nep-ino New Economics Papers
on Innovation
Issue of 2006‒06‒17
seventeen papers chosen by
Koen Frenken
Universiteit Utrecht

  1. Fragmented property rights and R&D competition By Derek J. Clark; Kai A. Konrad
  2. A Technology Acquisition Model: The Role of Learning and Innovation By Wamea, Watu
  3. Choosing intellectual protection : imitation, patent strength and licensing. By David Encaoua; Yassine Lefouili
  4. Creating the Capacity to Benefit from Technological Change in Developing Countries By Wamea, Watu
  5. Maintaining Switzerland's Top Innovation Capacity By Florence Jaumotte
  6. Innovativity: A Comparison Across Seven European Countries By Pierre Mohnen; Jacques Mairesse; Marcel Dagenais
  7. Geographic and technological spillovers within the triad: micro evidence from US patents By Luigi Aldieri; Michele Cincera
  8. Evaluating the market potential of innovations: A structured survey of diffusion models By Alexander Frenzel Baudisch; Hariolf Grupp
  9. Determinants influencing the choice of a cooperation partner By Uwe Cantner; Andreas Meder
  10. Intellectual Property Rights and their Impacts in Developing Countries - An Empirical Analysis of Maize Breeding in Mexico By Andréanne Léger
  11. Buying and Selling Research and Development Services, 1997 to 2002 By Mohnen, Pierre; Rose, Antoine; Rosa, Julio
  12. Politiques publiques et espace d'innovation dans la biologie. Etude de dispositifs d'intégration science/industrie et de création d'entreprises : le cas de la Génopole d'Evry By Anne Branciard
  13. The impact of financial constraints on innovation : evidence from french manufacturing firms. By Frédérique Savignac
  14. India's product patent protection regime: Less or more of "pills for the poor"? By Gehl Sampath, Padmashree
  15. Le développement économique lié aux potentiels scientifique et technologique en génomique : action publique nationale et dynamique régionale en PACA. Le cas de Marseille Nice Génopole By Anne Branciard
  16. Evidence on the Geographic Concentration of German Industries: Do High-Tech Clusters Really Matter? By Björn Alecke; Christoph Alsleben; Frank Scharr; Gerhard Untiedt
  17. The Downside of Knowledge Spillovers: An Explanation for the Dispersion of High-tech Industries By Christoph Alsleben

  1. By: Derek J. Clark (Department of Economics and Management, University of Tromsø, N-9037 Tromsø, Norway.; Kai A. Konrad (WZB, Reichpietschufer 50, D-10785 Berlin, Germany, and Free University of Berlin.
    Abstract: Where product innovation requires several complementary patents, fragmented property rights can be a factor that limits firms’ willingness to invest in the development and commercialization of new products. This paper studies multiple simultaneous R&D contests for complementary patents and how they interact with patent portfolios that firms may have acquired already. We also consider how this interaction and the intensity of the contests depends on the type of patent trade regimes and the product market equilibria that result from these regimes. We solve for the contest equilibria and show that the multiple patent product involves an important hold-up problem that considerably reduces the overall contest effort.
    Keywords: fragmented property rights, patents, contests, hold-up, R&D, patent pools, licensing
    JEL: D44
    Date: 2006–06
  2. By: Wamea, Watu (CEDERS, Faculté des Sciences Economique et Gestion, Université de la Méditerranée)
    Abstract: This paper theoretically analyses the dynamics of knowledge accumulation with the aim of understanding how developing economies can effectively engage in the process of knowledge accumulation. The main focus is on the complementarity between competence building and innovation. Our analysis is based on a simple standard economics model for the sake of clarity in understanding the link between the need for collaboration and competition in the innovation process at the national level. We find that the importance of developing an absorptive capacity in the knowledge generation process cannot be over-emphasized.
    Keywords: absorptive capacity, competences, domestic innovation, developing countries
    JEL: O11 O30 O40
    Date: 2006
  3. By: David Encaoua (Centre d'Economie de la Sorbonne); Yassine Lefouili (Centre d'Economie de la Sorbonne)
    Abstract: This paper investigates the choice of an intellectual protection regime for a process innovation. We set up a multi-stage model in which choosing between patent and trade secrecy is affected by three parameters : the patent strength defined as the probability that the right is upheld by the court, the cost of imitating a patented innovation relative to the cost of imitating a secret innovation, and the innovation size defined as the extent of the cost reduction. The choice of the protection regime is the result of two effects : the damage effect evaluated under the unjust enrichment doctrine and the effect of market competition that occurs under the shadow of infringement. We find that large innovations are likely to be kept secret whereas small innovations are always patented. Furthermore, medium innovations are patented only when patent strength is sufficiently high. Finally, we investigate a class of licensing agreements used to settle patent disputes between patent holders and their competitors.
