nep-ino New Economics Papers
on Innovation
Issue of 2008‒06‒27
fifteen papers chosen by
Steffen Lippert
Massey University Department of Commerce

  1. International R&D Spillovers and Institutions By Coe, David T; Helpman, Elhanan; Hoffmaister, Alexander
  2. Business method patents and U.S. financial services By Robert M. Hunt
  3. Innovation-systems, path-dependency and policy: The co-evolution of science, technology and innovation policy and industrial structure in a small, resource-based economy By Jan Fagerberg; David Mowery; Bart Verspagen
  4. The Value of European Patents By Gambardella, Alfonso; Harhoff, Dietmar; Verspagen, Bart
  5. EU-US differences in the size of R&D intensive firms: Do they explain the overall R&D intensity gap? By Raquel Ortega-Argiles; Andries Brandsma
  6. Matrices of science and technology interactions: implications for development By Leonardo Costa Ribeiro; Ricardo Machado Ruiz; Américo Tristão Bernardes; Eduardo da Motta e Albuquerque
  7. The Technology Endowments of Spin-off Companies By E. VAN DE VELDE; B. CLARYSSE; M. WRIGHT
  8. Innovation Studies – the emergence of a new scientific field By Jan Fagerberg; Bart Verspagen
  9. Academic Patenting in Europe: New Evidence from the KEINS Database. By Francesco Lissoni; Patrick Llerena; Maureen McKelvey; Bulat Sanditov
  10. The OECD REGPAT Database: A Presentation By Stéphane Maraut; Hélène Dernis; Colin Webb; Vincenzo Spiezia; Dominique Guellec
  11. Intangible Capital and Productivity: An Exploration on a Panel of Italian Manufacturing Firms By Maria Elena Bontempi; Jacques Mairesse
  12. Technology and development: Unpacking the relationship(s) By Jan Fagerberg; Martin Srholec
  13. The Design of Permit Schemes and Environmental Innovation By Grischa Perino
  14. The Productivity Impact of R&D Investment: Evidence from European Microdata By Raquel Ortega-Argilés; Lesley Potters; Marco Vivarelli
  15. Optimal CO2 abatement and technological change. Should emission taxes start high in order to spur R&D? By Mads Greaker and Lise-Lotte Pade

  1. By: Coe, David T; Helpman, Elhanan; Hoffmaister, Alexander
    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: Institutions; Productivity; R&D; Spillovers
    JEL: O31 O40 O43
    Date: 2008–06
  2. By: Robert M. Hunt
    Abstract: A decade after the State Street decision, more than 1,000 business method patents are granted each year. Yet only one in ten are obtained by a financial institution. Most business method patents are also software patents. ; Have these patents increased innovation in financial services? To address this question the author constructs new indicators of R&D intensity based on the occupational composition of financial industries. The financial sector appears more research intensive than official statistics would suggest but less than the private economy taken as a whole. There is considerable variation across industries but little apparent trend. There does not appear to be an obvious effect from business method patents on the sector’s research intensity. ; This working paper supersedes Working Paper No. 07-21
    Keywords: Patents ; Financial services industry
    Date: 2008
  3. By: Jan Fagerberg (Centre for Technology, Innovation and Culture, University of Oslo); David Mowery (University of California, Berkeley); Bart Verspagen (Centre for Technology, Innovation and Culture, University of Oslo)
    Abstract: This paper analyses the co-evolution of science, technology and innovation policy and industrial structure in a small, resource-based economy (Norway). The contributions of the paper are threefold. First, it develops an evolutionary and historically oriented approach to the study of the development of science, technology and innovation policy based that may have wide applicability. Second, if focuses on a particular type of innovation, innovation in resource-based activities, that differs in many respects from the more commonly studied “high-tech” case and which arguably be of relevance for may present day developing countries. Third, the paper advances our understanding of the roles played by institutions and politics in innovation. Previous work on national systems of innovation has often devoted little attention to these matters, possibly because much of it examines “snapshots” of various innovation systems at a specific point in time and lacks historical depth.
