nep-ino New Economics Papers
on Innovation
Issue of 2007‒12‒08
eight papers chosen by
Steffen Lippert
Massey University Department of Commerce

  1. Network of Tinkerers: A Model of Open-Source Technology Innovation By Meyer, Peter B.
  2. Barriers to innovation and public policy in Catalonia By Agustí Segarra-Blasco; José García-Quevedo; Mercedes Teruel-Carrizosa
  3. Government R&D funding: new approaches in the allocation policies for public and private beneficiaries By Poti' Bianca; Reale Emanuela
  4. Incentives and uncertainty: an empirical analysis of the impact of demand on innovation By Roberto Fontana; Marco Guerzoni
  5. The Multinational Corporation and the global sourcing of knowledge: Remodeling absorptive capacity By Constantina Kottaridi; Marina Papanastassiou; Christos Pitelis; Dimitrios Thomakos
  6. Determinants of MNE subsidiaries decision to set uo own R&D laboratories: Theory and Evidence By Constantina Kottaridi; Marina Papanastassiou; Christos Pitelis
  7. Innovation and Competitive Capacity in Bangladeshs Pharmaceutical Sector By Gehl Sampath, Padmashree
  8. Determinants of the Acquisition of Smaller Firms by Larger Incumbents in High-Tech Industries: Are they related to Innovation and Technology Sourcing? By Marcus Wagner

