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on Innovation |
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Issue of 2009‒07‒28
sixteen papers chosen by Steffen Lippert Massey University Department of Commerce |
| By: | Bronwyn H. Hall (Department of Economics, University of California at Berkeley); Francesca Lotti (Bank of Italy); Jacques Mairesse (CREST (ENSAE, Paris)) |
| Abstract: | Innovation in SMEs exhibits some peculiar features that most traditional indicators of innovation activity do not capture. Therefore, in this paper, we develop a structural model of innovation which incorporates information on innovation success from firm surveys along with the usual R&D expenditures and productivity measures. We then apply the model to data on Italian SMEs from the “Survey on Manufacturing Firms” conducted by Mediocredito-Capitalia covering the period 1995-2003. The model is estimated in steps, following the logic of firms’ decisions and outcomes. We find that international competition fosters R&D intensity, especially for high-tech firms. Firm size, R&D intensity, along with investment in equipment enhances the likelihood of having both process and product innovation. Both these kinds of innovation have a positive impact on firm’s productivity, especially process innovation. Among SMEs, larger and older firms seem to be less productive. |
| Keywords: | R&D, innovation, productivity, SMEs, Italy |
| JEL: | L60 O31 O33 |
| Date: | 2009–06 |
| URL: | http://d.repec.org/n?u=RePEc:bdi:wptemi:td_718_09&r=ino |
| By: | Gianluca Femminis (DISCE, Università Cattolica); Gianmaria Martini (Università di Bergamo) |
| Abstract: | We present a dynamic duopoly model of technical innovation where R&D costs decrease exogenously with time, and inter-firm knowledge spillover lowers the second comer's R&D cost. The spillover effect only becomes available after a disclosure lag. These features allow us to identify a new type of equilibrium: the leader delays investment until the R&D cost is low enough that the follower finds it optimal to invest as soon as he can benefit from the spillover. This equilibrium is subgame perfect over a wide range of parameters, and raises several interesting implications. First, in our new equilibrium the time delay between the two R&D investments is realistically short. Second, while the presence of a spillover favors the second mover, this benefit is not enough to rule out a first mover advantage. Indeed, the first mover advantage survives whenever technical progress is sufficiently fast and the disclosure lag is relatively long. Third, in case of a major innovation our equilibrium implies under--investment, which requires a substantial public intervention in favour of the investment activity. |
| Keywords: | R&D, knowledge spillover, dynamic oligopoly |
| JEL: | L13 L41 O33 |
| Date: | 2009–07 |
| URL: | http://d.repec.org/n?u=RePEc:ctc:serie6:itemq0955&r=ino |
| By: | Raymond Wladimir; Mohnen Pierre; Palm Franz; Schim van der Loeff Sybrand (METEOR) |
| Abstract: | This paper studies the dynamic relationship between input and output of innovation inDutch manufacturing using an unbalanced panel of enterprise data from five waves of the Community Innovation Survey during 1994-2004. We estimate by maximum likelihood a dynamic panel data bivariate tobit with double-index sample selection accounting for individual effects.We find persistence of innovation input and innovation output, a lag effect of the former onthe latter and a feedback effect of the latter on the former. The lag effect remains significantin the high-tech sector even after four years. Firm and industry effects are also important. |
| Keywords: | Economics (Jel: A) |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:umamet:2009030&r=ino |
| By: | S. DOBBELAERE; R. I. LUTTENS; B. PETERS |
| Abstract: | We study a two-stage R&D project with an abandonment option. Two types of uncertainty influence the decision to start R&D. Demand uncertainty is modelled as a lottery between a proportional increase and decrease in demand. Technical uncertainty is modelled as a lottery between a decrease and increase in the cost to continue R&D. We relate differences in uncertainty to differences in risk premia. We deduct testable hypotheses on the basis of which we empirically analyze the impact of uncertainty on the decision to start an R&D project. Using data for about 4000 German firms in manufacturing and services (CIS IV), our model predictions are strongly confirmed. |
| Keywords: | Investment under uncertainty, R&D, demand uncertainty, technical uncertainty,entry threat |
| JEL: | D21 D81 L12 O31 |
| Date: | 2009–05 |
| URL: | http://d.repec.org/n?u=RePEc:rug:rugwps:09/585&r=ino |
