nep-ino New Economics Papers
on Innovation
Issue of 2008‒06‒21
ten papers chosen by
Steffen Lippert
Massey University Department of Commerce

  1. Cumulative Innovation, Experimentation and the Hold-Up Problem By Pollock, R.
  2. Open Source Software, Closed Source Software or Both : Impacts on Industry Growth and the Role of Intellectual Property Rights By Sebastian von Engelhardt; Sushmita Swaminathan
  3. Post Merger Innovative Patterns in Small and Medium Firms By Elena Cefis; Mihaela-Livia Ghita
  4. International R&D Spillovers and Institutions By David T. Coe; Elhanan Helpman; Alexander W. Hoffmaister
  5. Horizontal Mergers and Acquisitions with Endogenous Efficiency Gains By Christos Cabolis; Constantine Manasakis; Emmanuel Petrakis
  6. Assessing the assignation of public subsidies: Do the experts choose the most efficient R&D projects? By Néstor Duch-Brown; José García-Quevedo; Daniel Montolio
  7. Do Tighter Intellectual Property Rights Raise High-Tech Exports to the Developing World? By Olena Ivus
  8. Knowledge, understanding and the dynamics of medical innovation By Ramlogan, Ronnie; Consoli, Davide
  9. The Relationship between Technology, Innovation, and Firm Performance: Empirical Evidence on E-Business in Europe By Koellinger, Ph.D
  10. How does University Collaboration Contribute to Successful R&D Management? By Broström, Anders; Lööf, Hans