  1. By: Meyer, Peter B. (U.S. Bureau of Labor Statistics)
    Abstract: Airplanes were invented by hobbyists and experimenters, and some personal computers were as well. Similarly, many open-source software developers are interested in the software they make, and not focused on profit. Based on these cases, this paper has a model of agents called tinkerers who want to improve a technology for their own reasons, by their own criteria, and who see no way to profit from it. Under these conditions, they would rather share their technology than work alone. The members of the agreement form an information network. The network's members optimally specialize based on their opportunities in particular aspects of the technology or in expanding or managing the network. Endogenously there are incentives to standardize on designs and descriptions of the technology. A tinkerer in the network who sees an opportunity to produce a profitable product may exit the network to create a startup firm and conduct focused research and development. Thus a new industry can arise.
    Keywords: Technological Change, Open Source Software, Uncertainty, Innovation, Invention, Collective Invention, Hackers, Hobbyists, Experimenters, Airplane
    JEL: O3 O31 O34 N10 D83 D85
    Date: 2007–11
    URL: http://d.repec.org/n?u=RePEc:bls:wpaper:ec070120&r=ino
  2. By: Agustí Segarra-Blasco (Research Group of Industry and Territory (GRIT); Rovira i Virgili University (URV)); José García-Quevedo (Institut d'Economia de Barcelona (IEB); Universitat de Barcelona (UB)); Mercedes Teruel-Carrizosa (Research Group of Industry and Territory (GRIT); Rovira i Virgili University (URV))
    Abstract: The present paper analyses the link between firms’ decisions to innovate and the barriers that prevent them from being innovative. The aim is twofold. First, it analyses three groups of barriers to innovation: the cost of innovation projects, lack of knowledge and market conditions. Second, it presents the main steps taken by Catalan Government to promote the creation of new firms and to reduce barriers to innovation. The data set used is based on the 2004 official innovation survey of Catalonia which was taken from the Spanish CIS-4 sample. This sample includes individual information on 2,954 Catalan firms in manufacturing industries and knowledge-intensive services (KIS). The empirical analysis reveals pronounced differences regarding a firm’s propensity to innovate and its perception of barriers. Moreover, the results show that cost and knowledge barriers seem to be the most important and that there are substantial sectoral differences in the way that firms react to barriers. The results of this paper have important implications for the design of future public policy to promote entrepreneurship and innovation together.
    Keywords: Obstacles to innovation, industrial policy, innovation system.
    JEL: O31 O38 D21
    Date: 2007
    URL: http://d.repec.org/n?u=RePEc:ieb:wpaper:2007/12/doc2007-6&r=ino
  3. By: Poti' Bianca (Ceris - Institute for Economic Research on Firms and Growth, Rome, Italy); Reale Emanuela (Ceris - Institute for Economic Research on Firms and Growth, Rome, Italy)
    Abstract: The objective of this paper is to perform a first experiment of quantitative assessment on changes in allocation mechanisms and in their underlying delegation models, using the quantitative information and the descriptions of national funding systems produced in the PRIME project funding activity. Delegation has been explored through changes in instrument portfolios and in evaluation modes, as proofs of an evolution in research governance. Some common trends can be identified: the reinforcing of both priority setting and peer review processes. The general result of our analysis is that some change in delegation modes took place, but there is not a simple transition from one delegation regime to another, while a "contract" delegation model (the NPM reform) is not detectable through project funding analysis.
    Keywords: R/D funding, allocation policy, project funding, research governance, evaluation modes, delegation models
    JEL: H0 H5 O30
    Date: 2007–09
    URL: http://d.repec.org/n?u=RePEc:csc:cerisp:200709&r=ino
  4. By: Roberto Fontana (University of Pavia & CESPRI, Bocconi University, Italy); Marco Guerzoni (Schiller Universität)
    Keywords: demand, product innovation, process innovation
    JEL: O31 O33
    Date: 2007–11–01
    URL: http://d.repec.org/n?u=RePEc:sru:ssewps:163&r=ino
  5. By: Constantina Kottaridi; Marina Papanastassiou; Christos Pitelis; Dimitrios Thomakos
    Abstract: We build on extant theory of the MNC, MNC subsidiaries, absorptive capacity and Penrose’s concept of ‘productive opportunity’ to develop a framework on the MNC and absorptive capacity (AC) that allows us to explore the role of subsidiaries in the global sourcing of knowledge. We develop and test hypotheses using primary questionnaire-collected data. Our results support the idea that subsidiaries’ realized AC can be improved by the realized and potential AC of the MNC group and the subsidiary and in turn may improve the performance of the subsidiaries and the group as a whole.
    Keywords: Multinational Corporation, absorptive capacity, subsidiaries, knowledge
    Date: 2007
    URL: http://d.repec.org/n?u=RePEc:uop:wpaper:008&r=ino
  6. By: Constantina Kottaridi; Marina Papanastassiou; Christos Pitelis
    Abstract: We explore the determinants of MNE subsidiaries decisions to set-up own R&D laboratories drawing on evidence from UK regions. In this context, we also test for the interaction between firm’s internal and external environments. We also integrate extant IB and strategic management literatures and incorporate recent debates in New Economic Geography (NEG) in specifying the ‘external environment’. We find support for the role of firm’s ‘productive opportunity’ and predictions of the NEG on the basis of an analysis of primary data. We discuss implications for managerial practice and government regional policies.
    Keywords: MNE subsidiaries, R&D laboratory, internal and external environment, productive opportunity
    Date: 2007
    URL: http://d.repec.org/n?u=RePEc:uop:wpaper:007&r=ino
  7. By: Gehl Sampath, Padmashree (UNU-MERIT)
    Abstract: The global pharmaceutical sector is highly patent intensive, and firms rely on product, process and formulation patents to protect their innovations. Intellectual property rights on pharmaceutical products, as contained in the Agreement on Trade Related Aspects of Intellectual Property Rights (hereafter, the TRIPS Agreement) have been defended on grounds of extensive R&D investments required to discover and develop new drugs. But at the same time, grant of uniform pharmaceutical patents in all developing and least developed countries that are members of the World Trade Organization in accordance with the TRIPS Agreement, raises a range of issues for access to medicines. These issues can be framed under three broad areas: the restriction of reverse engineering possibilities for firms in developing countries and its implications for catch-up in this sector, higher prices of drugs and access to medicines as well as access to technologies due to patents on upstream technologies. The transitional arrangements under the TRIPS Agreement specifically mandated that all developing countries that are members to the WTO enact national laws that are TRIPS-compliant by 2005. As a result, from 2005 onwards, several countries like India, which played an important role as producers and exporters of generic copies of brand name products patented outside the country, can no longer produce such drugs due to the introduction of TRIPS-compliant patent regimes in their countries. Least developed countries have an extension until 2016 to implement the pharmaceutical patent provisions of the TRIPS Agreement under the Doha Declaration on TRIPS and Public Health. However, such legal flexibility is quite meaningless for least developed countries in the absence of local technological capabilities to produce generic drugs amongst least developed countries. Bangladesh, although a least developed country, is an exception in this regard with thriving domestic processing sectors that are actively engaged in producing textiles and ready made garments (RMGs), processed food products and generic drugs. Therefore, the question that looms large in the global access to medicines debate is whether Bangladesh's pharmaceutical sector can gradually evolve to provide low-cost substitutes of important patented drugs to other developing and least developed countries? This study is an original empirical investigation into issues of innovative capacity and competitiveness of the local pharmaceutical sector in Bangladesh.
    Keywords: Bangladesh, WTO, TRIPs, Intellectual Property Rights, Pharmaceutical Industry, Public Health
    JEL: O34 O31 O24 F13 I18
    Date: 2007
    URL: http://d.repec.org/n?u=RePEc:dgr:unumer:2007031&r=ino
  8. By: Marcus Wagner
    Abstract: Innovation activities in high tech industries provide considerable challenges for technology and innovation management. In particular, firms frequently face significant technological challenges since these industries has a long history of radical innovations which are taking place through distinct industry cycles of higher and lower demand. The paper investigates these issues for three high-tech industries, namely semiconductor manufacturing, biotechnology and electronic design automation which is a specific sub-segment of the semiconductor industry. It analyses the association of firm characteristics with different aspects of acquisition behaviour. Particular focus is put on innovation-related firm characteristics. The paper finds that the determinants for acquisitions are mostly related to firm size, financial conditions and geographical origin of the firm. Only for biotechnology, a substitutive relationship is identified between acquisitions and own research activities.
    Keywords: acquisition, innovation, semiconductor, design, automation, biotechnology
    JEL: L10 L86 M20
    Date: 2007–11
    URL: http://d.repec.org/n?u=RePEc:hum:wpaper:sfb649dp2007-063&r=ino

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