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on Innovation |
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Issue of 2010‒05‒02
twenty papers chosen by Steffen Lippert Massey University Department of Commerce |
| By: | Pere Arqué Castells (Universitat de Barcelona & IEB) |
| Abstract: | This paper studies the relationship between venture capital (VC) and innovation using a self-collected dataset containing 119 innovative, VC-funded firms and 164,486 controls that operate in Spain. Probit model estimates indicate that firms that have applied for at least one patent are significantly more likely to obtain VC investments. However, when implementing a matching approach to correct for selectivity, no evidence is found of a significant impact of VC on firms’ patenting activity. Rather, evidence is found of a positive effect of VC on the sales growth of funded firms. These results suggest that, rather than having an impact on innovation activities, venture capitalists (VCs) focus on the commercialization of existing products. A finer breakdown by ownership and investment stage also provides evidence that private VCs and early stage investments are notably more effective at stimulating sales than public VCs and late stage investments respectively. |
| Keywords: | Venture capital, innovation, patents, matching estimator |
| JEL: | G24 O32 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:ieb:wpaper:2010/4/doc2010-12&r=ino |
| By: | José García-Quevedo (University of Barcelona & IEB); Francisco Mas-Verdú (Universidad Politécnica de Valencia & IEB); Jose Polo-Otero (University of Barcelona & CYD Foundation & IEB) |
| Abstract: | PhD graduates hold the highest education degree, are trained to conduct research and can be considered a key element in the creation, commercialization and diffusion of innovations. The impact of PhDs on innovation and economic development takes place through several channels such as the accumulation of scientific capital stock, the enhancement of technology transfers and the promotion of cooperation relationships in innovation processes. Although the placement of PhDs in industry provides a very important mechanism for transmitting knowledge from universities to firms, information about the characteristics of the firms that employ PhDs is very scarce. The goal of this paper is to improve understanding of the determinants of the demand for PhDs in the private sector. Three main potential determinants of the demand for PhDs are considered: cooperation between firms and universities, R&D activities of firms and several characteristics of firms, size, sector, productivity and age. The results from the econometric analysis show that cooperation between firms and universities encourages firms to recruit PhDs and point to the existence of accumulative effects in the hiring of PhD graduates. |
| Keywords: | PhD, university, R&D, technology transfer |
| JEL: | O32 J24 I23 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:ieb:wpaper:2010/4/doc2010-13&r=ino |
| By: | Ana Maria Bandeira (Instituto Superior de Contabilidade e Administração do Porto, EDGE and Faculdade de Economia da Universidade do Porto); Óscar Afonso (CEF.UP, OBEGEF and Faculdade de Economia, Universidade do Porto, Portugal) |
| Abstract: | This paper develops an empirical approach using econometric techniques for panel data which aims to contribute to the reduction/elimination of the deviation between the book and market value of firms. Based on 20 of the firms with the largest number of patents granted between 1996 and 2006, the results show that: (i) the increase in the return on equity following from an increase in the share of investment in R&D is greater in the long run; (ii) there is a positive relationship between the results (and the value of firms) and R&D activities; (iii) by updating the additional periodical results generated by investment in R&D, the present value of the intangible asset can be determined. |
| Keywords: | R&D, Financial information, Value of intangibles, Market value, Panel Data |
| JEL: | C23 G12 G31 M41 O32 |
| Date: | 2010–04 |
| URL: | http://d.repec.org/n?u=RePEc:por:fepwps:372&r=ino |
| By: | Samaniego, Roberto |
| Abstract: | This paper uncovers evidence of s potentially important channel linking financial development to growth: the financing of innovations introduced by entrepreneurs. Using internationally comparable data on European countries, entry and exit in research-intensive industries are found to be disproportionately sensitive to the level of financial development. Furthermore, financial development is related to increased R&D spending. The results are robust to several different measures of financial development, and are supported by surveys of the sources of finance used by entrepreneurs. The evidence suggests that intellectual property rights provide the institutional underpinning for financial markets to direct funds towards innovative entrepreneurs. |
| Keywords: | Entry; exit; financial development; creative destruction; R&D intensity; entrepreneurship; intellectual property rights. |
| JEL: | G18 O16 L26 O33 O31 O14 |
| Date: | 2009–12–10 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:22348&r=ino |
| By: | Boone, J.; Goeree, J.K. (Tilburg University, Center for Economic Research) |
