nep-ino New Economics Papers
on Innovation
Issue of 2009‒01‒17
twelve papers chosen by
Steffen Lippert
Massey University Department of Commerce

  1. Organizing High-Tech R&D - Secrets of Successful Innovation Alliances By Elad Harison; Heli Koski
  2. Supporting Measures for Research & Development as a Stimulus for Technology Transfer and Academic Entrepreneurship in Estonia By Indrek Jakobson; Valter Ritso
  3. Product innovation and renewal: foreign firms and clusters in Belgium By Filip De Beule; Ilke Van Beveren
  4. Managerial Practices, Performance and Innovativeness: Some Evidence from Finnish Manufacturing By Heli Koski; Luigi -Mäkinen Marengo
  5. Effectiveness of R&D Tax Incentives in Small and Large Enterprises in Quebec By Baghana, Rufin; Mohnen, Pierre
  6. When a good science base is not enough to create competitive industries: Lockin and inertia in Russian systems of innovation By Irina Jormanainen; Rajneesh Narula
  7. New Product Development and Firm Value in Mobile Handset Production By Heli Koski; Tobias Kretschmer
  8. The Internationalization of Inventive Activity: A Gravity Model Using Patent Data By Picci, Lucio
  9. Real Option Games with R&D and Learning Spillovers By Martzoukos, Spiros H; Zacharias, Eleftherios
  10. Measures of Science & Technology in Ecuador By Massón-Guerra, José Luis
  11. The Tunisian Pharmaceutical Sector in Transformation: Inventory of Fixtures and Innovation Prospects By Nejla Yacoub
  12. R&D policy in Economies with Endogenous Growth and Non Renewable Resources By Betty Agnani; Mª José Gutiérrez; Amaia Iza

  1. By: Elad Harison; Heli Koski
    Abstract: ABSTRACT : We use the data compiled from the USPTO patent and patent citations concerning the patented knowledge intensive technologies in three areas : cryptography, image analysis and data processing/software. The data is restricted to those patents between the years 1980-2003 that have two or more assignees, i.e. we consider only joint patents. We find some evidence that technological or product market proximity of partners in R&D alliance matters but whether the closeness generates more or less valuable innovations depends on the technology field. Our data further suggest that the most valuable innovations are generated when there is a certain level of prior patenting experience of the individual innovation partners. Interestingly, the prior patenting experience of the pairs of firms filing the joint patent does not seem to matter. It thus seems that learning from the prior joint patenting that creates more value for innovations is rather firm-specific than alliance-specific. Our findings on prior joint patenting experience generally hint that not only strategic benefits, and those benefits related to the management of joint patenting, can be gained from the R&D alliance experience.
    Date: 2009–01–07
  2. By: Indrek Jakobson (Tallinn School of Economics and Business Administration, Tallinn University of Technology); Valter Ritso (Tallinn School of Economics and Business Administration, Tallinn University of Technology)
    Abstract: The main aim of the article is to emphasise the need for governmental support in the process of building knowledge-based economy. The authors focus on the knowledge creating process in the form on R&D activities and also on entrepreneurial process, mostly in participation with universities. That means an analytical description of the survey provided by the Ministry of Economic Affairs and Communications of Estonia, outlining the major barriers to this process, proposes the main directions for development through business development of innovative and knowledge-based companies and also the survey conducted in Tallinn University of Technology about academic entrepreneurship. The authors are going to analyse companies’ cooperation with universities for better utilisation of their R&D possibilities, entrepreneurial attitude of universities and also to find out possibilities how further activate the stronger cooperation with universities in Estonia for better collaborative research. On the contrary, university as a partner for entrepreneurs is getting the possibilities to enhance the awareness of science-intensive entrepreneurship.
    Keywords: Research and development (R&D), innovation, technology transfer, knowledge transfer, academic entrepreneurship, spin-off, supporting measure
    JEL: L26 I23 O32 O38
    Date: 2008
  3. By: Filip De Beule; Ilke Van Beveren
    Abstract: Using the cluster definitions of the European Cluster Observatory, this paper investigates the link between cluster membership and firm-level product innovation and renewal,using data from the Community Innovation Survey for Belgium. Clustered firms account for 71 percent of total product renewal generated in 2004 and for 53 percent of product innovators; compared to 29 and 47 percent for non-clustered firms, respectivily. Furthermore, cluster membership is shown to be conducive to firm-level product innovation and renewal once firm size, export intensity and reseach inputs are taken into account. Foreign firms are not more prone to carry out product innovation, except for subsidiaries in clusters.
