nep-ino New Economics Papers
on Innovation
Issue of 2006‒11‒18
seventeen papers chosen by
Koen Frenken
Universiteit Utrecht

  1. Indian Patent Policy and Publich Health : implications from the Japanese Experience By Aoki, Reiko; Kubo, Kensuke; Yamane, Hiroko
  2. Sequential Innovation, Patents, and Imitation By James Bessen; Eric Maskin
  3. European Pharmaceutical Price Regulation, Firm Profitability, and R&D Spending By Joseph H. Golec; John A. Vernon
  4. Academic entrepreneurship, patents, and spin-offs: critical issues and lessons for Europe By Chiara Franzoni; Francesco Lissoni
  5. Minerva Unbound: Knowledge Stocks, Knowledge Flows and New Knowledge Production By Lynne G. Zucker; Michael R. Darby; Jonathan Furner; Robert C. Liu; Hongyan Ma
  6. Royalties vs. fees: How do firms pay for foreign technology? By Sharmila Vishwasrao
  7. Does Greater Competition Increase R&D Investments? Evidence from a Laboratory Experiment By Dario Sacco; Armin Schmutzler
  8. Structural Holes, Innovation and the Distribution of Ideas By Cowan, Robin; Jonard, Nicolas
  9. The structure of R&D collaboration networks in the European Framework Programmes By Roediger-Schluga, Thomas; Barber, Michael J.
  10. What drives productivity in Tanzanian manufacturing firms: technology or institutions? By Goedhuys, Micheline; Janz, Norbert; Mohnen, Pierre
  11. Cooperation in the Classroom: Experimenting with R&D Cooperatives By Michelle Sovinsky Goeree; Jeroen Hinloopen
  12. World Technology Usage Lags By Diego A. Comin; Bart Hobijn; Emilie Rovito
  13. The Growing Allocative Inefficiency of the U.S. Higher Education Sector By James D. Adams; J. Roger Clemmons
  14. The role of new technologies in the economic growth of Andalucia By Diego Martínez López; Jesús Rodríguez López
  15. Human Resource Management Technology Diffusion Through Global Supply Chains: Productivity and Workplace Based Health Care By Drusilla K. Brown; Thomas Downes; Karen Eggleston; Ratna Kumari
  16. Economics and Transitions: Lessons from Economic Sub-disciplines By Kemp, R.; van den Bergh, J.
  17. IFRS Adoption in Europe: the Case of Germany By Soledad Moya; Jordi Perramon; Anselm Constans

  1. By: Aoki, Reiko; Kubo, Kensuke; Yamane, Hiroko
    Abstract: The introduction of pharmaceutical product patents in India and other developing countries is expected to have a significant effect on public health and local pharmaceutical industries. This paper drawsimplications from the historical experience of Japan when it introduced product patents in 1976. In Japan, narrow patents and promotion of cross-licensing were effective tools to keep drug prices in check while ensuring the introduction of new drugs. While the global pharmaceutical market surrounding India today differs considerably from that of the 1970's, the Japanese experience offers a policy option that may profitably be considered by India today. The Indian patent system emphasizes the patentability requirement in contrast to the Japanese patent policy which relied on narrow patents and extensive licensing. R&D by local firms and the development of local products may be promoted more effectively under the Japanese model.
    Keywords: Pharmaceutical industry, Industrial policy, Intellectual property rights, Patent law, Public health, Industrial property law, India, Japan
    JEL: I11 I18 L50 L65 O10 O31 O34
    Date: 2006–03
  2. By: James Bessen (Boston University School of Law and Research on Innovation); Eric Maskin (School of Social Science, Institute for Advanced Study)
    Abstract: We argue that when discoveries are "sequential" (so that each successive invention builds in an essential way on its predecessors) patent protection is not as useful for encouraging innovation as in a static setting. Indeed, society and even inventors themselves may be better off without such protection. Furthermore, an inventor's prospective profit may actually be enhanced by competition and imitation. Our sequential model of innovation appears to explain evidence from a natural experiment in the software industry.
