nep-ino New Economics Papers
on Innovation
Issue of 2010‒01‒10
sixteen papers chosen by
Steffen Lippert
Massey University Department of Commerce

  1. International Harmonization of the Patent-Awarding Rules By Kaz Miyagiwa
  2. From Knowledge to Added Value: A Comparative, Panel-data Analysis of the Innovation Value Chain in Irish and Swiss Manufacturing Firms By Stephen Roper; Spyros Arvanitis
  3. Persistence of and interrelation between horizontal and vertical technology alliances By Belderbos, Rene; Gilsing, Victor; Lokshin, Boris
  4. Patent Productivity of German Professors over the Life Cycle By Sidonia von Ledebur
  5. The regional development of science and innovation in China: a brief review of current evidence on matches and mismatches By Kroll, Henning
  6. Fits and Misfits : Technological Matching and R & D Networks By Nicolas Jonard; R. Cowan; B. Sanditov
  7. The uncertainty in regional innovation policy: some ration-ales and tools for learning in policy making By Koschatzky, Knut
  8. Catching-up and falling behind: knowledge spillover from American to German machine tool makers By Richter, Ralf; Streb, Jochen
  9. Cohesion policy at the interface between regional development and the promotion of innovation By Koschatzky, Knut; Stahlecker, Thomas
  10. Crowdsourcing: What can be Outsourced to the Crowd, and Why ? By Eric Schenk; Claude Guittard
  11. The impact of the EU ETS on the sectoral innovation system for power generation technologies: findings for Germany By Rogge, Karoline; Hoffmann, Volker
  12. The Effect of Adversity on Process Innovations and Managerial Incentives By Benoit Dostie; Rajshri Jayaraman
  13. Importing, exporting and innovation in developing countries By Seker, Murat
  14. The spatial multidimensionality of sectoral innovation: the case of information and communication technologies By Koschatzky, Knut; Baier, Elisabeth; Kroll, Henning; Stahlecker, Thomas
  15. Do Competitively Acquired Funds Induce Public Research Institutions to Behave Efficiently? By Thomas Bolli; Frank Somogyi
  16. Royalty Licensing. By Marta San Martin; Ana I. Saracho

  1. By: Kaz Miyagiwa
    Abstract: While the rest of the world issues patents to those who file applications first the U.S. do so to those who can demonstrate to have made inventions first. The U.S. has recently been under pressure to conform to the international rule. In this paper I examine the effect of international harmonization of the patent-awarding rules. In a dynamic two-country model of R&D competition for sequential inventions, I find that harmonization to the first-to-file rule can undermine innovation. This result is more like to arise if secondary innovations are relatively easy and their commercial successes are predominantly in the U.S. markets.
    Date: 2009–12
  2. By: Stephen Roper (Centre for Small and Medium Enterprises, Warwick Business School, University of Warwick, Coventry,UK); Spyros Arvanitis (KOF Swiss Economic Institute, ETH Zurich, Switzerland)
    Abstract: The innovation value chain (IVC) divides the innovation process into three separate links or activities: knowledge gathering, knowledge transformation and knowledge exploitation. Here, we report a comparative panel data analysis of the IVC in Ireland and Switzerland. Both economies are small, very open and depend significantly on innovation to maintain competitive advantage. In recent years, however, R&D and innovation growth in Ireland has been markedly stronger than that in Switzerland. We investigate these differences through the ‘lens’ of the IVC. We identify significant similarities between the determinants of firms’ knowledge gathering behaviours in each country although firms are responding differently to financial and legal constraints. Strong complementarities emerge between external knowledge sources and between firms’ internal and external knowledge. In terms of knowledge transformation – the development of new products or processes – we again find strong similarities between the two countries in terms of the determinants of the probability of innovation. The determinants of innovation intensity vary more, however, with external ownership significantly more important in Ireland. Finally, we consider the link between innovation and productivity which involves significant endogeneity issues. Two-stage estimation procedures do not suggest any significant links between innovation and productivity as we might expect from the macro-economic evidence.
