nep-ino New Economics Papers
on Innovation
Issue of 2008‒05‒24
four papers chosen by
Steffen Lippert
Massey University Department of Commerce

  1. Credit constraints and the cyclicality of R&D investment: Evidence from France By Philippe Aghion; Philippe Askenazy; Nicolas Berman; Gilbert Cette; Laurent Eymard
  2. Pharmaceutical Research Strategies By Sandra Phlippen; An Vermeersch
  3. Institutional Change and Academic Patenting: French Universities and the Innovation Act of the 1999. By Antonio Della Malva; Francesco Lissoni; Patrick Llerena
  4. Firms in Scottish High Technology Clusters: software, life sciences, microelectronics, optoelectronics and digital media – preliminary evidence and analysis on firm size, growth and optimality By Gavin C. Reid; Vandana Ujjual

  1. By: Philippe Aghion; Philippe Askenazy; Nicolas Berman; Gilbert Cette; Laurent Eymard
    Abstract: We use a French firm-level data set containing 13,000 firms over the period 1993-2004 to analyze the relationship between credit constraints and firms' R&D behavior over the business cycle. Our main results can be summarized as follows: (i) the share of R&D investment over total investment is countercyclical without credit constraints, but it becomes less countercyclical as firms face tighter credit constraints; (ii) this result is magnified for firms in sectors that depend more heavily upon external finance, or that are characterized by a low degree of asset tangibility; (iii) in more credit constrained firms, R&D investment share plummets during recessions but does not increase proportionally during upturns; (iv) average R&D investment and productivity growth are more negatively correlated with sales volatility in more credit constrained firms.
    Date: 2008
  2. By: Sandra Phlippen (Erasmus University Rotterdam); An Vermeersch (McKinsey and Company)
    Abstract: This study analyses 1400 research projects of the top 20 R&D-spending pharmaceuticals to identify the determinants of successful research projects. We provide clear evidence that externally sourced projects and projects involving biotechnologies perform better than internal projects and chemical projects, respectively. Controlling for these effects, we find that big pharma should either build a critical mass of disease area knowledge or diversify projects over different DA’s in order to obtain higher success probabilities. Projects in which a firm has built a critical mass of disease knowledge (through at least 10 projects per DA) are significantly more likely to reach clinical testing. Moreover, within large disease areas, the success probabilities of internal projects increases when a few (less than 20%) externally sourced projects are involved. We interpret this finding as knowledge spillovers from external to internal projects, as the limited number of external projects enables the same people to be involved in both external and internal research projects and apply externally generated knowledge internally.
    Keywords: research strategies; pharmaceutical industry; innovation; external collaborations; make-or-buy
    JEL: L65 L25 L21 D21 D83
    Date: 2008–03–03
  3. By: Antonio Della Malva; Francesco Lissoni; Patrick Llerena
    Abstract: Recent empirical work in the field of university-industry technology transfer has stressed the importance of IPR-related reforms and university patenting has major forces behind the success of US high-tech industry. European policy-makers have been tempted to explain the poorer technological performance of their countries with the lower propensity of their academic institutions to get engaged in patenting and commercializing their research results. As a consequence, a number of measures have been taken to promote academic awareness of IPRs, as part of more comprehensive policies in favour of academic commercialization and entrepreneurship. This paper explores university patenting, and the related policies, in France. We provide evidence that university patenting in that countries has been underestimated by policy-makers’ perceptions: French academic scientists are in fact responsible for no less than 3% of patents by French inventors at the European Patent Office. However, only 10% of academic-invented patents are owned by domestic universities, with the remainder assigned both to firms and to Public Research Organizations (PROs). We then explore the impact of the Innovation Act, passed in France in 1999. We find that the Act has significantly increased the likelihood an academic patent to be assigned to a university rather than to a business company. We also find, that the opening of a technology transfer office in a university appears to have a stronger and more significant impact than the Act on the decision of universities to retain IPRs over their scientists’ discoveries.
    JEL: L31 O31 O34
    Date: 2008
  4. By: Gavin C. Reid; Vandana Ujjual
    Abstract: This paper reports on new primary source evidence and analysis on high technology clusters in Scotland. It focuses on the following sectors: software, life sciences, microelectronics, optoelectronics, and digital media. Evidence on a postal and e-mailed questionnaire is presented and discussed under the headings of: performance, resources, collaboration & cooperation, embeddedness, and innovation. The sampled firms are characterised as being small (viz. micro-firms and SMEs), knowledge intensive (all graduate staff), research intensive (average spend on R&D three times turnover), and internationalised (mainly selling to markets beyond Europe). Preliminary statistical evidence is presented on Gibrat’s Law (independence of growth and size) and the Schumpeterian Hypothesis (scale economies in R&D). Estimates suggest a short-run equilibrium size of just 100 employees, but a long-run equilibrium size of 1000 employees. Further, to achieve the Schumpeterian effect (of marked scale economies in R&D), estimates suggest that firms have to grow to very much larger sizes of beyond 3,000 employees. We argue that the principal way of achieving the latter scale may need to be by takeovers and mergers, rather than by internally driven growth
    Keywords: High technology, Scottish firms, Gibrat’s Law, the Schumpeterian Hypothesis.
    JEL: O18 O31 O34 O38
    Date: 2008–05

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