    Keywords: Patent, trade secrecy, imitation, licensing.
    JEL: D45 L10 O32 O34
    Date: 2005–12
  4. By: Wamea, Watu (CEDERS, Faculté des Sciences Economique et Gestion, Université de la Méditerranée)
    Abstract: What really makes an economy competitive? This paper reviews and discusses how the capacity to generate, exploit and diffuse new knowledge is key in enabling countries to capitalise on challenges brought about by rapid technology-driven transformations rather than succumb to their adverse effects. In particular, we look at the importance of new knowledge emanating from both domestic and foreign sources in the innovation process in view of the contention that "international technology transfer" is critical for growth in developing countries. We find that there is a tight link between high rates of technology acquisition and high investment ratios, and that the absorptive capacity is a sine qua non of foreign technology benefits.
    Keywords: absorptive capacity, knowledge, developing countries, systems of innovation
    JEL: C49 O11 O38
    Date: 2006
  5. By: Florence Jaumotte
    Abstract: Despite some weakening in the 1990s, partly due to sluggish trend growth, the Swiss innovation performance has been very strong. There are, however, areas in which policy reforms could strengthen innovation further and help Switzerland maintain its lead in the face of a changing global environment. Boosting competition, simplifying administrative burdens and reforming the bankruptcy law would go a long way towards stimulating the innovativeness of small enterprises in sheltered services sectors, which becomes more crucial to sustaining high domestic innovation in a context where large firms are increasingly mobile. On the other hand,the growing knowledge economy and the increasing competition from emerging countries in skill-intensive activities press for further upgrading the vocational education system and increasing the efficiency of the university system. Regarding innovation-specific policies, budget spending priorities on education and research should be better protected and more resources devoted to bridge the gap between fundamental research and the market, especially through the activities of the Commission for Technology and Innovation. This Working Paper relates to the 2006 OECD Economic Survey of Switzerland ( <P>Préserver le haut niveau des capacités d?innovation de la Suisse Nonobstant une certaine détérioration durant les années 1990 liée en partie à une croissance tendencielle faible, la performance de la Suisse en matière d'innovation a été très bonne. Dans certains domaines cependant, des réformes permettraient d'encore renforcer cette performance et d'aider la Suisse à préserver sa position de leader malgré les changements qui s'opèrent dans l'environnement international. Ainsi, une intensification de la concurrence, accompagnée d'un allègement des charges administratives et d'une réforme du droit des faillites contribueraient largement à stimuler la capacité d'innovation des petites entreprises opérant dans les secteurs de services abrités, condition importante pour maintenir un niveau intérieur d'innovation élevé dans un contexte où les grandes entreprises sont de plus en plus mobiles. D'autre part, le développement de l'économie du savoir et la concurrence toujours plus grande des pays émergents dans les activités qualifiées plaident pour un renforcement du système d'education professionnelle et une amélioration de l'efficience du système universitaire. Concernant les politiques spécifiques d'innovation, il faudrait s'efforcer de mieux satisfaire les priorités des dépenses budgétaires en matière d'éducation et de recherche ainsi que d'accroître les ressources pour combler le fossé entre recherche fondamentale et le marché, surtout au travers des activités de la Commission pour la Technologie et l'Innovation. Ce Document de travail se rapporte à l'Étude économique de l'OCDE de la Suisse, 2006 (
    Keywords: Switzerland, Suisse, venture capital, capital-risque, innovation, innovation, product market competition, concurrence sur les marchés de produits, tertiary education, éducation tertiaire, patents, scientists and engineers, public research organisations, brevets, scientifiques et ingénieurs, R&D, R&D, organisme de recherche public, recherche fondamentale, liens entre secteur privé et universités, charges administratives, droit des faillites, double taxation, basic research, business-academic links, administrative burdens, bankruptcy law, double taxation
    JEL: I2 O3 O52
    Date: 2006–05–31
  6. By: Pierre Mohnen; Jacques Mairesse; Marcel Dagenais
    Abstract: This paper proposes a framework to account for innovation similar to the usual accounting framework in production analysis and a measure of innovativity comparable to that of total factor productivity. This innovation accounting framework is illustrated using micro-aggregated firm data from the first Community Innovation Surveys (CIS1) for seven European countries: Belgium, Denmark, Ireland, Germany, the Netherlands, Norway and Italy for the year 1992. Based on the estimation of a generalized Tobit model and measuring innovation as the share of total sales due to improved or new products, it compares the propensity to innovate, and the innovation intensity conditional and unconditional on being innovative, across the seven countries and low- and high-tech manufacturing sectors. Even with relatively few explanatory variables our innovation framework already accounts for sizeable differences in country innovation intensity. It also shows that differences in innovativity across countries can be nonetheless very large.
