nep-ino New Economics Papers
on Innovation
Issue of 2009‒11‒14
twenty-one papers chosen by
Steffen Lippert
Massey University Department of Commerce

  1. Does partner type matter in R&D collaboration for product innovation? By Ki H. Kang; Jina Kang
  2. Contextual effects on the complementarities between R&D activities: An empirical analysis of the Korean manufacturing industry By Sungki Lee; Donghyuk Choi; Yeonbae Kim
  3. How Do Firms Source External Knowledge for Innovation? : Analyzing Effects of Different Knowledge Sourcing Methods By Ki H. Kang; Jina Kang
  4. Do external knowledge sourcing methods matter in service innovation?: analysis of South Korean service firms By Ki H. Kang; Jina Kang
  5. FDI, R&D and Innovation Output in the Chinese Automobile Industry By Chen, Fang; Mohnen, Pierre
  6. Picking the Winner? - Empirical Evidence on the Targeting of R&D Subsidies to Start-ups By Uwe Cantner; Sarah Kösters
  7. The Internationalization of Inventive Activity: A Gravity Model Using Patent Data By Picci, Lucio
  8. Economic incongruities in the European patent system By Malwina Mejer; Bruno van Pottelsberghe de la Potterie
  9. R&D Productivity and Intellectual Property Rights Protection Regimes By Joanna Poyago-Theotoky; Khemarat Talerngsri Teerasuwannajak
  10. Skills required for innovation: A review of the literature By Pierre Therrien; Petr Hanel
  11. Productivity of Catalan firms. International exposure and (product) innovation By Cassiman, Bruno; Golovko, Elena
  12. Global Value Chains, Technology Transfer and Local Firm Upgrading in Non-OECD Countries By Juliane Brach; Robert Kappel
  13. The Role of Search in University Productivity: Inside, Outside, and Interdisciplinary Dimensions By James D. Adams; J. Roger Clemmons
  14. Catalan competitiveness: Science and business By Cassiman, Bruno; Mas, Jordi
  15. The effects of teacher firms¡¯ characteristics and student firms¡¯ absorptive capacity on firm performance in technology alliances By Gunno Park; Jina Kang
  16. Toward a Theory of Public Entrepreneurship By Klein, Peter G.; Mahoney, Joseph T.; McGahan, Anita M.; Pitelis, Christos N.
  17. Centers tehnology transfer-active factor an the regional development By Ghimisi, Stefan/St; Popescu , Gheorghe
  18. Revisiting Knowledge Transfer: Effects of Knowledge Characteristics on Organizational Effort for Knowledge Transfer By Ki H. Kang; Jina Kang
  19. Endogenous Technological Progress and the Cross Section of Stock Returns By Xiaoji Lin
  20. Intellectual Property Rights in Indian Agriculture By Jayashree Watal
  21. Regional Factors and Innovativeness – An Empirical Analysis of Four German Industries By Tom Broekel; Thomas Brenner

  1. By: Ki H. Kang; Jina Kang (Technology Management, Economics and Policy Program(TEMEP), Seoul National University)
    Abstract: Recent research identify the type of partner as a critical factor determining the effect of R&D collaboration on innovation. Most firms tend to utilize various types of R&D collaboration partners simultaneously, and partnerships between different types of partners show different properties. Thus, the effect of R&D collaboration may vary depending on partner types. This study considers four partner types: competitors, customers, suppliers, and universities. It empirically examines the effect of R&D collaboration with each type of partner on product innovation,employing the Korea Innovation Survey data. Results show that R&D collaborations with customers and universities have a positive effect on product innovation, whereas R&D collaborations with suppliers and competitors have an inverted-U shape relationship with product innovation.
    Keywords: R&D collaboration, product innovation, competitors, customers, suppliers, universities
    Date: 2009–08
  2. By: Sungki Lee; Donghyuk Choi; Yeonbae Kim (Technology Management, Economics and Policy Program(TEMEP), Seoul National University)
    Abstract: Firms undertake various R&D activities to generate commercializable innovations and to create and sustain competitive advantage. However, mere exploitation of various R&D opportunities has no conclusive impacts on a firm¡¯s competitive advantage in innovation, since R&D activities might closely interact with each other and their appropriate combination would have a synergy effect on a firm¡¯s innovation performance. The aim of this paper is to explore various contextual factors behind synergy effects derived from interactions between R&D activities based on the economic and technological sources of the R&D complementarities, such as absorptive capacity, knowledge flows, and uncertainty, as well as to examine the existence of complementarities between corporate R&D activities, using the 2004 innovation survey data of Korean manufacturing industries. The corporate R&D activities considered in this study are in-house R&D, R&D cooperation, and commissioned R&D. Our research concludes that there exists a complementary relationship between a firm¡¯s internal R&D and R&D cooperation activity. In addition, our study discovered that the complementarity between R&D activities relies on the organizational contextualities?a firm¡¯s cumulative patent stocks, perceived level of imitation risk, experience of external knowledge acquisition, and information inflows from public research institutes and universities?that lie hidden under the firm-specific activities.
