nep-ino New Economics Papers
on Innovation
Issue of 2006‒10‒21
fifteen papers chosen by
Koen Frenken
Universiteit Utrecht

  1. Dynamique de l'innovation dans les services français. By MUSOLESI, Antonio
  2. Management of Knowledge Workers By Hvide, Hans K.; Kristiansen, Eirik G.
  3. Technological Progress in Races for Product Supremacy By Nguyen, Thang
  4. Claiming more: the increased voluminosity of patent applications and its determinants. By Nicolas van Zeebroeck; Bruno van Pottelsberghe de la Potterie; Dominique Guellec
  5. Intellectual Property and Marketing By Darius Lakdawalla; Tomas Philipson; Y. Richard Wang
  6. When small is beautiful: measuring the evolution and consequences of the voluminosity of patent applications at the EPO By Eugenio Archontopoulos; Dominique Guellec; Niels Stevnsborg; Bruno van Pottelsberghe de la Potterie; Nicolas van Zeebroeck
  7. The R&D Drop in European Utilities. Should we care about it? By Alessandro Sterlacchini
  8. Climate agreements: emission quotas versus technology policies By Golombek, Rolf; Hoel, Michael
  9. T&K:n verokannustimien mahdollisia vaikutuksia suomalaisten yrityskyselyjen valossa By Mika Pajarinen; Petri Rouvinen; Pekka Ylä-Anttila
  10. The economic importance of cross-sectional technologies: An input-output approach By Janßen-Timmen, Ronald; Moos, Waike
  11. Entrepreneurial Innovations, Competition and Competition Policy By Norbäck, Pehr-Johan; Persson, Lars; Vlachos, Jonas
  12. Usage and Diffusion of Cellular Telephony, 1998-2004 By Michal Grajek; Tobias Kretschmer
  13. What's in it for us? Network effects and bank payment innovation By Milne , Alistair
  14. From the ivory tower to the market place? The changing role of knowledge organisations in spurring the development of biotechnology clusters in Austria By Michaela Trippl; Franz Tödtling
  15. When Knowledge is an Asset: Explaining the Organizational Structure of Large Law Firms By James B. Rebitzer; Lowell J. Taylor

  1. By: MUSOLESI, Antonio (LEG - CNRS UMR 5118 - Université de Bourgogne)
    Abstract: Cette étude, suite aux contributions de Crépon, Duguet et Mairesse (1998) et de Duguet (2002), propose une approche structurelle qui cherche à faire le lien entre les travaux visant à étudier la fonction d’innovation et ceux sur l’évaluation des effets de l’innovation. Ici, toutefois nous analysons la relation R&D-innovation-productivité d’une manière dynamique. De plus, notre analyse focalise sur le secteur des services qui a été longtemps mis à l’écart de l’analyse empirique. Nos résultats indiquent, d’une part, l’existence d’un haut degré de persistance de l’innovation et, d’autre part, que l’effet de la mise en oeuvre d’une innovation sur la productivité s’estompe assez rapidement dans le temps.
    Keywords: R&D ; innovation ; diffusion des connaissances ; modèle structurel ; dynamique de l’innovation
    JEL: C35 O30
    Date: 2006–07
  2. By: Hvide, Hans K. (University of Aberdeen Business School); Kristiansen, Eirik G. (Dept. of Economics, Norwegian School of Economics and Business Administration)
    Abstract: We study how complementarities and intellectual property rights affect the management of knowledge workers. The main results relay when a firm will wish to sue workers that leave with innovative ideas, and the effects of complementary assets on wages and on worker initiative. We argue that firms strongly protected by property rights may not sue leaving workers in order to motivate effort, while firms weakly protected by complementary assets must sue in order to obtain positive profits. Firms with more complementary assets pay higher wages (and have lower turnover), but such higher pay has a detrimental effect on worker initiative. Our analysis suggests that strengthened property rights protection reduces turnover costs but weakens worker initiative.