    JEL: C35 L60 O31 O33
    Date: 2006–06
  7. By: Luigi Aldieri (Università degli Studi di Napoli "Parthenope", Naples & DULBEA-CERT, Université libre de Bruxelles, Brussels.); Michele Cincera (DULBEA-CERT, Université libre de Bruxelles, Brussels, and CEPR)
    Abstract: This paper aims at assessing the magnitude of R&D spillover effects on large international R&D companies’ productivity growth. In particular, we investigate the extent to which R&D spillover effects are intensified by both geographic and technological proximities between spillover generating and receiving firms. We also control for the firm’s ability to identify, assimilate and absorb the external knowledge stock. The results estimated by means of panel data econometric methods (system GMM) indicate a positive and significant impact of both types of R&D spillovers and of absorptive capacity on productivity performance.
    Keywords: Geographic and technological R&D spillovers, absorptive capacity, firms’ productivity growth.
    JEL: O33 O47
    Date: 2006–05
  8. By: Alexander Frenzel Baudisch (Max-Planck-Institute for Economics, Evolutionary Economics Unit); Hariolf Grupp (Fraunhofer Institute for Systems and Innovation Research)
    Abstract: This paper provides a systematic methodology to identify general innovation diffusion patterns in a given case study: First, an analytical framework is introduced which structures a review of innovation diffusion research. This framework may be used to structure the analysis of a case study. Second, a classification of innovation diffusion models is developed by focusing on the analytical hypotheses and stylized facts, which they assume. This categorization allows selecting appropriate models for a given case study based on the matching of the model's hypotheses and case study's characteristics. This provides an structured approach to allow innovators to evaluate ex-ante the market potential and the diffusion process, i.e. commercial success of their new product or practice. The paper concludes with critical recommendations on the use of innovation diffusion models. Based on the systematic approach to survey diffusion models, future research opportunities are outlined.
    Keywords: Innovation diffusion model, case study methodology, taxonomy, forecasting
    Date: 2006–06–11
  9. By: Uwe Cantner (University of Jena, Faculty of Economics); Andreas Meder (University of Jena, Faculty of Economics)
    Abstract: This paper provides empirical tests of hypotheses of cooperative behavior provided by evolutionary approaches in the resource-based view of the firm. The influences of "technological proximity", individual incentives to cooperate and managerial tools to the choice of research partner are analyzed. Using German patent data we can show the positive influence of those three determinants. The results of this paper confirm theories dealing with the path-dependency of research activities.
    Keywords: innovation, resource-based view of the firm, cooperation, technological proximity, organizational know-how
    JEL: C30 L14 O32
    Date: 2006–06–10
  10. By: Andréanne Léger (DIW Berlin, Department of International Economics , Koenigin-Luise-Str. 5, 14195 Berlin and Humboldt University Berlin, Faculty of Agriculture and Horticulture, Department of Agricultural Economics and Social Sciences, Chair of International Agricultural Trade and Development, Lusienstr. 56, 10099 Berlin)
    Abstract: There is little empirical evidence concerning the effects of intellectual property rights (IPR)on a technologically advanced developing country. Complete enumeration of the Mexican maize breeding industry showed that, contrary to the hypothesis that IPR would provide, in a technologically advanced developing country, incentives for R&D and innovation, IPR play no role for the industry in general, but that they are important for certain breeders' categories.The paper presents the theory on IPR and a short background on the Mexican maize breeding industry. The analysis of the interviews with maize breeders leads to the conclusion that the theory on IPR should be revised and take into account the characteristics of developing countries critical for the good functioning of IPR, especially the quality of the institutional environment and the judiciary system, and the importance of transaction costs related to IPR protection. The level of technological development also determines the extent to which actors can benefit from IPR protection. Given the relatively good score of Mexico on these two critical factors, IPR are likely to play an even smaller role for other developing countries.
