nep-ino New Economics Papers
on Innovation
Issue of 2009‒05‒16
fifteen papers chosen by
Steffen Lippert
Massey University Department of Commerce

  1. Intellectual property in a knowledge-based economy : Patents to include vs. patents to exclude. By Patrick Cohendet; Matthieu Farcot; Julien Pénin
  2. Competitive Innovation with Codified And Tacit Knowledge By Tetsugen Haruyama
  3. HOW MUCH DOES IMMIGRATION BOOST INNOVATION? By Jennifer Hunt; Marjolaine Gauthier-Loiselle
  4. Managerial incentive and the firms' propensity to invest in product and process innovation By R. Cellini; L. Lambertini; A. Sterlacchini
  5. Why weak patents? Rational ignorance or pro-"customer" Tilt? By Lei, Zhen; Wright, Brian D.
  6. Technological Diversity and Future Product Diversity in the Drug Industry By Uwe Cantner; Tatiana Plotnikova
  7. Scarcity of Ideas and R&D Options: Use it, Lose it or Bank it By Nisvan Erkal; Suzanne Scotchmer
  8. Market Structure and Property Rights in Open Source By Michele Boldrin; David K Levine
  9. R&D-hindering collusion. By E. Bacchiega; L. Lambertini; A. Mantovani
  10. Impact of local public goods on agricultural productivity growth in the U.S. By Sun, Ling; Ball, Eldon; Fulginiti, Lilyan; Plastina, Alejandro
  11. In search of excellence - Innovation contests to foster innovation and entrepreneurship in Portugal By Adão Carvalho
  12. Competition, innovation and intellectual property rights in software markets By Michiel Bijlsma; Paul de Bijl; Viktoria Kocsis
  13. Multinational Technology Diffusion in Agriculture By King, John L.
  14. Constructing intersectoral innovation diffusion networks with input-output: how to get relative flows? An illustrative application to six OECD technological systems for the middle '90s By S. Montresor; Vittucci; G. Marzetti
  15. Productivity of Nanobiotechnology Research and Education in U.S. Universities By Xia, Yin

  1. By: Patrick Cohendet; Matthieu Farcot; Julien Pénin
    Abstract: The traditional perception of patents puts the emphasis on their importance to exclude imitators and to restore incentives to invent. This view is far too restrictive and at variance with many empirical and theoretical works. We show that these contradictions can be overcome by shifting from a traditional economic framework to a knowledge-based one. Such a move allows a renewed economic perception of patents, making them into essential instruments which serve not only to exclude potential infringers but also to “include” all the different stakeholders in the innovation process. Within this new approach the main role of the patent system is therefore to ensure the coordination among heterogeneous actors and to structure innovation activities. We illustrate our view by presenting the four polar cases of pharmaceuticals, electronics, software and biotechnologies.
    Keywords: Intellectual property rights, incentives, coordination, R&D collaboration, collective invention.
    JEL: L00
    Date: 2009
  2. By: Tetsugen Haruyama (Graduate School of Economics, Kobe University)
    Abstract: R&D-based models of endogenous technical progress rest on a premise that technical progress is driven by profit-seeking entrepreneurs. This literature led to a dominant view that endogenous technical advance is not consistent with perfect competition with constant returns to scale. Departing from this dominant perspective, we demonstrate that technical progress endogenously occurs in a perfectly competitive economy under constant returns to scale in rivalrous inputs. Our result is based on a hypothesis that R&D creates codified and tacit knowledge as joint products. Empirical and case studies are discussed to support the hypothesis. Using the model, we demonstrate that stronger patent protection can encourage or discourage R&D, depending on the size of an economy.
    Date: 2009–04
  3. By: Jennifer Hunt; Marjolaine Gauthier-Loiselle
    Abstract: We measure the extent to which skilled immigrants increase innovation in the United States by exploring individual patenting behavior as well as state-level determinants of patenting. The 2003 National Survey of College Graduates shows that immigrants patent at double the native rate, and that this is entirely accounted for by their disproportionately holding degrees in science and engineering. These data imply that a one percentage point rise in the share of immigrant college graduates in the population increases patents per capita by 6%. This could be an overestimate of immigration's benefit if immigrant investors crowd out native investors, or an underestimate if immigrantes have positive spill-overs on investors. Using a 1950-2000 state panel, we show that natives are not crowded out by immigrants, and that immigrants do have positive spill-overs, resulting in an increase in patents per capita of about 15% in response to a one percentage point increase in immigrant college graduates. We isolate the causal effect by instrumenting the change in the share of skilled immigrants in a state with the initial share of immigrant high school dropouts from Europe, China and India. In both data sets, the positive impacts of immigrant post-college graduates and scientists and engineers are larger than for immigrant college graduates.
