nep-ino New Economics Papers
on Innovation
Issue of 2010‒09‒18
ten papers chosen by
Steffen Lippert
Massey University, Albany

  1. Innovation Strategy and Firm Performance What is the long-run impact of persistent R&D? By Börje, Johansson; Hans, Lööf
  2. Indigenous Innovation In China: Implications For Sustainable Growth By Yanrui Wu
  3. Indicator-based reporting on the Chinese innovation system 2010: The regional dimension of science and innovation in China By Kroll, Henning
  4. Trade, Firm selection, and innovation: the competition channel By Giammario Impullitti; Omar Licandro
  5. Intellectual Property Protection and the Licensing of Technology to Developing Countries By Sunil Kanwar
  6. Employment and sustainable development: education, training and R&D in the regulation of the labour market By Kovács, Ilona; Chagas Lopes, Margarida
  7. Product and Quality Innovations: An Optimal Control Approach By Anton Bondarev
  8. Information sharing in contests By Dan Kovenock; Florian Morath; Johannes Münster
  9. General Purpose Technologies and the Industrial Revolution By Leonard Dudley
  10. Scope of Innovations, Knowledge Spillovers and Growth By Gray, Elie; Grimaud, André

  1. By: Börje, Johansson (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology); Hans, Lööf (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology)
    Abstract: There are systematic long-run differences in the performance of firms explained by the R&D-strategy that each firm employs. Controlling for unobservable heterogeneity, past performance and other firm characteristics, this paper shows that labour productivity is, on average, 13 percent higher among firms with persistent R&D commitment and 9 percent higher among firms which make occasional R&D efforts when compared with non-R&D-firms. Furthermore, firms which employ a strategy with persistent R&D efforts are rewarded with a productivity growth rate that on average is about 2 percent higher than for other firms. The results are similar when firm performance is measured as total sales or exports per labor input.
    Keywords: R&D; Innovation-strategy; productivity; export; dynamic panel-data
    JEL: C23 O31 O32
    Date: 2010–09–07
  2. By: Yanrui Wu (UWA Business School, The University of Western Australia)
    Abstract: This paper aims to examine indigenous innovation and draw implications for sustainable economic growth in China. It investigates China’s capacity and achievements in indigenous innovation at both the macro and micro levels. China’s indigenous innovation is also compared to that in other major economies in the world. It is found that China’s innovation development is well ahead of other economies at the similar stage of development but there is a gap between China and the world’s leading innovative economies. Both aggregate and disaggregate evidence shows that China is catching up rapidly with the world’s innovation leaders. If current growth momentum is maintained, China is well positioned to become one of the most innovative economies in the world in the coming decade. There are however some serious issues to be resolved before China’s innovation potential could be realized.
    Keywords: Indigenous innovation, R&D, Chinese economy
    Date: 2010
  3. By: Kroll, Henning
    Abstract: As regularly stated by both international scholars and confirmed by the Chinese government itself socio-economic development in China remains highly uneven both sociologically and regionally. Conventional wisdom holds that the prevailing economic trend remains one of divergence rather than convergence. While the world-market oriented coastal provinces develop dynamically, the inland and certainly the Western provinces keep lagging behind. Nonetheless, after a number of years with increasing government proclamations regarding the objective of a harmonious society and efforts to develop the inland provinces there is no longer a unanimous trend, particularly with regard to activities under the direct or indirect control of government. Hence, it appears reasonable to analyse to what extent these general trends with regard to the regional distribution of socio-economic development affect the different dimensions of relevance to science and innovation. Consequently, it will be a key aspect of this study to focus on the development of the regional concentration of different R&D activities, thus addressing the question whether the Chinese innovation system is becoming more heterogeneous or less so. The following sections will follow the R&D process through from R&D-related investments to its eventual possible effects on the national export performance. In detail, it will analyse the regional dimension of R&D activities... --
    Date: 2010
  4. By: Giammario Impullitti; Omar Licandro
    Abstract: The availability of rich firm-level data sets has recently led researchers to uncover new evidence on the effects of trade liberalization. First, trade openness forces the least productive firms to exit the market. Secondly, it induces surviving firms to increase their innovation efforts and thirdly, it increases the degree of product market competition. In this paper we propose a model aimed at providing a coherent interpretation of these findings. We introducing firm heterogeneity into an innovation-driven growth model, where incumbent firms operating in oligopolistic industries perform cost-reducing innovations. In this framework, trade liberalization leads to higher product market competition, lower markups and higher quantity produced. These changes in markups and quantities, in turn, promote innovation and productivity growth through a direct competition effect, based on the increase in the size of the market, and a selection effect, produced by the reallocation of resources towards more productive firms. Calibrated to match US aggregate and firm-level statistics, the model predicts that a 10 percent reduction in variable trade costs reduces markups by 1:15 percent, firm surviving probabilities by 1 percent, and induces an increase in productivity growth of about 13 percent. More than 90 percent of the trade-induced growth increase can be attributed to the selection effect.
    Keywords: International Trade, Trade Liberalization, Heterogeneous Firms, Endogenous Market Structure, Productivity Growth, Endogenous Growth.
    JEL: F12 F13 O31 O41