    Date: 2006–03
  3. By: Joseph H. Golec; John A. Vernon
    Abstract: EU countries closely regulate pharmaceutical prices whereas the U.S. does not. This paper shows how price constraints affect the profitability, stock returns, and R&D spending of EU and U.S. firms. Compared to EU firms, U.S. firms are more profitable, earn higher stock returns, and spend more on research and development (R&D). Some differences have increased over time. In 1986, EU pharmaceutical R&D exceeded U.S. R&D by about 24 percent, but by 2004, EU R&D trailed U.S. R&D by about 15 percent. During these 19 years, U.S. R&D spending grew at a real annual compound rate of 8.8 percent, while EU R&D spending grew at a real 5.4 percent rate. Results show that EU consumers enjoyed much lower pharmaceutical price inflation, however, at a cost of 46 fewer new medicines introduced by EU firms and 1680 fewer EU research jobs.
    JEL: I11 I18 K2 O34
    Date: 2006–11
  4. By: Chiara Franzoni (A. Young School of Policy Studies, Georgia State University, USA); Francesco Lissoni (Università di Brescia and CESPRI-Università Commerciale Bocconi, Milano, Italy)
    Abstract: The paper proposes a definition of “academic entrepreneur” which draws from draws from the economics, history, and sociology of science. Academic entrepreneurs are scientists with a brilliant scientific record, who build their careers through discipline-building, the creation and of new labs and teams, and an appetite for the economic resources necessary to pursue those goals. Long-standing institutional features of national university systems explain to what extent commercial activities may or may not help academic entrepreneurs to progress in their careers. European policies for technology transfer should address these features, rather than aiming straight at university patenting and firm creation.
    Keywords: Academic entrepreneurship, Technology transfer
    JEL: I23 M13 O31
    Date: 2006–09
  5. By: Lynne G. Zucker; Michael R. Darby; Jonathan Furner; Robert C. Liu; Hongyan Ma
    Abstract: The rate of regional growth of new knowledge in the field of nanotechnology, as measured by counts of articles and patents in the open-access digital library NanoBank, is shown to be positively affected both by the size of existing regional stocks of recorded knowledge in all scientific fields, and the extent to which tacit knowledge in all fields flows between institutions of different organizational types. The level of federal funding has a large, robust impact on both publication and patenting. The data provide further support for the cumulative advantage model of knowledge production, and for ongoing efforts to institutionalize channels through which cross-organizational collaboration may be achieved.
    JEL: O31 O33 R11 Z13
    Date: 2006–11
  6. By: Sharmila Vishwasrao (Department of Economics, College of Business, Florida Atlantic University)
    Abstract: The theoretical determinants of technology licensing contracts have been extensively studied but empirical evidence is scarce. We assemble a data set of all the foreign technology licensing agreements entered into by manufacturing firms in India between 1989 and 1993. Industry, firm, and contract characteristics are used to explain differences between the forms of payment in licensing contracts. Our findings support theoretical arguments; licensing contracts are more likely to use royalties when sales are relatively high, while increased volatility of sales and greater profitability favor fixed fee contracts. We also find that firms are more likely to use output based payments to control the sale and diffusion of R&D or brand intensive know-how to unaffiliated firms.
    Keywords: Technology transfer; licensing contracts
    JEL: F23 L14 L24 O32
    Date: 2004–10
  7. By: Dario Sacco (Socioeconomic Institute, University of Zurich); Armin Schmutzler (Socioeconomic Institute, University of Zurich)
    Abstract: Using an experiment based on two-stage games, we analyze the effects of competitive intensity on firms’ incentives to invest in process innovations. The experiment suggests that intense competition is favorable to investments.
    Keywords: R&D investment, intensity of competition, experiment
    JEL: C92 L13 O31
    Date: 2006–11
  8. By: Cowan, Robin (UNU-MERIT); Jonard, Nicolas (Université de Luxembourg)
    Abstract: We model knowledge diffusion in a population of agents situated on a network, interacting only over direct ties. Some agents are by nature traders, others are by nature "givers": traders demand a quid pro quo for information transfer; givers do not. We are interested in efficiency of diffusion and explore the interplay between the structure of the population (proportion of traders), the network structure (clustering, path length and degree distribution), and the scarcity of knowledge. We find that at the global level, trading (as opposed to giving) reduces efficiency. At the individual level, highly connected agents do well when knowledge is scarce, agents in clustered neighbourhoods do well when it is abundant. The latter finding is connected to the debate on structural holes and social capital.
