nep-ino New Economics Papers
on Innovation
Issue of 2008‒05‒31
fifteen papers chosen by
Steffen Lippert
Massey University Department of Commerce

  1. Government Sponsored versus Private Venture Capital: Canadian Evidence By James A. Brander; Edward J. Egan; Thomas F. Hellmann
  2. On The Stability of Research Joint Ventures: Implications for Collusion By Tomaso Duso,; Enrico Pennings; Jo Seldeslachts
  3. Innovators and the Diversity of Innovation Systems By Uwe Cantner; Andreas Meder
  4. Measuring the Returns of Research and Development: An Empirical Study of the German Manufacturing Sector over 45 Years By Guenter Lang
  5. Interaction Structures in Local Innovation Systems By Uwe Cantner; Holger Graf
  6. Local Innovation Systems and Benchmarking By Uwe Cantner
  7. The impact of network structure on knowledge transfer: An application of social network analysis in the context of regional innovation networks By Michael Fritsch; Martina Kauffeld-Monz
  8. Congestion at the floating road? Negotiation in networked innovation By Soekijad, M.; Walschots, J.; Huysman, M.
  9. The Impact of Continuous Training on a Firm’s Innovations By Stefan Bauernschuster; Oliver Falck; Stephan Heblich
  10. Innovator networks and regional knowledge base By Uwe Cantner; Andreas Meder; Anne ter Wal
  11. What do Scientists Want: Money or Fame? By Devrim Göktepe; Prashanth Mahagaonkar
  12. A Theoretical Framework for Understanding University Inventors and Patenting By Devrim Göktepe
  13. Technology transfer offices and university patenting - a review By Sidonia von Ledebur
  14. Knowledge Economics role in explaining growth and innovation By Khumalo, Bhekuzulu
  15. Forever Minus a Day? Theory and Empirics of Optimal Copyright Term By Pollock, Rufus

  1. By: James A. Brander; Edward J. Egan; Thomas F. Hellmann
    Abstract: This paper investigates the relative performance of enterprises backed by government-sponsored venture capitalists and private venture capitalists. While previous studies focus mainly on investor returns, this paper focuses on a broader set of public policy objectives, including value-creation, innovation, and competition. A number of novel data-collection methods, including web-crawlers, are used to assemble a near-comprehensive data set of Canadian venture-capital backed enterprises. The results indicate that enterprises financed by government-sponsored venture capitalists underperform on a variety of criteria, including value-creation, as measured by the likelihood and size of IPOs and M&As, and innovation, as measured by patents. It is important to understand whether such underperformance arises from a selection effect in which private venture capitalists have a higher quality threshold for investment than subsidized venture capitalists, or whether it arises from a treatment effect in which subsidized venture capitalists crowd out private investment and, in addition, provide less effective mentoring and other value-added skills. We find suggestive evidence that crowding out and less effective treatment are problems associated with government-backed venture capital. While the data does not allow for a definitive welfare analysis, the results cast some doubt on the desirability of certain government interventions in the venture capital market.
    JEL: G24 H0 O3
    Date: 2008–05
  2. By: Tomaso Duso,; Enrico Pennings; Jo Seldeslachts
    Abstract: Though there is a body of theoretical literature on research joint venture (RJV) participation facilitating collusion, empirical tests are rare. Even more so, there are few empirical tests on the general theme of collusion. This note tries to fill this gap by assuming a correspondence between the stability of research joint ventures and collusion. By using data from the U.S. National Cooperation Research Act, we show that large RJVs in concentrated industries are more stable and hence more suspect to collusion. <br> <br> <i>ZUSAMMENFASSUNG - Trotz einer Vielzahl von theoretischen Studien, die zeigen, dass Kollusion durch Forschungsallianzen erleichtert werden kann, fehlen empirische Arbeiten, die diesen Zusammenhang bestätigen. Noch erstaunlicher ist die allgemein geringe Anzahl von empirischen Untersuchungen auf dem Forschungsgebiet der Kollusion. Dieser Aufsatz versucht diese Lücke zu schließen wobei unterstellt wird, dass ein Zusammenhang zwischen der Stabilität von Joint-Ventures und der Entstehung von Kollusionen besteht. Anhand von Daten des U.S. National Cooperation Research Act zeigen wir, dass große Forschungsallianzen in stark konzentrierten Branchen stabiler und daher eher der Absprache verdächtig sind.
    Keywords: Research Joint Ventures, Product Market Collusion, Empirical Test
    JEL: L24 L44 L52
    Date: 2008–04
  3. By: Uwe Cantner (Friedrich-Schiller University, Jena, Economics Department); Andreas Meder (Friedrich-Schiller University, Jena, Economics Department)
    Abstract: This work deals with the determinants of cooperative invention and innovation within innovation systems. Several proximity dimensions are used to identify the levels on which systemic innovation activities can be observed. To disentangle the effects of different proximity dimensions a procedure is suggested to identify the relative regional impact (RRI) on cooperative invention and innovation. Applying this method to German patent data shows that there are significant differences in the RRI of German regions. These differences are related to measures of the technological relatedness of the regions knowledge bases, and over time they show a considerable path dependency.
