nep-ino New Economics Papers
on Innovation
Issue of 2009‒03‒14
seven papers chosen by
Steffen Lippert
Massey University Department of Commerce

  1. R&D Productivity and Intellectual Property Rights Protection Regimes By Joanna Poyago-Theotoky; Khemarat Talerngsri Teerasuwannajak
  2. Pros and Cons of ‘Backing Winners’ in Innovation Policy By Frank A.G. den Butter; Seung-gyu Jo
  3. Open Innovation in firms located in an intermediate technology developed country By Mariana Lopes; Aurora A.C. Teixeira
  4. The persistence of innovation : the italian evidence By Antonelli Cristiano
  5. Research and Development in Culture: A Case for Cross Subsidies in the Arts By Christian Jaramillo
  6. Health Systems, Inequality and Incentives to Innovate By Rajat Archaryya; María del Carmen García-Alonso
  7. The motivations, organisation and outcomes of university-industry interaction in the Netherlands By Isabel Maria Bodas Freitas; Bart Verspagen

  1. By: Joanna Poyago-Theotoky (Department of Economics, Loughborough University and RCEA); Khemarat Talerngsri Teerasuwannajak (Faculty of Economics, Chulalongkorn University)
    Abstract: We study firms' preferences towards intellectual property rights (IPR) regimes in a North-South context, using a simple duopoly model where a 'North' and a 'South' firm compete in a third market. Unlike other contributions in this field, we explicitly introduce the South's capability to undertake cost-reducing R&D, but maintain the South's inferiority in utilizing and managing its R&D. In contrast to traditional results, we show that the North may encourage lax IPR protection provided that its South rival's R&D productivity is sufficiently high, while the South may find it in its best interest to strictly enforce IPR protection if its R&D productivity is low. In this sense, our results do not support the idea of universal or uniform IPR protection regime. In addition, we find that if firms are allowed to agree on any level of information exchange when IPR protection is strictly enforced, such an exchange can always be established as long as each firm is ensured that what it gets to utilize in return is greater than a half of what it gives to its rival.
    Keywords: intellectural property rights (IPRs), cost-reducing R&D, R&D productivity, information exchange.
    JEL: O34 F13 O32 O38 L13 D43
    Date: 2009–03
  2. By: Frank A.G. den Butter (VU University Amsterdam); Seung-gyu Jo (VU University Amsterdam)
    Abstract: In the economics profession there is a fierce debate whether industrial and innovation policy should be targeted to specific sectors or firms. This paper discusses the welfare effects of such targeted policies from the perspective of strategic game theory of the firm. A theoretical case for picking winners through a preferential innovative policy is discussed in a third-market international trade model, which is shown to hold without evoking retaliation from foreign competitors. However, in practice information uncertainties remain a concern. The question whether in this case ‘backing winners’ is a wise policy option depends on the characteristics of the information asymmetries and on the extent the government is able to design selection procedures which minimize the transaction costs that may be caused from the market participants’ opportunistic behavior.
    Keywords: Innovation policy; R&D subsidies; strategic trade policy; asymmetric information; spill-over effects
    JEL: C73 F12 O24 O32
    Date: 2009–02–17
  3. By: Mariana Lopes (Faculdade de Economia, Universidade do Porto); Aurora A.C. Teixeira (CEFUP, Faculdade de Economia, Universidade do Porto; INESC Porto)
    Abstract: Open Innovation is a flow of inputs and outputs of knowledge and technology which favours, at the firm level, the acceleration of the innovation process, as well as the establishment and penetration of firms in new markets. This type of innovation incorporates technological innovation from internal and external sources, as well as different ways to access markets. The empirical studies in the area reveal that there is a significant bias in favour of countries of technological frontier, such as the United States, Finland, the Netherlands, Germany or Sweden. The present study aims at covering this gap in literature by examining firms in a country of intermediate technology development – Portugal. Based on 70 innovative firms located in Portugal we found that open innovation is only partially diffused throughout these firms. In addition, open innovation is more widespread in terms of external absorption of knowledge/ technology rather than in terms of knowledge/technology transfer. This result may indicate lack of awareness about the economic potential of making available to third parties the technologies internally created. This may require a different approach to organization/management of R&D, in particular, and of innovation, in general.
    Keywords: Open Innovation; Intermediate technology development; Portugal.
    JEL: O32
    Date: 2009–03
  4. By: Antonelli Cristiano (University of Turin)
    Abstract: This paper contributes the analysis of the persistence of innovation activities, as measured by total factor productivity (TFP) and explores its path pendent caracteristics. The empirical analysis of firm level TFP for a sample of 7020 Italian manufacturing companies observed during the years1996-2005 confirms that firms that have been able to improve the general efficiency of their production process at time t are likely to keep innovating in the following periods of time, more than firms that never innovated before. The empirical analysis is based on both transition probability matrixes and on dynamic discrete choice panel data models. The evidence suggests that innovation persistence is path dependent, as opposed to past dependent. The dynamics of the process in fact is typically non-ergodic, yet it is not exclusively determined by its but is shaped by a number of complementary and contingent factors origins that affect locally the sequence of the hysteretic effects of the early state dependence.
    Date: 2009–02
  5. By: Christian Jaramillo
    Abstract: Several types of arguments advocate state involvement in the promotion of culture. Many of them imply some sort of subsidy, usually to non-for-profit firms; none favors taxing cultural events. The tax literature, on the other side, discusses excise taxation on culture only as a way to redistribute income. However, to the extent that culture is a public good, taxing it is undesirable. Why are then excise taxes on public events extant in many countries? This paper argues that the development of profitable artists is analogous to R&D in the industrial organization literature, and that the excise taxation of public cultural events may be part of an efficient policy to fund it. Using a Stackelberg game to model the investment to develop an artist, I find that the optimal tax is a multiple of the expected surplus created by the artist that cannot be appropriated by the investor who funds her, and that progressivity plays a limited role at most.
    Date: 2009–02–11
  6. By: Rajat Archaryya; María del Carmen García-Alonso
    Abstract: Governments often subsidize poorer groups in society to ensure their access to new drugs. We analyze here the optimal income-based price subsidies in a strategic environment. We show that asymmetric health systems can arise even though countries are ex-ante symmetric when international price discrimination is possible. Universal access is less likely to arise without price discrimination but also health policy coordination becomes more important. This is due to the multiple equilibria which make the attainment of universal coverage within a given income range ambiguous. We also show that an increase in intra-country inequality does not always lead to less likely universal coverage when international price discrimination is possible.
    Keywords: Health systems; Pharmaceuticals; Innovation; Income based subsidies; Price dicsrimination
    JEL: D4 L1 I1
    Date: 2009–02
  7. By: Isabel Maria Bodas Freitas (Grenoble Ecole de Management); Bart Verspagen (Centre for Technology, Innovation and Culture, University of Oslo)
    Abstract: This paper aims at analysing the impact of institutional and organizational factors on bridging industrial and university motivations for collaboration, as well as on the content, management and outcome of this relationship, in the Netherlands. In particular, we explore which type of projects, set up under specific industrial and university motivations, are more likely to face institutional barriers related to technology, market and organisational incentives frameworks. Moreover, we analyse the impact of technology transfer offices, research sponsoring, part-time professorships, and patenting on aligning university and industry motivations towards collaboration. To proceed empirically, thirty in-depth cases of successful university-industry knowledge transfer are analysed.
    Date: 2009–03

This nep-ino issue is ©2009 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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