nep-ino New Economics Papers
on Innovation
Issue of 2008‒01‒05
thirteen papers chosen by
Steffen Lippert
Massey University Department of Commerce

  1. Technology Mobility and Job Mobility: A comparative analysis between patent and survey data By Camilla Lenzi
  2. Innovation in Private Infrastructure Development: Effects of the Selection Environment and Modularity By Nuno Gil; Marcela Miozzo
  3. Corporate diversification and R&D intensity dynamics By Cesar Alonso-Borrego; Francisco Javier Forcadell
  4. Opportunity Spin-offs and Necessity Spin-offs By G. Bünstorf
  5. International Schumpeterian Competition and Optimal R&D subsidies By Giammario Impullitti
  6. Connaissance et transformations dans l’industrie pharmaceutique<br />Une approche en terme de système sectoriel d’innovation By Nathalie Coutinet; Philippe Abécassis
  7. Why Develop Open Source Software? The Role of Non-Pecuniary Benefits, Monetary Rewards and Open Source Licence Type By Robert M. Sauer
  8. A System Architecture Approach to Global Product Development By Tripathy, Anshuman; Eppinger, Steven D.
  9. Investor Protection and Interest Group Politics By Lucian A. Bebchuk; Zvika Neeman
  10. Inventors and the Geographical Breadth of Knowledge Spillovers By Mikhail Anufriev; Pietro Dindo
  11. The Dynamics of Research Joint Ventures: A Panel Data Analysis By Tomaso Duso; Enrico Pennings; Jo Seldeslachts
  12. European Patenting and the Size of Investors By Alessandro STERLACCHINI; Francesco SCHETTINO
  13. The effects of FDI in R&D on home countries, the case of Switzerland By Michel, Julie

  1. By: Camilla Lenzi
    Abstract: In recent years, increasing attention and resources have been devoted to the analysis of workers’ mobility and the collection of new and extensive datasets in order to monitor and appraise this phenomenon. Most of the studies make use of information about inventors extracted from patent data. In fact, patent data collects detailed information on inventors, their geographical location and the applicants of their patents. This paper instead makes use of unique data on inventors’ curriculum vitae collected through a survey addressed to a group of Italian inventors in the pharmaceutical field and compares this information to those extracted from patent data. Results seem to challenge the traditional interpretation of mobility phenomena based on patent data and suggest that patent and survey data might capture different aspects of inventors’ career path. In particular, results indicate that survey data describes the whole set of inventors’ employers and the knowledge flows across them. Conversely, patent data portrays a different set that is the one composed of those actors directly involved in inventive processes and participating to the production of patented knowledge. More interestingly, they overlap only partially and do not necessarily coincide.
    Keywords: Patent; Mobility; Inventor
    JEL: J60 O30
    Date: 2007
  2. By: Nuno Gil; Marcela Miozzo
    Abstract: This study investigates how the selection environment and modularity affect innovation in private infrastructure development. Our findings stem from an in-depth empirical study of the extent ten process innovations were implemented in an airport expansion programme. Our findings suggest that developer and customers can each occasionally champion or resist innovations. An innovation succeeds contingent upon the capability of the stakeholder groups to develop collectively a plan to finance and implement the innovation, which reconciles subjective individual assessments. Innovations can be particularly hard to adopt when they require financing from different budgets, or when the developer’s investment pays off only if customers behave in a specified way in the future. We also find that the degrees of novelty and modularity neither represent sufficient or necessary conditions enabling or hindering innovation. Novelty, however, makes the innovation champion’s job harder because it leads to perceptions of downside risk and regulatory changes, whereas modularity helps the champion operationalise ways that moderate resistance to innovate.
    Keywords: Innovation; financing; implementation
    JEL: O31 R42
    Date: 2007
  3. By: Cesar Alonso-Borrego; Francisco Javier Forcadell
    Abstract: We study the dynamic bidirectional relationship between firm R&D intensity and corporate diversification, using longitudinal data of Spanish manufacturing companies. Our empirical approach takes into account the censored nature of the dependent variables and the existence of firm-specific unobserved heterogeneity. Whereas we find a positive linear effect of R&D intensity on related diversification, the evidence about the effect of related diversification on R&D intensity takes the form of an inverted U. Hence, the effect of related diversification on R&D intensity is positive but marginally decreasing for moderate levels of related diversification, but such effect can turn out negative for high levels of related diversification. Additionally, the consequences of the dynamic relation are that the effects are substantially larger in the long-run than in the short-run.
    Date: 2007–12
  4. By: G. Bünstorf
    Abstract: Necessity spin-offs are organized by employees of incumbent firms to escape deteriorating job conditions. This paper proposes a conceptual model of the spin-off process. Necessity spin-offs are distinguished from opportunity spin-offs on the basis of their triggering events. An empirical analysis of German laser spin-offs traces differences in the performance and determinants of the two types of spin-offs. Necessity spin-offs are important to limit the devaluation of individual competences by the market process. They are particularly relevant in growth crises of innovative firms, and in the restructuring of economies with protected or state-owned companies.
