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on Innovation |
| By: | Alberto Galasso |
| Abstract: | In many industries broad cross-license agreements are considered a useful method toobtain freedom to operate and to avoid patent litigation. In this paper I study thepreviously neglected dynamic trade-off between litigating and cross-licensing that firmsface to protect their intellectual property. I present a model of bargaining with learning inwhich firms' decisions to litigate or crosslicense depend on their investments intechnology specific assets. In particular the model predicts that where firms' sunk costsare higher, their incentive to litigate and delay a cross-license agreement is lower. Inaddition, the bargaining game shows how firms with intermediate values of assetspecificity tend to engage in inefficient "persuasive litigation". Using a novel dataset onthe US semiconductor industry I obtain empirical results consistent with those suggestedby the model. Combining model intuition with some empirical figures, I evaluate possibleeffects of the currently debated patent litigation reform. |
| Keywords: | cross-license, patent litigation, bargaining, semiconductors. |
| JEL: | C78 L63 |
| Date: | 2007–07 |
| URL: | http://d.repec.org/n?u=RePEc:cep:stieip:45&r=ino |
| By: | Roberto Fontana (Department of Economics, University of Pavia and CESPRI - Bocconi University, Milan, Italy.); Lionel Nesta (Observatoire Fran»cais des Conjonctures Economiques, D¶epartement de Recherche sur l'Innovation et la Concurrence, Valbonne, France.) |
| Abstract: | We investigate the relationship between product innovation and firm survival for a sample of 121 firms in a high-tech industry. We find that location near the technological frontier is an important determinant of fim survival. Firms located near the frontier are also more likely to be acquired than to exit by failure if they cannot survive. This suggests that product location in the technology space acts as a signal of firm quality. Possessing a substantial stock of intangible capital, on the other hand, determines neither exit via failure nor exit via acquisition, although it increases the probability of surviving. |
| Keywords: | Product innovation, survival, high-tech industry |
| JEL: | L25 L63 O32 |
| Date: | 2007–12 |
| URL: | http://d.repec.org/n?u=RePEc:cri:cespri:wp208&r=ino |
| By: | Lucia Cusmano (Insubria University, Varese and CESPRI - Bocconi University, Milan, Italy.); Maria Luisa Mancusi (CESPRI - Bocconi University, Milan, Italy.); Andrea Morrison (URU - Utrecht University, Utrecht, The Netherlands and CESPRI - Bocconi University, Milan, Italy) |
| Abstract: | The paper investigates the diversified patterns of outsourcing in the Lombardy region and relates them to the probability of introducing product and process innovation. Based on a large firm-level survey, we show that outsourcing processes are strongly regionally embedded and that offshoring is still a limited phenomenon. Outsourcing strategies are shown to have a positive impact on firms’ innovation. In particular, the outsourcing of service activities contributes the most to innovation, thus suggesting that firms successfully pursue core strengthening strategies. Our econometric estimates show that both geographical and organizational proximity matter. Indeed, the positive association of services with innovation is strongly related to their regional dimension, which points toward the importance of local user-producer relationships. When outsourcing crosses national borders, keeping the outsourced activities at least loosely connected to the firm appears critical, as offshoring to non affiliated firms has a clear negative impact on innovation. |
| Keywords: | Product Innovation, Process Innovation, Outsourcing, Offshoring. |
| JEL: | D21 F23 L22 L23 O31 O32 O33 |
| Date: | 2007–12 |
| URL: | http://d.repec.org/n?u=RePEc:cri:cespri:wp210&r=ino |
| By: | Grid Thoma (Department of Mathematics and Computer Science, University of Camerino and CESPRI - Bocconi University, Milan, Italy.); Salvatore Torrisi (Department of Management, Univesity of Bologna and CESPRI - Bocconi University, Milan, Italy.) |
| Abstract: | The lack of firm-level data on innovative activities has always constrained the development of empirical studies on innovation. More recently, the availability of large datasets on indicators, such as R&D expenditures and patents, has relaxed these constrains and spurred the growth of a new wave of research. However, measuring innovation still remains a difficult task for reasons linked to the quality of available indicators and the difficulty of integrating innovation indicators to other firm-level data. As regards quality, data on R&D expenditures represent a measure of input but do not tell much about the ‘success’ of innovative activities. Moreover, especially in the case of European firms, data on R&D expenditures are often missing because reporting these expenditures is not required by accounting and fiscal regulations in some countries. An increasing number of studies have used patents counts as a measure of inventive output. However, crude patent counts are a biased indicator of inventive output because they do not account for differences in the value of patented inventions. This is the reason why innovation scholars have introduced various patent-related indicators as a measure of the ‘quality’ of the inventive output. Integrating these measures of inventive activity with other firm-level information, such as accounting and financial data, is another challenging task. A major problem in this field is represented by the difficulty of harmonizing information from different data sources. This is a relevant issue since inaccuracy in data merging and integration leads to measurement errors and biased results. An important source of measurement error arises from inaccuracies in matching data on innovators across different datasets. This study reports on a test of company names standardization and matching. Our test is based on two data sources: the PATSTAT patent database and the Amadeus accounting and financial dataset. Earlier studies have mostly relied on manual, ad-hoc methods. More recently scholars have started experimenting with automatic matching techniques. This paper contributes to this body of research by comparing two different approaches – the character-tocharacter match of standardized company names (perfect matching) and the approximate matching based on string similarity functions. Our results show that approximate matching yields substantial gains over perfect matching, in terms of frequency of positive matches, with a limited loss of precision – i.e., low rates of false matches and false negatives. |