| Abstract: | This paper introduces three methodological advances to study the optimal design of static and dynamic markets. First, we apply a mechanism design approach to characterize all incentive-compatible market equilibria. Second, we conduct a normative analysis, i.e. we evaluate alternative competition and innovation policies from a welfare perspective. Third, we introduce a reliable way to measure competition in dynamic markets with nonlinear pricing. We illustrate the usefulness of our approach in several ways. We reproduce the empirical finding that innovation levels are higher in markets with lower price-cost margins, yet such markets are not necessarily more competitive. Indeed, we prove the Schumpeterian conjecture that more dynamic markets characterized by higher levels of innovation should be less competitive. Furthermore, we demonstrate how our approach can be used to determine the optimal combination of market regulation and innovation policies such as R&D subsidies or a weakening of the patent system. Finally, we show that optimal markets are characterized by strictly positive price-cost margins. |
| Keywords: | competition policy;dynamic markets;competition measures;Schumpeter;mechanism design |
| JEL: | K21 L40 O31 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:kubcen:201025&r=ino |
| By: | Ramadani, Veland; Gerguri, Shqipe |
| Abstract: | Competition between companies differentiates a lot nowadays compared to many years before. They compete in "nicety" that are so small but so important. Companies are trying to achieve competitive advantage in order to help them obtain a better and a stable position in the marketplace. The best way for companies to achieve a competitive advantage is through innovation. This paper addresses the meaning of innovation what does innovation present, types of innovation specifically discussing the right way of usage. In order for companies to get the as more innovations as possible it is necessary for them to be familiar with the process of innovation and its principles which innovation was found on. There are several types of innovation or ways in which companies can achieve innovation in a level of whole organization. This paper discusses the ways how that can be achieved, starting from their products and services, ways of selling, supply ect. Innovation is essential for sustainable growth and economic development. Several core conditions enable innovation and encourage economic growth. In the modern economy, innovation is crucial for value creation, growth and employment and innovation processes take place at the enterprise, regional and national level. Innovation will lead to new businesses as well as to the increased competitiveness of existing enterprises. In this paper are not covered all the characteristics of innovation but it presents a very good basis for a proper usage of innovation and ways of transforming it in competitive advantage for companies. Also this paper identifies the impact that innovation has on economic growth. |
| Keywords: | innovation; types of innovation; principles and strategies of innovation; sources of innovation |
| JEL: | A22 A10 |
| Date: | 2010–06–09 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:22267&r=ino |
| By: | Rene Söllner (Friedrich Schiller University Jena, DFG-RTG "The Economics of Innovative Change") |
| Abstract: | The paper investigates the relationship between human capital diversity measured in terms of occupational diversity and a firm's likelihood to innovate. The empirical analysis is based on a linked employer-employee panel dataset of German firms over the period 1998 to 2007. Despite notable differences between service and manufacturing rms, our results clearly indicate a positive relationship between occupational diversity and the propensity to innovate. |
| Keywords: | Human Capital, Diversity, Innovation |
| JEL: | J24 L20 O31 |
| Date: | 2010–04–19 |
| URL: | http://d.repec.org/n?u=RePEc:jrp:jrpwrp:2010-027&r=ino |
| By: | Gerguri, Shqipe; Ramadani, Veland |
| Abstract: | Competition between companies differentiates a lot nowadays compared to many years before. They compete in "nicety" that are so small but so important. Companies are trying to achieve competitive advantage in order to help them obtain a better and a stable position in the marketplace. The best way for companies to achieve a competitive advantage is through innovation. This paper addresses the meaning of innovation what does innovation present, types of innovation specifically discussing the right way of usage. In order for companies to get the as more innovations as possible it is necessary for them to be familiar with the process of innovation and its principles which innovation was found on. There are several types of innovation or ways in which companies can achieve innovation in a level of whole organization. This paper discusses the ways how that can be achieved, starting from their products and services, ways of selling, supply ect. Innovation is essential for sustainable growth and economic development. Several core conditions enable innovation and encourage economic growth. In the modern economy, innovation is crucial for value creation, growth and employment and innovation processes take place at the enterprise, regional and national level. Innovation will lead to new businesses as well as to the increased competitiveness of existing enterprises. In this paper are not covered all the characteristics of innovation but it presents a very good basis for a proper usage of innovation and ways of transforming it in competitive advantage for companies. Also this paper identifies the impact that innovation has on economic growth. |
