|
on Innovation |
|
Issue of 2008‒11‒04
fifteen papers chosen by Steffen Lippert Massey University Department of Commerce |
| By: | Michael Rothgang |
| Abstract: | The EU Barcelona target assumes a close causal relationship between corporate R&D, the competitiveness of business firms and the economic performance of industrial countries. Testing this hypothesis, this paper contrasts innovation and production activities in four research-intensive manufacturing sectors (chemicals and pharmaceuticals, motor vehicles, machinery, and electrical engineering). Starting point are observed long-term changes in worldwide value added of the manufacturing sector.The empirical analysis is based on a unique survey of R&D-intensive business firms in Germany and 50 personal interviews in large industrial companies. The results show that there is no simple connection between R&D and competitiveness. Moreover, the likely consequences of promoting R&D differ substantially between industries. |
| Keywords: | Sectoral innovation systems, corporate R&D Strategies, chemicals and pharmaceuticals, machinery, electrical engineering,motor vehicles, bazaar effect |
| JEL: | L6 O23 R32 |
| Date: | 2008–08 |
| URL: | http://d.repec.org/n?u=RePEc:rwi:repape:0059&r=ino |
| By: | Klaus M. Schmidt; (Department of Economics, University of Munich, Ludwigstrasse 28, D-80539 Muenchen, Germany; ) |
| Abstract: | Many high technology goods are based on standards that require access to several patents that are owned by different IP holders. We investigate the royalties chosen by IP holders under different market structures. Vertical integration of an IP holder and a downstream producer solves the double mark-up problem between these firms. Nevertheless, it may raise royalty rates and reduce output as compared to non-integration. Horizontal integration of IP holders (or a patent pool) solves the complements problem but not the double mark-up problem. Vertical integration discourages entry and reduces innovation incentives, while horizontal integration always encourages entry and innovation. |
| Keywords: | IP rights, complementary patents, standards, licensing, patent pool, vertical integration |
| JEL: | L15 O31 L24 O32 K11 |
| Date: | 2008–09 |
| URL: | http://d.repec.org/n?u=RePEc:trf:wpaper:249&r=ino |
| By: | Gaetan de Rassenfosse; Bruno van Pottelsberghe de la Potterie |
| Abstract: | This paper investigates whether patent fee policies are a potential factor underlying the boom in patent applications observed in major patent offices. We provide the first panel-based evidence suggesting that fees affect the demand for patents in three major patent offices (EPO, USPTO and JPO), with a price elasticity of about -0.4 (similar to that of the residential demand for oil or water). The laxity of fee policies adopted by patent offices over the past 25 years therefore contributed, to a significant extent, to the rising propensity to patent observed since the mid-nineties. This is especially true at the European Patent Office, which has dramatically decreased its fees since the mid-1990s. |
| Keywords: | patent cost, patenting fees, price elasticity, patent systems, propensity to patent |
| JEL: | O34 O30 O31 O38 O57 |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:eca:wpaper:2008_031&r=ino |
| By: | Gautier Duflos (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Panthéon-Sorbonne - Paris I, EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris); Etienne Pfister (BETA-Règles - Université de Nancy II) |
| Abstract: | This article analyzes the individual determinants of acquisition activity and target choices in the pharmaceutical industry over the period 1978-2002. The "innovation gap" hypothesis states that acquiring firms lack promising drug compounds and acquire firms with more promising drug prospects. A duration model implemented over a panel of more than 400 firms relates the probabilities of being an purchaser or a target to financial, R&D ant patent data to investigate this explanation more deeply. Results show that purchasers are firms with a lower Tobin's Q and decreasing sales, which could indicate that acquisitions are used to compensate for low internal growth prospects. Firms with a higher proportion of radical patents in their portfolio, especially in pharmaceutical and biothechnological patent classes, face a higher probability of being targeted, indicating that acquiring firms are indeed searching for innovative competencies. However, acquiring firms also present a significant absorptive capacity : their R&D investment increases in the year preceding the operation and their patent stock is larger and more diversified than for non-acquiring firms. Finally, we observe that over the last ten years of the sample period, firms have paid a greater attention to the size of the target's portfolio. |