    Keywords: proximity concepts, cooperative innovation, innovation systems
    JEL: O31 P25 Q55
    Date: 2008–05–26
  4. By: Guenter Lang (Faculty of Management Technology, The German University in Cairo)
    Abstract: Motivated by recent statistics that show significant growth in labor productivity, this paper seeks to analyze the relationship between domestic R&D, knowledge stock and productivity dynamics. Time series data of the German manufacturing industry is used to estimate a variable cost function with the stock of knowledge being dependent upon current and past R&D spending. The estimates indicate that 50 percent of the effects of R&D on the knowledge stock appear within four years. However, the rate of return on R&D are shown to be drastically declining; recent rates of return on R&D are estimated to have reached an all-time low spanning the last 45 years. Current yields of R&D are only one third compared to the sixties. In conclusion, though the productivity slowdown of the seventies seems to have been overcome, this is not attributed to R&D investments.
    Keywords: Productivity, innovation, research, development, technology, productivity slowdown
    JEL: D24 L60 O31
    Date: 2008–05
  5. By: Uwe Cantner (Friedrich-Schiller University, Jena, Economics Department); Holger Graf (Friedrich-Schiller University, Jena, Economics Department)
    Abstract: The flow of knowledge through interaction between innovative actors is central to the systemic view of innovation. We review the lite ature on interaction and innovator networks with a focus on regional aspects. To illustrate the relevance of these relations, we apply social network analysis methods to describe the evolution of the innovator network of Jena, Germany in the period from 1995 to 2001. During this period, the network is characterised by growth in the number of patents, actors and relations, with central positions of public research. The evolution is directed towards an increasing focus on core compe- tencies of the network.
    Keywords: Innovator Networks, Innovation System, R+D Cooperation. Mobility
    JEL: O31 L14 R11
    Date: 2008–05–08
  6. By: Uwe Cantner (Friedrich-Schiller University, Jena, Economics Department)
    Abstract: This paper reviews approaches used for evaluating the performance of local or regional innovation systems. This evaluation is performed by a benchmarking approach in which a frontier production function can be determined, based on a knowledge production function relating innovation inputs and innovation outputs. In analyses on the regional level and especially when acknowledging regional innovation systems those approaches have to take into account cooperative invention and innovation - the core of the innovation system approach. To make these interactive effects visible, a method is suggested to identify the relative regional impact on cooperative innovative activities.
    Keywords: benchmarking, regional innovation systems, frontier function approaches
    JEL: O3 R11 C2 C6
    Date: 2008–05–13
  7. By: Michael Fritsch (Friedrich Schiller University Jena, German Institute for Economic Research (DIW-Berlin), and Max Planck Institute of Economics, Jena, Germany); Martina Kauffeld-Monz (Institute for Urban Science and Structural Policy (IfS Berlin), Germany)
    Abstract: We analyze information and knowledge transfer in a sample of 16 German regional innovation networks with almost 300 firms and research organizations involved. The results indicate that strong ties are more beneficial for the exchange of knowledge and information than weak ties. Moreover, our results suggest that broker positions tend to be associated with social returns rather than with private benefits.
    Keywords: Regional innovation networks, R+D-collaboration, knowledge exchange, social network analysis, strong ties, knowledge brokers
    JEL: D83 D85 L14 O32
    Date: 2008–05–06
  8. By: Soekijad, M. (Vrije Universiteit Amsterdam, Faculteit der Economische Wetenschappen en Econometrie (Free University Amsterdam, Faculty of Economics Sciences, Business Administration and Economitrics); Walschots, J.; Huysman, M.
    Abstract: In this paper we develop a framework for analyzing negotiation processes in networked innovation, and apply it in infrastructure construction. The paper departs from the question: Why do technological innovative concepts sometimes emerge and diffuse while at other times they ‘congest’? An explanation is found in negotiation processes at different levels in networks, as technological innovations increasingly emerge in heterogeneous networks. We contribute to theory by focusing on the process of negotiation in networks (instead of on network structure), and by showing and explaining how negotiations can both contribute to and adjourn networked innovation processes.
    Keywords: Embeddedness; Infrastructure technology; Innovation processes; Negotiation; Networked innovation
    Date: 2008
  9. By: Stefan Bauernschuster (University of Passau); Oliver Falck (Ifo Institute for Economic Research, University of Munich); Stephan Heblich (Max Planck Institute of Economics, Jena)
    Abstract: Keeping up with rapid technological change necessitates constant innovation. Successful innovation depends on both incumbent workers’ knowledge, based on experience, and knowledge about the latest technologies, along with the skills needed to implement them. Both of these knowledge-based elements of innovation can be attained through moderate labor force turnover in combination with continuous training. Based on German micro data, we find empirical evidence in support of training leading to innovation within a multivariate regression framework. However, when instrumenting training by the existence of a union’s contract or a works council this impact disappears.
