nep-ino New Economics Papers
on Innovation
Issue of 2006‒11‒12
fourteen papers chosen by
Koen Frenken
Universiteit Utrecht

  1. A case for non-globalization? The organisation of r&d in the wireless telecommunications industry By Alberto Di Minin; Christopher Palmberg
  3. Trade Liberalisation, Process and Product Innovation, and Relative Skill Demand By Sebastian Braun
  4. ICT Use in the Developing World: An Analysis of Differences in Computer and Internet Penetration By Menzie D. Chinn; Robert W. Fairlie
  5. Usage and Diffusion of Cellular Telephony, 1998-2004 By Michal Grajek; Tobias Kretschmer
  6. Heterogeneity and the Dynamics of Technology Adoption By Stephen Ryan; Catherine Tucker
  7. How Do Mobile Information Technology Networks Affect Firm Strategy and Performance? Firm-Level Evidence from Taxicab Fleets By Evan Rawley
  8. When Does Co-location of Manufacturing and R&D Matter? By Mikko Ketokivi
  9. The role of Entrepreneurial Universities in interfacing Competitive Advantages: The Case of Beira Interior region (Portugal) By Ferreira, Joao; Leitao, Joao; Raposo, Mario
  10. The financing of innovative activities by banking institutions: policy issues and regulatory options By Ughetto, Elisa
  11. Adoption and Usage of Online Services in the Presence of Complementary Offline Services: Retail Banking By Anja Lambrecht; Katja Seim
  12. Geography and Electronic Commerce: Measuring Convenience, Selection, and Price By Chris Forman; Anindya Ghose; Avi Goldfarb
  13. The Hidden Surplus From Research Joint Ventures: An Application Of Systems Reliability Theory By Manfredi M.A. La Manna 
  14. What’s It To You? A Survey of Online Privacy Concerns and Risks By Janice Tsai; Lorrie Cranor; Alessandro Acquisti; Christina Fong

