nep-ino New Economics Papers
on Innovation
Issue of 2006‒07‒21
eight papers chosen by
Koen Frenken
Universiteit Utrecht

  1. Innovation and the Determinants of Firm Survival By Hielke Buddelmeyer, Paul H. Jensen and Elizabeth Webster; Paul H. Jensen; Elizabeth Webster
  2. Pool of Patents and Follow-up Innovations By Langinier, Corinne
  3. Information Technologies (IT) Adoption and Localized Knowledge Diffusion: an Empirical Study By Rachel BOCQUET (IREGE, IUT-University of Savoie); Olivier BROSSARD (LEREPS-GRES)
  4. Regional Disparity in ICT Adoption: an Empirical Evaluation of The Effects of Subsidies in Italy By Gianfranco E. Atzeni; Oliviero A. Carboni
  5. Intellectual Property Rights and Entry into a Foreign Market: FDI vs. Joint Ventures By Alireza Naghavi; Dermot Leahy
  6. Can R&D-Inducing Green Tariffs Replace International Environmental Regulations? By Alireza Naghavi
  7. ICT Use in the Developing World: An Analysis of Differences in Computer and Internet Penetration By Menzie D. Chinn; Robert W. Fairlie
  8. Applying a Comprehensive Neo-Schumpeterian Approach to Europe and its Lisbon Agenda By Horst Hanusch; Andreas Pyka

