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on Innovation |
| By: | Adriana Cassoni; Magdalena Ramada |
| Abstract: | Uruguay’s inability to sustain high levels of economic growth cannot be fully explained by external shocks, the prevailing institutional setting or the level of human capital accumulation. Instead, low investment in knowledge capital stands as a most likely explanation. This hypothesis is supported by empirical evidence analyzed in this study. Returns on innovation were found to be significant, promoting a non-negligible acceleration of labor productivity gains. However, the propensity to innovate and the intensity of the effort expended critically depend on the firm’s already having a high internal efficiency level. As firms’ behavior is differentiated depending on the type of innovation output pursued, the significantly higher frequency of processes relative to product-innovative firms is matched by the larger impact of novel processes with respect to products on labor productivity. However, the degree of novelty of process innovation is significantly inferior to that of product innovation. The research points to inadequate choices of input mixes as the underlying cause. Policy recommendations center on finding adequate channels to generate and disseminate information on the optimal input mixes depending on the type of innovation output sought. |
| Keywords: | Innovation input, Innovation output, Productivity growth, CDM model |
| JEL: | O31 O32 D21 |
| Date: | 2010–08 |
| URL: | http://d.repec.org/n?u=RePEc:idb:wpaper:4680&r=ino |
| By: | Martimort, David; Poudou, Jean-Christophe; Sand-Zantman, Wilfried |
| Date: | 2010–05 |
| URL: | http://d.repec.org/n?u=RePEc:ner:toulou:http://neeo.univ-tlse1.fr/2676/&r=ino |
| By: | Justus Baron (CERNA - Centre d'économie industrielle - Mines ParisTech); Tim Pohlmann (Chair of Innovation Economics - Berlin University of Technology) |
| Abstract: | This article investigates the interplay between formal standards, essential patents and informal industry alliances such as consortia and patent pools. Building upon more than 6.200 declarations of essential patents to major international Standard Development Organizations (SDO), we investigate how informal standardization consortia and patent pools influence the number and timing of patent declarations to formal SDOs. This is the first thorough empirical investigation of the effectiveness of industry-driven coordination mechanisms addressing the problems raised by the high number of patents. We find that patent pools increase the number of declared essential patents controlling for the effects of standardization. On the other hand, informal consortia reduce the number of patent declarations at given standardization activity. These findings confirm results in the literature that patent pools provide incentives for strategic patent files and that informal standardization consortia have a regulatory function on the firms' patent strategies. |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-00508792_v1&r=ino |
| By: | Priit Vahter |
| Abstract: | Does FDI affect productivity growth, innovation, 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. I use instrumental variables approach to identify the effects. I find no evidence of an effect of FDI entry on local incumbents’ TFP and labour productivityg rowth in the short term. The effect on productivity does not depend on the local firms’ distance to the productivity frontier. However, there are positive spillovers on process innovation. 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: | 2010–04–01 |
| URL: | http://d.repec.org/n?u=RePEc:wdi:papers:2010-986&r=ino |
| By: | Grossmann, Volker; Steger, Thomas M.; Trimborn, Timo |
| Abstract: | Previous research on optimal R\& D subsidies has focussed on the long run. This paper characterizes the optimal time path of R\& D subsidization in a semi- endogenous growth model, by exploiting a recently developed numerical method. Starting from the steady state under current R\& D subsidization in the US, the R\& D subsidy should significantly jump upwards and then slightly decrease over time. There is a negligible loss in welfare, however, from immediately setting the R\& D subsidy to its optimal long run level, compared to the case where the dynamically optimal policy is implemented. |
| Keywords: | R\& D subsidy, Transitional dynamics, Semi-endogenous growth, Welfare |
| JEL: | H20 O30 O40 |
| Date: | 2010–08 |
| URL: | http://d.repec.org/n?u=RePEc:han:dpaper:dp-453&r=ino |
| By: | Economides, Nicholas |