    Keywords: Innovation, training, unions, works councils
    JEL: J24 L11 O31
    Date: 2008–03
  10. By: Uwe Cantner (Friedrich-Schiller University, Jena, Economics Department); Andreas Meder (Friedrich-Schiller University, Jena, Economics Department); Anne ter Wal (Faculty of Geosciences, Utrecht University)
    Abstract: This paper concerns the regional innovation system approach. It deals with the characteristics of three regional systems, Northern Hesse, Alpes-Maritime and Jena, and focusses on each regional network of innovators. In this context the importance of the size and homogeneity of a regional pool of knowledge spillovers for those networks is analyzed. We ï¬nd evidence that an increasing regional knowledge base in combination with an increas- ing homogeneity of this knowledge base enhances the knowledge flows and the incentives for actors to interact with each other.
    Keywords: cooperation, innovator networks, complementarity of knowledge, interaction structure
    JEL: O31 P25 Q55
    Date: 2008–05–13
  11. By: Devrim Göktepe (Max Planck Institute of Economics); Prashanth Mahagaonkar (Max Planck Institute of Economics)
    Abstract: What makes scientists patent and disclose inventions to employers? Using a new dataset on Max Planck scientists, we explore their motivations to patent and/or disclose inventions. We propose that patenting need not be used for monetary benefits. Scientists value reputation as important use patenting and disclosures as a signal to gain it. We find that it is not monetary benefits that drive patenting and disclosures but expectation of reputation. We also find that experience with the employer matters for disclosure of inventions. This may imply that patents are indeed used as information transfer mechanisms with prime motivation being reputation.
    Keywords: university patenting, inventors, incentives
    JEL: B31 C12 O31 O34
    Date: 2008–04–08
  12. By: Devrim Göktepe (Max Planck Institute of Economics)
    Abstract: This paper develops theoretical standpoints to investigate and analyse university inventors and patenting activities. Although the studies on academic entrepreneurship and university patenting have substantially increased, first there have not been enough studies on individual inventors and second the current theoretical studies are not eclectic enough to capture the different factors that may explain university inventors patenting activities. The framework described here addresses this need. To accomplish this we inductively derive several factors from a substantial number of studies on university patenting and entrepreneurship, and develop these factors into a tentative framework. It is our hope that this framework is useful in future empirical research on university patenting and provides a point of departure for scientists.
    Keywords: theoretical approach, university patenting, inventors, incentives
    JEL: O31 O34 B31
    Date: 2008–04–08
  13. By: Sidonia von Ledebur (Friedrich Schiller Universität Jena, Graduate School "Economis of Innovative Change")
    Abstract: This policy paper on science-industry technology transfer has four emphases: the rationale of recent changes in German science policy, the contribution of diverse transfer channels to economic development as well as the role of IPR in that context, the differences in the institutional framework between Europe and USA regarding academic patenting, and the organisational design of technology transfer offices (TTOs). The extensive literature review highlights the importance of TTOs, the necessity of supporting manifold transfer channels, and continuous government funding of intermediaries. Important open research questions are the relative importance of transfer channels and the optimal size of TTOs.
    Keywords: science-industry links, university patenting, technology transfer offices, science policy
    JEL: O34 O33 O31
    Date: 2008–04–18
  14. By: Khumalo, Bhekuzulu
    Abstract: This paper is written to show that there is a definite model that has been developed that explains the role of innovation to economic growth. This paper is based on the theorem that was built up in the paper that I wrote in 2007 entitled “Point X and the Economics of Knowledge”, as well as the so far unpublished papers concerning the long and short term properties of knowledge. This paper shall us the short term properties of knowledge to explain the relationship between growth and Knowledge. Stuart Kauffman of the university of Calgary believes that “Conventional economic theories about growth and the evolution of future wealth may be inadequate. We need a theory and historical examination of the growth of the actual economic web and of whether, in a supracritical economy, a sufficiently high diversity of the web autocatalytically drives its own growth. Furthermore, we need to understand the mutually and collectively cross-enhancing power of complementary technologies, regulatory structure and attraction of consumers in the creation of wealth.” I say this is wrong, the paper “Point X and the Economics of Knowledge”, gives an excellent framework to answer these questions. This paper will delve to be as simple as possible.
    Keywords: Knowledge Economics; growth; innovation; short term knowledge growth; knowl; research
    JEL: A20 C02 D20 O39 O31 A10 D80
    Date: 2008–05–19
  15. By: Pollock, Rufus
    Abstract: The optimal term of copyright has been a matter for extensive debate over the last decade. Using a simple model we characterise optimal term as a function of a few key parameters. We estimate this function using a combination of new and existing data on recordings and books and find an optimal term of around fifteen years. This is substantially shorter than any current copyright term and implies that existing copyright terms are too long.
    Keywords: Copyright; Intellectual Property; Copyright Term
    JEL: O34 L10 O31
    Date: 2008–01

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