    Date: 2008–08
  4. By: R. Cellini; L. Lambertini; A. Sterlacchini
    Date: 2009–02
  5. By: Lei, Zhen; Wright, Brian D.
    Abstract: The issuance of weak patents is widely viewed as a fundamental problem in the current US patent system. Reasons that have been offered for the granting of weak patents by the US Patent and Trademark Office (USPTO) include examinersâ ârational ignoranceâ of the patentability of applications and pro-âcustomerâ rules and institutions that create incentives for examiners to grant patents of dubious validity to their âcustomersâ- applicants. In this paper, we study whether US examinersâ behavior in prior art search betrays their assessment of applicationsâ patentability. For a sample of US patents for which applications were also filed at the European Patent Office (EPO), we construct a measure of the fraction of prior art that is missed by US examiners. We find that this measure significantly explains the probability of receiving a patent at the EPO. The results are robust to different empirical specifications. US examinersâ prior art searches indicate that they are, on average, not ârationally ignorantâ. On the contrary, they identify and dedicate more search effort to those applications that seem more problematic, because they bear the burden of proof of non-patentability. Our study offers empirical evidence that a systematic problem of weak patents likely exists, and suggests that the problem may be more strongly attributable to the pro-applicant rules and policies than to examinersâ ignorance. The current prevalence of weak patents does not appear to be caused at the margin by lack of resources at the USPTO.
    Keywords: Weak patents, Rational ignorance, cited prior art, missed prior art, Industrial Organization, Institutional and Behavioral Economics, Research and Development/Tech Change/Emerging Technologies,
    Date: 2009
  6. By: Uwe Cantner (Friedrich-Schiller-University, Jena, Department of Economics, Chair of Economics); Tatiana Plotnikova (Friedrich-Schiller-University, Jena, GSBC-EIC The Economics of Innovative Change)
    Abstract: This paper deals with the topic of related R&D and innovation strategies of large firms. We ask what determines the diversity of a firm's product portfolio. More specifically, we try to explain large firms' expansion into new product markets driven by the characteristics of their technological knowledge. Empirically, we study firms in the pharmaceutical and biotech industries, using relevant data on product development and technological knowledge. We find a positive relationship between the diversity of a firm's future product portfolio and the diversity of its stock of technological knowledge. This relationship becomes weaker when the breadth of technological knowledge increases.
    Keywords: Product diversity, technological diversity, product relatedness, technological relatedness, coherence
    JEL: O32 L25 L65
    Date: 2009–05–05
  7. By: Nisvan Erkal; Suzanne Scotchmer
    Abstract: We investigate rewards to R&D in a model where substitute ideas for innovation arrive to random recipients at random times. By foregoing investment in a current idea, society as a whole preserves an option to invest in a better idea for the same market niche, but with delay. Because successive ideas may occur to different people, there is a conflict between private and social optimality. We characterize the welfare-maximizing reward structure when the social planner learns over time about the arrival rate of ideas, and when private recipients of ideas can bank their ideas for future use. We argue that private incentives to create socially valuable options can be achieved by giving higher rewards where "ideas are scarce."
    JEL: K00 L00 O34
    Date: 2009–05
  8. By: Michele Boldrin; David K Levine
    Date: 2009–05–06
  9. By: E. Bacchiega; L. Lambertini; A. Mantovani
    Date: 2008–11
  10. By: Sun, Ling; Ball, Eldon; Fulginiti, Lilyan; Plastina, Alejandro
    Abstract: In this paper we revisit the issue on the impact of public R&D expenditure on US agricultural productivity growth. We estimate a dual cost function using a state-by-year panel data set. We construct the potential R&D âspillinsâ based on both geographical location and production mix. We also examine the role of the extension service, transportation network, and human capital in the process of technology dissemination. The results indicate that higher levels of local public goods, R&D spillins, extension activities, and an intensive transportation network decrease costs. The contributions to agricultural productivity from all series of R&D spillins are positive even though the social rate of return may differ.