    Keywords: Contextuality, Complementarity, Innovation, In-house R&D, R&D cooperation, Commissioned R&D
    Date: 2009–09
  3. By: Ki H. Kang; Jina Kang (Technology Management, Economics and Policy Program(TEMEP), Seoul National University)
    Abstract: In the era of ¡®open innovation¡¯, external knowledge is a very important source for technology innovation. In this paper, we investigate the relationship between external knowledge and performance of technology innovation. The effect of external knowledge on the performance of technology innovation can vary with different external knowledge sourcing methods. We identify three ways of external knowledge sourcing: information transfer from informal network, R&D collaboration, and technology acquisition. We propose three hypotheses to examine relationship between the three methods of external knowledge sourcing and the technology innovation performance. Our results show that information transfer from informal network and technology acquisition have positive relationships with the technology innovation performance. R&D collaboration, however, has an inverted-U shape relationship with technology innovation performance. This implies that the effect of external knowledge on technology innovation varies depending on the particular external knowledge sourcing method. This research has important implication for firms in selecting appropriate strategy for accessing external knowledge.
    Keywords: external knowledge, open innovation, knowledge sourcing method, technology innovation
    Date: 2009–08
  4. By: Ki H. Kang; Jina Kang (Technology Management, Economics and Policy Program(TEMEP), Seoul National University)
    Abstract: This paper analyses the effects of different external knowledge sourcing methods on service innovation performance. We identify three external knowledge sourcing methods: informal information transfer, R&D collaboration, and technology outsourcing. Three hypotheses are established to examine the relationship between these three external knowledge sourcing methods and service innovation. Our result shows that the relationship between the extent of external knowledge sourcing and service innovation performance varies depending on the particular external knowledge sourcing method. This research grants important implication to firms in selecting an appropriate external knowledge sourcing strategy in service industry.
    Keywords: service innovation, external knowledge sourcing method, informal information transfer, R&D collaboration, technology outsourcing
    Date: 2009–08
  5. By: Chen, Fang (Chinese Academy of Sciences); Mohnen, Pierre (UNU-MERIT, Maastricht University, and CIRANO)
    Abstract: After joining the World Trade Organization (WTO), China witnessed a major inflow of Foreign Direct Investment (FDI). Many famous automobile firms of developed countries were attracted to invest in China to cooperate with domestic firms. This paper uses firm-level data of the Chinese automobile industry to analyze the determinants of, and the interrelationships between, innovation input and innovation output, and in particular whether FDI had any influence on these two aspects of innovation. A generalized tobit model will be estimated for both R&D and the share of innovative sales for 2002/2003 and 2005/2006. The findings show that FDI firms are less R&D intensive but, when they innovate in new products, they are more product innovative than domestic-funded firms.
    Keywords: FDI, China, R&D, innovation, automobile industry
    JEL: O14 L62 F21
    Date: 2009
  6. By: Uwe Cantner (Department of Economics, Friedrich Schiller University of Jena); Sarah Kösters (DFG RTG 1411 "The Economics of Innovative Change", Friedrich Schiller University of Jena)
    Abstract: This paper investigates the allocation of R&D subsidies given to start-ups. Considering the coexistence of various R&D project schemes, we take an aggregate view and analyze the determinants of the receipt of (any) R&D subsidies within the first three business years of the start-ups. We argue that policymakers and funding authorities follow a strategy of "picking the winner". Analyzing a unique data set of start-ups in the East German state of Thuringia, we conduct logistic regressions and find ambiguous support. R&D subsidies are given to start-ups with innovative business ideas, especially academic spin-offs. On the other hand, the ambitions and the patent stock of the founder(s) do not decide the receipt of R&D subsidies. These insights into the overall allocation of R&D subsidies are important since they have implications for policy effectiveness and efficiency. The implied difficulties of policy targeting fundamentally question the massive subsidization of private R&D.