    Keywords: Entrepreneurship; Innovation; IPP; Litigation; Personnel economics; R&D; Start-ups
    JEL: K41 M13 M50 O32
    Date: 2006–08–04
  3. By: Nguyen, Thang
    Abstract: How does market organization affect quality innovation efforts and social welfare? Three stochastic dynamic market structures considered are monopoly, duopoly, and social planning. Products can be either linearly or nonlinearly substitutable. The introduction of a step function allows richer innovation strategies. First, given nonlinear substitution, a duopoly may follow an unbalanced evolution path and have a technology frontier not dominated by that in social planning. This result does not hold for the linear substitution case. Second, ex ante and long-run welfare values are always the highest in social planning and the lowest in monopoly. Thus, policies should encourage static and dynamic competition.
    Keywords: R&D; quality innovation; product supremacy
    JEL: L13 D43 L15 D92 O31 D21
    Date: 2004–05–01
  4. By: Nicolas van Zeebroeck (Centre Emile Bernheim, Solvay Business School, Université Libre de Bruxelles, Brussels.); Bruno van Pottelsberghe de la Potterie (Centre Emile Bernheim, Solvay Business School, Université Libre de Bruxelles, Brussels); Dominique Guellec (OECD-DSTI, Paris.)
    Abstract: The joint increase in the number and size of patents filed around the world puts the patent system under pressure. This paper analyses the sources of this surge in number of claims and pages of patent applications at the EPO. Four hypotheses are scrutinized: the diffusion of national drafting practices, the increasing complexity of inventions, the emergence of new sectors, and new patenting strategies. The results show that the increasing voluminosity is explained by all these hypotheses and suggest that the diffusion of the US model through the PCT is one of the major factors driving the size of EPO patent applications.
    Keywords: Patent voluminosity, Patent applications, IP strategy, Claim drafting, Patent systems.
    JEL: O31 O34 O50
    Date: 2006–10
  5. By: Darius Lakdawalla; Tomas Philipson; Y. Richard Wang
    Abstract: Patent protection spurs innovation by raising the rewards for research, but it usually results in less desirable allocations after the innovation has been discovered. In effect, patents reward inventors with inefficient monopoly power. However, previous analysis of intellectual property has focused only on the costs patents impose by restricting price-competition. We analyze the potentially important but overlooked role played by competition on dimensions other than price. Compared to a patent monopoly, competitive firms may engage in inefficient levels of non-price competition—such as marketing—when these activities confer benefits on competitors. Patent monopolies may thus price less efficiently, but market more efficiently than competitive firms. We measure the empirical importance of this issue, using patent-expiration data for the US pharmaceutical industry from 1990 to 2003. Contrary to what is predicted by price competition alone, we find that patent expirations actually have a negative effect on output for the first year after expiration. This results from the reduction in marketing effort, which offsets the reduction in price. The short-run decline in output costs consumers at least $400,000 per month, for each drug. In the long-run, however, expirations do raise output, but the value of expiration to consumers is about 15% lower than would be predicted by a model that considers price-competition alone, without marketing effort. The non-standard effects introduced by non-price competition alter the analysis of patents’ welfare effects.
    JEL: I11 L12 O34
    Date: 2006–10
  6. By: Eugenio Archontopoulos (European Patent Office, The Netherlands); Dominique Guellec (OECD -DSTI, Paris); Niels Stevnsborg (European Patent Office, The Netherlands); Bruno van Pottelsberghe de la Potterie (Centre Emile Bernheim, Solvay Business School, Université Libre de Bruxelles, Brussels); Nicolas van Zeebroeck (Centre Emile Bernheim, Solvay Business School, Université Libre de Bruxelles, Brussels)
    Abstract: The joint increase in the number and size of patents filed around the world puts patent systems under pressure.This paper addresses issues in measuring the voluminosity of patent applications and highlights patterns in its evolution. The results – based on a 2 million EPO applications database – show that the average size of applications has doubled over the past 20 years and that it is mainly associated with PCT applications having a US priority. Voluminosity indicators are also influenced by geographical origins and technological areas and strongly impact the workload of the EPO, justifying the need for regulatory and policy actions.
