nep-ino New Economics Papers
on Innovation
Issue of 2006‒09‒03
sixteen papers chosen by
Koen Frenken
Universiteit Utrecht

  1. Competition, Innovation and Racing for Priority at the U.S. Patent and Trademark Office By Linda R. Cohen; Jun Ishii
  2. The skill content of technological change. Some conjectures on the role of education and job-training in reducing the timing of new technology adoption. By R. Antonietti
  3. Complementarity between Product and Process innovation in a Monopoly Setting By A. Mantovani
  4. The role of general and firm-specific training for new technology adoption and economic growth: a critical review By R. Antonietti
  5. Financing Pharmaceutical Innovation: How Much Should Poor Countries Contribute? By William Jack; Jean O. Lanjouw
  6. "Process and Product Innovation by a Multiproduct Monopolist: A Dynamic Approach" By L. Lambertini; A. Mantovani
  7. Valuing R & D Investments With A Jump-Diffusion Process By L. Sereno
  8. `Coaching´ Small Biotech Companies into Success: The Value-adding Function of VC By Terttu Luukkonen; Mari Maunula
  9. Total Factor Productivity and R&D Capital in Manufacturing Industries By Jeong Yeon Lee; Jung Woo Kim
  10. Copyleft vs Copyright: some competitive effects of Open Source By D. Lanzi
  11. Reflections on "The Simple Economics of Basic Research": Looking Back and Looking Forwards By Richard Nelson
  12. Why Butterflies Don’t Leave. Locational behaviour of entrepreneurial firms By Erik Stam
  13. Contracting for an Innovation under Bilateral Asymmetric Information By Martimort, D.; Poudou, J.-C.; Sand-Zantman, W.
  14. Siting Renewable Energy Facilities: A Spatial Analysis of Promises and Pitfalls By Vajjhala, Shalini
  15. Competition, Innovation and Growth with Limited Commitment By Ramon Marimon; Vincenzo Quadrini
  16. Pharmaceutical and Industrial Traits in Genetically Modified Crops: Co-existence with Conventional Agriculture By GianCarlo Moschini