    Keywords: productivity, public R&D expenditure, cost function, extension services, Productivity Analysis, Research and Development/Tech Change/Emerging Technologies, O3, O4,
    Date: 2009
  11. By: Adão Carvalho (Universidade de Evora, Departamento de Economia, CEFAGE-UE)
    Abstract: Numerous initiatives of different nature have taken place in Portugal over the recent years aiming at raising consciousness of the importance and advantages of innovation and entrepreneurship, persuading businesspeople to place innovation as strategic intent and encouraging would-be entrepreneurs to come forward with novel businesses ideas. Innovation contests are but one of such initiatives. From sporadic events before 2000, the phenomenon gained unprecedented dimension and growing sophistication at several levels, including the number of innovation contests launched annually, number and kind of organizations involved, volume and kind of prizes and support in business plan construction. Today, this is a popular means that a range of different organizations use to uncovering novel business ideas and promoting innovation and entrepreneurship. Based on a large data base purposefully built for this research by the author, this paper aims to describe the phenomenon of innovation contests in Portugal and characterize its evolution over the period 2000-2008. Findings show a general use of contests as instruments to promote and prize innovation across a range of target audiences going from high school students to established businesses; an increasing trend in the number of innovation contests launched annually in Portugal; high rates of rotation of the innovation contests launched annually over the period under analysis; a growing diversification in the type of promoters which is particularly clear from 2004 onwards; and that private firms, higher education institutions and business associations appear to be gaining a prominent role as promoters of innovation contests.
    Keywords: Innovation contest, innovation, entrepreneurship, Portugal.
    JEL: O31 L26
    Date: 2009
  12. By: Michiel Bijlsma; Paul de Bijl; Viktoria Kocsis
    Abstract: This study analyzes under which circumstances it may be desirable for the government to stimulate open source software as a response to market failures in software markets. To consider whether policy intervention can increase dynamic efficiency, we discuss the differences between proprietary software and open source software with respect to the incentives to innovate and market failures that may occur. The document proposes guidelines to determine which types of policy intervention may be suitable. Our most important finding is that directly stimulating open source software, e.g. by acting as a lead customer, can improve dynamic efficiency if (i) there is a serious customer lock-in problem, while (ii) to develop the software, there is no need to purchase specific, complementary inputs at a substantial cost, and (iii) follow-on innovations are socially valuable but there are impediments to contractual agreements between developers that aim at realizing such innovations.
    Keywords: Software markets; Intellectual property rights; Open source software; Public policy
    JEL: L17 L52 L86 O34
    Date: 2009–03
  13. By: King, John L.
    Abstract: This paper presents data on international technology diffusion of agricultural biotechnology. Patent family data, which identify related intellectual property in different countries with the same owner, represents technology flows between countries. Technology flows occur mostly between developed countries, and are similar for different types of entities (private, non-profit and university, government) that seek patent protection abroad. Technology diffusion through patent families is a significant predictor of international trade flows, which is consistent with several different models of trade.
    Keywords: Research and Development/Tech Change/Emerging Technologies,
    Date: 2009
  14. By: S. Montresor; Vittucci; G. Marzetti
    Date: 2008–10
  15. By: Xia, Yin
    Abstract: The National Science Foundation (NSF) estimates that nanotechnology will become a trillion-dollar industry by 2015 and that 800,000 workers will be needed in this field in the United States. Nanobiotechnology â the interface of nanotechnology and the life sciences â is one of the most active and promising application frontiers in nanotechnology. To assess the productivity of basic and applied research and education in this field, I construct a structural model composed of a system of three equations which respectively represent the productions of a universityâs scientific publications, patents, and graduate training outputs. The model is estimated using a unique data set on thirty universities that participated in nanobiotechnology during the 1990-2005 period. Ten of them are private universities, ten are public land-grant universities, and ten are public non-land-grant universities. Universities indeed serve as a principal seedbed for future development of the cutting-edge nanobiotechnology. NSF investment in nanobiotechnology strongly affects the universityâs basic science research and graduate education. The universityâs research expenditures in life sciences, engineering, and physical sciences contribute to its nanobiotechnology fields. Importantly, there is no evidence that science and graduate training compete strongly with one another. Rather, basic science research and graduate education serve as strong complements to one another, while basic science and applied research, and applied research and graduate education serve as weak complements. On average, public non-land-grant universities are more efficient in applied research. Such characteristics of universities, however, do not significantly affect the universitiesâ efficiencies in basic research and graduate education in nanobiotechnology. Presence of a nanotechnology research center on campus enhances the universityâs basic science research and a formal nanotechnology education program promotes the universityâs graduate education.
    Keywords: nanotechnology, graduate education, university research, productivity, Productivity Analysis, Research and Development/Tech Change/Emerging Technologies,
    Date: 2009

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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