| Keywords: | M&A, pharmaceutical, innovations, patent citations. |
| Date: | 2008–09 |
| URL: | http://d.repec.org/n?u=RePEc:hal:paris1:halshs-00331211_v1&r=ino |
| By: | Jeroen de Jong; Eric von Hippel |
| Abstract: | The contribution of this paper is threefold. Firstly, we measure the incidence of user innovation in a broad sample of firms. Previous work has collected repeated evidence on the frequency of user innovation in a variety of industries and products, but so far its incidence has not been demonstrated in samples of larger business populations. Secondly, we assess if current innovation surveys adequately capture user innovation. Surveys such as the CIS (Community Innovation Survey) take a producer perspective and seem to overlook that in practice many innovation efforts are done by users to satisfy their process needs. Thirdly, we explore to what extent user innovations are transferred to producer firms. In doing so we assess if user innovation is marked by voluntary spillovers which is a strong argument to justify policies for user innovation. Drawing on survey data of 2 416 SMEs in the Netherlands, we find that 21% of all SMEs engage in user innovation, i.e. they develop and/or significantly modify existing techniques, equipment or software to satisfy their own process-related needs. We also find that user innovation is remains largely invisible in the current innovation surveys. Next, in a survey of technology-based small firms in the Netherlands we identified 364 specific user innovations. We found that users tend not to patent or protect their innovations, and that one out of four is transferred to producers. The data suggest a significant feedstock of voluntary knowledge spillovers from users to producer firms. We conclude that future innovation surveys should explicitly capture user innovation, and develop some recommendations to guide this effort. We also plea for more research on policies for user innovation. |
| Date: | 2008–10–21 |
| URL: | http://d.repec.org/n?u=RePEc:eim:papers:h200814&r=ino |
| By: | Fabio Mariani (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Panthéon-Sorbonne - Paris I) |
| Abstract: | This paper aims at explaining why countries with comparable levels of education still experience notable differences in terms of R&D and innovation. High-skilled migration, ultimately linked to differences in R&D costs, might be responsible for the persistence of such a gap. In fact, in a model where human capital accumulation and innovation are strategic complements, we show that allowing labor outflows may strengthen educational incentives in the lagging economy if migration is probabilistic in nature, but at the same time reduces the share of innovative production. Income (growth) might be consequently affected, and a positive migration chance is very unlikely to act as a substitute for educational subsidies. |
| Keywords: | Innovation; Education; Brain drain. |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:hal:paris1:halshs-00308746_v1&r=ino |
| By: | Oliviero A. Carboni |
| Abstract: | This paper uses a comprehensive firm level data set for the manufacturing sector in Italy to investigate the effect of government support on privately financed R&D expenditure. Estimates from a two-step equation model suggest that public assistance has a positive effect on private R&D investment. A non parametric matching procedure is also used to investigate the same effect. Here again the results suggest that the recipient firms achieve more private R&D than they would have without public support. The paper also examines whether public funding effects the financial sources available for R&D and finds that grants encourage credit financing for R&D. The effects on the use of internal sources are not conclusive. |
| Keywords: | Applied Econometrics, matching, public subsidies, R&D investment |
| JEL: | C24 L10 O30 O31 O38 |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:cns:cnscwp:200815&r=ino |
| By: | Giammario Impullitti |