    Keywords: Product Innovation, Clusters, Community Innovation Survey, Multinational Firms
    JEL: D21 F23 O31 O33
    Date: 2008
  4. By: Heli Koski; Luigi -Mäkinen Marengo
    Abstract: ABSTRACT : Our study aims at shedding light on the organizational mechanisms that produce differences in the firms´ innovation performance. We use a survey data collected from 398 Finnish manufacturing firms for the years 2002 and 2005 to empirically explore whether and which organizational factors explain why certain firms produce larger innovative research output than others, and whether the incentives to innovate that certain organizational practices generate differ between the SME’s and large firms, and between those firms that are operating in low-tech and high-tech industries. Our study indicates that one size does not fit all when it comes to the selection of organizational practices creating a business environment that is fruitful for innovation. There are vast differences in the organizational practices leading to more innovation both between the small and large firms, and between the firms that are functioning in high- and low-tech industries. While innovation in the small firms tend to benefit from the practices that enhance employee participation in the decision-making, the large firms that have more decentralized decision-making patterns do not seem to perform better in terms of innovation than those with a more bureaucratic decision-making structure. The most efficient incentive-based compensation means encouraging innovation among the sampled companies seems to be the ownership of a firm’s stocks by the employees and/or managers. Performance based wages also relates positively to innovation, but only when it is combined with a systematic monitoring of the firm´s performance.
    Keywords: innovation, firm size, organizational practices, HRM practices
    JEL: L25 M54 O31
    Date: 2009–01–07
  5. By: Baghana, Rufin (Ministere des Finances, Quebec); Mohnen, Pierre (UNU-MERIT, Maastricht University, and CIRANO)
    Abstract: In this paper we evaluate the effectiveness of R&D tax incentives in Quebec, using manufacturing firm data from 1997 to 2003 originating from R&D surveys, annual surveys of manufactures and administrative data. The estimated price elasticity of R&D is -0.10 in the short run and -0.14 in the long run, with a slightly higher elasticities for small firms than for large firms. We show that there is a deadweight loss associated with level-based R&D tax incentives that is particularly acute for large firms. For small firms it is not sizeable enough to suppress the R&D additionality, at least not during quite a number of years after the initial tax change. Incremental R&D tax credits do not suffer from this deadweight loss and are from that perspective preferable to level-based tax incentives.
    Keywords: R&D, tax credits, tax incentives, price elasticity, research and development, manufacturing industry, Quebec, Canada
    JEL: O32 O38 H25 H50 C23
    Date: 2009
  6. By: Irina Jormanainen (Department of International Business, Helsinki School of Economics.); Rajneesh Narula (School of Management, University of Reading)
    Abstract: Despite a well-developed science and technology base and considerable industrial capacity during the soviet era, Russia has largely failed to create a competitive industrial sector despite two decades of transition. This paper seeks to understand why Russia has not succeeded despite having relatively favourable initial conditions. We develop an understanding of its innovation system and the interplay between the firm and the nonfirm sector. We argue that – in any economy - when political and economic regimes were rapidly reformed, there is considerable structural inertia associated with complex interdependencies between the state, domestic firms and the formal and informal institutions that bind them together. In the case of Russia, this inertia has resulted in a system-wide lock-in, and industrial enterprises continued to engage in routines that generated a suboptimal outcome. Market forces did not result in the western-style innovation system, but a hybrid one, with numerous features of the soviet system. A significant segment of industry maintains a Soviet-style dependence on ‘top-down’ supply-driven allocation of resources and a reliance on external (but domestic) network of sources for innovation and capital. At the same time, ‘new’ firms and industries have also evolved which undertake their own R&D, and utilise foreign sources of capital and technology, and at least partly determine their production and innovative activities on the basis on market forces.
    Keywords: innovation systems, R&D, Russia, inertia, institutions, lock-in, transition, competitiveness
    Date: 2008
  7. By: Heli Koski; Tobias Kretschmer
    Abstract: ABSTRACT : We study the effect of new product introduction on firm value. Using a unique sample on mobile phone handset introduction by 16 major handset manufacturers over 10 years, we distinguish between imitative product introduction and truly innovative product introduction. We find that while most product introduction is imitative, both types of innovation increase firm value. However, truly innovative innovation is found to increase firm value by more than imitative introductions.
    Keywords: product innovation, mobile telephony, firm value
    Date: 2009–01–07
  8. By: Picci, Lucio
    Abstract: This paper discusses the extent and the determinants of the internationalization of European inventive activity, between 1990 and 2004, using an innovative method to treat the information contained in the European Patent Office's Patstat database. The observed level of internationalization of inventive activities, while being rather low, has steadily increased over time. The amount of collaboration between actors residing in different countries is assessed by means of a "gravity model", as it is familiar in the literature on international trade. The amount of bilateral collaboration is positively affected by the presence of a common language and a common border, and by the common participation in the European Union. Participation in the Euro Zone is also found to have a (marginally) negative effect. International collaboration is negatively affected by distance, with estimated elasticities that are significantly smaller than the ones that characterize international trade. Contrary to the rumors about the "death of distance", this effect has become stronger in recent years.
    Keywords: Gravity models; R&D; patents; internationalization
    JEL: F15 C51 O30 C24
    Date: 2008–12–15
  9. By: Martzoukos, Spiros H; Zacharias, Eleftherios
    Abstract: We model pre-investment R&D decisions in the presence of spillover effects in an option pricing framework with analytic tractability. Two firms face two decisions that are solved for interdependently in a two-stage game. The first-stage decision is: what is the optimal level of coordination (optimal policy/technology choice)? The second-stage decision is: what is the optimal effort for a given level of the spillover effects and the cost of information acquisition? The framework is extended to a two-period stochastic game with (path-dependency inducing) switching costs that make strategy revisions harder. Strategy shifts are easier to observe in more volatile environments.