| By: | Thomas Brenner (Department of Geography, Philipps University Marburg); Tom Broekel (Department of Human Geography and Planning, Faculty of Geosciences, Utrecht University) |
| Abstract: | Measuring the innovation performance of regions or nations has been repeatedly done in the literature. What is missing in the literature is a discussion of what innovation performance of a region means. How do regions or nations contribute really to the innovation output of ï¬rms? And how can this contribution be investigated in an empirically sound way? We argue that while the literature offers many suggestions, their theoretical foundation is often weak and the underlying assumptions are rarely discussed. In this paper, we systematize various mechanisms by which spatial units influence ï¬rms' innovation activities. On the basis of this, common innovation performance measures and analyses are discussed and evaluated. It is concluded that there is no general best way of measuring the innovation performance of spatial units. In fact, the most interesting insights can be obtained using a multitude of different approaches at the same time. |
| Keywords: | Innovation performance, regional innovativeness, innovation generation, regional innovation system, national innovation system |
| Date: | 2009–01 |
| URL: | http://d.repec.org/n?u=RePEc:pum:wpaper:2009-01&r=ino |
| By: | Chu, Angus C.; Lai, Ching-Chong |
| Abstract: | In the US, defense R&D share of GDP has decreased significantly since 1960. To analyze the implications on economic growth and welfare, we develop an R&D-based growth model that features the commonly discussed crowding-out and spillover effects of defense R&D on civilian R&D. The model also captures the important effects of defense technology on (a) national security and (b) aggregate productivity via the spin-off effect resembling consumption public goods and productive public goods respectively. In this framework, economic growth is driven by market-based civilian R&D as in standard R&D growth models and government-financed public goods (i.e. defense R&D) as in Barro (1990). We find that defense R&D has an inverted-U-shape effect on growth, and the growth-maximizing level of defense R&D is increasing in the spillover effect and in the spin-off effect. Also, there is a welfare-maximizing level of defense R&D that is increasing in the security effect of national defense, and there exists a critical degree of this security effect below (above) which the welfare-maximizing level of defense R&D is below (above) the growth-maximizing level. |
| Keywords: | defense R&D; economic growth; public goods; social welfare |
| JEL: | O41 O38 H56 |
| Date: | 2009–07 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:16325&r=ino |
| By: | Okay, Nesrin; Konukman, Alp Er S.; Akman, Ugur |
| Abstract: | We present Turkey’s manufacturing-sector innovation data and, for the first time, analyze likely relationships among GDP growth, sectoral innovation intensities, energy consumptions, and energy-saving potentials. We detect a power-law-like relationship between the projected energy-saving potentials and realized energy consumptions of the manufacturing-sector groups. We observe that the energy consumptions of the sectors do not change significantly despite varying innovation levels during transitions from economic crisis and recovery periods. We conclude that the Turkey’s manufacturing sectors’ energy consumptions are insensitive to their innovation levels, or their innovation activities are not energy-efficiency- and energy-saving-oriented, reflecting Turkey’s past supply-oriented energy policy. The leader innovating sectors are, nevertheless, expected to contribute more to Turkey’s energy-saving and energyefficiency policies if their innovation potentials can be directed to achieve higher energy savings and energy efficiencies via government incentives within the agenda of the recent energy-efficiency and R&D laws. |
| Keywords: | Manufacturing sector; Innovation; Energy consumption; Energy saving potential; Energy efficiency; R&D; GDP; Turkey |
| JEL: | Q48 Q55 L52 O3 Q43 L60 Q4 |
| Date: | 2009–07–19 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:16344&r=ino |
| By: | Prashanth Mahagaonkar; Rainer Schweickert; Aditya S. Chavali |
| Abstract: | A recent literature has pointed at potential negative effects of exchange rate volatility on innovation. In this paper, we propose that there may be a direct effect as well as an indirect effect via export activity. We test these hypotheses for sectoral R&D intensities using OECD panel data for manufacturing and services sectors for 14 OECD economies and the years 1987 - 2003. We find that the direct negative effect of volatility is pronounced in manufacturing sector but is dominated by the indirect effect via the export channel. Services do not face any effects of volatility on R&D intensities. While it is not clear which channel dominates our results confirm that there is a negative volatility affect related to openness on a sectoral level |