    Keywords: Intellectual property rights; Developing Country; Empirical Evidence; Transaction costs; Mexico; Maize
    JEL: O34 Q16 O31 Q17
    Date: 2005–01
  11. By: Mohnen, Pierre (United Nations University, Maastricht Economic and social Research and training centre on Innovation and Technology); Rose, Antoine (Statistics Canada, Science, Innovation and Electronic Information Division); Rosa, Julio (Statistics Canada, Science, Innovation and Electronic Information Division)
    Abstract: Research and development is a crucial activity in the innovation process. Not every firm is in a position to overcome constraints to R&D, such as costs. Those that perform R&D must choose between forming a partnership with other firms, governmental organisations, universities or doing it themselves internally. Others may sell R&D services or buy them. This study provides a statistical portrait of the strategies Canadian companies used in conducting research and development between 1997 and 2002. It is based on data from the Survey of Research and Development in Canadian Industry. During this time period, the majority of R&D spending, around 62%, was of internal origin, that is, it was conducted by the performer. The remaining 38% portion was comprised of two groups: one group representing 24% performed R&D on behalf of another organization, that is, they contracted in. The remaining 14% was conducted by another R&D performer, that is, they contracted out. An estimated 42% of research and development was conducted with no external partnerships. Foreign-controlled firms were much more heavily involved in selling R&D services than their Canadian counterparts. About 22% of all foreign-controlled firms conducted R&D for outside organizations, more than twice the proportion of only 9% of domestic performers. However, Canadian-controlled firms on average spent more on research and development. As a result, the 9% of Canadian-controlled performers allocated 23% of their total R&D spending to selling R&D services, virtually the same proportion as the 25% allocated by foreign-controlled firms.
    Keywords: Research and Development, Public-Private Partnerships
    JEL: O32
    Date: 2006
  12. By: Anne Branciard (LEST - Laboratoire d'économie et de sociologie du travail - [CNRS : UMR6123] - [Université de Provence - Aix-Marseille I][Université de la Méditerranée - Aix-Marseille II])
    Abstract: Cette recherche analyse un dispositif d'action publique et privée visant à mettre en place en France, sur un site dédié à la génomique et aux biotechnologies, un pôle de recherche et développement économique de niveaux national et international, articulant science et industrie. Elle s'intéresse aux « modèles » sous-jacents à la mise en place de cette politique S§T axée sur l'aide à l'innovation, à ses enjeux économiques dans un contexte de « globalisation », à ses modalités d'intervention, et aux ambiguîtés de leur mise en œuvre dans les procédures et modes de gestion aux différents niveaux. Elle retrace la montée en puissance de la Génopole d'Evry depuis sa création, ses apprentissages, ses externalités locales, nationales et internationales (campus, centres nationaux de ressources, installation et création d'entreprises, valorisation..), la convergence créée entre organisations publiques et privées. Elle souligne les difficultés à conjuguer de façon optimale la construction de cet « espace d'innovation » territorialisé, la diffusion de ce « modèle-type » à d'autres « institutions intermédiaires d'innovation » en génomique et post-génomique sur le territoire national, la coordination en réseau de ces nouvelles structures scientifico-industrielles (génopoles). Elle aborde donc les problèmes soulevés par les oscillations entre les résurgences d'une politique centralisatrice pas encore caduque et les nouvelles donnes créées par la multiplication des opérateurs publics et les partenariats entre acteurs publics et privés au niveau décentralisé, qui impulsent de nouveaux modes hybrides d'action de politique scientifique et d'innovation.
    Keywords: Politique S§T; Politique d'innovation; Génomique; Biotechnologies; Relations science/industrie; Réseau; Compétitivité; Incubateur; Start-up; France; Europe
    Date: 2006–06–02
  13. By: Frédérique Savignac (CREST et Centre d'Economie de la Sorbonne)
    Abstract: This paper examines the impact of financial constraints on innovation for established firms. We make use of a qualitative indicator of the existence of financial constraints based on firms' own assessment obtained thanks to a French specific survey. Thus, the existence of financial constraints for innovation is measured by a direct indicator whereas previous studies rely on proxies (like the cash-flow sensitivity) subject to interpretation problems. The descriptive analysis of balance sheet structures reveals that innovative firms without financial constraints have the best profile in terms of economic performances, financing structure and risk whereas non innovative firms facing financial constraints have the poorest profile. From the econometric point of view, the probabilities of implementing innovative projects and of facing financial constraints are simultaneously estimated by a recursive bivariate probit model to account for the endogeneity of the financial constraint variable. We then find that firms having innovative projects face financial constraints that significantly reduce the likelihood that they implement their innovative investment. The probability of facing financing constraints is explained by firms' ex ante financing structure and economic performances, by industry sector and it decreases with firms' size.
    Keywords: Innovation, financing constraints, recursive bivariate probit.