    Keywords: Benefit Analysis; Real Options; Coordination Games; R&D
    JEL: G31 G13
    Date: 2008–04
  10. By: Massón-Guerra, José Luis
    Abstract: One of the structural problems in Latin-American has been the lower innovative capacity and lower generation of economically exploitable knowledge. This phenomenon has been produced by the absence of government’s incentives and strategies in order to be competitive inside the Knowledge Based Economy. More concretely, political, institutional and social factors have contributed negatively within this reality. As a consequence, the knowledge generation in this region is insufficient not only to satisfy its necessities but also to be competitive in the global context. At difference, the developing regions have recognized the significance impact of Science and Technology (S&T) and Education in their sustainable growth. In the Latin-American context, this analysis requires robust indicators that help to evidence the causes of this problematic. In this respect, the absence of harmonized politics and common variables that allows studying the evolution of S&T in the Latin-American region is the main limitation for this analysis. Based on that, this report brings an exploratory analysis that allows identifying the critical factors and the possible solutions of this S&T problematic. In parallel, the case of the National Innovation System implanted in Ecuador is presented and evaluated.
    Keywords: Science; Technology; Entrepreneurship; Innovation
    JEL: O32
    Date: 2009–01–04
  11. By: Nejla Yacoub (labrii, ULCO)
    Abstract: Since the entrance of Tunisia to the World Trade Organisation (WTO) in 1995, the Tunisian pharmaceutical industry has recorded considerable changes. Notably, with the extension of patentability to pharmaceuticals, the sector is now at a dynamic stage of transformation, translated by a notable development of the industry of generics. The purpose of this paper is to analyze the mutations that have marked the Tunisian pharmaceutical industry over the last decade and study its potential of developing future innovation. In this purpose, the paper is divided into two main parts. In the first one, we are going to present the legal and economic changes in the Tunisian pharmaceutical sector and highlight the emphasis of the government on the production of generics. In the second part, the paper aims at studying the perspectives for innovation in Tunisia through the study of the innovation capabilities in the Tunisian pharmaceutical sector. The results show that in spite of some strengths of the Tunisian economy, the perspectives for pharmaceutical innovation remain handicapped by several financial and structural deficiencies of the national and pharmaceutical innovation systems. Depuis l’adhésion de la Tunisie à l’Organisation Mondiale du Commerce (OMC) en 1995, le secteur pharmaceutique tunisien enregistre des changements considérables. Il se situe aujourd’hui à un stade dynamique de transformations, traduites particulièrement par le développement notable de l’industrie des génériques. L’objectif de cet article consiste donc à analyser les mutations ayant marqué le secteur pharmaceutique tunisien durant la dernière décennie et d’étudier son potentiel d’innovation. Dans cette perspective, l’article s’articule autour de deux grandes parties. Dans la première, nous allons exposer les changements réglementaires et économiques du secteur pharmaceutique tunisien et mettre l’accent surtout sur l’incitation du gouvernement pour la production des génériques. Dans la seconde partie, nous nous proposons d’étudier les perspectives d’innovation en Tunisie à travers l’étude des capacités d’innovation locales dans le secteur pharmaceutique. Les résultats montrent qu’en dépit de certaines forces qui caractérisent l’économie tunisienne par comparaison à d’autres Pays En Développement (PED) similaires, les perspectives d’innovation pharmaceutique demeurent handicapées par nombreuses défaillances financières et structurelles liées aux systèmes national et pharmaceutique d’innovation.
    Keywords: generics, innovation, innovation system, patents, pharmaceuticals, Tunisia
    JEL: O55 O34 O32 L65
    Date: 2008–07
  12. By: Betty Agnani (Universidad de Granada); Mª José Gutiérrez (Universidad del País Vasco); Amaia Iza (Universidad del País Vasco)
    Abstract: The aim of this paper is to analyze how active R&D policies affect the growth rate of an economy with endogenous growth and non-renewable resources. We know from Scholz and Ziemens (1999) and Groth (2006) that in infinitely lived agents (ILA) economies, any active R&D policy increases the growth rate of the economy. To see if this result also appears in economies with finite lifetime agents, we developed an endogenous growth overlapping generations (OLG) economy à la Diamond which uses non-renewable resources as essential inputs in final good’s production. We show analytically that any R&D policy that reduces the use of natural resources implies a raise in the growth rate of the economy. Numerically we show that in economies with low intertemporal elasticity of substitution (IES), active R&D policies lead the economy to increase the depletion of non-renewable resources. Nevertheless, we find that active R&D policies always imply increases in the endogenous growth rate, in both scenarios. Furthermore, when the IES coefficient is lower (greater) than one, active R&D policies affect the growth rate of the economy in the ILA more (less) than in OLG economies.
    Keywords: Crecimiento endógeno, I+D, recursos no renovables, sendas de crecimiento, estable,endogenous growth, R&D, non-renewable resources, overlapping generations, infinitely lived agents, balanced growth path.
    JEL: O13 O40 Q32
    Date: 2008

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