  1. By: Alberto Di Minin; Christopher Palmberg
    Keywords: globalization, R&D, wireless telecommunications, essential patents
    JEL: O32 O34 F23
    Date: 2006–10–27
  2. By: Lee, Lena; Wong, Poh Kam
    Abstract: The interactive process perspective of innovation suggests that the innovation performance of individual R&D scientist or engineers (RSEs) is influenced by a nexus of interaction between individual attributes and organizational characteristics. While numerous empirical studies have investigated the effects of various sets of individual and organizational antecedents on the innovation performance of individuals, few have examined the interaction effects between the two. This paper addresses this gap in the literature by providing empirical evidence on the interactive effects of the attitudes of individual RSEs and the organizational reward system on the patenting performance of these RSEs.
    Keywords: Innovative performance; individual attitudes; organizational reward system
    JEL: L1
    Date: 2006
  3. By: Sebastian Braun (School of Business and Economics, Humboldt University of Berlin)
    Abstract: The interaction between trade liberalisation, product and process innovation, and relative skill demand is analysed in a model of international oligopoly. Lower trading barriers increase the degree of foreign competition. The competing enterprises respond by investing more aggressively in lowering marginal costs of production. Moreover, firms reduce the substitutability of their products through additional investment in product innovation. The paper also shows that the relative demand for skilled workers may increase as a result.
    Keywords: Intra-industry trade, process innovation, product innovation, relative skill demand, trade liberalisation
    JEL: F12 F15 F16 O32
    Date: 2006–10
  4. By: Menzie D. Chinn (University of Wisconsin, and NBER); Robert W. Fairlie (University of California, Santa Cruz)
    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.
    JEL: O30 L96
    Date: 2006–09
  5. By: Michal Grajek (Wissenschaftszentrum Berlin (WZB) and Humboldt University); Tobias Kretschmer (Institute for Communication Economics, University of Munich and Centre for Economic Performance, LSE)
    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? Second, 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.
    Keywords: Cellular telephony, diffusion, usage intensity, network effects, consumer heterogeneity, fixed-mobile substitutability
    JEL: L1 L52 O38
    Date: 2006–10
  6. By: Stephen Ryan (MIT and NBER); Catherine Tucker (MIT Sloan School of Business)
    Abstract: This paper analyzes the role of heterogeneity and forward-looking expectations in the diffusion of network technologies. Using a detailed dataset on the adoption of a new videoconferencing technology within a firm, we estimate a structural model of technology adoption and communications choice. We allow for heterogeneity in network benefits and adoption costs across agents. We find that ignoring heterogeneity in the interplay between adoption costs and network effects will underpredict the size of the steady-state network size by almost 50 percent. We develop a new “simulated sequence estimator” to measure the extent to which agents seek diversity in their calling behavior, and characterize the patterns of communication as a function of geography, job function, and rank within the firm. We find that agents have significant welfare gains from having access to a diverse network, and that a policy of strategically targeting the right subtype for initial adoption can lead to a faster-growing and larger network than a policy of uncoordinated or diffuse adoption.
    Date: 2006–10
  7. By: Evan Rawley (University of California, Berkeley)
    Abstract: This paper examines how the adoption of mobile information technology networks impact firm strategy and performance in the U.S. taxicab industry. Using a rich, novel firm-level data set from the Economic Census, I test transaction cost economics’ prediction that adoption of mobile IT networks leads to shifts in the boundary of the firm toward increased fleet ownership of vehicles. I then exploit the homogeneity of the industry’s production function and exogenous variation in local market conditions to precisely measure the impact of adoption of mobile IT networks on productivity. I find strong evidence that firms respond to adoption of mobile IT networks by changing their organizational structure, shifting toward owning a greater fraction of vehicles in their fleets (as opposed to contracting with independent driver-owners for vehicles). I then use a precise and economically meaningful measure of firm performance to show that adoption of mobile IT networks causes firms to become more productive. The results suggest that adoption of mobile IT networks increases asset utilization by improving within-firm coordination but that firms must simultaneously shift toward a more highly vertically integrated structure to fully capture the benefits of mobile IT networks.
    Date: 2006–10
  8. By: Mikko Ketokivi
    Keywords: location decisions, co-location, functional integration, organization theory
    JEL: D21 L23 M11 O32 R32
    Date: 2006–11–03
  9. By: Ferreira, Joao; Leitao, Joao; Raposo, Mario
    Abstract: This paper reveals the importance of a local entrepreneurial university in interfacing competitive advantages, by assuming the condition of most influent and dynamic engine of regional development. The strategic diagnosis provides the identification of a dominant quadrant in the TOWS matrix application to the Beira Interior region, which is dominated by Mini-Maxi strategies. For improving the competitive positioning of that region, the transition from the dominant quadrant (Mini-Maxi) to the most desirable quadrant (Maxi-Maxi) is also proposed. In this sense, the University assumes a fundamental role in the design and in the promotion of the proposed set of strategic actions, which should be implemented in two critical areas: traditional activities and tourism; and entrepreneurship and innovation. In terms of future research, the same analytical tool could be applied to other regions with a similar competitive profile, in order to obtain comparative analyses and to better calibrate the TOWS Matrix.
    Keywords: Entrepreneurship; Regional Development; Strategy.
    JEL: M13 R11
    Date: 2006–10–10
  10. By: Ughetto, Elisa
    Abstract: The paper investigates to what extent the convergence of banks over risk-adjusted capital standards set by the new Basel Capital Accord may affect the way in which they screen innovative firms. It also gives an overview of the existing forms of credit support to R&D activities. The study is built upon a survey conducted in January and February 2006 on 12 main Italian banking groups. The survey provides interesting insights on the use of non-financial parameters to assess the creditworthiness of potential borrowers and on the architecture of internal rating systems in the light of Basel II requirements. Results suggest that the majority of banks does not consider intangibles as meaningful determinants in credit risk assessment. This could imply that the sole implementation of the Accord might not lead to reduce informational asymmetries between lenders and borrowers as it could be expected. However, such an effect could be compensated by specific measures provided by single financial intermediaries.
    Keywords: internal rating systems; innovation financing; Basel II
    JEL: G21
    Date: 2006–05–15
  11. By: Anja Lambrecht (UCLA Anderson School of Management); Katja Seim (The Wharton School, University of Pennsylvania)
    Abstract: The availability and variety of online services has increased dramatically in recent years. Many questions remain, however, regarding patterns of online service use, consumer preferences when using online services, and how consumers substitute between equivalent online and offline services. Using an extensive data set of consumer adoption and usage of the online banking service of a major German bank, this paper analyzes consumers’ adoption and usage of online banking over the period August 2001 to July 2003, including the effect of demographics and branch banking on usage of online banking. We also examine the relationship between Internet availability and channel choice as well as usage. Finally, we analyze the effect of channel usage on customer level and product-specific revenues earned by the bank and derive revenue implications of online banking.
    Date: 2006–10
  12. By: Chris Forman (Tepper School of Business); Anindya Ghose (Stern School of Business, New York University); Avi Goldfarb (Rotman School of Management, University of Toronto)
    Abstract: We develop a formal model of online-offline substitution to identify three factors that drive consumers to purchase online: convenience, selection, and price. This model builds hypotheses on how features of offline retail supply impact online purchasing. We then examine how the local availability of offline retail options drives use of the online channel and consequently how the convenience, selection, and price advantages of the online channel may vary by geographic location. In particular, we examine the effect of local store openings on online book purchases in that location. We explore this problem using data from Amazon on the top selling books for 1501 unique locations in the US for 10 months ending in January 2006. In addition to this data, we use information on changes in local retail competition as measured by openings of large specialty bookstores such as Borders or Barnes & Noble and discount stores such as Wal-Mart or Target. We show that even controlling for product-specific preferences by location, changes in local retail options have substantial effects on online purchases. We demonstrate how the convenience, selection, and price benefits of the Internet are different for customers in different types of locations. More generally, we show that geography significantly impacts the benefit that consumers derive from electronic markets.
    Date: 2006–09
  13. By: Manfredi M.A. La Manna 
    Abstract: The paper’s aim is two fold: (a) to model some key features of the research process as a multi-component system, as understood by the mathematical theory of systems reliability; and (b) to apply the resulting model to Research Joint Ventures, showing that a potentially very large surplus can be realized purely by organizing research efficiently, i.e. even without any changes in R&D investment.
    Keywords: optimal organization, systems reliability, Research Joint Ventures, parallel and series systems, majorization, organizational surplus.
    JEL: O32
    Date: 2006–11
  14. By: Janice Tsai (Carnegie Mellon University); Lorrie Cranor (Carnegie Mellon University); Alessandro Acquisti (Carnegie Mellon University); Christina Fong (Carnegie Mellon University)
    Abstract: Finding information about privacy practices can be difficult: privacy policies often do not present this information in an accessible way. People typically do not know how or for what purpose their personal information, gathered online, will be used. When asked, people frequently express concerns about their privacy, but their behavior often does not reflect their concerns. We conducted an online survey to examine participants’ online privacy concerns, focusing especially on the online shopping context. We asked participants about several scenarios related to the privacy of personal information. We found that Privacy Finder, a P3Penhanced search engine, provides information that addresses the scenarios that participants believe are most likely to occur. We also asked participants about a wide range of items for purchase online to evaluate which types of items are more likely to raise privacy concerns.
    Date: 2006–10

This nep-ino issue is ©2006 by Koen Frenken. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.