises and Globalization of R&D: A Study of U.S-based Firms By Prema-chandra Athukorala; Archanun Kohpaiboon
  5. Technology and Trade - an analysis of technology specialization and export flows By Andersson, Martin; Ejermo, Olof
  6. R&D lab location. Evidence from the French case By Corinne Autant-Bernard
  7. A Percolation-Based Model Explaining Delayed Take-Off in New-Product Diffusion By Martin Hohnisch; Sabine Pittnauer; Dietrich Stauffer
  8. Industrial Renewal and Growth through Nanotechnology ? - An Overview with Focus on Finland By Christopher Palmberg; Tuomo Nikulainen
  9. The Use of Design in Finnish Manufacturing Firms By Maarit Lindström; Mika Pajarinen

  1. By: Gautier Duflos (Centre d'Economie de la Sorbonne et CREST-LEI)
    Abstract: This paper analyzes American pharmaceutical firms' persistence in innovating just before the wave of mergers and acquisitions that accompanied the "Biotech revolution". We evaluate the impact of past innovative activity on firms' innovation propensities using a non-linear GMM estimator for exponential models that allows for predetermined regressors and linear feedback. We find that innovative activity at the firm level depends strongly on the scope of past innovations. Breakthroughs in particular depend largely on past quality innovation made by firms, and this effect may likely deter further pioneering discoveries rather than strengthen incentives to invest on non cumulative R&D. The results also shed light on the importance of small firms in the dynamics of innovation in pharmaceutical industry, and suggest that large firms persist in using patents strategically to remain dominant.
    Keywords: Patent citations, pharmaceutical industry, persistence in innovation.
    JEL: O31 L12 C23
    Date: 2006–01
  2. By: James Bessen; Eric Maskin
    Date: 2006–05–10
  3. By: Eliasson, Gunnar (The Ratio Institute); Eliasson, Åsa (IBMP, CNRS, Strasbourg and VitiGen AG, Siebeldingen)
    Abstract: While innovative technology supply has been the focus of much neo Schumpeterian modeling, few have addressed the critical and more resource demanding commercializing of the same technologies. The result may have been a growth policy focused on the wrong problem. Using competence bloc theory and a firm based macro to macro approach we abandon the assumed linear relation between technology change and economic growth of such models, and demonstrate that lack of local commercialization competences is likely to block growth even though innovative technology supplies are abundant. The break up, reorganization and part withdrawal of Pharmacia from the local Uppsala (in Sweden) economy after a series of international mergers illustrate. Pharmacia has “released” a wealth of technologies in local markets. Local commercialization competence, notably industrially competent financing has, however, not been sufficient to fill in through indigenous entrepreneurship the vacuum left by Pharmacia. Only thanks to foreign investors, attracted by Pharmacia technologies, that have opted to stay for the long term the local Uppsala economy seems to be heading for a successful future. The Pharmacia case also demonstrates the role of advanced firms as “technical universities” and the nature of an experimentally organized economy (EOE) in which business mistakes are a natural learning cost for economic development.
    Keywords: Competence Bloc Theory; Commercialization of Innovations; Experimentally Organized Economy; Innovation and Entrepreneurship; Pharmaceutical industry
    JEL: L20 L65 M10
    Date: 2006–05–11
  4. By: Prema-chandra Athukorala; Archanun Kohpaiboon
    Abstract: This paper examines patterns and determinants of overseas R&D expenditure of US-based manufacturing MNEs using a new panel dataset over the period 1990-2001. It is found that inter-country differences in R&D intensity of operation of US MNE affiliates are fundamentally determined by the domestic market size, overall R&D capability and cost of hiring R&D personnel. The impact of domestic market orientation of affiliates on R&D propensity varies among countries depending on their stage of global economic integration. Intellectual property protection seems to matter largely for mature economies with complementary endowments. There is no evidence to suggest that financial incentives have a significant impact on inter-country differences in R&D intensity when controlled for other relevant variables. Nor is there a statistically significant relationship between the size of the capital stock of MNEs and R&D intensity of their operation across countries. Overall, our findings serve as a caution against paying too much attention by host country governments on turning MNEs affiliates into technology creators as part of their foreign direct investment policy.
    Keywords: R&D, multinational enterprises, foreign direct investment
    JEL: F21 O19 O31 O32
    Date: 2006
  5. By: Andersson, Martin (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology); Ejermo, Olof (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology)
    Abstract: This paper examines how technology specialization, measured by citations-weighted patents, affects trade flows. The paper analyzes (i) the relationship between technology specialization and export specialization across regions and (ii) how the technology specialization of origin and destination affect the size and structure of link-specific export flows. We find that the export specialization of a region typically corresponds to the region’s technology specialization, which supports the view that comparative advantages can be created by investments in technology and knowledge. Export flows from regions to destination countries with similar technology specialization as the origin regions consist of commodities of higher quality in the specific technology, as indicated by higher prices. Highly specialized regions export more and charge higher prices. The results of the paper suggest that an understanding of trade ultimately requires an understanding of the spatial pattern of investments in (and creation of) technology and knowledge, as such investments shape export specialization patterns and the corresponding composition of export flows between locations across space.
    Keywords: exports; technology; knowledge; specialization; quality; patents
    JEL: F14 O33 O52 R12
    Date: 2006–05–11
  6. By: Corinne Autant-Bernard (CREUSET (EA 3724) - Centre de Recherche Economique de l'Université de Saint Etienne - [Université Jean Monnet - Saint-Etienne])
    Abstract: The purpose of this paper is to empirically investigate how regional advantages and firms characteristics influence the location of R&D. Looking at 2024 decisions of R&D lab location in France, we implement an extended conditional logit with spatially lagged explanatory variables to evaluate the importance of each factor and to test the spatial dimension of knowledge spillovers. The results indicate that large market size, large amount of ideas, and low level of competition in the target region increases the probability of setting up R&D labs while the diffusion of knowledge across regions induces a significant spatial dependence
    Keywords: Economic geography; Location choice; Knowledge spillovers; Spatial dependence; géographie économique; externalités de connaissance; choix de localisation; dépendance spatiale
    Date: 2006–04–21
  7. By: Martin Hohnisch; Sabine Pittnauer; Dietrich Stauffer
    Abstract: A model of new-product diffusion is proposed in which a site-percolation dynamics represents socially-driven diffusion of knowledge about the product's characteristics in a population of potential buyers. A consumer buys the new product if her valuation of it is not below the price of the product announced by the firm in a given period. Our model attributes the empirical finding of a delayed ``take-off'' of a new product to a drift of the percolation dynamics from a non-percolating regime to a percolating regime. This drift is caused by learning-effects lowering the price of the product, or by network-effects increasing its valuation by consumers, with an increasing number of buyers.
    Keywords: new-product diffusion, innovation adoption, spatial stochastic processes, percolation
    JEL: C15 L15
    Date: 2006–04
  8. By: Christopher Palmberg; Tuomo Nikulainen
    Keywords: nanotechnology, general purpose technology, industrial renewal, Finland
    Date: 2006–05–17
  9. By: Maarit Lindström; Mika Pajarinen
    Keywords: design, firm performance, manufacturing, economic performance, design management
    JEL: L20 L25 L60 M21
    Date: 2006–05–09

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