    JEL: G31 C35 O31
    Date: 2006–04
  14. By: Gehl Sampath, Padmashree (United Nations University, Maastricht Economic and social Research and training centre on Innovation and Technology)
    Abstract: The year 2005 marks the end of transition period for many developing countries with competent pharmaceutical sectors that competed in supplying generic versions of patented drugs to LDCs before, thereby inducing price competition and enhancing access to medicines. In a post-2005 scenario, the critical issue is whether LDCs without adequate manufacturing capabilities can make use of compulsory licensing expeditiously to induce price competition and secure lower prices. This paper uses empirical evidence collected during a firm-level survey of the Indian pharmaceutical sector to generate evidence on emerging strategies of firms. It shows that the vigour of compulsory licensing as a price-leveraging instrument post-2005 is incumbent mainly on its economic feasibility. It shows that Indian firms view the market potential (in terms of market size and profits involved in such supply, especially if they have to make specific technological investments to produce the drug) of the mechanism much more severely than before, and may be less inclined to engage in such production if their commercial expectations are grossly unmet. The analysis assesses implications of emerging strategies of firms in the Indian pharmaceutical sector for access to medicines both domestically and internationally, and highlights the challenges involved.
    Keywords: product patents, Indian pharmaceuticals, generics, access
    JEL: O34 O31 L65 F13
    Date: 2006
  15. By: Anne Branciard (LEST - Laboratoire d'économie et de sociologie du travail - [CNRS : UMR6123] - [Université de Provence - Aix-Marseille I][Université de la Méditerranée - Aix-Marseille II])
    Abstract: Cette recherche fait suite à une recherche sur Genopole Evry*, biopole de niveau international articulant science et industrie, dédié à la recherche en génomique et à la création et au développement d'entreprises de biotechnologies. Elle porte sur l'implantation en régions, dans le cadre d'un dispositif d'action publique (Programme Génopoles, 1999), de “génopoles”, “institutions intermédiaires” répondant aux critères à la fois de structuration du champ scientifique de la génomique et de la post génomique, autour de plateformes biotechnologiques (instrumentation à grande échelle) ; et de création de start-ups de biotechnologies, s'appuyant sur des dispositifs publics d'aide à l'innovation (loi de 1999) soutenus par les collectivités territoriales dans une perspective de développement socioéconomique. La recherche s'inscrit dans une démarche d'économie politique et dans une approche institutionnaliste des sciences et de l'innovation.<br />Dans sa dimension empirique, l'analyse porte sur la création, historiquement située, puis sur la trajectoire de Marseille Nice Génopole, avec celles de Rhône-Alpes Génopole et de Montpellier Languedoc-Roussillon Génopole en contre-points, du point de vue de l'efficacité de la configuration des acteurs, du couplage recherche/innovation et des relations public/privé. Cette trajectoire est articulée avec l'action du Réseau National des Génopoles, incitée sous l'égide du Ministère de la Recherche, et avec l'action régionale en faveur de la recherche et de l'innovation. En interne, les mutations fortes impulsées par les coordinations autour de l'instrumentation, les repositionnements des disciplines, les relations avec le secteur privé, produisent un apprentissage organisationnel des biologistes et des biomédicaux. En externe, la dynamique scientifique et économique de la génopole est analysée dans le cadre des fluctuations de la politique nationale S§T pour les biotechnologies, et de la mobilisation territoriale pour un développement des biotechnologies, dans un projet de biocluster, puis de pôle de compétitivité en biotechnologies diagnostiques et thérapeutiques.
    Keywords: Politique S§T; Politique d'innovation; Génomique; Biotechnologies; Relations science/industrie; Réseau; Compétitivité, Territoires; France; Europe
    Date: 2006–06–02
  16. By: Björn Alecke; Christoph Alsleben; Frank Scharr; Gerhard Untiedt
    Abstract: The agglomeration of industries has received much interest both in empirical and theoretical work in recent time. Especially in Germany politicians became inspired by the notion of high-technology industry clusters and German regional policy has seen a wave of initiatives aiming at the formation of such clusters. This papers explorers in a systematic w ay the geographic concentration of German manufacturing industries and relates it to industry characteristics and agglomeration forces proposed by theory. The main finding is that there is no general relationship between agglomeration and R&D or high-technology related business which suggests that hope put in the fast and effective development of "high-tech" clusters might be disappointed.
  17. By: Christoph Alsleben
    Abstract: Both theoretical work on knowledge spillovers and regional policy initiatives often assume that there exists a general and unanimous advantage for firms to cluster. But opposed to the benefit is the disadvantage of sharing knowledge with other (rival) firms. This paper highlights the "downside" associated with knowledge spillovers and presents a four-stage game of location choice where spillovers result from labour poaching and where the strategic interaction between firms may make them avoid colocation with spillovers. The model follows Combes and Duranton (2001) and provides an explanation for the dispersion of German high-tech industries we found in a companion paper.

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