    Keywords: Spin-offs, necessity entrepreneurship, opportunity discovery, market process, laser industry Length 32 pages
    JEL: L25 L26 M13
    Date: 2007–12
  5. By: Giammario Impullitti
    Abstract: This paper studies the welfare effects of international competition in the market for innovations, and analyzes how competition affects the costs and the benefits of cooperative and non-cooperative R&D subsidies. I set up a two-country quality-ladder growth model where the leader, the home country, has R&D firms innovating in all sectors of the economy, and the follower, the foreign country, shows innovating firms only in a subset of industries. The measure of the set of sectors where R&D workers from both countries compete for innovation determines the scale of international Schumpeterian competition. Both governments engage in a strategic R&D subsidy game and respond optimally to changes in competition. For a given level of subsidies, increases in foreign competition raise the quality of goods available (growth effect) and lowers domestic profits (business-stealing effect); the overall effect of competition on domestic welfare depends on the relative strength of these two counteracting forces. When governments play a strategic subsidy game, increases in foreign competition trigger a defensive innovation policy mechanism that raises the optimal domestic R&D subsidy. Cooperation in subsidies leads both countries to set higher subsidies. Finally, while cooperation is beneficial for the global economy, there exists a threshold level of competition below which the home country experiences welfare losses under cooperation.
    Keywords: international competition, endogenous technical change, growth theory, strategic R&D subsidies, international policy cooperation
    JEL: O41 O31 O38 F12 F43
    Date: 2007
  6. By: Nathalie Coutinet (CEPN - Centre d'économie de l'Université de Paris Nord - CNRS : UMR7115 - Université Paris-Nord - Paris XIII); Philippe Abécassis (EconomiX - CNRS : UMR7166 - Université de Paris X - Nanterre)
    Abstract: A partir d'une analyse des évolutions de l'offre et de la demande, l'objectif de ce travail est de mettre en évidence l'émergence d'un système sectoriel pharmaceutique (Malerba 2004) issu non seulement de l'adaptation des firmes à la révolution biotechnologique mais aussi de l'exercice par les patients de leurs nouveaux pouvoirs. <br />Ce travail sera réalisé dans un premier temps au moyen d'une étude approfondie du mode de diffusion des nouvelles connaissances des patients et des répercutions de ces connaissances nouvelles sur la relation patient-médecin. Le second temps sera consacré à un récapitulatif des principales évolutions dans les formes organisationnelles retenues par les firmes ainsi que dans les stratégies privilégiées. L'hypothèse soutenue est que ces évolutions peuvent être analysées tant comme une réponse aux changements de l’environnement technologique que comme une adaptation des firmes à l'influence des nouveaux comportements des patients.
    Keywords: Système sectoriel d'innovation; Industrie pharmaceutique ; pouvoir des patients
    Date: 2006–11–23
  7. By: Robert M. Sauer (University of Southampton and IZA)
    Abstract: A review of the basic theory of optimal open-source software contributions points to three key factors affecting supply: non-pecuniary benefits, future expected monetary returns, and opensource licence type. This paper argues that existing large-scale software developer surveys are inadequate for measuring the relative importance of these three factors. Moreover, previous econometric studies that collect their own unique datasets generally measure the importance of only one supply factor in isolation. To fill the gap, I specify a dynamic programming model of joint labour supply and open-source contribution decisions that can provide empirical estimates of relative importance within a single unified framework.
    Keywords: software, open-source, labour supply, dynamic programming
    JEL: C61 C80 J24 J44
    Date: 2007–12
  8. By: Tripathy, Anshuman; Eppinger, Steven D.
    Abstract: Recent advances in engineering collaboration tools and internet technology have enabled the distribution of product development tasks to offshore sites and global outsourcing partners while still maintaining a tightly connected process. Most firms in complex engineering industries are indeed experimenting with various ways to structure their product development processes on a global basis. In this research, we have explored global product development structures from the perspectives of process flow and system architecture. We employ the design structure matrix method to display and explain these structures and our observations thereof. Through five case studies spanning electronics, equipment, and aerospace industries, we consider the interaction complexity inherent in various global work distribution strategies. We conclude the paper with a summary and directions for future research work.