  1. By: Linda R. Cohen (Department of Economics, University of California-Irvine); Jun Ishii (Department of Economics, University of California-Irvine)
    Abstract: The U.S. Patent and Trademark Office resolves patent priority disputes in patent interference cases. Using a random sample of cases declared between 1988 and 1994, we establish a connection between patent interferences and patent races, and then use the data to consider some key issues in dynamic competition and innovation. We look at the incidence and distribution of patent races by technology, evidence for strategic delay of innovation by incumbent firms, and evidence that patent races moderate incentives to delay. Our results have implications for patent policy in general and for evaluating the U.S. “first to invent” patent priority rule.
    Keywords: Patent race, Patent interference, US Board of Patent Appeals and Interferences, Patent litigation; Innovation; Research and development
    JEL: K41 L20 O31 O34
    Date: 2005–08
  2. By: R. Antonietti
    Date: 2006
  3. By: A. Mantovani
    Date: 2005
  4. By: R. Antonietti
    Date: 2005
  5. By: William Jack; Jean O. Lanjouw
    Abstract: We use a public economics framework to consider how pharmaceuticals should be priced when at least some of the R&D incentive comes from sales revenues. We employ familiar techniques of public finance to relax some of the restrictions implied in the standard use of Ramsey pricing. In the more general model, poor countries should not necessarily cover even their own marginal costs, and the pricing structure is not related to that which would be chosen by a monopolist in a simple way. We use this framework to examine on-going debates regarding the international patent system as embodied in the WTO’s TRIPS agreement.
    Keywords: pharmaceutical, poor countries, pricing structure, patent system
    JEL: O32 D42 D40 D63 I12
  6. By: L. Lambertini; A. Mantovani
    Date: 2005
  7. By: L. Sereno
    Date: 2006
  8. By: Terttu Luukkonen; Mari Maunula
    Keywords: venture capital, biotechnology
    JEL: O16 G24 O38 L65
    Date: 2006–08–23
  9. By: Jeong Yeon Lee (Graduate School of International Studies, Yonsei University); Jung Woo Kim (Samsung Economic Research Insitute)
    Abstract: This study analyzes total factor productivity in manufacturing industries for a sample of OECD countries. The estimates of Malmquist indexes clearly indicate that research and development (R&D) capital is an important determinant of productivity growth in manufacturing industries. The empirical results also show that it is the pace, not the intensity, of R&D investment that is significantly related to the extent to which R&D capital formation contributes to output growth. Furthermore, this study finds that productivity gains in manufacturing industries depend importantly on R&D spillovers as well.
    Date: 2006–06
  10. By: D. Lanzi
    Date: 2005
  11. By: Richard Nelson
    Abstract: Many of the points argued in this old paper have withstood the tests of time. The economic contribution of basic research is to enable or facilitate downstream invention. The range of inventions that may be facilitated by basic research is unpredictable, but often large. For these reasons, it is desirable that the results of basic research be in the public domain rather than being patented. One major point has turned out not to be fully true. In some cases the results of basic research can be and have been patented. The heart of this essay is an exploration of the problems that have been caused in recent years by the patenting of basic research results, and a consideration of the policy options and appropriate responses.
    Keywords: Basic research, Science, Public Domain, Patenting, Bayh-Dole
    Date: 2006–08–31
  12. By: Erik Stam
    Abstract: Entrepreneurship is an important process in regional economic development. Especially the continued growth of a minority of new firms is of major significance to the commercialization of new ideas and employment growth. These growing new firms are transforming on a structural basis, like caterpillars turning into butterflies. However, like butterflies they are at risk to leave their region of origin for better places. This paper analyses how and why the spatial organization of firms develops subsequent to their start-up. A new conceptual framework and an empirical study of the life course of entrepreneurial firms are used to construct a theory on their locational behavior that explains that behavior as the outcome of a process of initiatives taken by entrepreneurs, enabled and constrained by resources, capabilities and relations with stakeholders within and outside of the firm. This study shows that entrepreneurs decide whether or not to move their firm outside of their region of origin for different reasons in distinct phases of the firm life course. Being embedded in social networks, for example, is an important constraint on locational behavior during the early life course of a firm, but over time this becomes less important and other mechanisms like sunk costs increasingly determine the locational behavior of fast-growing firms. The development of the spatial organization is also of major importance: when a multilocational spatial organization has been realized, it is much easier to move the headquarters to another region. The spatial organization of entrepreneurial firms co-evolves with the accumulation of their capabilities. A developmental approach incorporating evolutionary mechanisms and recognizing human agency provides new insights into the age-old study of firm location.
    Keywords: location, location behavior, spatial organization, theory of the firm, entrepreneurial firms, entrepreneurship, firm growth, regional economic development
    JEL: D21 L14 L22 M13 R11 R30
    Date: 2006–08
  13. By: Martimort, D.; Poudou, J.-C.; Sand-Zantman, W.
    Abstract: This article analyzes the optimal contract design between an inventor and a developer. The inventor is privately informed on the value of his idea. The developer must exert some non-verifiable effort to improve the probability of success of this innovation but may also choose to opt out of the relationship upon learning the quality of the idea. While first-best efficiency requires that all marginal returns on innovation be left to the developer, second-best efficiency taking into account this bilateral asymmetric information leads to distort downwards the developer’s incentives to prevent innovators from overstating the value of their ideas. There exists a trade-off between inviting inventor to reveal their ideas and inducing both effort and participation from the developer. The extent of this trade-off depends on the regime of property rights on ideas, i.e., on how easy to steal ideas. Since decreasing the marginal share of developers makes it more difficult to have them participating to the contract, countervailing incentives might sometimes appear. Taking into account those various effects leads to reduce the responsiveness of the contract to the exact value of the idea and might force to give up additional rents to the developer. Some extensions of our framework, including the cases of limited commitment, partial disclosure and double moral hazard, are studied to show the robustness and limits of our previous findings.
    Keywords: Contracts, Innovation, Ideas Stealing, Bilateral Asymmetric Information
    JEL: D82 D86 L24 O31
    Date: 2006
  14. By: Vajjhala, Shalini (Resources for the Future)
    Abstract: Recent efforts to site renewable energy projects have provoked as much, if not more, opposition than conventional energy projects. Because renewable energy resources are often located in sensitive and isolated environments, such as pristine mountain ranges or coastal waters, siting these facilities is especially difficult. Moreover, the viability of different renewable energy projects depends not only on complex economic and environmental factors, but also on the availability of supporting infrastructures, such as transmission lines. This paper examines the spatial relationships between four types of renewable energy resources – wind, solar, geothermal, and biomass – and an empirical measure of state-level transmission-line siting difficulty. Analyses explore the locations of renewable resource potential relative to areas of high siting difficulty, state electricity demand and imports, and states with renewable portfolio standards (RPSs). Major results reveal that state resource potential varies, and siting is significantly more difficult in states that import electricity and those with RPSs. These results suggest that states with the greatest incentives to develop renewable energy also face the most serious obstacles to siting new facilities.
    Keywords: siting, renewable energy, transmission lines, wind, solar, geothermal, biomass, geographic information systems (GIS), renewable portfolio standards (RPS)
    JEL: L94 L98 Q42 Q48
    Date: 2006–07–20
  15. By: Ramon Marimon; Vincenzo Quadrini
    Abstract: We study how barriers to competition---such as restrictions to business start-up and strict enforcement of covenants or IPR---affect the investment in knowledge capital when contracts are not enforceable. These barriers lower the competition for human capital and reduce the incentive to accumulate knowledge. We show in a dynamic general equilibrium model that this mechanism has the potential to account for significant cross-country income inequality.
    JEL: L14 L16 O4
    Date: 2006–08
  16. By: GianCarlo Moschini (Center for Agricultural and Rural Development (CARD))
    Abstract: This paper discusses the implications of using genetically modified crops to biomanufacture pharmaceuticals and industrial compounds from the perspective of their co-existence with conventional agriculture. Such plant-made pharmaceuticals and plant-made industrial products rely on exciting scientific and technological breakthroughs and promise new opportunities for the agricultural sector, but they also entail novel risks. The management of the externalities and of the possible unintended economic effects that arise in this context is critical and poses difficult questions for regulators.
    Keywords: agriculture, biopharming, co-existence, externalities, genetically modified products, liability, molecular farming, regulation.
    Date: 2006–08

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