    Keywords: Start-ups, R&D subsidies, Subsidy allocation
    JEL: O38 L26 L52
    Date: 2009–11–09
  7. By: Picci, Lucio
    Abstract: This paper discusses the extent and the determinants of the internationalization of European inventive activity, between 1990 and 2005, using an innovative method to treat the information contained in the European Patent Office's Patstat database. We introduce a new set of indicators measuring internationalized patent applications that are fully coherent with the principle of fractional counting. 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. The amount of bilateral collaboration is positively affected by the presence of a common language, a common border and by more similar cultural characteristics. International collaboration is negatively affected by distance, with estimated elasticities that are significantly smaller than the ones that characterize international trade.
    Keywords: Gravity models, R&D, patents, internationalization
    JEL: F15 C51 O30 C24
    Date: 2009–10–15
  8. By: Malwina Mejer (Université Libre de Bruxelles); Bruno van Pottelsberghe de la Potterie (Université Libre de Bruxelles)
    Abstract: This article argues that the consequences of the ‘fragmentation’ of the European patent system are more dramatic than the mere prohibitive costs of maintaining a patent in force in many jurisdictions. The prevalence of national jurisdictions, which are highly heterogeneous in their costs and practices, over the validity and enforcement of European patents induces both a high level of uncertainty and an intense managerial complexity which undoubtedly reduces both the effectiveness and the attractiveness of the European patent system in its mission to stimulate innovation.
    Keywords: European patent system, litigation process, enforcement, uncertainty
    JEL: K41 P14 O34
    Date: 2009
  9. By: Joanna Poyago-Theotoky (Rimini Centre for Economic Analysis (RCEA); University of Loughborough, Department of Economics); Khemarat Talerngsri Teerasuwannajak (Faculty of Economics, Chulalongkorn University)
    Abstract: We study fi…rms' 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 fi…eld, 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 fi…nd 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 fi…rms 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 fi…rm is ensured that what it gets to utilize in return is sufficiently more than what it gives to its rival.
    Keywords: intellectual property rights (IPR), cost-reducing R&D, R&D productivity, information exchange
    JEL: O34 F13 O32 O38 L13 D43
    Date: 2009–01
  10. By: Pierre Therrien (Industrie Canada, Ottawa); Petr Hanel (CIRST, GREDI, Faculte d'administration, Université de Sherbrooke)
    Abstract: Research teams from 18 OECD countries used the methodology introduced by Crepon-Dugay and Mairesse (CDM) to analyze the impact of innovation on labour productivity using firm data from national innovation and administrative surveys. To ensure international comparability, the OECD ‘core’ CDM model did not include variables for which data were missing in some countries. In spite of this shortcoming, the results are broadly in line with theoretical hypotheses and previous studies and show a surprising degree of similarity between countries. This paper builds on the Canadian application of the ‘core’ model used for the OECD project. It uses to the full extent all information available on manufacturing establishments from the Canadian Survey of innovation 2005 linked with the Annual Survey of Manufactures and Logging (ASML). The estimated econometric model controls for selection bias, simultaneity, size of firm and industry effects. The main findings suggest that (1) export outside of the US market, size of the firm and use of direct or indirect government support are factors increasing the probability to innovate and having positive innovation sales. (2) Exports (both to the US and outside of the US market), cooperation with other firms and organizations, and high share of the firms’ revenue coming from sales to its most important client are all factors correlated with higher innovation expenditures per employees. Moreover, firms with a higher market share at the beginning of the period are spending more on innovation by the end of the period. (3) Firms with higher innovation expenditures per employee generate more innovation sales per employee. Other factors increasing innovation sales are human and physical capital and introduction of process innovations. (4) Finally, the firms generating more innovation sales per employees achieve higher labour productivity, even when the size of firms, the intensity of human and physical capital and labour productivity at the beginning are taken into account. The results add valuable further information to and are in line with the simpler model applied to 18 other OECD countries. The paper concludes with discussion of policy implications.
    Keywords: Innovation; skills; national innovation systems; labour market; education of innovation; effect of innovation on skills
    JEL: J24 J44 L6 L8
    Date: 2009–09–01
  11. By: Cassiman, Bruno (IESE Business School); Golovko, Elena (Tilburg University)
    Abstract: Exporting firms are typically the more productive firms in an economy. Based on this observation, policy makers typically enact policies to stimulate exportation by domestic firms. In this chapter, we argue that firms make productivity enhancing investments and as a result the more productive firms start an export activity, which might make these firms even more productive. We find evidence of two types of productivity enhancing investments made by Catalan firms: both the fact that a firm imports some of its inputs and that the firm has innovated in the previous year seem to positively affect productivity and, hence, the decision to start exporting. We also find that there is an important difference between the effects of product innovations versus process innovations: product innovations seem to matter more for the export decision of Catalan firms while process innovations have little or no effect on this decision. Overall, we find that importing, innovating and exporting are strongly complementary activities. At the same time, firms develop these activities sequentially. Therefore, it seems that stimulating firms to become active in the international sourcing market and generate (product) innovations might be more productive policy measures than stimulating firms to enter the export market directly.