    Keywords: Innovation, value chain, Switzerland, Ireland
    JEL: O3 O5 P5
    Date: 2009–11
  3. By: Belderbos, Rene (UNU-MERIT, Maastricht University and KU Leuven); Gilsing, Victor (Centre for Innovation Research, University of Tilburg); Lokshin, Boris (UNU-MERIT and Maastricht University)
    Abstract: We examine how and to what extent the propensity to be engaged in alliances with different partner types (suppliers, customers and competitors) depends on prior alliance engagement with partner firms of the same type (persistence) and prior engagement in alliances with the other partner types (interrelation). We derive hypotheses from a combined competence and governance view of collaboration, and test these on an extensive panel dataset of innovation-active Dutch firms during 1996-2004. We find persistence in alliance engagement of all three types of partners, but customer alliances are more persistent than supplier alliances. Most persistent are joint supplier and customer alliances, which we attribute to the advantages of value chain integration in innovation processes. Positive interrelation also exists in vertical alliances, as immediate past customer alliances increase the propensity to engage in supplier alliances and vice versa. On the other hand, while prior engagement in horizontal (competitor) alliances increases the propensity to engage in vertical alliances, this effect only occurs with a longer lag. Overall, our findings are highly supportive of the idea that alliance engagement with different partner types is heterogeneous but interrelated. Our analysis suggests that the inter-temporal relationship between different types of alliances may be as important as their simultaneous relationship in alliance portfolios.
    Keywords: R&D collaboration, technological partnerships, innovation, path dependency
    JEL: O31 O32
    Date: 2009
  4. By: Sidonia von Ledebur (Department of Geography, Philipps University Marburg)
    Abstract: The paper studies the patent productivity of scientists over their life cycle. The incentives for patenting and for publishing are compared and how they shape life cycle productivity. In most empirical studies, publication productivity decreases at the end of the scientific career. In contrast, the analytical model given here suggests an increase of patent productivity over the life time. In the empirical part the patents of nearly 1000 German patent active professors are analyzed. The empirical findings support the theoretical prediction that patent productivity does not decline for older scientists.
    Keywords: : university patenting, patent productivity, scientific productivity, age and productivity, Germany
    JEL: O33 O34 J24
    Date: 2009
  5. By: Kroll, Henning
    Abstract: --
    Date: 2009
  6. By: Nicolas Jonard; R. Cowan; B. Sanditov (CREA, University of Luxembourg)
    Abstract: This paper presents an economic model of R&D network formation through the creation of strategic alliances. Firms are randomly endowed with knowledge elements. They base their alliance decisions purely on the technological fit of potential part- ners, ignoring social capital considerations and indirect benefits on the network. This is sucient to generate equilibrium networks with the small world properties of ob- served alliance networks, namely short pairwise distances and local clustering. The equilibrium networks are more clustered than "comparable" random graphs, while they have similar characteristic path length. Two extreme regimes of competition are examined, to show that while the competition has a quantitative eect on the equilibrium networks (density is lower with competition), the small world features of the equilibrium networks are preserved.