| Keywords: | innovation; competition; economic growth |
| JEL: | A23 A10 |
| Date: | 2010–05–20 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:22270&r=ino |
| By: | Daron Acemoglu; Gino Gancia; Fabrizio Zilibotti |
| Abstract: | We study a dynamic general equilibrium model where innovation takes the form of the introduction new goods, whose production requires skilled workers. Innovation is followed by a costly process of standardization, whereby these new goods are adapted to be produced using unskilled labor. Our framework highlights a number of novel results. First, standardization is both an engine of growth and a potential barrier to it. As a result, growth in an inverse U-shaped function of the standardization rate (and of competition). Second, we characterize the growth and welfare maximizing speed of standardization. We show how optimal IPR policies affecting the cost of standardization vary with the skill-endowment, the elasticity of substitution between goods and other parameters. Third, we show that the interplay between innovation and standardization may lead to multiple equilibria. Finally, we study the implications of our model for the skill-premium and we illustrate novel reasons for linking North-South trade to intellectual property rights protection. |
| Keywords: | Growth, technology adoption, competition policy, intellectual property rights |
| JEL: | F43 O31 O33 O34 |
| Date: | 2010–04 |
| URL: | http://d.repec.org/n?u=RePEc:zur:iewwpx:483&r=ino |
| By: | Óscar Afonso (CEF.UP, OBEGEF and Faculdade de Economia, Universidade do Porto, Portugal); Sara Monteiro (Nice Sophia Antipolis University, Faculty of Law, Political Science, Economics and Management, CEMAFI, Nice, France); Maria Thompson (NIPE, Departamento de Economia, Universidade do Minho, Portugal) |
| Abstract: | We propose a theoretical growth model with which to frame analytically the Quadruple Helix Innovation Theory (QHIT). The aim is to emphasise the investment in innovation transmission mechanisms in terms of economic growth and productivity gains, in one-high-technology sector, by stressing the role played by the helices of the Quadruple Helix Innovation Model: Academia and Technological Infrastructures, Firms of Innovation, Government and Civil Society. In the existing literature, the relationship between the helices and respective impacts on economic growth does not appear clear. Results are fragile due to data weakness and the inexistence of a theoretical framework to specify the relationship between the helices. Hence our motivation for providing the QHIT with a theoretical growth model. Our intent is to model the importance of emerging, dynamically adaptive, and transdisciplinary knowledge and innovation ecosystems to economic growth. We find that higher economic growth rate is obtained as a result of an increase in synergies and complementarities between different productive units, or an increase in productive government expenditure. |
| Keywords: | Economic Growth, Quadruple Helix Innovation Model, Innovation Ecosystems |
| JEL: | O10 O18 O31 |
| Date: | 2010–04 |
| URL: | http://d.repec.org/n?u=RePEc:por:fepwps:370&r=ino |
| By: | Andrew T. Young (Department of Economics, West Virginia University); Hernando Zuleta (Department of Economics, Universidad del Rosario American University in Bulgaria); Andres Garcia-Suaza (Facultad de Economia, Universidad del Rosario – Bogota) |
| Abstract: | We use annual data on capital’s share and relative factor prices from 35 US industries from 1960 to 2005 to test the induced innovation hypothesis. We derive, from a production function framework, testable implications for the effect of contemporaneous and lagged factor price ratios on capital’s share of production. The predicted effect is positive or negative depending on the elasticity of substitution between labor and capital. From panel regressions, the estimated effect of the contemporaneous factor price ratio implies an elasticity of substitution that is less than unity, consistent with the consensus from the literature. Based on this, our negative estimated effects for lagged price ratios are both statistically significant and consistent with the induced innovation hypothesis. |
| Keywords: | induced innovation, biased technical change, capital’s share, labor’s share, elasticity of substitution |
| JEL: | O31 O47 E25 E23 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:wvu:wpaper:10-03&r=ino |
| By: | Priit Vahter |