    Keywords: Patent drafting, patent voluminosity, patent applications, patent statistics, patent systems, workload
    JEL: O31 O34 O50
    Date: 2006–10
  7. By: Alessandro Sterlacchini
    Abstract: By using accounting data from the largest utility companies of Europe, this note illustrates the recent R&D performance in energy and telecommunication. Although not all the companies under consideration behaved symmetrically, most of them reduced substantially their R&D investment. Over the period 2000-05, their total R&D expenditures at current prices decreased by 33%, while their R&D intensity (on sales) diminished from 1.1 to 0.7%. In discussing the above findings, it is argued that a drop of this size is hardly justifiable and weakens the EU economy in a non-negligible manner.
    Keywords: R&D performance; energy and telecommunication utilities
    JEL: O32 O38 L50 L97
    Date: 2006
  8. By: Golombek, Rolf (The Ragnar Frisch Centre for Economic Research); Hoel, Michael (Dept. of Economics, University of Oslo)
    Abstract: The Kyoto Agreement is the result of international negotiations over many years. However, because of a number of weaknesses, different sorts of climate agreement have been suggested: for example, coordinated R&D activities that reduce abatement costs for all firms. We will compare an agreement focusing only on emissions (a Kyoto type of agreement) with an agreement focusing only on technology, assuming that the costs of abatement are affected by R&D in all firms through technology spillovers. In an emissions agreement, emissions should be restricted to the extent that the carbon price exceeds the Pigovian level. For sufficiently low technology spillovers, an emissions agreement is more efficient than a technology agreement specifying an R&D subsidy to be imposed on all firms in all countries. The opposite may hold if technology spillovers are sufficiently large. Finally, an alternative technology agreement specifying R&D expenditure in each country is more efficient than an agreement specifying an R&D subsidy.
    Keywords: climate policy; international climate agreements; R&D policy; technology spillovers
    JEL: H23 O30 Q20 Q28 Q48
    Date: 2006–09–29
  9. By: Mika Pajarinen; Petri Rouvinen; Pekka Ylä-Anttila
    Keywords: Corporate taxation, R&D, innovative activity, public subsidies, tax incentives
    JEL: D21 D78 H25 K34 O31 O38
    Date: 2006–10–13
  10. By: Janßen-Timmen, Ronald; Moos, Waike
    Abstract: Technologies that are used in different production processes of miscellaneous industries are known as cross-sectional technologies. The economic importance of these technologies normally is measured by economic benchmarks of the producing industry. However, the impact of these tech-nologies for the whole economy is often not exactly known. By using a modified input-output ap-proach, it is shown for the welding technology how much the economic importance of a cross-sectional technology exceeds the economic importance of the technology producing industry.
    Keywords: Cross-sectional technologies; benchmark; input-output analysis; decomposition; multi-pliers
    JEL: E17 E12 C67
    Date: 2004–10–29
  11. By: Norbäck, Pehr-Johan (Research Institute of Industrial Economics); Persson, Lars (Research Institute of Industrial Economics); Vlachos, Jonas (Research Institute of Industrial Economics)
    Abstract: We show that, in the case when innovations are for sale, increased product market competition, captured by reduced product market profits, can increase the incentives for innovations. The reason is that the incentive to innovate depends on the acquisition price which, in turn, might increase despite firms in the market making lower profits. We also show that stricter, but not too strict, merger and cartel policies tend to increase the incentive for innovations for sale by ensuring the bidding competition for the innovation and by increasing the relative profitability of being the most efficient firm in the industry. Moreover, it is shown that increased intensity of competition can increase the relative profitability of innovation for sale, relative to innovation for entry.
