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on Innovation |
| By: | Joëlle Noailly (CPB Netherlands Bureau for Economic Policy Analysis The Hague) |
| Abstract: | This paper investigates the impact of alternative environmental policy instruments on technological innovations aiming to improve energy-efficiency in buildings. The empirical analysis focuses on three main types of policy instruments, namely regulatory energy standards in buildings codes, energy taxes as captured by energy prices and specific governmental energy R&D expenditures. Technological innovation is measured using patent counts for specific technologies related to energy-efficiency in buildings (e.g. insulation, high-efficiency boilers, energy-saving lightings). The estimates for seven European countries over the 1989-2004 period imply that a strengthening of 10% of the minimum insulation standards for walls would increase the likelihood to file additional patents by about 3%. In contrast, energy prices have no significant effect on the likelihood to patent. Governmental energy R&D support has a small positive significant effect on patenting activities. |
| Keywords: | Innovation, Technological Change, Patents, Energy-Efficiency, Buildings, Environmental Policy |
| JEL: | O31 O34 Q55 |
| Date: | 2010–09 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2010.106&r=ino |
| By: | Philippe Aghion (Harvard University and CEPR); John Van Reenen (London School of Economics (LSE), Centre for Economic Performance, NBER and CEPR); Luigi Zingales (University of Chicago, NBER and CEPR) |
| Abstract: | We find that institutional ownership in publicly traded companies is associated with more innovation (measured by cite-weighted patents). To explore the mechanism through which this link arises, we build a model that nests the lazy-manager hypothesis with career-concerns, where institutional owners increase managerial incentives to innovate by reducing the career risk of risky projects. The data supports the career concerns model. First, whereas the lazy manager hypothesis predicts a substitution effect between institutional ownership and product market competition (and managerial entrenchment generally), the career-concern model allows for complementarity. Empirically, we reject substitution effects. Second, CEOs are less likely to be fired in the face of profit downturns when institutional ownership is higher. Finally, using instrumental variables, policy changes and disaggregating by type of owner we find that the effect of institutions on innovation does not appear to be due to endogenous selection. |
| Keywords: | Career Concerns, Innovation, Institutional Ownership, Productivity and R&D |
| JEL: | G20 G32 O31 O32 O33 |
| Date: | 2010–07 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2010.99&r=ino |
| By: | Gonzales, Kathrina G.; Yap, Josef T.; Macasaquit, Mari-Len R. |
| Abstract: | <p>Research and development (R&D) is an important resource for sustained economic growth. New knowledge created by a firm has spillover effects that improve the productivity of other firms and even other sectors. This is the heart of endogenous growth theory. In this framework, government policies can affect the rate of long-term economic growth by impacting the accumulation of both physical and human capital and the effort dedicated to research and development and the creation of new knowledge. A country can supplement its R&D efforts by enticing R&D firms to locate in the country or encourage local firms and multinational corporations operating there to conduct R&D activities. Factors that affect these decisions can be classified into push factors, pull factors, policy factors, and enabling factors. The last three are relevant for the host country while the first set of factors relate to the home country.</p> <p>A survey of firms operating in the Philippines was conducted to determine which factors are deemed important and areas where the Philippines is deemed inadequate. The findings have important policy implications. Push factors are found to be important, particularly the need to remain competitive. The pull factors that rate highly are (i) availability of talented skills at low cost; and (ii) size of market. The main policy factors that encourage firms to locate in the Philippines are: (i) good quality of education; and (ii) protection of intellectual property rights. The enabling factors are: (i) low cost of doing business; (ii) good physical and communication infrastructure; (iii) legal system; and (iv) availability of R&D support services. Two aspects are prominent in terms of discouraging R&D activity in the Philippines: (i) the high cost of R&D equipment and technology; and (ii) lack of technical manpower/engineers.</p> <p>Policies can look into the host country factors that do not rate highly and address the areas that are evaluated poorly. Policymakers should also be aware of the source of outward R&D spending which are mainly firms from the US and Japan. Most R&D of these firms is conducted in the ICT, automotive, and pharmaceutical industries. Meanwhile, interviews with associations of firms indicate that there is no cooperation among individual firms in terms of conducting R&D. The government can also initiate, strengthen, and support joint R&D efforts among firms in a specific sector given that there will likely be significant spillover effects in this type of endeavor.</p> |