  1. By: Hielke Buddelmeyer, Paul H. Jensen and Elizabeth Webster (Melbourne Institute of Applied Economic and Social Research and Centre for Microeconometrics, The University of Melbourne and IZA Bonn); Paul H. Jensen (Melbourne Institute of Applied Economic and Social Research, The University of Melbourne and Intellectual Property Research Institute of Australia, The University of Melbourne); Elizabeth Webster (Melbourne Institute of Applied Economic and Social Research, The University of Melbourne and Intellectual Property Research Institute of Australia, The University of Melbourne)
    Abstract: While many firms compete through the development of new technologies and products, it is well known that new-to-the-world innovation is inherently risky and therefore may increase the probability of firm death. However, many existing studies consistently find a negative association between innovative activity and firm death. We argue that this may occur because authors fail to distinguish between innovation investments and innovation capital. Using an unbalanced panel of over 290,000 Australian companies, we estimate a piecewise-constant exponential hazard rate model to examine the relationship between innovation and survival and find that current innovation investments increase the probability of death while innovation capital lowers it.
    Date: 2006–07
  2. By: Langinier, Corinne
    Abstract: Basic innovations are often fundamental to the development of applications that may be developed by other innovators. In this setting, we investigate whether patent pools can rectify the lack of incentives for developers to invest in applications. Following Green and Scotchmer (1995), we also wonder whether broad basic patents are necessary to provide enough incentives for basic innovators. We show that patent pools are more likely to be formed with patents of very different breadth, or patents of similarly wide breadth. Further, even though patent pools rectify the problem of developers’ incentives, they may reduce the incentive for doing basic research.
    Keywords: Patent pool, innovation, breadth
    JEL: L2
    Date: 2006–07–19
  3. By: Rachel BOCQUET (IREGE, IUT-University of Savoie); Olivier BROSSARD (LEREPS-GRES)
    Abstract: We use a specially designed survey on French firms located in Haute-Savoie to provide empirical evidence suggesting that IT adoption is not only influenced by the traditional factors of technology diffusion (rank, stock-order, epidemic effects and complementary organizational practices) but also by local diffusion of knowledge effects. The data collected permit us to make several advances. Firstly, we study the adoption of several authentic Information and Communication Technologies while the recent empirical literature has mainly focused on computer capital stocks or automation tools. Secondly, we construct measures to replace the traditional epidemic effect by different proximity variables. Thirdly, we assess the real impact of proximity on the IT adoption process by examining different channels of knowledge transmission among nearby firms, from knowledge spillovers to well-regulated arrangements. Our econometric methodology is designed to deal with potential biases that are encountered when implementing technology adoption equations and testing practice complementarities. In particular, we explicitly deal with the problem of simultaneous technological choices, using bivariate adoption equations.
    Keywords: Localized knowledge spillovers. Proximity.Technology diffusion. IT adoption. Complementary organizational practices
    JEL: L2
    Date: 2006
  4. By: Gianfranco E. Atzeni; Oliviero A. Carboni
    Abstract: This paper investigates on a marked case of regional inequality concerning the information and communication technology adoption process and the role of subsidies in Italy. There is a consolidated and persistent gap between the industrialized North and the sensibly backward South. Econometric results show that adoption of ICT is affected by the geographical location, the industry and firm characteristics. A matching estimator is applied to explore subsidies effectiveness. We find that subsidies have a significant impact but only for small firms. Given the firm system in Italy, we conclude that, to limit the acceleration of Italian North-South dualism, subsidies should only be granted to small firms.
    Keywords: Information and Communication Technologies, Regional Disparities, Digital Divide, Subsidies, Treatment Effect, Nearest Neighbour Matching Estimator
    JEL: C21 D21 L2 O18
    Date: 2006
  5. By: Alireza Naghavi (Università di Modena e Reggio Emilia); Dermot Leahy (University College Dublin)
    Abstract: We study the effect of the intellectual property rights (IPR) regime of a host country (South) on a multinational's decision between serving a market via greenfield foreign direct investment to avoid the exposure of its technology or entering a joint venture (JV) with a local firm, which allows R&D spillovers under imperfect IPRs. JV is the equilibrium market structure when R&D intensity is moderate and IPRs strong. The South can gain from increased IPR protection by encouraging a JV, whereas policies to limit foreign ownership in a JV gain importance in technology intensive industries as complementary policies to strong IPRs.
    Keywords: Joint Ventures, Intellectual Property Rights, Technology Transfer, R&D Spillovers, FDI Policy
    JEL: O34 F23 O32 F13 L24 O24
    Date: 2006–06
  6. By: Alireza Naghavi (University of Modena)
    Abstract: This paper investigates the link between trade and environment by exploring the effects of green tariffs on the location of firms, innovation and the environment. It shows that tariffs levied on polluting goods could result in less global pollution than harmonization of environmental standards by inducing more pollution abatement R&D, generating lower unit emissions from production, and reducing competition. Green tariffs reduce pollution by (1) shifting production to the region where environmental standards are respected, (2) strategically inducing abatement R&D by the Northern firm by granting the latter a higher market share, (3) creating abatement R&D by deterring delocation.
    Keywords: Environmental Standards, Multinationals, Location of Firms, Pollution Abatement R&D, Green Tariffs
    JEL: F13 F18 F23 H23 Q21 R38
    Date: 2006–06
  7. By: Menzie D. Chinn (University of Wisconsin, Madison and NBER); Robert W. Fairlie (University of California, Santa Cruz and IZA Bonn)
    Abstract: Computer and Internet use, especially in developing countries, has expanded rapidly in recent years. Even in light of this expansion in technology adoption rates, penetration rates differ markedly between developed and developing countries and across developing countries. To identify the determinants of cross-country disparities in personal computer and Internet penetration, both currently and over time, we examine panel data for 161 countries over the 1999-2004 period. We explore the role of a comprehensive set of economic, demographic, infrastructure, institutional and financial factors in contributing to the global digital divide. We find evidence indicating that income, human capital, the youth dependency ratio, telephone density, legal quality and banking sector development are associated with technology penetration rates. Overall, the factors associated with computer and Internet penetration do not differ substantially between developed and developing countries. Estimates from Blinder-Oaxaca decompositions reveal that the main factors responsible for low rates of technology penetration rates in developing countries are disparities in income, telephone density, legal quality and human capital. In terms of dynamics, our results indicate fairly rapid reversion to long run equilibrium for Internet use, and somewhat slower reversion for computer use, particularly in developed economies. Financial development, either measured as bank lending or the value of stocks traded, is also important to the growth rate of Internet use.
    Keywords: technology, development, digital divide, Internet, computers
    JEL: O30 L96
    Date: 2006–07
  8. By: Horst Hanusch (University of Augsburg, Department of Economics); Andreas Pyka (University of Augsburg, Department of Economics)
    Abstract: The paper shows that Comprehensive Neo-Schumpeterian Economics (CNSE) is an adequate theoretical approach accompanying the enforcement of the aims of the Lisbon Agenda. The CNSE approach is based on the principle of innovation and the idea of future orientation penetrating all spheres of economics which can be summarized in three domains of economic life: industry, finance and public sector, the 3-pillars of CNSE. The CNSE approach is applied to an empirical study of 18 OECD countries using a three step procedure: In a first step country patterns of pillars are identified in a cluster analysis. This gives a fine grained picture of institutional and structural set-ups for the countries under study. In a second step within the pillar clusters a performance analysis is exercised in order to rank the countries. Because of the similarities of countries within a cluster this comparative analysis can be done whereas for countries belonging to different clusters this comparison would lead to wrong conclusions. In a final step as a crude representation of macro-economic performance the cluster composition is sorted by the average growth rates of the economies. This allows a first correlation of pillar composition and growth performance.
    Keywords: Lisbon Agenda, Comprehensive Neo-Schumpeterian Economics, European Country Patterns, future-oriented indicator-based model
    JEL: O30 O40 L2 P0 G10 B52
    Date: 2006–07

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