    Keywords: Acquisitions; Entrepreneurship; Innovation; Competition
    JEL: G34 L13 L22 M13 O31
    Date: 2006–09–22
  12. By: Michal Grajek; Tobias Kretschmer
    Abstract: In this paper, we study the dynamics of usage intensity of second-generation cellular telephony over the diffusion curve. We address two specific questions: First, does information about usage intensity over time allow us to draw conclusions about the underlying drivers of technology diffusion? Seconds, what effect does the existence and penetration of previous generations and other networks in the same generation on network usage intensity? Using an operator-level panel covering 41 countries with quarterly data over 6 years, we find that heterogeneity among adopters dominates network effects and that different technological generations are complements in terms of usage, but substitutes in terms of subscription. <br> <br> <i>ZUSAMMENFASSUNG - (Gebrauch und Infusion von Mobilfunktelefonie, 1998-2004) <br> In diesem Beitrag untersuchen wir die Dynamik der Gebrauchsintensität von Mobilfunktelekommunikation zweiter Generation (D-Netzwerk in Deutschland) in verschiedenen Phasen ihrer Marktdiffusion. Wir stellen zwei spezifische Fragen: Erstens, kann man an Hand der Informationen über die Gebrauchsintensität die zugrundeliegenden Treiber der Technologiediffusion identifizieren? Zweitens, welche Auswirkung haben die Existenz und die Marktdurchdringung der vorherigen Generationen und andere Netzwerke derselben Generation auf die Gebrauchsintensität eines Mobilfunknetzwerks? Mittels der Paneldaten auf Netzwerkbetreiberebene, die 41 Nationen vierteljährlich über 6 Jahre umspannen, finden wir, dass die Abonnentenheterogenität die Netzwerkeffekte dominiert. Außerdem stellt sich heraus, dass die unterschiedlichen Technologiegenerationen bezüglich der Gebrauchsintensität komplementär zueinander sind, jedoch bezüglich ihrer Subskription Substituten darstellen.</i>
    Keywords: Cellular telephony, diffusion, network effects, consumer heterogeneity, fixed-mobile substitutability
    JEL: L1 L52 O38
    Date: 2006–09
  13. By: Milne , Alistair (Faculty of Finance, Cass Business School and Bank of Finland)
    Abstract: The developed world exhibits substantial but poorly understood differences in the efficiency and quality of low-value payment services. This paper compares payments arrangements in the UK, Norway, Swe-den, and Finland, and discusses the impact of network effects on incentives to adopt new payments tech-nology. A model is presented, in which private benefits for investment in shared inter-bank payments in-frastructure are weak. In contrast, due to ‘account externalities’, there are strong incentives for investment in intra-bank payment systems. These two features, distinguishing bank payments from other network in-dustries, can help explain some of the observed cross country differences in payments arrangements.
    Keywords: network effects; incentives; payment technology; externalities
    JEL: G21 L14
    Date: 2005–07–11
  14. By: Michaela Trippl; Franz Tödtling
    Date: 2006
  15. By: James B. Rebitzer; Lowell J. Taylor
    Abstract: We study the economics of employment relationships through theoretical and empirical analysis of an unusual set of firms, large law firms. Our point of departure is the "property rights" approach that emphasizes the centrality of ownership's legal rights to control important, non-human assets of the enterprise. From this perspective, large law firms are an interesting and potentially important object of study because the most valuable assets of these firms take the form of knowledge - particularly knowledge of the needs and interests of clients. We argue that the two most distinctive organizational features of large law firms, the use of "up or out" promotion contests and the practice of having winners become residual claimants in the firm, emerge naturally in this setting. In addition to explaining otherwise anomalous features of the up-or-out partnership system, this paper suggests a general framework for analyzing organizations where assets reside in the brains of employees.
    JEL: J4 L2 M5
    Date: 2006–10

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