    Keywords: Firms; Productivity; Catalonia; Innovation;
    Date: 2009–07–17
  12. By: Juliane Brach; Robert Kappel (GIGA Institute of Global and Area Studies)
    Abstract: The productivity and competitiveness of local firms in non-OECD countries depends as much on technological capacities and successful upgrading as in industrialized countries. However, developing countries undertake very little to no original R&D and primarily depend on foreign technology. Long-term contracts and subcontracting arrangements within global value chains are here very important forms of transnational cooperation and therefore also important channels for technology transfer, especially as the majority of these countries attract only limited foreign direct investment. Drawing on innovation and growth models as much as on value-chain literature, we outline an analytical model for empirical research on local firm upgrading in non-OECD countries and technology transfer within global value chains.
    Keywords: technology transfer, upgrading, innovation, non-OECD countries, global value chains
    Date: 2009–10
  13. By: James D. Adams; J. Roger Clemmons
    Abstract: Due to improving information technology, the growing complexity of research problems, and policies designed to foster interdisciplinary research, the practice of science in the United States has undergone significant structural change. Using a sample of 110 top U.S. universities observed during the late 20th century we find that knowledge flows, both in total and in their major components, are a significant and positive determinant of research output. Outside knowledge-flows from other universities have increased at a faster rate than inside flows from the same university. Over time, the importance of outside flows for research output has risen, and it has done so at a faster rate than the importance of inside flows has decreased. Thus the overall contribution of knowledge-flows has increased and has shifted towards outside flows. Turning to knowledge-flows by field, we find that interdisciplinary knowledge-flows have increased only slightly relative to same field flows, despite policy initiatives that favor interdisciplinary research. Moreover, the importance of interdisciplinary flows for research output, while positive and statistically highly significant, has stayed about the same, even as same field flows have become more important, probably because of growth in cyber infrastructure. Although a final verdict is yet to be reached, one interpretation is that interdisciplinary research is still in its early stages. While interdisciplinary flows have begun to increase, the resulting discoveries, and their influence on subsequent research, may still lie in the future.
    JEL: D24 D80 L31 O32 O33 O38
    Date: 2009–11
  14. By: Cassiman, Bruno (IESE Business School); Mas, Jordi (IESE Business School)
    Abstract: Science has been shown to be an important driver of economic growth and performance. In this chapter we take a careful look at a key ingredient of this driver for Catalonia: the link between science and business. We argue that the Catalan innovation system faces three important challenges in order to better connect science to business: 1) the need for a sufficient supply of high quality science; 2) the need for a sufficient demand for science by companies, and 3) the ability to connect science and business, i.e., science needs different channels to connect with business and requires coordinated efforts between the different players in the innovation system. We find that the science landscape at Catalan (Spanish) scientific institutions has improved considerably in the last decade. Demand for science by Catalan firms, on the contrary, is still very weak. Nevertheless, we do find that industry and universities use a large variety of channels for knowledge interaction. In addition, we show that the three large Catalan universities have very different profiles in their interactions with industry. However, our analysis does indicate that there is currently a lack of basic information about the Catalan innovation system to help inform and direct such important policy measures. Some coordination on recording this information systematically would improve matters considerably.
    Keywords: Competitiveness; Catalonia; Science; Business;
    Date: 2009–07–17
  15. By: Gunno Park; Jina Kang (Technology Management, Economics and Policy Program(TEMEP), Seoul National University)
    Abstract: With the dramatically changing technology and market environments, the importance of technology alliance to develop new products and technologies by utilizing firms¡¯ external knowledge has increased. In order to provide insight on the relationship between teacher characteristics and technology alliance performances, this study conceptualized an alliance structure according to Lane and Lubatkin¡¯s ¡®dyadic construct,¡¯ consisting of student firms which absorb knowledge and teacher firms that transfer knowledge. Then we analyzed the relationship between teacher firms¡¯ relative characteristics and student firms¡¯ performance of the technology alliance, using the empirical data of the Korean IT firms that are listed on Korean stock market during 1999-2005. From this analysis, we find that teacher characteristics, such as technology capability, technology similarity, and capability for knowledge transfer, influence the performance of technology alliance.