| Abstract: | The geographical distribution of R&D investment changes dramatically in the 1970s and 1980s. In the early 1970s U.S. firms are the uncontested world leaders in R&D investment in most manufacturing sectors. Later, led by Japan and Europe, foreign firms start challenging American R&D leadership in many sectors of the economy. In this period of increasing competition we also observe a substantial increase in the U.S. R&D subsidy. In a version of the multi-country quality ladder growth model I study the effects of foreign R&D competition on domestic welfare and on the optimal R&D subsidy. I build a new empirical index of international R&D rivalry that can be used to perform quantitative analysis in this type of frameworks. In a calibrated version of the model I focus on the period 1979-1991 and perform the following quantitative exercises: first, I evaluate the quantitative effects of the observed increase in foreign R&D competition on U.S. welfare. I find that the positive growth effect and the negative business-stealing effect of foreign competition on U.S. welfare substantially balance each other, and the overall welfare effect of competition is negligible - less then 1 percent of per-capita consumption. Moreover, using estimates of the effective U.S. R&D subsidy rate, I compute the distance from optimality of the observed subsidy at each level of competition. I find that international competition increases the optimal subsidy and that, surprisingly, the U.S. subsidy observed in the data is fairly close to the optimal subsidy. |
| Date: | 2008–06 |
| URL: | http://d.repec.org/n?u=RePEc:fda:fdacee:15-08&r=ino |
| By: | Ernest Miguélez (Faculty of Economics, University of Barcelona); Rosina Moreno (Faculty of Economics, University of Barcelona); Manuel Artís (Faculty of Economics, University of Barcelona) |
| Abstract: | In this paper we seek to verify the hypothesis that trust and cooperation between individuals, and between them and public institutions, can encourage technological innovation and the adoption of knowledge. Additionally, we test the extent to which the interaction of social capital with human capital and R&D expenditures improve their effect on a region’s ability to innovate. Our empirical evidence is taken from the Spanish regions and employs a knowledge production function and longitudinal count data models. Our results suggest that social capital correlates positively with innovation. Further, our analysis reveals a powerful interaction between human and social capital in the production of knowledge, whilst the complementarity with R&D efforts would seem less clear. |
| Keywords: | social capital, human capital, innovation, complementarities. |
| Date: | 2008–10 |
| URL: | http://d.repec.org/n?u=RePEc:ira:wpaper:200813&r=ino |
| By: | Malwina Mejer; Bruno van Pottelsberghe de la Potterie |
| Abstract: | This paper analyses the consequences for the European Patent System (EPS) of the recently ratified London Agreement (LA), which aims to reduce the translation requirements for patent validation procedures in 15 out of 34 national patent offices. The simulations suggest that the cost of patenting has been reduced by 20 to 30 percent since the enforcement of the LA. With an average translation cost saving of €3,600 per patent, the total savings for the business sector amount to about €220 millions. The fee elasticity of patents being about -0.4, one may expect an increase in patent filings of eight to 12 percent. Despite the translation cost savings, the relative cost of a European patent validated in six (thirteen) countries is still at least five (seven) times higher than in the United States. |
| Keywords: | European patent system, London Agreement, patent fees, translation costs, fee elasticity |
| JEL: | P14 P51 O34 |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:eca:wpaper:2008_032&r=ino |
| By: | David Encaoua (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Panthéon-Sorbonne - Paris I); Yassine Lefouili (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Panthéon-Sorbonne - Paris I) |
| Abstract: | In this paper we examine the implications of uncertainty over patent validity on patentholders' licensing strategies. Two licensing mechanisms are examined: per-unit royalty and up-front fee.We provide conditions under which uncertain patents are licensed in order to avoid patent litigation. It is shown that while it is possible for the patentholder to reap som e "extra profit" by selling an uncertain patent under the pure per-unit royalty regime, the opportunity to do so does not exist under a pure up-front fee regime. We also establish that the relatively high bargaining power the licensor has even when its patent is weak can be reduced if the patentholder cannot refuse to license an unsucessful challenger or if collective challenges are allowed for. Furthermore we show that the patentee may prefer to license through the per-unit royalty mechanism rather than the fixed fee mechanism, especially if its patent is weak. This finding contradicts the traditional theoretical result that fixed fee licensing dominates royalty rate licensing from the patentholder's perspective. |