    Date: 2010–09–01
  5. By: Sunil Kanwar
    Abstract: In this paper, the influence of stronger intellectual property protection on technology transfer into developing countries via licensing is analyzed. Using panel data for the post-TRIPs period 1995-2005, it is found that stronger protection is associated with increased royalty and license fee payments by developing countries, implying greater technology transfer into these countries. [Working Paper No. 188].
    Keywords: intellectual property, protection, research, per capita income, population, profitability, economy, economic freedom, financial, developing countries, royalty, license, technology transfer, fee payment, TRIPs,
    Date: 2010
  6. By: Kovács, Ilona; Chagas Lopes, Margarida
    Abstract: “Employment and sustainable development: education, training and R&D in the regulation of the labour market” Ilona Kovács & Margarida Chagas Lopes Abstract Sustainable development has been considered in various discourses as the answer to the economic, social and ecological crisis. However, its principles are far from being implemented. The dominant model of society giving priority to financial capital and short term profitability in the context of globalization and market deregulation involves social disinvestment, increasing inequalities and exclusion, that is to say non sustainable development. We argue that sustainable development requires an orientation towards human needs, social and ecological sustainability and consequently a break with the prevailing model of society and learning and knowledge sharing within modern societies. In the first section we confront the “market driven work society”, which is embedded in the neo-liberal paradigm with the alternative model of the “humanized work society”, which aims to dignify work, enhance quality of working life and skills development. The next sections focus on long trend and new forms of labour market regulation and the role successively played by Education, Vocational Training and – desirably – Innovation in that regulation process . We stress that sustainable development imply an effective upgrading of work and skills, requiring adequate structural education, training and R&D policies.
    Keywords: Renewed and humanised work centered societies; Education; training and R&D in labour market regulation
    JEL: E24 J01 I21 J24 O32 J68 J23
    Date: 2010–09–11
  7. By: Anton Bondarev (Institute of Mathematical Economics, Bielefeld University)
    Abstract: In the suggested paper an attempt to combine two different aspects of innovative activity which are known as product and process innovations is made. The main objective of the paper is to demonstrate the importance of interdependence between these two types of innovative activity through means of a simple one agent model. Research questions which are studied in the paper are as following: 1. Whether it is possible to analyze simultaneously two di.erent aspects of innovations on a continious and dynamical basis. To our knowledge there are no models which would suggest the dynamical analysis of such type. 2. What is the interaction between product and quality innovations and how it may in uence both processes. 3. What is the effect of the degree of diversity of products on the innovative activity. The suggested model contains no uncertainty and only one agent (monopolist) which may invest in expan- sion of variety of products available on the market and into the development of quality of every product which already exists. To develop such a model in continuous time I make use of Infinite-dimensional Optimal Control methods. Main finding of the paper is that interaction between different types of innovative activity significantly changes the dynamics of product emergence to the market as well as the quality of products on the market as incentives of investor are changed. Another important finding is that heterogeneity of products and its nature are fundamental for the outcome of the model. The complementarity of product and process innovations changes our view on technology management and competition in this field.
    Date: 2010–08
  8. By: Dan Kovenock (University of Iowa); Florian Morath (Max Planck Institute of Intellectual Property, Competition and Tax Law); Johannes Münster (Free University of Berlin)
    Abstract: We study the incentives to share private information ahead of contests, such as markets with promotional competition, procurement contests, or R&D. We consider the cases where firms have (i) independent values and (ii) common values of winning the contest. In both cases, when decisions to share information are made independently, sharing information is strictly dominated. With independent values, an industry-wide agreement to share information can arise in equilbrium. Expected effort is lower with than without information sharing. With common values, an industry-wide agreement to share information never arises in equilibrium. Expected effort is higher with than without information sharing.
    Keywords: information sharing; contest; all-pay auction
    JEL: D82 D43 D44 L13 D74
    Date: 2010–09
  9. By: Leonard Dudley
    Abstract: Did breakthroughs in core processes during the Industrial Revolution tend to generate further innovations in downstream technologies? Here a theoretical model examines the effect of a political shock on a non-innovating society in which there is high potential willingness to cooperate. The result is regional specialization in the innovation process by degree of cooperation. tests with a zero-inflated Poisson specification indicate that 116 important innovations between 1700 and 1849 may be grouped into three categories: (1) General Purpose Technologies (GPTs) tended to be generated in large states with standardized languages following transition to pluralistic political systems; (2) GPTs in turn generated spillovers for their regions in technologies where cooperation was necessary to integrate distinct fields of expertise; (3) however, GPTs discouraged downstream innovation in their regions where such direct cooperation was not required.
    Keywords: General Purpose Technologies, Industrial Revolution, innovation, cooperation, spillovers Length 38 pages
    JEL: O3 N6
    Date: 2010–04
  10. By: Gray, Elie; Grimaud, André
    Date: 2010–06

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