    Keywords: Global Product Development, System Architecture,
    Date: 2007–04–20
  9. By: Lucian A. Bebchuk; Zvika Neeman
    Abstract: We model how lobbying by interest groups affects the level of investor protection. In our model, insiders in existing public companies, institutional investors (financial intermediaries), and entrepreneurs who plan to take companies public in the future, compete for influence over the politicians setting the level of investor protection. We identify conditions under which this lobbying game has an inefficiently low equilibrium level of investor protection. Factors that operate to reduce investor protection below its efficient level include the ability of corporate insiders to use the corporate assets they control to influence politicians, as well as the inability of institutional investors to capture the full value that efficient investor protection would produce for outside investors. The interest that entrepreneurs (and existing public firms) have in raising equity capital in the future reduces but does not eliminate the distortions arising from insiders' interest in extracting rents from the capital public firms already have. Our analysis generates testable predictions, and can explain existing empirical evidence, regarding the way in which investor protection varies over time and around the world.
    JEL: D72 G20 G30 K22 O16
    Date: 2007–12
  10. By: Mikhail Anufriev; Pietro Dindo
    Abstract: We study the co-evolution of asset prices and agents' wealth in a financial market populated by an arbitrary number of heterogeneous, boundedly rational investors. We model assets' demand to be proportional to agents' wealth, so that wealth dynamics can be used as a selection device. For a general class of investment behaviors, we are able to characterize the long run market outcome, i.e.~the steady-state equilibrium values of asset return, and agents' survival. Our investigation illustrates that market forces pose certain limits on the outcome of agents' interactions even within the ``wilderness of bounded rationality''. As an application we show that our analysis provides a rigorous explanation for the results of the simulation model introduced in Levy, Levy, and Solomon (1994).
    Keywords: Heterogeneous agents, Asset pricing model, Bounded rationality, CRRA framework, Levy-Levy-Solomon model, Evolutionary Finance.
    Date: 2007–12–19
  11. By: Tomaso Duso (Humboldt University and Wissenschaftszentrum Berlin (WZB) Reichpietschufer 50, 10785 Berlin, Germany E-Mail : Tel: +49 30 2549 1403); Enrico Pennings (Dept. of Applied Economics, Erasmus University Rotterdam, P.O. Box 1738, 3000 DR Rotterdam, The Netherlands E-mail: Tel: +31 10 40 82166); Jo Seldeslachts (Wissenschaftszentrum Berlin (WZB) Reichpietschufer 50, 10785 Berlin, Germany E-Mail: Tel: +49 30 2549 1404)
    Abstract: The aim of this paper is to test the determinants of Research Joint Ventures’ (RJVs) group dynamics. We look at entry, exit and turbulence in RJVs that have been set up under the US National Cooperative Research Act, which allows for certain antitrust exemptions in order to stimulate firms to cooperate in R&D. Accounting for unobserved project characteristics and controlling for inter-RJV interactions and industry effects, the Tobit panel regressions show the importance of group and time features for an RJV’s evolution. We further identify an average RJV’s long-term equilibrium size and assess its determining factors. Ours is a first attempt to produce robust stylized facts about cooperational short- and long-term dynamics, an important but neglected dimension in research cooperations.
    Keywords: research joint ventures, dynamics, panel data
    JEL: C23 L24 O32
    Date: 2007
  12. By: Alessandro STERLACCHINI (Universita' Politecnica delle Marche, Dipartimento di Management ed Organizzazione Aziendale); Francesco SCHETTINO (Universit… Politecnica delle Marche)
    Abstract: This paper presents the results of a survey on a regional sample of Italian inventors who, over the period 1991-2005, have submitted patent applications to the European Patent Office. The inventors' features and patenting activities are mainly examined according to the size of the firms they are working in. Compared to those coming from medium-large companies, `small inventors' (encompassing employees or owners of small firms and independent inventors) have a lower educational level, ascribe less importance to codified sources of knowledge and are less productive in terms of patent applications. However, by using forward citations and other indicators, it emerges that there is no difference in the average quality of patented inventions of the two groups. Nevertheless, one third of small inventors evaluates negatively its patenting experience, while it is true for only a tiny fraction of larger patentees. On the basis of further interviews, we find that the inventors' assessments are particularly influenced by their different capabilities to enforce intellectual property rights.
    Keywords: European patents, Firm size, Intellectual property rights, Inventors, Patent quality
    JEL: L20 O31 O34
    Date: 2007–12
  13. By: Michel, Julie
    Abstract: The purpose of this paper is to participate in the discussion of the effects of outward FDI in R&D on the home country. The main possible threat for home economies is the relocation of R&D activities to foreign regions and, as a result, the loss of technological capacity. This study contributes to this issue by analysing the role played by the home country in the development of the multinational enterprises’ innovative activities. Three different elements will be evaluated: the extent of R&D activities operated outside the home country; the compared value of foreign and home R&D activities; and the role of the home country as a source of knowledge. These elements are investigated through an analysis of patents and patent citations of 71 Swiss MNEs issued between 1978 and 2006.
    Keywords: R&D; Home countries; Innovation; MNEs
    JEL: F23 O32 O31 O3
    Date: 2007–12

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