    Keywords: Technology alliance, teacher firms¡¯characteristics, absorptive capacity, knowledge transfer, Korean IT firm
    Date: 2009–08
  16. By: Klein, Peter G. (University of Missouri); Mahoney, Joseph T. (University of Illinois at Urbana-Champaign); McGahan, Anita M. (University of Toronto); Pitelis, Christos N. (University of Cambridge)
    Abstract: This paper explores innovation, experimentation, and creativity in the public domain and in the public interest. Researchers in various disciplines have studied public entrepreneurship, but there is little research specifically on the nature, incentives and constraints of public entrepreneurship to innovate in the public interest. We begin by extending concepts of the entrepreneurial firm to include greater interactions in the public domain, and then turn to the role of entrepreneurial firms in fostering institutional change. This focus points toward opportunities for integrating transaction-costs, political and international business theories to achieve a more refined institutional theory of firm-government interactions that incorporates entrepreneurial agency as a principal mechanism for innovating in the fulfillment of public and private interests.
    Date: 2009
  17. By: Ghimisi, Stefan/St; Popescu , Gheorghe
    Abstract: The purpose of this paper is to investigate mechanisms of knowledge transfer between firms and universities. Universities have become increasingly involved in technology transfer by establishing offices of technology transfer, business incubators, and technology parks. This paper presents some aspects of technology transfer centers, specific activities in these entities, with a real example, UCB-Pitt, an entity founded the University Constantin Brancusi of Targu Jiu.
    Keywords: tehnology transfer; knowledge; university
    JEL: A12 D24
    Date: 2009–11–10
  18. By: Ki H. Kang; Jina Kang (Technology Management, Economics and Policy Program(TEMEP), Seoul National University)
    Abstract: This study analyzes the effects of knowledge characteristics on the extent of organizational effort for knowledge transfer. In this paper, three knowledge characteristics that affect organizational behavior for knowledge transfer are identified based on knowledge-based views and organizational learning theory: tacitness, difficulty, and the importance of knowledge. We establish three hypotheses on the effects of these three knowledge characteristics on the extent of effort for knowledge transfer (i.e., the frequency of contact with knowledge source), and provide empirical tests employing the dataset from project teams in a multinational consulting firm via the OLS model. Results show that tacitness, difficulty, and importance have positive effects on the frequency of contact with knowledge sources. This implies that firms exert more effort to acquire the knowledge when the knowledge is tacit, difficult, or important
    Keywords: knowledge transfer, knowledge characteristics, tacitness, difficulty,importance
    Date: 2009–08
  19. By: Xiaoji Lin
    Abstract: I study the cross sectional variation of stock returns and technological progress using a dynamic equilibrium model with production. In the model, technological progress is endogenously driven by R&D investment and is composed of two parts. One part is product innovation devoted to creating new products; the other part is dedicated to increasing the productivity of physical investment and is embodied in new tangible capital (e.g., structures and equipment). The model breaks the symmetry assumed in standard models between in- tangible capital and tangible capital, in which the accumulation processes of tangible capital stock and intangible capital stock do not affect each other. The model explains qualitatively and in many cases quantitatively well-documented empirical regularities: (i) the positive relation between R&D investment and the average stock returns; (ii) the negative relation between physical investment and the average stock returns; and (iii) the positive relation between book-to-market ratio and the average stock returns.
    Date: 2009–11
  20. By: Jayashree Watal
    Abstract: This paper distinguishes the Intellectual Property Rights relevant to agriculture and explain these rights. The international intellectual property law for these rights will be described. India's international obligations vis-a-vis her own IPR laws has been explained. Analysis of the public debate in India on the controversial IPRs and the status of the legislation on these is given. This paper concludes conclude with prescriptions for public policy on IPRs and agriculture in India. [ICRIER WP no.44].
    Keywords: India, trade, paptents, countries, plants, animals, industrially, industry, technology, geographical indications, Basmati, rice, laws, industrial property, World Trade Organization (WTO), TRIPS, agriculture, IPR, intellectual property rights, legislation,
    Date: 2009
  21. By: Tom Broekel; Thomas Brenner
    Abstract: A growing body of work emphasizes the importance of regional factors for regional innovativeness. In this paper, about seventy variables approximating the social-economic characteristics of regions are aggregated to twelve regional factors. In four industry-specific set-ups their influence on firms’ innovativeness is tested. The study confirms that inter-industrial differences exist in the importance of these factors. In the empirical analyses a log-linear model is compared with a linear approach. While both are theoretically problematic it is shown that the log-linear model performs better in the empirical assessment.
    Keywords: regional innovation performance, regional innovativeness, knowledge production function, industry comparison, German regions
    JEL: O18 R11 R12
    Date: 2009–10

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