    Date: 2008–06
  4. By: Gambardella, Alfonso; Harhoff, Dietmar; Verspagen, Bart
    Abstract: This paper employs data from an extensive European survey to produce one of the first systematic assessments of the private economic value of patents. The estimated mean of our patent value distribution is higher than 3 million Euros, the median is about one-tenth, and the mode is around a few thousand Euros. This is in line with previous findings about the skewed distribution of patent values. Our measure is significantly correlated with the number of patent citations, references, claims, and countries in which the patent is applied. Citations explain value as much as the other three indicators combined, and the right tail of citations is correlated with the right tail of our value measure. Yet, the four indicators only explain 2.7% of the variance of patent value. Thus, while the use of these indicators as proxies for value, particularly citations, may be justified, predictions based on these indicators carry significant noise. After using country, technology, and patent class fixed effects, we only explain 11.3% of the variation in patent value. The "measure of our ignorance" about patent value is still sizable, which calls for additional research to fill the gap.
    Keywords: intellectual property rights; patent citations; patent claims; patent references; patent value; patent value indicators; patents
    JEL: L20 O31 O32 O34
    Date: 2008–06
  5. By: Raquel Ortega-Argiles (Joint Research Centre-European Commission, IPTS Seville); Andries Brandsma (Joint Research Centre-European Commission, IPTS Seville)
    Abstract: The average firm size of the top R&D investors among US-based companies is smaller than that of the EU-based firms. Does this help to explain why the US has a greater R&D intensity, or is the higher firm size in the EU, just as its lower R&D intensity, determined by the sectors in which the top R&D investors are operating? Using data on the top-R&D investors from the 2006 EU Industrial R&D Investment Scoreboard, the size differential between R&D performers in the EU and US is more closely examined. A first observation is that, despite great differences between sectors, the overall distribution of companies' R&D investments in both economies is remarkably similar, as opposed to the distribution of the R&D/sales ratios of the same two sets of companies. The notion that size plays a role, independent of the sectoral composition of R&D, is then confirmed by regression analysis. In the US as well as in the EU, smaller sized Scoreboard companies tend to spend a larger proportion of their income from sales on R&D.
    Keywords: R&D intensity, firm size, panel data
    JEL: L11
    Date: 2008–06–18
  6. By: Leonardo Costa Ribeiro (Cedeplar-UFMG); Ricardo Machado Ruiz (Cedeplar-UFMG); Américo Tristão Bernardes (UFOP); Eduardo da Motta e Albuquerque (Cedeplar-UFMG)
    Abstract: Scientific and other non-patent references (NPRs) in patents are important tools to analyze interactions between science and technology. This paper organizes a database with 514,894 USPTO patents granted globally in 1974, 1982, 1990, 1998 and 2006. There are 165,762 patents with at least one reference to science and engineering (S&E) literature, and there are 1,375,503 references. In 2006 there are 83 countries with USPTO patent citing S&E literature. Through a lexical analysis 71.1% of this S&E literature is classified by S&E fields. These data underscore the elaboration of global and national tri-dimensional matrices (by OST technological domains, ISI science and engineering fields and number of references). Descriptive statistics investigate how science and technology linkages differ over time across countries and across levels of development. This paper highlights how the existence (or not) of a pattern of structured growth differentiates mature and immature systems of innovation.
    Keywords: science and technology linkages, stages of economic development, systems of innovation
    JEL: O O3
    Date: 2008–06
    Abstract: Innovative start-ups, including spin-offs from universities and companies, play a vital role in the development and growth of emerging, high-technology industries. Research attention has traditionally focused on the links between demographic, educational, psychological and financial influences on start-up activity and growth. The extent to which the characteristics of technology inherited from the parent, important for spin-offs, helps explain post start-up performance has been neglected. We analyse the scope and newness of the endowed technology as a predictor of post-spin-off growth for corporate and university spin-offs. Using a novel, hand-collected dataset, 48 corporate and 73 university spin-offs were identified, comprising the whole population of such spin-offs in Flanders over the period 1991-2002. We find that corporate spin-offs seem to benefit from a narrow scope of technology and a high level of newness of technology, while university spin-offs benefit from a broad scope of technology and a lower level of newness of technology. We conclude that the same choice of technology endowments may have a different impact on the spin-offs’ growth, since spin-offs start with different knowledge inheritance.
    Keywords: technology endowment, corporate spin-offs, university spin-offs
    Date: 2008–04
  8. By: Jan Fagerberg (Centre for Technology, Innovation and Culture, University of Oslo); Bart Verspagen (Centre for Technology, Innovation and Culture, University of Oslo)
    Abstract: The scholarly literature on innovation was for a long time not very voluminous. But as shown in the paper, this is now rapidly changing. New journals, professional associations and organizational units within universities focusing on innovation have also been formed. This paper explores the cognitive and organizational characteristics of this emerging field of social science and considers its prospects and challenges. The research reported in this paper is based on a web-survey in which more than one thousand scholars worldwide took part.