| Keywords: | R&D intensity, Innovation, Real Exchange Rate, Volatility, Exports, OECD-Countries |
| JEL: | E32 F31 O32 |
| Date: | 2009–07 |
| URL: | http://d.repec.org/n?u=RePEc:kie:kieliw:1531&r=ino |
| By: | Barros, Henrique M.; Lazzarini, Sergio G. |
| Date: | 2009–10 |
| URL: | http://d.repec.org/n?u=RePEc:ibm:ibmecp:wpe_168&r=ino |
| By: | Sidonia von Ledebur (Department of Geography, Philipps University Marburg) |
| Abstract: | This paper analyses the development of universities' patent applications in Germany before and after the abolition of the 'professors' privilege' in 2002. By means of a database with all patent applications of German universities with professors among the inventors (1990-2006), systematic changes in the trend are investigated. There are contrasts in the patenting patterns of universities with or without long patenting experience. A structural break at the point of the new legislation is found only for universities without patent activities in the past. This indicates the importance of collecting patenting experience and that the amount of patents is path-dependent. |
| Keywords: | university patenting, Germany, technology transfer, professors' privilege |
| JEL: | O34 O38 L31 |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:pum:wpaper:2009-02&r=ino |
| By: | Rego, Conceição; Caleiro, António |
| Abstract: | Many studies, provided by diverse authors and institutions, demonstrate that, at a territorial level, development is directly related to the level of education and R&D. Territories with higher development levels are, generally, those that have a higher level of education and R&D. The relationship between the acquisition of knowledge and institutional education is therefore decisive. In this area, the role of universities is fundamental. The retention of university graduates is one of the main ways that the cities and the regions can adopt to retain those endowed with higher propensity to innovation, enterprise spirit and management capacity. Given that higher education institutions, in general, and universities, in particular, are obviously crucial in the process of knowledge increase, it becomes important to analyse how can these institutions act as ways of spatial diffusion of knowledge given that their graduates may migrate to other regions of the country (or for another country). The alleged increased probability of this migration to occur when the university is located in a small or medium sized town makes that analysis also interesting from the viewpoint of the development role that this kind of cities can perform, not only in the adjacent rural areas, but also across all the urban areas of the territory. The focus of our work consists in this analysis, which complements a theoretical approach with an empirical part based upon the results that can be observed for the influence of one university located in a small/medium sized town (the University of Évora) in the spatial diffusion of knowledge through its graduates. |
| Keywords: | Human capital; Small towns; Spatial diffusion of knowledge; Universities |
| JEL: | O15 I23 J24 R11 |
| Date: | 2009–07–13 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:16241&r=ino |
| By: | Clark, Derek J.; Sand, Jan Yngve |
| Abstract: | This paper analyses the endogenous formation of technology sharing coalitions with asymmetric firms. Coalition partners produce complementary technology advancements, although each firm determines its R&D investment level non-cooperatively and there is no co-operation in the product market. We show that the equilibrium coalition outcome is either one between the two most efficient firms, or a coalition with all three firms. The two-firm coalition is the preferred outcome of a welfare maximising authority if ex ante marginal cost is sufficiently high, and the three-firm coalition is preferred otherwise. Furthermore, we show that the equilibrium outcomes result in the lowest total R&D investment of all possible outcomes. Aircraft engine manufacturing provides a case study, and indicates the importance of anti-trust issues as an addition to the theory. |
| Keywords: | R&D, endogenous coalitions, asymmetric firms |
| JEL: | L11 L13 |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ifwedp:7592&r=ino |
| By: | Márquez-Ramos, Laura; Martínez-Zarzoso, Inmaculada |