    JEL: D85
    Date: 2009
  7. By: Koschatzky, Knut
    Abstract: This paper deals with two major dilemmas in regional innovation policy making: The dilemma that theory does not provide sufficient answers for the formulation of specific innovation policy measures addressing the problem configurations of single regions and the dilemma that role models are used as a substitute for orientation. In order to support policy learning, different approaches like evaluation, the development of innovation strategies and regional foresight are discussed. --
    Date: 2009
  8. By: Richter, Ralf; Streb, Jochen
    Abstract: In our days, German machine tool makers accuse their Chinese competitors of violating patent rights and illegally imitating German technology. A century ago, however, German machine tool makers used exactly the same methods to imitate American technology. To understand the dynamics of this catching-up process we use patent statistics to analyze firms' activities between 1877 and 1932. We show that German machine tool makers successfully deployed imitating and counterfeiting activities in the late 19th century and the 1920s to catchup to their American competitors. The German administration supported this strategy by stipulating a patent law that discriminated against foreign patent holders and probably also by delaying the granting of patents to foreign applicants. Parallel to the growing international competitiveness of German firms, however, the willingness to guarantee intellectual property rights of foreigners was also increasing because German firms had now to fear retaliatory measures in their own export markets when violating foreign property rights within Germany. --
    Date: 2009
  9. By: Koschatzky, Knut; Stahlecker, Thomas
    Abstract: Taking the implications of the cohesion policy framework for innovation governance as a starting point, it is the objective of this paper to discuss challenges for regional policy making with regard to a policy mix that is new to regional policy makers. Based on two German regions representing convergence and competitive and employment regions it will be discussed how regional policy makers can deal with this new policy approach and what could be appropriate strategies, programmes and learning tools. What can be seen from both the Bavarian and the Saxon case study is that the two regions apply a broad mix of different innovation policy measures, supporting all innovation policy tasks with relevance to regional development. In both regions innovation policy is not a new task, but Saxony as well as Bavaria can look back to a quite long tradition in the im-plementation of this policy. Differences exist with regard to policy learning in a way that due the longer innovation policy experiences of Bavaria more sophisticated structures and activities can be found in this federal state. --
    Date: 2009
  10. By: Eric Schenk (LGeco - Laboratoire de Génie de la Conception - Institut National des Sciences Appliquées de Strasbourg, BETA - Bureau d'économie théorique et appliquée - CNRS : UMR7522 - Université de Strasbourg); Claude Guittard (BETA - Bureau d'économie théorique et appliquée - CNRS : UMR7522 - Université Louis Pasteur - Strasbourg I)
    Abstract: Why should a firm outsource certain activities in countries where labor is inexpensive, when by using the Internet, firms are a mouse click away from an eclectic, university educated, population ready to invest in intellectually stimulating projects for little or no remuneration ? The word Crowdsourcing –a compound contraction of Crowd and Outsourcing, was used by Howe in order to define outsourcing to the crowd. Beyond cost, benefits for the company can be substantial. It can externalize the risk of failure and it only pays for products or services that meet its expectations. The aim of this paper is to characterize Crowdsourcing from a management science perspective. Our approach is mainly theoretical, although we rely on extensive illustrations. First we discuss the definition of Crowdsourcing, and provide examples that illustrate the diversity of Crowdsourcing practices. Then, we present similarities and differences between Crowdsourcing and established theories (Open Innovation, User Innovation) and a phenomenon that has inspired many studies in Economics and Management, Open Source Software. Our goal is to avoid future misunderstandings and to show that Crowdsourcing is a concept per se. Finally, we propose and illustrate a typology of Crowdsourcing practices based on two criteria: the integrative or selective nature of the process and the type of tasks that are crowdsourced (routine, complex and creative tasks). In either case, the client firm seeks to mobilize external competencies. Relying upon the crowd can be an adequate method, because of its unique characteristics that are fostered by the Internet.
    Keywords: Web 2.0; Crowdsourcing; Open Source: Open Innovation; User Innovation
    Date: 2009–12–07
  11. By: Rogge, Karoline; Hoffmann, Volker
    Abstract: This paper provides an overview of early changes in the sectoral innovation system for power generation technologies which have been triggered by the European Emission Trading Scheme (EU ETS). Based on a broad definition of the sector, our research analyses the impact of the EU ETS on the four building blocks knowledge and technologies, actors and networks, institutions and demand by combining two streams of literature, namely systems of innovation and environmental economics. Our analysis is based on 42 exploratory inter-views with German and European experts in the field of the EU ETS, the power sector and technological innovation. We find that the EU ETS mainly affects the rate and direction of the technological change of power generation technologies within the large-scale, coal-based power generation technological regime to which carbon capture technologies are added as a new technological trajectory. While this impact can be interpreted as defensive behaviour of incumbents, the observed changes should not be underestimated. We argue that the EU ETS' impact on corporate CO2 culture and routines may prepare the ground for the transition to a low carbon sectoral innovation system for power generation tech-nologies. --
    Keywords: EU emission trading scheme (EU ETS),innovation system,power sector
    Date: 2009
  12. By: Benoit Dostie (HEC Montréal); Rajshri Jayaraman (ESMT European School of Management and Technology)
    Abstract: This paper asks whether adversity spurs the introduction of process innovations and increases the use of managerial incentives by firms. Using a large panel data set of workplaces in Canada, our identification strategy relies on exogenous variation in adversity arising from increased border security along the 49th parallel following 9/11. Our longitudinal difference-in-differences estimates indicate that firms responded to adversity by introducing new or improved processes, but did not change their use of managerial incentives. These results suggest that the threat of bankruptcy may provide impetus for improving efficiency.