| Keywords: | economic growth, foreign investment, technological innovation, intellectual property rights, research and development, Philippines, outsourcing, knowledge spillover, endogenous growth theory, push and pull factors, R&D spending, R&D investment |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:phd:dpaper:dp_2010-07&r=ino |
| By: | Gray, Elie (Toulouse Business School and Toulouse School of Economics (LERNA)); Grimaud, André (Toulouse School of Economics (IDEI, LERNA) and Toulouse Business School) |
| Abstract: | This paper exploits the formalization of a circular product differentiation model of Salop (1979) to propose an endogenous growth quality ladder model in which the knowledge inherent in a given sector can spread variously across the sectors of the economy, ranging from local to global influence. Accordingly, this affects the size of the pool of knowledge in which innovations draw themselves on in order to be produced. Therefore, the law of knowledge accumulation, and thus the growth rate of the economy, depend positively on the expected scope of diffusion of innovations, i.e. on the intensity of knowledge spillovers. This approach generalizes the endogenous growth theory as developed in the seminal models of Grossman & Helpman (1991) and Aghion & Howitt (1992), extending their analysis to the possibility of considering stochastic and partial knowledge spillovers. This framework allows us to mitigate the positive externality of knowledge and thus to apprehend the issue of the funding of research with more parsimony. We characterize the set of steady-state Schumpeterian equilibria as a function of the public tools. We provide an explanation for the fact that research effort can either be suboptimal or over-optimal, depending on the expected scope of knowledge. Accordingly, we find that the optimal public tool dedicated to foster R&D activity depends positively on it. |
| Keywords: | Schumpeterian growth, scope of diffusion of innovations, knowledge spillovers |
| JEL: | O30 O31 O41 |
| Date: | 2010–03 |
| URL: | http://d.repec.org/n?u=RePEc:tse:wpaper:22693&r=ino |
| By: | Valeria Costantini (University of Roma III); Massimiliano Mazzanti (University of Ferrara, University of Bologna and CERIS-CNR); Anna Montini (University of Bologna) |
| Abstract: | The achievement of positive environmental performance at national level could strongly depend on differences in local capabilities of both institutions and the private business sector. Environmental regulation alone is a weak instrument if the institutional and business environment cannot transform regulation strengths into opportunities. In this paper, we use the new environmental accounting matrix for polluting emissions now available for the 20 Italian Regions that covers 24 sectors and combines a shift-share approach with spatial econometric modelling. We provide evidence of the role played by internal innovation, innovation spillovers and regional policies in shaping the geographical distribution of environmental performance achievements. |
| Keywords: | Environmental Performance, Technological Innovation, Regional Spillovers, Polluting Emissions, Italian Regions |
| JEL: | Q53 Q55 Q56 R15 |
| Date: | 2010–09 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2010.108&r=ino |
| By: | Sergey Lychagin; Joris Pinkse; Margaret E. Slade; John Van Reenen |
| Abstract: | We simultaneously assess the contributions to productivity of three sources of research anddevelopment spillovers: geographic, technology and product- market proximity. To do this,we construct a new measure of geographic proximity that is based on the distribution of afirm's inventor locations rather than its headquarters, and we report both parametric andsemiparametric estimates of our geographic-distance functions. We find that: i) Geographicspace matters even after conditioning on horizontal and technological spillovers; ii)Technological proximity matters; iii) Product-market proximity is less important; iv)Locations of researchers are more important than headquarters but both have explanatorypower; and v) Geographic markets are very local. |