| Abstract: | This paper focuses on the relationship between technological innovation and international trade. In particular, the effect of technological achievement on exports is studied. In order to measure technological innovation, the technological achievement index (TAI) is used, thus providing a summary of a society’s technological achievements and allowing countries to be classified into four groups according to their level of technological innovation: Leaders, Potential Leaders, Dynamic Adopters and Marginalised. The effect of technological variables on sectoral exports is analysed using a gravity model of trade. The existence of a possible non-linear relationship is also investigated, since the effect of improved technological innovation on trade could vary according to the technological achievement in countries. Results show the expected positive effect of technological innovation on export performance and the existence of non-linearities is confirmed. A “U-shaped” relationship is found between exports and creation of technology and between exports and diffusion of old innovations, whereas an inverted–“U-shaped” relationship is found between exports and diffusion of recent innovations and between exports and human skills. |
| Keywords: | Technological innovation, sectoral exports, gravity model, panel data, non-linearities |
| JEL: | F10 |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ifwedp:7588&r=ino |
| By: | Davide Dragone (Department of Economics, University of Bologna); Luca Lambertini (Department of Economics, University of Bologna; ENCORE, University of Amsterdam; RCEA); Arsen Palestini (Department of Economics, University of Bologna) |
| Abstract: | The established view on oligopolistic competition with environmental externalities has it that, since firms neglect the external effect, their incentive to invest in R&D for pollution abatement is nil unless they are subject to some form of environmental taxation. We take a dynamic approach to this issue, using a simple differential game to show that the conclusion reached by the static literature is not robust, as the introduction of dynamics shows that firms do invest in R&D for environmental-friendly technologies throughout the game, as long as R&D is accompanied by an output restriction exhibiting a distinctively collusive flavour. We also examine the social planning case and the effects of Pigouvian taxation, to show that there exists a feasible tax rate inducing profit-seeking firms to choose a combination of output and R&D such that the resulting social welfare level is the same as in the first best |
| Keywords: | pollution, environmental externality, R&D, differential games, social planning |
| JEL: | H23 L13 O31 Q55 |
| Date: | 2009–01 |
| URL: | http://d.repec.org/n?u=RePEc:rim:rimwps:wp21_09&r=ino |
| By: | Cusolito, Ana |
| Abstract: | Some researchers have documented that the path of development is remarkably related to the pattern of sectoral diversification. Others have highlighted the relation between productive specialization and economic progress. This paper explores the role of product market competition and intellectual property rights protection in the pattern of sectoral diversification. The paper confirms the insight of the innovation literature, that competition induces firms to specialize and upgrade the quality of existing goods. However, it reveals a new force, called the imitation effect, through which competition biases technical change toward product diversification. The paper shows that if knowledge spillovers increase with imitation, or the degree of product substitution is high, weak protection of property rights encourages firms to create low-quality goods, thereby directing technical change toward diversification. The predictions are tested with data on Italian firms'innovation activity. They are found to be consistent with observed behavior. |
| Keywords: | Education for Development (superceded),Economic Theory&Research,E-Business,Markets and Market Access,Labor Policies |
| Date: | 2009–07–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:4997&r=ino |
| By: | Carlota Perez |
| Abstract: | This paper locates the notion of technological revolutions in the Neo- Schumpeterian effort to understand innovation and to identify the regulari- ties, continuities and discontinuities in the process of innovation. It looks at the micro- and meso-foundations of the patterns observed in the evolution of technical change and the interrelations with the context that shape the rhythm and direction of innovation. On this basis, it defines technological revolutions, examines their structure and the role that they play in rejuve- nating the whole economy through the application of the accompanying techno-economic paradigm. This over-arching meta-paradigm or shared best practice .common senseÿ is in turn defined and analysed in its compo- nents and its impact, including the influence it exercises on institutional and social change. |
| Date: | 2009–01 |
| URL: | http://d.repec.org/n?u=RePEc:tth:wpaper:20&r=ino |