| Abstract: | Does FDI affect innovation, productivity growth, and knowledge sourcing activities of domestic firms? This study employs detailed firm-level panel-data from Estonia’s manufacturing sector to investigate different channels through which FDI can affect domestic firms. Instrumental variables approach is used to identify the effects. There is no evidence of an effect of FDI entry on local incumbents’ TFP and labour productivity growth in the short term.. However, there are positive spillovers on process innovation. These effects do not depend on the local firms’ distance to the productivity frontier. The results show significant positive correlation between the entry of FDI in a sector and the more direct measures of spillovers in subsequent periods. This is consistent with the view that FDI inflow to a sector intensifies knowledge flows to domestic firms. |
| Keywords: | foreign direct investment, productivity, innovation, learning |
| JEL: | F21 F23 O31 O33 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:mtk:febawb:69&r=ino |
| By: | Appelt, Silvia |
| Abstract: | Patent holders frequently attempt to mitigate the loss of monopoly power by authorizing generic entry prior to patent expiry (early entry). Competition in off-patent pharmaceutical markets may be adversely affected if early entry substantially impairs the attractiveness of subsequent market entry. I examine generic entry decisions made in the course of recent patent expiries to quantify the impact of early entry on incentives for generic entry. Using unique micro data and accounting for the endogeneity of early entry, I estimate recursive bivariate probit models of entry. Drug markets' pre-entry revenues largely determine both independent generic entry and early entry decisions. Early entry in turn has no significant impact on the likelihood of generic entry. Original drug producers appear to authorize generic entry prior to loss of exclusivity primarily fueled by rent-seeking rather than strategic entry-deterrence motives. |
| Keywords: | Generic Entry; Early Entry; Anticompetitive Practices |
| JEL: | L41 I11 O34 C35 |
| Date: | 2010–04 |
| URL: | http://d.repec.org/n?u=RePEc:lmu:muenec:11476&r=ino |
| By: | Al-Ubaydli, O.; Pollock, R. |
| Abstract: | Current methods of disseminating scholarly information focus on the use of journals who retain exclusive rights in the material they publish. Using a simple model we explore the reasons for the development of the traditional journal model, why it is no longer efficient and how it could be improved upon. One of our main aims is to go beyond the basic question of distribution (access) to that of filtering, i.e. the process of matching information with the scholars who want it. With the volume of information production ever growing - and attention ever more scarce - filtering is becoming crucial and digital technology oers the possibility of radical innovation in this area. In particular, distribution and filtering can be separated allowing filtering to be made open and decentralized. This would promises to deliver dramatic increases in transparency and effciency as well as greatly increased innovation in related product, processes and services. |
| Keywords: | Journal, Open Access, Scholarly Communication, Matching |
| JEL: | D02 L82 D40 L30 |
| Date: | 2010–04–30 |
| URL: | http://d.repec.org/n?u=RePEc:cam:camdae:1023&r=ino |
| By: | Jesus Cambra-Fierro (Department of Business Administration, Universidad Pablo de Olavide); Ana Fuster-Mur (Grupo Fuster-Mur); Susan Hart (Department of Marketing, University of Strathclyde); Yolanda Polo-Redondo (Department of Bsiness Administration, University of Zaragoza) |
| Abstract: | Despite 20 years of research into various aspects of the ‘Market Orientation’ (MO) construct, dubiety persists regarding the existence, nature and significancy of the relationship between market orientation and firm performance. In order to get more evidence some authors suggest including innovation in MO models. Debate also continues to examine whether organizational strategy is an antecedent or a consequence of MO, whilst some argue that strategy moderates the MO-performance relationship. Furthermore, there are sectors of industry and geographies where the phenomenon has received very little investigation, even of an exploratory nature. This study aims to explore the MO-performance relationship and to value the effect of innovation in MO-performance models in a sector where MO was virtually unknown: the Spanish real estate industry. The magnitude of the shifts taking place in this sector enhances its potential as a showcase for processes of anticipation and adaptation to the environment. In addition, the paper aims to shed some light on the question of whether strategy potentially moderates the MO-performance link. Finally, the principal implications of our findings are discussed. |
| Keywords: | Market orientation, innovation, performance, strategy, real estate sector |
| Date: | 2010–04 |
| URL: | http://d.repec.org/n?u=RePEc:pab:wpbsad:10.03&r=ino |
| By: | Katalin Erdõs (Department of Economics and Regional Studies, University of Pécs); Attila Varga (Department of Economics and Regional Studies, University of Pécs) |