    Keywords: Innovation, Diffusion of Innovations, Knowledge, Information, Networks
    JEL: O31 D8
    Date: 2006
  9. By: Roediger-Schluga, Thomas (Department of Technology Policy, ARC Systems Research); Barber, Michael J. (Centro de Ciências Matemáticas, Universidade da Madeira)
    Abstract: Using a large and novel data source, we study the structure of R&D collaboration net-works in the first five EU Framework Programmes (FPs). The networks display proper-ties typical for complex networks, including scale-free degree distributions and the small-world property. Structural features are common across FPs, indicating similar network formation mechanisms despite changes in governance rules. Several findings point towards the existence of a stable core of interlinked actors since the early FPs with integration increasing over time. This core consists mainly of universities and research organisations. We observe assortative mixing by degree of projects, but not by degree of organisations. Unexpectedly, we find only weak association between central projects and project size, suggesting that different types of projects attract different groups of actors. In particular, large projects appear to have included few of the pivotal actors in the networks studied. Central projects only partially mirror funding priorities, indicating field-specific differences in network structures. The paper concludes with an agenda for future research.
    Keywords: R&D collaboration, EU Framework Programmes, Complex Networks, Small World Effect, Centrality Measures, European Research Area
    JEL: L14 O38 Z13
    Date: 2006
  10. By: Goedhuys, Micheline (UNU-MERIT); Janz, Norbert (UNU-MERIT); Mohnen, Pierre (UNU-MERIT)
    Abstract: Using the rich micro data set of the World Bank Investment Climate Survey, this paper examines the determinants of productivity among manufacturing firms in the context of a least developed country, Tanzania. In particular it seeks to evaluate the importance of technological variables - such as R&D, education and training, innovation, foreign ownership, licensing and ISO certification - and institutional variables – such as access to credit, health of the workforce, regulation and business support services. Among the technological variables, R&D, and innovations in the form of new products or processes fail to produce any significant impact, and only foreign ownership, ISO certification and high education of the management appear to affect productivity. Some of the institutional variables on the contrary are highly significant and robust to different specifications of the model. As such, formal credit constraints, administrative burdens related to regulations and a lack of business support services seem to depress productivity, while membership of a business association produces the opposite effect. The results of a quantile regression further indicate that the educational level of the managers and access to formal credit are significant for the less productive firms only, whereas for the more productive firms it is having an ISO certification or being a member of a business association that are the significant determinants.
    Keywords: Development, Productivity, Innovation, Institutions
    JEL: O12 D24 C21
    Date: 2006
  11. By: Michelle Sovinsky Goeree (Claremont McKenna College); Jeroen Hinloopen (Universiteit van Amsterdam)
    Abstract: This paper describes a classroom experiment that illustrates the research and development investment incentives facing firms when technological spillovers are present. The game involves two stages in which student sellers first make investment decisions then production decisions. The classroom game can be used to motivate discussions of research joint ventures, the free-rider problem, collusion, and antitrust policy regarding research and development.
    Keywords: classroom games; research and development; research joint ventures; technological spillovers
    JEL: C91 L13 L41
    Date: 2006–09–27
  12. By: Diego A. Comin; Bart Hobijn; Emilie Rovito
    Abstract: We present evidence on the differences in the intensity with which ten technologies are used in 185 countries. To measure differences in technology use, we determine how long ago these technologies were used in the U.S. at the same intensity as they are used in the countries in our sample. We denote these time lags as technology usage lags and compare them with lags in real GDP per capita. We find that (i) many countries trail the U.S. in technology usage by several decades or more; (ii) usage lags are highly correlated with disparities in per-capita income; and (iii) usage lags are highly correlated across technologies.
    JEL: O33 O47 O57
    Date: 2006–11
  13. By: James D. Adams; J. Roger Clemmons
    Abstract: This paper presents new evidence on research and teaching productivity in universities using a panel of 102 top U.S. schools during 1981-1999. Faculty employment grows at 0.6 percent per year, compared with growth of 4.9 percent in industrial researchers. Productivity growth per researcher is 1.4-6.7 percent and is higher in private universities. Productivity growth per teacher is 0.8-1.1 percent and is higher in public universities. Growth in research productivity within universities exceeds overall growth, because the research share grows in universities where productivity growth is less. This finding suggests that allocative efficiency of U.S. higher education declined during the late 20th century. R&D stock, endowment, and post-docs increase research productivity in universities, the effect of nonfederal R&D is less, and the returns to research are diminishing. Since the nonfederal R&D share grows and is higher in public schools, this may explain the rising inefficiency. Decreasing returns in research but not teaching suggest that most differences in university size are due to teaching.