| Abstract: | While some broadband providers have called Internet content and application providers free riders on their infrastructure, this is incorrect and misguided. End-users pay for their residential broadband providers for access to the Internet, and content providers pay their own ISPs for connectivity as well. However, content providers need not pay residential broadband providers’ ISPs in order to reach their customers. This feature of the Internet has been one key factor that has allowed innovation to prosper and kept barriers to entry low, as the network transport market for content and application providers functions relatively efficiently.<br><br>In this paper, I consider the impact of a departure from this current system. I examine the possible impact of last-mile broadband providers’ imposing “termination fees” on third-party content providers or application providers to reach end-users. Broadband providers would engage in paid prioritization arrangements – that is, application and content providers could pay the broadband provider to have their traffic prioritized over competitors’ services. I argue that these arrangements would create inefficiency in the market and harm innovation. Because the last mile access broadband market is concentrated and consumers face switching costs, these concerns are particularly significant.<br><br>Broadband providers insist that imposing these new charges will greatly improve network investment, and thus these charges are beneficial. I argue that this is not the case. Possible higher revenues from discrimination may simply be returned to shareholders and not invested. Additionally, evidence suggests networks invest more under non-discrimination requirements, and paid prioritization schemes would divert money towards managing scarcity instead of expanding capacity. Paid prioritization could even create an incentive for broadband providers to create congestion to increase the price of prioritized service. |
| Keywords: | Technology and Industry |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:reg:wpaper:21&r=ino |
| By: | Farber, David J.; Faulhaber, Gerald R. |
| Abstract: | The Federal Communications Commission’s Notice of Inquiry in GN 09-157 Fostering Innovation and Investment in the Wireless Communications Market is a significant event at an opportune moment. Wireless communications has already radically changed the way not only Americans but people the world over communicate with each other and access and share information, and there appears no end in sight to this fundamental shift in communication markets. Although the wireless communications phenomenon is global, the US has played and will continue to play a major role in the shaping of this market. At the start of a new US Administration and important changes in the FCC, it is most appropriate that this proceeding be launched. |
| Keywords: | Technology and Industry |
| Date: | 2009–01 |
| URL: | http://d.repec.org/n?u=RePEc:reg:rpubli:27&r=ino |
| By: | Yoo, Christopher S. |
| Abstract: | Over the past two decades, the Internet has undergone an extensive re-ordering of its topology that has resulted in increased variation in the price and quality of its services. Innovations such as private peering, multihoming, secondary peering, server farms, and content delivery networks have caused the Internet’s traditionally hierarchical architecture to be replaced by one that is more heterogeneous. Relatedly, network providers have begun to employ an increasingly varied array of business arrangements and pricing. This variation has been interpreted by some as network providers attempting to promote their self interest at the expense of the public. In fact, these changes reflect network providers’ attempts to reduce cost, manage congestion, and maintain quality of service. Current policy proposals to constrain this variation risk harming these beneficial developments. |
| Keywords: | Technology and Industry |
| Date: | 2010–04 |
| URL: | http://d.repec.org/n?u=RePEc:reg:rpubli:578&r=ino |
| By: | Paulo Bastos; Odd Rune Straume |
| Abstract: | This paper develops a two-country, general equilibrium model of oligopoly in which the degree of horizontal product differentiation is endogenously determined by rms’ strategic investments in product innovation. Consumers seek variety and product innovation is more skill intensive than production. Stronger import competition increases innovation incentives, and thereby the relative demand for skill. An intraindustry trade expansion following trade liberalization can therefore increase wage inequality between skilled and unskilled workers. In addition, since product differentiation is resource consuming, freer trade entails a potential trade-off between production and variety. The import competition effect highlighted by the model, which plays a key role in determining the general equilibrium, is consistent with panel data on Chilean manufacturing plants. |
| Keywords: | Trade liberalization, Product differentiation, Innovation,Wage inequality, General oligopolistic equilibrium |
| JEL: | F15 F16 L13 O31 |
| Date: | 2010–08 |
| URL: | http://d.repec.org/n?u=RePEc:idb:wpaper:4679&r=ino |