| Keywords: | innovation statistics, patents, matching company names, software. |
| JEL: | C81 C88 O31 O34 |
| Date: | 2007–12 |
| URL: | http://d.repec.org/n?u=RePEc:cri:cespri:wp211&r=ino |
| By: | Vermeulen, P.A.M.; Bosch, F.A.J. van den; Volberda, H.W. (Erasmus Research Institute of Management (ERIM), RSM Erasmus University) |
| Abstract: | Many product innovation studies have described key determinants that should lead to successful incremental product innovation. Despite numerous studies suggesting how incremental product innovation should be successfully undertaken, many firms still struggle with this type of innovation. In this paper, we use an institutional perspective to investigate why established firms in the financial services industry struggle with their complex incremental product innovation efforts. We argue that although the impact of micro institutional forces is often overlooked in innovation studies, these forces matter for innovation success. Our study complements the existing innovation literature and provides an additional explanation why incremental product innovation is highly complex and suffers from several liabilities in established firms. Using qualitative data from the Dutch financial services sector collected over the period 1997-2002, the paper illustrates how micro institutional forces at the business unit level affect complex incremental product innovation and how the interaction of these forces delivers their impact. |
| Keywords: | complex incremental product innovation;neo-institutional theory;micro institutional forces;financial services sector |
| Date: | 2007–11–02 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:eureri:1765010713&r=ino |
| By: | Maliranta, Mika (The Research Institute of the Finnish Economy); Mohnen, Pierre (UNU-MERIT); Rouvinen, Petri (The Research Institute of the Finnish Economy) |
| Abstract: | An employer-employee panel is used to study whether the movement of workers across firms is a channel of unintended diffusion of R&D-generated knowledge. Somewhat surprisingly, hiring workers from others' R&D labs to one's own does not seem to be a significant spillover channel. Hiring workers previously in R&D to one's non-R&D activities, however, boosts both productivity and profitability. This is interpreted as evidence that these workers transmit knowledge that can be readily copied and implemented without much additional R&D effort. |
| Keywords: | Labor Mobility, R&D Spillovers, Profitability, Linked Employer-Employee Data |
| JEL: | D62 J24 J62 L25 O31 |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:unumer:2008005&r=ino |
| By: | Mohnen, Pierre (UNU-MERIT and University of Maastricht); Palm, Franz (University of Maastricht); Schim van der Loeff, Sybrand (University of Maastricht); Tiwari, Amaresh (University of Maastricht) |
| Abstract: | In this paper we examine the importance of financial and other obstacles to innovation in the Netherlands using statistical information from the CIS 3.5 innovation survey. We report results on the effect of these obstacles on the firms' decision to abandon, prematurely stop, seriously slow down, or not to start an innovative project. These results are compared with those from other studies in the Netherlands and other countries. We end with a discussion of policy measures that have been taken to overcome, or at least attenuate these obstacles, such as R&D tax incentives, venture capital financing and policy mix pakages. |
| Keywords: | Financial Constraints, Innovation, Innovation Policy |
| JEL: | O38 |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:unumer:2008006&r=ino |
| By: | Czarnitzki, Dirk; Kraft, Kornelius |
| Abstract: | Knowledge spillovers to competitors are regarded as an important aspect of the innovation process. While a company possibly benefits from incoming information on successful R&D conducted by other companies, a generally high probability of leakage of knowledge in an industry will negatively affect profitability. This paper presents the results of an empirical study on the effects of outgoing and incoming spillovers on firms’ profitability. It turns out that the expected asymmetry is actually at work. In contrast to spillovers from competitors, spillovers from suppliers, customers and research institutions exert no effect. |
| Keywords: | Innovation, Spillover, Profitability |
| JEL: | L12 O31 O32 |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:6893&r=ino |
| By: | Hussinger, Katrin |
| Abstract: | Mergers and acquisitions (M&As) constitute a disruption to the working environment of the inventive labor force of the acquired company. If inventors would respond with a decline of their patent productivity or departure from the firm this can be detrimental to the innovative process within the merged entity and can be contradictory to the aims of the firm acquisition. This paper provides empirical evidence on post-merger mobility and productivity of 673 inventors employed by European acquisition targets in the years 2000 and 2001. The empirical results show that 1.) the most productive and experienced individuals stay with the merged entity; 2.) inventors that left the acquired firm are less productive in post-merger years than those that stayed with the merged entity; 3.) M&As trigger inventor mobility, but do not lead to a decline in patent productivity if compared to a control group of inventors that have not been involved in a firm acquisition. |
| Keywords: | M&As, inventor mobility and productivity |
| JEL: | C24 G34 O32 |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:6898&r=ino |
| By: | Rajneesh Narula (Department of Economics, University of Reading Business School); Grazia D. Santangelo (Facoltà di Scienze Politiche, Università degli Studi di Catania) |
| Abstract: | This paper shows empirically that in an intra-industry oligopolistic scenario the location of a firm’s innovative activities plays an important role in determining its partner selection in R&D alliances. Such a role is mainly attributed to a strategic use of R&D alliances as a means to limit knowledge flows and protect competences, rather than to promote knowledge flows. By drawing on a novel dataset matching alliances and patent data for the European ICT industry, the econometric analysis shows that partners’ prior co-location (at both national and sub-national regional level), previous ties and technological overlap matter in the choice of partner, while common nationality has a negative impact on alliance formation. |
| Keywords: | Alliances, R&D location, strategy, co-location, knowledge flows |
| JEL: | D23 F23 O18 O32 R3 |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:rdg:cibswp:cibs-wp2007-01&r=ino |