    JEL: J3 L3 O3
    Date: 2006–11
  14. By: Diego Martínez López (Centro de Estudios Andaluces); Jesús Rodríguez López (Universidad Pablo de Olavide)
    Abstract: This paper explores the contribution of Information and Communication Technologies (ICT) on economic growth and labor productivity growth of Andalucía during 1995-2004. We find that the contribution of ICT assets to total market GVA growth is quantitatively modest. Anyway the contribution to GVA growth and employment growth within the intensive ICT sectors has experienced a considerable increase in Andalucía. Although our analysis detects that intensive ICT sectors exhibit a high productivity level with respect to that of the non intensive ones, our main conclusion is that the advantages that might emerge from the use of ICT are nor yet observable in the economic dynamics of Andalucía, at least in a similar manner to that of the most developed.
    Keywords: Information and Communication Technologies, productivity growth, regional growth
    JEL: E13 O30 O40 O47
    Date: 2006
  15. By: Drusilla K. Brown; Thomas Downes; Karen Eggleston; Ratna Kumari
    Abstract: We examine the role that buyers play in helping vendors uncover productivity-enhancing labor management innovations. We report on a buyer-directed factory-based program targeting intestinal parasites and anemia in seven Bangalore apparel factories. Raw pre-post productivity comparisons were confounded by factory organizational changes that were implemented in anticipation of the termination of the MFA. Using a DDD estimator, treatment was found to increase individual productivity of anemic workers by 8 percent. The treatment program also reduced the probability that an anemic worker would leave the factory by 38 percent.
    Date: 2006
  16. By: Kemp, R. (UNU-MERIT); van den Bergh, J. (Faculty of Economics and Business Administration, Vrije Universiteit and Institute for Environmental Studies)
    Abstract: Currently, there is much interest in stimulating or 'speeding up' socio-technical transitions to sustainable systems, most notably in the sectors of energy, transport and agriculture. This essay attempts to assess whether and how 'transition' type problems and issues are being addressed in the various sub-disciplines and methodological approaches of economics. This allows us to identify concepts, ideas, theories and empirical methods in economics that are suitable for inclusion and elaboration in 'transition research'. Surprisingly, we find that many sub-disciplines of economics have in one way or another addressed problems similar to transitions. Our main conclusion therefore is that economics offers a rich palette of ideas that may be useful for transition research. Studies on development stages, long waves, technological path-dependency, conflict resolution, public investments, emergence of institutions and, transitions from communist to market-democracy systems seem especially relevant to the study of transition. Although mainstream economics conflicts in certain ways with the approach called for by many involved in transition research, we show that economics certainly has something to offer to the study of transitions.
    Keywords: Sustainable Development, Technological Change, Economic Development
    JEL: Q01 O13 O33
    Date: 2006
  17. By: Soledad Moya (Department of Business Economics, Universitat Autonoma de Barcelona); Jordi Perramon (Departament d'Economia i Empresa, Universitat Pompeu Fabra); Anselm Constans (Departament d'Economia i Empresa, Universitat Pompeu Fabra)
    Abstract: From 2005 onwards, consolidated financial statements of listed European companies will have to comply with IFRS (IAS). Many German companies began adopting those standards in the 1990s, on a voluntary basis, because of their need to access international capital funding. Spanish companies, by contrast, are not permitted to adopt IFRS before 2005. This paper has two purposes: first, it analyses the financial impact of initial IFRS adoption on the statement of changes in equity and the income statement of individual German companies. Second, and taking into account the German experience, it focuses on the expected impacts on a sample of listed Spanish companies in two industrial sectors: chemical-pharmaceutical and fashion. Our analysis of German companies comprised all non-financial DAX groups applying IFRS plus additional listed companies in the two selected industrial sectors identified above. The impact of initial adoption of IFRS on German companies was, both individually and overall, very significant. The analysis suggests that the expected impact on Spanish companies is likely to be significant but to a lesser degree than in respect of the German companies in the study.
    Keywords: IFRS adoption, Germany, Spain, IFRS adjustments, chemical-pharmaceutical sector, fashion sector
    Date: 2005–02

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.
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