| By: | Singer, Hal J.; Hahn, Robert W. |
| Abstract: | Because of the overwhelming, positive response to the iPhone as compared to other smart phones, exclusive agreements between handset makers and wireless carriers have come under increasing scrutiny by regulators and lawmakers. In this paper, we document the myriad revolutions that have occurred in the mobile handset market over the past twenty years. Although casual observers have often claimed that a particular innovation was here to stay, they commonly are proven wrong by unforeseen developments in this fast-changing marketplace. We argue that exclusive agreements can play an important role in helping to ensure that another must-have device will soon come along that will supplant the iPhone, and generate large benefits for consumers. These agreements, which encourage risk taking, increase choice, and frequently lower prices, should be applauded by the government. In contrast, government regulation that would require forced sharing of a successful break-through technology is likely to stifle innovation and hurt consumer welfare. |
| Date: | 2009–09 |
| URL: | http://d.repec.org/n?u=RePEc:reg:wpaper:599&r=ino |
| By: | Adam Copeland; Adam Hale Shapiro |
| Abstract: | We study the effect of market structure on a personal computer manufacturer’s decision to adopt new technology. This industry is unusual because there exist two horizontally segmented retail markets with different degrees of competition: the IBM-compatible (or PC) platform and the Apple platform. We first document that, relative to Apple, producers of PCs typically have more frequent technology adoption, shorter product cycles, and steeper price declines over the product cycle. We then develop a parsimonious vintage-capital model that matches the prices and sales of PC and Apple products. The model predicts that competition is the key driver of the rate at which technology is adopted. |
| Keywords: | Computer industry ; Technological innovations ; Competition |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fednsr:462&r=ino |
| By: | Leo, Evan; Hazlett, Thomas W. |
| Abstract: | The traditional system of radio spectrum allocation has inefficiently restricted wireless services. Alternatively, liberal licenses ceding de facto spectrum ownership rights yield incentives for operators to maximize airwave value. These authorizations have been widely used for mobile services in the U.S. and internationally, leading to the development of highly productive services and waves of innovation in technology, applications and business models. Serious challenges to the efficacy of such a spectrum regime have arisen, however. Seeing the widespread adoption of such devices as cordless phones and wi-fi radios using bands set aside for unlicensed use, some scholars and policy makers posit that spectrum sharing technologies have become cheap and easy to deploy, mitigating airwave scarcity and, therefore, the utility of exclusive rights. This paper evaluates such claims technically and economically. We demonstrate that spectrum scarcity is alive and well. Costly conflicts over airwave use not only continue, but have intensified with scientific advances that dramatically improve the functionality of wireless devices and so increase demand for spectrum access. Exclusive ownership rights help direct spectrum inputs to where they deliver the highest social gains, making exclusive property rules relatively more socially valuable. Liberal licenses efficiently accommodate rival business models (including those commonly associated with unlicensed spectrum allocations) while mitigating the constraints levied on spectrum use by regulators imposing restrictions in traditional licenses or via use rules and technology standards in unlicensed spectrum allocations. |
| Date: | 2010–03 |
| URL: | http://d.repec.org/n?u=RePEc:reg:wpaper:570&r=ino |
| By: | Greenstein, Shane |
| Abstract: | The innovations that became the foundation for the Internet originate from two eras that illustrate two distinct models for accumulating innovations over the long haul. The pre-commercial era illustrates the operation of several useful non-market institutional arrangements. It also illustrates a potential drawback to government sponsorship – in this instance, truncation of exploratory activity. The commercial era illustrates a rather different set of lessons. It highlights the extraordinary power of market-oriented and widely distributed investment and adoption, which illustrates the power of market experimentation to foster innovative activity. It also illustrates a few of the conditions necessary to unleash value creation from such accumulated lessons, such as standards development and competition, and nurturing legal and regulatory policies. |
| Keywords: | Technology and Industry |
| Date: | 2010–04 |
| URL: | http://d.repec.org/n?u=RePEc:reg:wpaper:574&r=ino |