| Keywords: | geographic proximity, R&D spillovers, semiparametric and technological proximity |
| JEL: | C23 L60 O33 |
| Date: | 2010–08 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp0991&r=ino |
| By: | ONORI, Daria (Université catholique de Louvain, CORE, B-1348 Louvain-la-Neuve, Belgium; University of Rome "La Sapienza", Faculty of Economics, I-00161 Rome, Italy) |
| Abstract: | In this paper we modify a standard quality ladder model by assuming that R&D is driven by outsider firms and the winners of the race sell licenses over their patents, instead of entering directly the inter- mediate good sector. As a reward they get the aggregate profit of the industry. Moreover, in the intermediate good sector firms compete à la Cournot and it is assumed that there are spillovers represented by strategic complementarities on costs. Our goal is to prove that there exists an interval of values of the spillover parameter such that the relationship between competition and growth is an inverted-U-shape. |
| Keywords: | quality ladder, Cournot oligopoly, strategic complementarities, competition and growth |
| JEL: | L13 L16 O31 O52 |
| Date: | 2010–07–01 |
| URL: | http://d.repec.org/n?u=RePEc:cor:louvco:2010033&r=ino |
| By: | Christian Le Bas; Alexandre Cabagnols; Riad Bouklia-Hassane |
| Abstract: | The prolific (serial) inventors set up the core of the paper. Prolific inventors tend to have a high productivity in terms of inventions (patents) having in general more economic value. The capacity to produce a lot of inventions (patents) is termed “prolificness”. We want to deepen our knowledge about the size of their population, some of their main characteristics, the factors that explain the number patents applied. We exploit a rich data set built onto information available released by the US Patent and Trade Mark Office (USPTO) for the five more important countries as far as technological activities are concerned: Great-Britain, France, USA, Germany, Japan over a long time period (1975-2002). We give insights upon the size of the population of prolific inventors and provide new information about some of their characteristics. We carry out an empirical study in order to explain the prolific inventor patents distribution. We suggest models for estimating the effects of the main variable explaining their productivity. Binomial regressions explaining the inventor productivity after controlling for patent duration and time concentration (among others factors) show that interfirm and international mobility and technological variety (at the inventor level) affects positively the inventor productivity. But there is simultaneity. The overall results suggest that the same factors impact positively productivity with no difference across countries (with exceptions). |
| Date: | 2010–09 |
| URL: | http://d.repec.org/n?u=RePEc:icr:wpicer:14-2010&r=ino |
| By: | Valentina Cristiana MATERIA (Universita' Politecnica delle Marche, Dipartimento di Economia); Roberto ESPOSTI (Universita' Politecnica delle Marche, Dipartimento di Economia) |
| Abstract: | This paper analyses how a public institution chooses the optimal contract (cofinancing rate) in funding agricultural R&D research projects. A theoretical model is developed within a principal-agent framework taking into account the asymmetric information both players have to handle. The researcher (the agent) initially does not know the cofinancing granted by the funding institution (the principal). This latter, in turn, only observes some objective features of the researchers and of the selected research projects and, ex post, the research outcome, but not the agent's actual effort on the project. The principal uses the available information to offer the cofinancing rate (the contract) that, under specific contractual clauses, induces the agent's effort that maximizes principal's utility. The model eventually assumes the form of a Stackelberg-type game. An empirically testable relation is also derived from the theoretical model and is then applied to the agricultural R&D programme funded by the Italian region Emilia-Romagna over years 2001-2006. |
| Keywords: | Censored-Normal Regression, Principal-Agent Problem, Public R&D Funding, Stackelberg-type game |
| JEL: | O32 Q16 |
| Date: | 2010–09 |
| URL: | http://d.repec.org/n?u=RePEc:anc:wpaper:347&r=ino |
| By: | Susan Scott; John Van Reenen; Markos Zachariadis |