  1. By: Pollock, R.
    Abstract: Extending the basic model of two-stage cumulative innovation with asymmetric information to include `experimentation' by second-stage rms, we nd that the costs of a strong (versus weak) intellectual property (IP) regime may be substantially increased. In addition, these costs increase as experimentation becomes cheaper and as the differential between high and low value second-stage innovations grows, with the result that a weak IP regime is more likely to be optimal. Thus, technological change which reduces the cost of encountering and trialling new `ideas' implies a reduction in the socially optimal level of IP rights such as patent and copyright.
    Keywords: Cumulative Innovation, Hold-Up, Experimentation, Intellectual Property.
    JEL: K3 L5 O3
    Date: 2008–04
  2. By: Sebastian von Engelhardt; Sushmita Swaminathan
    Abstract: There is considerable debate regarding the use of intellectual property rights (IPR) to spur innovation in the software industry. In this paper we focus on the choice of intellectual property right regimes and industry growth. We begin by developing a growth optimal mixture of open source and closed source software. This optimal scenario is then used as a basis to examine the co-existence of open and closed source software within various institutional frameworks ranging from no protection, copyright to patent protection. Such an analysis is beneficial as it enables an objective comparison of the three scenarios under the assumption that both copyrights and patents serve the purpose for which they were designed. Our analysis, based on the existence or absence of spillovers, confirms that a co-existence is growth optimal for the industry. Further, we find that the move from no protection to copyright protection increases the maximum growth rate. However, despite assuming properly functioning patents, the benefits of moving from copyright to patent protection are less clear.
    Keywords: Intellectual Property rights, software, open source, spillovers, co-existence, innovative growth
    JEL: L17 L86 O31 O34 O41 O43
    Date: 2008
  3. By: Elena Cefis; Mihaela-Livia Ghita
    Abstract: This paper investigates whether involvement in mergers and acquisitions (M&As) triggers distinct patterns of innovative behaviour across firms situated at different points on the firm size distribution. Firms use more and more M&As as mechanisms to bridge the gap between where they are and what they want to achieve in terms of innovation and performance. We explore the different impact of M&A activity on the likelihood that firms begin to innovate using an unique dataset combining innovation and economic firm-level data from two different sources: the 4 waves of Community Innovation Survey and the Business Register, for the Dutch manufacturing sector. The analysis is carried out at different size classes. The results show that both new entry and persistence in innovative activities are fostered by M&A involvement. Medium firms are the ones showing the highest probabilities of entering /persisting in innovative activities after M&As. For small firms, M&As do not ease the overcome of “the innovative threshold”; on the contrary they seem to increase the probability of exiting innovative status in the post-merger period.
    Keywords: Mergers and acquisitions; innovation; small and medium enterprises; transition probabilities; probit models
    JEL: L11 L25 D21 C14
    Date: 2008–05
  4. By: David T. Coe; Elhanan Helpman; Alexander W. Hoffmaister
    Abstract: The empirical analysis in "International R&D Spillovers" (Coe and Helpman, 1995) is first revisited by applying modern panel cointegration estimation techniques to an expanded data set that we have constructed for the purpose of this study. The new estimates confirm the key results reported in Coe and Helpman about the impact of domestic and foreign R&D capital stocks on TFP. In addition, we show that domestic and foreign R&D capital stocks have measurable impacts on TFP even after controlling for the impact of human capital. Furthermore, we extend the analysis to include institutional variables, such as legal origin and patent protection, in order to allow for parameter heterogeneity based on a country's institutional characteristics. The results suggest that institutional differences are important determinants of total factor productivity and that they impact the degree of R&D spillovers.
    Keywords: Working Paper , Productivity , Investment , Foreign investment , Capital , Economic models ,
    Date: 2008–04–28
  5. By: Christos Cabolis (ALBA Graduate Business School); Constantine Manasakis (Department of Economics, University of Crete, Greece); Emmanuel Petrakis (Department of Economics, University of Crete, Greece)
    Abstract: We examine how the strategic long-run decisions, such as cost-reducing R&D investments, prior to the decision for integration; create endogenous efficiency gains that make a horizontal integration profitable. The "merger" and the "acquisition" are distinguished as different modes of horizontal integration, with respect to both incentives and equilibrium outcomes. We show that firms' incentives for integration depend on the magnitude of the cost efficiencies that R&D investments give rise to and the rule of sharing of the integrated entity's profits across participants. The welfare effects of horizontal integrations are also discussed.
    Keywords: Horizontal mergers and acquisitions; Processes Innovations; Endogenous efficiency gains.
    JEL: C72 G34 O31
    Date: 2008–06–18
  6. By: Néstor Duch-Brown (IEB & Universitat de Barcelona); José García-Quevedo (IEB & Universitat de Barcelona); Daniel Montolio (IEB & Universitat de Barcelona)
    Abstract: The implementation of public programs to support business R&D projects requires the establishment of a selection process. This selection process faces various difficulties, which include the measurement of the impact of the R&D projects as well as selection process optimization among projects with multiple, and sometimes incomparable, performance indicators. To this end, public agencies generally use the peer review method, which, while presenting some advantages, also demonstrates significant drawbacks. Private firms, on the other hand, tend toward more quantitative methods, such as Data Envelopment Analysis (DEA), in their pursuit of R&D investment optimization. In this paper, the performance of a public agency peer review method of project selection is compared with an alternative DEA method.
    Keywords: Subsidies, R&D, DEA, Multi Criteria Decision Analysis, “peer review”.
    JEL: O32 C61 H25
    Date: 2008
  7. By: Olena Ivus
    Abstract: Despite over 20 years of debate, the TRIPs agreement remains very contentious. This paper evaluates the impact of tightening intellectual property rights (IPRs) in developing countries on developed countries' exports over the 1962-2000 period. Colonial origin is used to isolate exogenous variation in IPRs. The impact is then identified by examining the across industry difference in sensitivity to IPRs. The pre-TRIPs and post-TRIPs periods are examined separately. I find that for each 1% increase in the strength of IPRs, under the TRIPs agreement, developed countries' high-tech exports increased by 1.3% which amounts to additional exports of approximately $680 million per year (1994 US dollars).
    Date: 2008–01–12
  8. By: Ramlogan, Ronnie; Consoli, Davide
    Abstract: This paper investigates the processes by which scientific knowledge is created and legitimized. It focuses on scientific developments in a branch of medicine and explores the pathways through which the growth of knowledge enables advances in medical science and in clinical practice. This work draws conceptually on evolutionary approaches to technological change. The empirical part presents a longitudinal analysis of a database of scientific publications in the field of ophthalmology over a period of 50 years. Such an exercise allows us to identify pathways of shared understanding on a disease area, and to map out distinctive trajectories followed by the ophthalmology research community. The paper also contributes to general understanding of the innovation process by supporting the notion that knowledge coordination is a distributed process that cuts across and connects complementary areas of expertise.
    JEL: O33 D83 O31
    Date: 2008–04–01
  9. By: Koellinger, Ph.D (Erasmus Research Institute of Management (ERIM), RSM Erasmus University)
    Abstract: This article analyzes the relationship between the usage of Internet-based technologies, different types of innovation, and performance at the firm level. Data for the empirical investigation originates from a sample of 7,302 European enterprises. The empirical results show that Internet-based technologies were an important enabler of innovation in the year 2003. It was found that all studied types of innovation, including Internet-enabled and non-Internet-enabled product or process innovations, are positively associated with turnover and employment growth. Firms that rely on Internet-enabled innovations are at least as likely to grow as firms that rely on non-Internet-enabled innovations. Finally, it was found that innovative activity is not necessarily associated with higher profitability. Possible reasons for this and implications are discussed.
    Keywords: information technology;e-business;innovation;firm performance;profitability
    Date: 2008–05–26
  10. By: Broström, Anders (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology); Lööf, Hans (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology)
    Abstract: The issue of through what processes R&D collaboration with universities affects a firms’ innovation performance remains under-researched. In particular, university relationships have not been fully integrated in the open innovation framework. This study explores the relationship between firms’ collaboration with universities and their capabilities for innovation, as perceived by R&D managers. Drawing on a series of interviews with R&D managers at 45 randomly selected firms collaborating with two research universities in Sweden, we explicitly recognise mechanisms through which university relationships contribute to successful R&D management.
    Keywords: University-Industry Link; Innovation; Technology transfer; R&D; Research collaboration
    JEL: I23 O31 O32
    Date: 2008–06–09

This nep-ino issue is ©2008 by Steffen Lippert. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
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