    Date: 2008–06
  9. By: Francesco Lissoni; Patrick Llerena; Maureen McKelvey; Bulat Sanditov
    Abstract: The paper provides summary statistics from the KEINS database on academic patenting in France, Italy, and Sweden. It shows that academic scientists in those countries have signed many more patents than previously estimated. This re‐evaluation of academic patenting comes by considering all patents signed by academic scientists active in 2004, both those assigned to universities and the many more held by business companies, governmental organizations, and public laboratories. Specific institutional features of the university and research systems in the three countries contribute to explain these ownership patterns, which are remarkably different from those observed in the US. In the light of these new data, European universities’ contribution to domestic patenting appears not to be much less intense than that of their US counterparts.
    Date: 2008
  10. By: Stéphane Maraut; Hélène Dernis; Colin Webb; Vincenzo Spiezia; Dominique Guellec
    Abstract: The OECD REGPAT database presents patent data that have been linked to regions according to the addresses of the applicants and inventors. The data have been 'regionalised' at a very detailed level so that more than 2 000 regions are covered across OECD countries. REGPAT allows patent data to be used in connection with other regional data such as GDP or labour force statistics, and other patent-based information such as citations, technical fields and patent holder's characteristics (industry, university, etc.), thus providing researchers with the means to develop a rich set of new indicators and undertake a broad range of analyses to address issues relating to the regional dimension of innovation. By making regionalised patent data available to all students interested in the field, the OECD aims to stimulate research and contribute to a better understanding of the regional dimension of innovation. In addition, the methodology used for the construction of REGPAT is published, to give users the opportunity to suggest modifications and thus contribute to improvements in the quality of REGPAT. The full technical description of the REGPAT database as accessible to users is provided in annex. Patent data provide unique insights into the outcome and characteristics of inventive activities, including at regional level. They have limitations however, like all data sources, and should be handled with methodological care. <P>Base de données REGPAT de l’OCDE : Présentation <BR>La base REGPAT de l'OCDE présente des données relatives aux brevets appariées à des régions en fonction des adresses des demandeurs et inventeurs. Le niveau de détail de cette « régionalisation » est très poussé, de sorte que plus de 2 000 régions de toute la zone OCDE sont couvertes. REGPAT permet d'utiliser les données concernant les brevets en relation avec d'autres données régionales telles que le PIB ou les statistiques sur la main-d'oeuvre, et avec d'autres informations propres aux brevets - citations, domaines techniques, caractéristiques du détenteur du brevet (secteur d'activité, université, etc.) ; les chercheurs peuvent ainsi agencer à leur guise un ensemble élargi d'indicateurs nouveaux et se livrer à des analyses très diverses portant sur les questions liées à la dimension régionale de l'innovation. En mettant des données régionalisées sur les brevets à la disposition de tous les analystes qui s'intéressent à ce domaine, l'OCDE a pour objectif de stimuler la recherche et de concourir à mieux faire appréhender cette dimension. Par ailleurs, la méthodologie présidant à la construction de REGPAT est rendue publique, de sorte que ses utilisateurs peuvent suggérer des modifications et, par là, contribuer à son amélioration qualitative. La description technique complète de la base telle qu'y accède l'usager est fournie en annexe. Les données relatives aux brevets livrent des enseignements sans équivalents sur les résultats et les caractéristiques des activités d'invention, y compris au niveau régional. Comme toutes les sources de données, elles comportent toutefois des limites et doivent être manipulées avec les précautions méthodologiques d'usage.
    Date: 2008–06–03
  11. By: Maria Elena Bontempi; Jacques Mairesse
    Abstract: The paper examines the size and productivity of total intangible capital relative to total tangible capital for a large panel of Italian Manufacturing firms. In the analysis, we decompose total intangibles in two different ways: in intangibles expensed in firms' current accounts (as usually considered in empirical studies) versus intangible capitalized in firms' balance sheets (usually not considered); and in "intellectual capital" (i.e. R&D expenditures, and patenting and related costs) versus "customer capital" (i.e., advertising expenditure, and trademarks and related costs). We systematically assess the robustness of our results by using different specifications of the production functions implying different elasticities of substitution between tangible and intangible capital, and comparing different panel data estimates. Our results underscore that firms' accounting information on intangible investments is genuinely informative, showing that intangible capital and its different components are at least as productive as tangible capital.