| Abstract: | Knowledge flows from universities to the regional economy can take different forms ranging from formal research collaborations to consultancy and informal personal connections. One of the knowledge communication channels drawing substantial interest of both researchers and regional policy makers is academic spin-off firm formation. According to the concept of the “academic entrepreneur” (Etzkowitz) university spin-off firm formation has grown naturally from the academic culture of the US where professors traditionally behave very much like entrepreneurs while setting up and maintaining research labs, hiring research assistants, “marketing” research results in conferences and publications or networking with colleagues and funding agencies. Spinning off a company is just a step forward from such entrepreneurial tasks of academics. Thus according to this concept academic motivations are main drivers in university spin-off firm formation in the US. Despite this challenging view the empirical literature pays relatively little attention to the particular “academic” features of university spin-offs and rarely considers the specificities of university entrepreneurship most notably the role of scientists as entrepreneurs. Empirical evidence suggests that Europe performs less successfully than the US in transferring knowledge from university labs to the regional economy via spin-off companies. One potential reason behind this difference is that institutions that determine the continental European research system hold back the emergence of academic entrepreneurs. Thus it is the main research question in our paper whether those specific “academic” drivers behind university spin-off firm formation are present at all in the continental European context. The related question is whether professional characteristics of the academics, their social capital, the norms of academia and the academic and business environment support or hinder these academic motivations? This paper is based on interviews carried out with university researchers who actively participate in firm formation in Hungary. Hungary is an excellent European case since the features of its university system are rooted in the continental (mainly German) tradition, but it also inherits some characteristics from the even more centralized socialist (soviet) tradition. |
| Keywords: | University, spin-off, academic entrepreneurship, regional university technology transfer |
| JEL: | I23 O18 O33 R11 |
| Date: | 2009–12 |
| URL: | http://d.repec.org/n?u=RePEc:pec:wpaper:2009/7&r=ino |
| By: | Amit Shovon Ray; Sabyasachi Saha |
| Abstract: | In this paper we attempt to provide a comprehensive understanding of the drivers of academic research and patenting in India. Research inputs by a faculty member are considered to be an outcome of his/her own decision-making process, which in turn determine his/her research outputs. Exogenous parameters, like faculty background, faculty attitude, research sponsorship and institutional factors, are expected to influence both set of endogenous variables (research inputs and outputs). This production function is specified as a recursive simultaneous equation model and estimate the structural parameters using standard econometric methods. [ICRIER WP No. 247]. |
| Keywords: | production function, academic research, India, patenting, inputs, faculty members, attitude, institutional factors, econometric methods, IPR, Bayh-Dole Act, patents, variables, |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:ess:wpaper:id:2476&r=ino |
| By: | James B. Ang; Rajabrata Banerjee; Jakob B. Madsen |
| Abstract: | Theory, historiography and empirical evidence suggest that agriculture is the key to economic development. This paper examines the extent to which productivity advances in British agriculture in the period 1620-1850 were driven by technological progress. Measuring technology by patents and new book titles on agricultural methods, the results indicate that technological progress has played a significant part in productivity advances. Furthermore, the results show that research effort has permanent growth effects, consistent with the prediction of Schumpeterian growth theory. |
| JEL: | N13 O30 O40 Q16 |
| Date: | 2010–04 |
| URL: | http://d.repec.org/n?u=RePEc:acb:camaaa:2010-11&r=ino |
| By: | Oz Shy |
| Abstract: | This paper surveys a variety of topics related to network economics. Topics covered include: consumer demand under network effects, compatibility decisions and standardization, technology advances in network industries, two-sided markets, information networks and intellectual property, and social influence. |
| Keywords: | Consumers' preferences ; Telecommunication ; Technology |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedbwp:10-3&r=ino |
| By: | Eric BROUILLAT (GREThA UMR CNRS 5113); Yannick LUNG (GREThA UMR CNRS 5113) |
| Abstract: | The paper identifies 5 stylized facts to characterize the geographic distribution of innovative activities in France (mainly its high concentration in the region Ile-de-France). It proposes an original model of regional growth in a knowledge-based economy considering the density of RD activities and the connectivity to the other regions. The model is computed and run into 2 different configurations: equidistribution and overconcentration. The simulations’ results lead to the conclusion that the equidistribution configuration is Pareto-efficient (higher growth rate of the national economy, lower income spatial inequalities) compared to the overconcentration. Policy implications are discussed in conclusion. |
| Keywords: | France; Geography of innovation; Knowledge spillover; Regional growth; Simulation |
| JEL: | O33 R11 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:grt:wpegrt:2010-11&r=ino |