| Date: | 2008–07 |
| URL: | http://d.repec.org/n?u=RePEc:hal:paris1:hal-00318208_v1&r=ino |
| By: | Klaus Desmet (Universidad Carlos III); Stephen L. Parente (University of Illinois) |
| Abstract: | This paper proposes a novel mechanism whereby larger markets increase competition and facilitate process innovation. Larger markets, in the sense of more people or more open trade, support a larger variety of goods, resulting in a more crowded product space. This raises the price elasticity of demand and lowers mark-ups. Firms, therefore, become larger to break even. This facilitates process innovation as larger firms can amortize R&D costs over more goods. We demonstrate this mechanism in a standard model of process and product innovation. In doing so, we question some important results in the new trade and endogenous growth literatures. |
| Keywords: | trade; population; price elasticity; competition; innovation; firm-size; scale effects; Dixit-Stiglitz; Hotelling |
| JEL: | F12 L11 O31 |
| Date: | 2008–10–27 |
| URL: | http://d.repec.org/n?u=RePEc:imd:wpaper:wp2008-10&r=ino |
| By: | Uwe Cantner (Department of Economics, Friedrich-Schiller-University); Andreas Meder (Department of Economics, Friedrich-Schiller-University); Tina Wolf (Department of Economics, Friedrich-Schiller-University) |
| Abstract: | This paper investigates the possible presence of three problems in regional innovation systems (RIS): intermediation, reciprocity and compatibility. Based on ï¬rm data gathered for three different regions, Northern Hesse, Jena and Sophia Antipolis, we can show that a low propensity to cooperate in a RIS is related to poorly performing intermediaries and a low complementarity with the regional knowledge base. The issue of trust in cooperating tends to have no effect on the propensity to cooperate. However, it is a main determinant of failed cooperation projects. |
| Keywords: | regional innovation systems, reciprocity, intermediation, complementarity, cooperation |
| JEL: | D81 O18 P25 |
| Date: | 2008–10–28 |
| URL: | http://d.repec.org/n?u=RePEc:jrp:jrpwrp:2008-081&r=ino |
| By: | Jan Gunnarsson (Department of Economics, University of Copenhagen); Torsten Wallin |
| Abstract: | This article examines how the birth and the development of regional systems of innovation are connected with economic selection and points to implications for regional-level policies. The research questions are explored using an evolutionary model, which emphasises geographical spaces and production of intermediate goods. In particular we are concerned with how cooperative behaviour of technology producers is affected by the need to protect technological secrecies and of being financially constrained by forms demanding innovative input. Based on the theoretical model, we provide an analysis using computer simulations. The primary fidings are, firstly, that the model generates predictions suited for empirical research on how economic selection influences cooperative behaviour of innovative actors. Secondly, we demonstrate how a region's entrepreneurial activity and growth can be controlled in a decentralised way by regions. |
| Keywords: | social capital; social identity; civil society; open methods of coordination |
| JEL: | L24 O33 R38 |
| Date: | 2008–06 |
| URL: | http://d.repec.org/n?u=RePEc:kud:kuiedp:0823&r=ino |
| By: | J.W.B. Bos; C. Economidou; B. Candelon |
| Abstract: | This paper investigates whether technology spills over across national borders and technology regimes. We advocate a modeling strategy where changes in technical efficiency capture technology spillovers as industries absorb and implement the best-practice (frontier) technology. Recently developed dynamic panel-based techniques are used to determine whether efficiency series move together in the long run (cointegrate) and/or move closer together over time (converge). We contribute to the literature by controlling for technological heterogeneity and for cross-sectional dependence in the data. For a panel of manufacturing industries in six EU countries, we find evidence of long-run relationships among industries' efficiency levels in different countries and technology regimes. Furthermore, we find convergence among manufacturing industries, both across countries and across technology regimes. |
| Keywords: | technology spillovers, efficiency, panel cointegration, convergence, manufacturing industries |
| JEL: | C23 L60 O14 |
| Date: | 2008–10 |
| URL: | http://d.repec.org/n?u=RePEc:use:tkiwps:0832&r=ino |