| Abstract: | How does a major financial network innovation influence firm performance? Despite muchspeculation we have little hard quantitative evidence about the impact of technology diffusionin financial services. In this paper we use the entire adoption history for SWIFT (the Societyfor Worldwide Interbank Financial Telecommunication - standards provider and messagingcarrier) matched to bank-level panel data for the US, Canada and 27 European countries. Ourdataset covers almost 7,000 banks (including 1,689 SWIFT adopters) between 1998 and2005. We find that adoption appears to have large effects on profitability, but it takes severalyears before any positive return is discernible, consistent with the idea of significantcomplementarities between new technologies and firm organization. The profitability effectoperates by both raising sales and decreasing operating costs and is greater for smaller firmsthan larger firms. Although the long-run effects are similar, US and UK banks appear to reapthe benefits from adoption more quickly than their Continental European counterparts. This isconsistent with the idea that the impact of information and communication technologies isstronger in the US than Europe due to lower adjustment costs. |
| Keywords: | Diffusion, profitability, banks, SWIFT |
| JEL: | O33 N20 |
| Date: | 2010–08 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp0992&r=ino |
| By: | Paul Grootendorst; Aidan Hollis; David K Levine; Thomas Pogge; Aled M Edwards |
| Date: | 2010–09–21 |
| URL: | http://d.repec.org/n?u=RePEc:cla:levrem:661465000000000169&r=ino |
| By: | Pierre-Carl Michaud; Darius Lakdawalla; Dana Goldman; Neeraj Sood; Ze Cong |
| Abstract: | We propose to combine clinical trial and estimates of behavioral responses in the population to quantify the value of new drug innovations when such values cannot be obtained by randomized experiments alone. New drugs are seen as having two distinct effects on patients. First, they can provide better outcomes for patients currently under treatment, due to better clinical efficacy. Second, they can also provide treatment access to more patients, perhaps by reducing side effects or expanding treatment. We compare these “clinical” and “access” effects using claims data, data on the arrival rate of new drugs, and the clinical trials literature on the effectiveness of these drugs. We find that the effect of new drug introductions on the number of patients treated accounts for a substantial majority of the value created by new drugs. |
| Keywords: | Pharmaceutical innovation, effectiveness, cost-benefit analysis, cancer |
| JEL: | I10 J14 J18 C23 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:lvl:lacicr:1038&r=ino |
| By: | Bertschek, Irene; Meyer, Jenny |
| Abstract: | The paper analyses the relationship between two major challenges firms are faced to: using the potentials of information technologies (IT) as an enabler of process innovations on the one hand and an ageing workforce that might interfere these potentials on the other hand. Econometric results based on firm-level data from the German manufacturing and service sectors reveal that firms with a higher IT-intensity are more likely to introduce new or improved processes. Older workers are harmful to the probability of process innovation based on IT. Leaving the negative relationship between older workers and the probability to innovate unaffected, IT-specific training for older workers is conducive to the realisation of process innovations. Thus, not older workers in general are harmful to firms' innovation capabilities, but older workers who lack the appropriate IT skills. -- Die Schlüsselrolle von Informations- und Kommunikationstechnologien (IKT) für Produktivität und Wachstum ist mittlerweile unumstritten. Als Basistechnologien sind IKT in allen Branchen einsetzbar und ermöglichen Produkt- und Prozessinnovationen, welche wiederum zu positiven Produktivitätseffekten führen und die langfristige Wettbewerbsfähigkeit von Firmen sicherstellen können. Während einerseits der Einsatz von IT Firmen die Möglichkeit bietet Geschäftsprozesse umzugestalten und sie bei ihrer Innovationsaktivität zu unterstützen, so sehen sich Firmen andererseits einer alternden Belegschaft gegenüber. Die Wahrscheinlichkeit und Häufigkeit der Nutzung von IT und Software ist indes nicht für alle Altersgruppen gleich. Im Jahr 2008 nutzten 28 Prozent der 55- bis 64-Jährigen einen Computer am Arbeitsplatz, während dies bei jeweils mehr als 50 Prozent der Beschäftigten im Alter von 25 bis 54 Jahren der Fall war. Dies mag zum Teil daran liegen, dass ältere Beschäftigte in Positionen mit keinem oder einem geringeren IT-Einsatz tätig sind. Verschiedene empirische Studien zeigen jedoch, dass ältere Beschäftigte, im Vergleich zu Jüngeren, geringere IT-Fähigkeiten und ein niedrigeres Niveau im Umgang mit IT erreichen. Im vorliegenden Papier gehen wir der Fragestellung nach, ob die Altersstruktur der Belegschaft einen Einfluss auf die durch IT geförderten Innovationsaktivitäten hat. Die Ergebnisse zeigen, dass die Wahrscheinlichkeit Prozessinnovationen zu realisieren positiv und signifikant mit der IT-Intensität einer Firma zusammenhängt. Der Anteil der Beschäftigten, die älter als 49 Jahre sind, hängt hingegen negativ mit der Innovationswahrscheinlichkeit zusammen. Diese negative Beziehung wird dadurch verstärkt, dass die Interaktion zwischen dieser Altersgruppe und der IT-Intensität negativ mit der Prozessinnovationswahrscheinlichkeit korreliert ist. IT-Weiterbildung für ältere Beschäftigte ist der Innovationswahrscheinlichkeit zuträglich. Das bedeutet, dass nicht grundsätzlich ältere Beschäftigte die Innovationsfähigkeit von Firmen hemmen, sondern ältere Beschäftigte, denen die geeigneten IT-Fähigkeiten fehlen. |