    Keywords: process innovation, managerial incentives, efficiency, natural experiment
    JEL: L20 O31 M52 J33
    Date: 2009–06–02
  13. By: Seker, Murat
    Abstract: Recent studies have shown that not only exporters but also importers perform better than firms that do not trade. Using a detailed firm level dataset from 43 developing countries, I show that there are persistent differences in evolution of firms when they are grouped according to their trade orientation as: two-way traders (both importing and exporting), only exporters, only importers, and non-traders. Extending the existing models of firm evolution in open economies by incorporating importing decision, I show that: i) globally engaged firms are larger, more productive, and grow faster than non-traders; ii) two-way traders are the fastest growing and most innovative group who are followed by only-exporters; iii) estimating export premium without controlling for import status is likely to overestimate the actual value by capturing the import premium; and iv) R&D investment contributes to growth of traders significantly more than to non-traders. Finally I show the robustness of the findings by providing evidence from the panel data constructed from the original dataset and controlling for variables that are likely to affect firm growth.
    Keywords: E-Business,Labor Policies,Microfinance,Economic Theory&Research,Emerging Markets
    Date: 2009–12–01
  14. By: Koschatzky, Knut; Baier, Elisabeth; Kroll, Henning; Stahlecker, Thomas
    Abstract: The innovation system approach has become a current and frequently used tool for the assessment of innovative activities in different fields of study. So far, however, there is no unanimous agreement on the issue of the most relevant perspective which has to be taken when applying the approach to the study of individual cases - the territorial or the sectoral. This paper argues that it is both unlikely and analytically undesirable that any one of them should prevail. We will point out that taking the ICT sector as a case study, in most cases both territorial and sectoral determinants influence the develop-ment of innovative activities. We thus argue that neither the sectoral perspective can be thought of without taking into account territorial framework conditions nor vice versa. Even when the individual academic undertaking requires lying emphasis on one of the perspectives, the other needs to be included in the analysis. --
    Date: 2009
  15. By: Thomas Bolli (KOF Swiss Economic Institute, ETH Zurich, Switzerland); Frank Somogyi (KOF Swiss Economic Institute, ETH Zurich, Switzerland)
    Abstract: This paper analyzes the effect of public and private third-party funds on the efficiency of departments of Swiss public research institutions. Estimating an output distance function assuming that labor is used to produce master students and scientific publications, we find no statistically significant effectcant effect of private or public third-party funding on research effciency. However, once we include technology transfer as an additional output, the coeffcient of private funding is statistically significant. We further find that this disciplining effect of private funding is qualitatively robust in a setting controlling for endogeneity.
    Keywords: Efficiency, Research, University, Technology Transfer, Third-Party Funding, Public Finance
    Date: 2009–11
  16. By: Marta San Martin (UPV/EHU); Ana I. Saracho (UPV/EHU)
    Abstract: A patent provides its holder the monopolist´s right to sell licenses that allow the use of new technology. Empirically, most of the patent licensing agreements that are observed include royalties, in particular per unit or ad valorem royalties. The theoretical literature, however, has focused most of its attention to attempt to explain the presence of royalties by considering per-unit royalties. In this paper, we show that an internal patentee may prefer licensing by means of ad valorem royalties rather than per-unit royalties and other licensing mechanism traditionally considered in the literature. The reason is that by including an ad valorem royalty in the licensing contract the patentee can commit strategically to be less aggressive since its licensing revenues become increasing in the price of output. As a result, licensing hurts consumers.
    Keywords: Patent Licening; Royalty; Cournot Duooly
    JEL: D45
    Date: 2009–12–16

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