    JEL: C23 C52 D24
    Date: 2008–06
  12. By: Jan Fagerberg (Centre for Technology, Innovation and Culture, University of Oslo); Martin Srholec (Centre for Technology, Innovation and Culture, University of Oslo)
    Abstract: Innovation is, as Joseph Schumpeter once pointed out, above all a combinatory phenomenon. Success in accessing knowledge and exploiting it in a way that is beneficial for development depends on the ability to combine many different skills and resources, of which many will be external to the firm. Arguably, political choices, past as well as present, the quality of governance and the business environment, availability of skills, finance and broader social and cultural characteristics may all have a say for how well this combinatory dynamics works. Based on a review of the literature on how technological, economic and social factors interact in the development process this paper sets out to explore these interrelationships empirically. The results, based on data for 75 countries on different levels of development, suggest that there is a strong correlation between technological capability, (innovation-friendly) governance and social capital, confirming, it is suggested, the important role played by politics and deeper social and cultural factors for technological catch-up (or lack of such). This contrasts with the role played by for instance openness to trade, FDI, etc., which - according to the results presented here - hardly correlates with anything.
    Date: 2008–06
  13. By: Grischa Perino (University of Heidelberg, Department of Economics)
    Abstract: Most real world emission permit schemes are in effect hybrid instruments that feature both quantity and price controls. While the effects of price bounds are well understood for issues such as uncertain abatement costs it has not been investigated how such bounds affect time-consistency of environmental regulation and research incentives. The present paper analyzes these issues for two types of innovation. While price bounds increase static efficiency they reduce incentives to innovate. Commitment on details of a scheme’s design might be necessary to avoid the latter.
    Keywords: Environmental Regulation, Hybrid Instruments, Innovation, Time-inconsistency
    JEL: Q55 H23 O33 L51
    Date: 2008–06
  14. By: Raquel Ortega-Argilés (Joint Research Centre-European Commission, IPTS Seville); Lesley Potters (Joint Research Centre-European Commission and Utrecht School of Economics); Marco Vivarelli (Joint Research Centre-European Commission, Catholic University, Milan and Max Planck Institute of Economics, Jena)
    Abstract: The aim of this study is to investigate the relationship between a firm's R&D activities and its productivity using a unique micro data panel dataset and looking at sectoral peculiarities which may emerge; more specifically, we used an unbalanced longitudinal database consisting of 532 top European R&D investors over the six-year period 2000-2005. Our main findings can be summarised along the following lines: knowledge stock has a significant positive impact on a firm's productivity, with an overall elasticity of about 0.125; this general result is largely consistent with previous literature in terms of the sign, the significance and the estimated magnitude of the relevant coefficient. More interestingly, the coefficient increases monotonically when we move from the low-tech to the medium-high and high-tech sectors, ranging from a minimum of 0.05/0.07 to a maximum of 0.16/0.18. This outcome, in contrast with recently-renewed acceptance of low-tech sectors as a preferred target of R&D investment, suggests that firms in high-tech sectors are still far ahead in terms of the impact on productivity of their R&D investments, at least as regards top European R&D investors.
    Keywords: R&D, productivity, knowledge stock, panel data, perpetual inventory method
    JEL: O33
    Date: 2008–06–18
  15. By: Mads Greaker and Lise-Lotte Pade (Statistics Norway)
    Abstract: Many European politicians argue that since technological development is needed to solve the climate problem, the EU should take the lead and set tougher emission targets than what is required by the Kyoto protocol. Moreover, emission trading with other countries outside EU should be limited so as to keep emission quota prices high. However, the policy of spurring R&D by setting high emission taxes today is not suggested by the literature on climate change and R&D. In this paper we investigate this result further by modeling innovation activity explicitly. In our model both the amount of R&D and the amount of CO2 abatement are decided in a decentralized way by the market as a response to an emission tax. Moreover, we introduce three distinct failures in the market for new innovations; monopolistic pricing behavior, insufficient patent protection and dynamic knowledge spillovers. Our findings suggest that governments should under some circumstances set a higher carbon tax today if we have technological change driven by R&D than if we have pure exogenous technological change. Based on numerical simulations these circumstances are i) "a standing on shoulders" type of externality in R&D or ii) weak patent protection.
    Keywords: Climate policy; technological change; emission tax
    JEL: Q28 D21 C68
    Date: 2008–06

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.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.