| Keywords: | process innovation,information technology,older workers |
| JEL: | J14 L23 O31 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:10053&r=ino |
| By: | Emanuele Massetti (Fondazione Eni Enrico Mattei and Euro-Mediterranean Center for Climate Change); Lea Nicita (Fondazione Eni Enrico Mattei) |
| Abstract: | This paper studies the implications for climate policy of the interactions between environmental and knowledge externalities. Using a numerical analysis performed with the hybrid integrated assessment model WITCH, extended to include mutual spillovers between the energy and the non-energy sector, we show that the combination between environmental and knowledge externalities provides a strong rationale for implementing a portfolio of policies for both emissions reduction and the internalisation of knowledge externalities. Moreover, we show that implementing technology policy as a substitute for stabilisation policy is likely to increase global emissions. |
| Keywords: | Technical Change, Climate Change, Development, Innovation, Spillovers |
| JEL: | C72 H23 Q25 Q28 O31 O41 Q54 |
| Date: | 2010–07 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2010.96&r=ino |
| By: | Valeria Costantini (University of Roma Tre); Massimiliano Mazzanti (University of Ferrara, and CERIS-CNR) |
| Abstract: | This paper aims to explore how the competitiveness of the EU economy, here captured by export dynamics over the medium run (1996-2007), has been affected by environmental regulation both on the public and private sector side. The strong and weak versions of the Porter hypothesis are tested by specifying the export dynamics of five aggregated manufacturing sectors classified by their technological or environmental content using a dynamic panel data estimator applied to a theoretically-based gravity model. When testing the strong version on export performances of manufacturing sectors, the overall effect of environmental policies does not conflict with export competitiveness. When testing the weak version using export flows of environmental goods, environmental policies, as well as innovation activities, all foster competitive advantages of green exports. Public policies and private innovation patterns trigger higher efficiency in the production process, thus turning the perception of environmental protection actions as a production cost into a net benefit. These results constitute useful advice for policy makers involved in the new wave of environmental tax reforms and green recovery packages currently debated at European Union level. |
| Keywords: | Environmental Policies, Porter Hypothesis, Technological Innovation, Export Performances, Gravity Model, European Union |
| JEL: | F14 O14 Q43 Q56 |
| Date: | 2010–07 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2010.94&r=ino |
| By: | Pollock, R.; Stepan, P. |
| Abstract: | This paper reports results from a large recent study of the public domain in the European Union. Based on a combination of catalogue and survey data our figures for the number of items (and works) in the public domain extend across a variety of media and provide one of the first quantitative estimates of the `size' of the public domain in any jurisdiction. |
| Keywords: | Copyright; Public Domain; Intellectual Property; Europe |
| Date: | 2010–04–30 |
| URL: | http://d.repec.org/n?u=RePEc:cam:camdae:1046&r=ino |
| By: | Pollock, R.; Stepan, P.; Välimäki, M. |
| Abstract: | This paper reports results from a large recent study of the public domain in the European Union. Based on a combination of catalogue, commercial and survey data we present detailed figures both on the prices (and price dierences) of in copyright and public domain material and on the usage of that material. Combined with the estimates for the size of the EU public domain presented in the companion paper Pollock and Stepan (2009) our results allow us to provide the first quantitative estimate for the `value' of the public domain (i.e. welfare gains from its existence) in any jurisdiction. |
| Keywords: | Copyright; Public Domain; Intellectual Property; Europe |
| Date: | 2010–04–30 |
| URL: | http://d.repec.org/n?u=RePEc:cam:camdae:1047&r=ino |