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on Innovation |
| By: | Ufuk Akcigit; William R. Kerr |
| Abstract: | We study how exploration versus exploitation innovations impact economic growth through a tractable endogenous growth framework that contains multiple innovation sizes, multi-product firms, and entry/exit. Firms invest in exploration R&D to acquire new product lines and exploitation R&D to improve their existing product lines. We model and show empirically that exploration R&D does not scale as strongly with firm size as exploitation R&D. The resulting framework conforms to many regularities regarding innovation and growth differences across the firm size distribution. We also incorporate patent citations into our theoretical framework. The framework generates a simple test using patent citations that indicates that entrants and small firms have relatively higher growth spillover effects. |
| JEL: | L16 O31 O33 O41 |
| Date: | 2010–11 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:16443&r=ino |
| By: | Geir H. Bjertnæs, Tom-Reiel Heggedal and Karl Jacobsen (Statistics Norway) |
| Abstract: | We analyze how knowledge spillovers influence the optimal timing of R&D policy. Using numerical simulations we find that optimal subsidies to R&D may be rising over time even when the returns to knowledge is decreasing. The optimal time profile of the subsidies is determined by the elasticity of scale in the R&D production function, which again depends on both the returns to knowledge and the returns to labor. |
| Keywords: | Innovation policy; R&D; Technological spillovers |
| JEL: | O32 O38 |
| Date: | 2010–11 |
| URL: | http://d.repec.org/n?u=RePEc:ssb:dispap:635&r=ino |
| By: | Czarnitzki, Dirk; Wastyn, Annelies |
| Abstract: | Export is an important factor to improve growth and welfare especially for industrialized small, open economies such as Belgium. Policy may be interested in key variables that can influence export. This paper finds evidence for the importance of R&D for export activities using Belgian firm-level data. To control for reverse causality, R&D-subsidy variables are used to instrument R&D. The results show that R&D policies may indirectly help to increase the export performance of the economy. Due to the exceptionally high openness of Belgium, two subsamples of firms are considered, domestic firms and multinational firms. We observe positive effects of R&D on export for both domestic and MNEs. Once we instrument R&D because of its potential endogeneity, however, it turns out that the effect of R&D on exports is larger for domestic firms than for multinational companies. -- |
| Keywords: | Export,R&D,Multinational enterprises,Innovation Policy |
| JEL: | F23 O33 O38 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:10071&r=ino |
| By: | Christian Helmers |
| Abstract: | This paper investigates the effect of market entry of new firms on incumbent firms'innovative activity measured as patent applications. The basic assumption is that the effect ofentry varies by geographical distance between entrants and incumbents due to the presence oflocalized unobserved spillovers. In order to avoid endogeneity problems commonlyassociated with the timing of entry and entrants' location choice, I analyze entry induced bythe establishment of university business incubators, which are usefully exogenous in time andspace. The results show that entry has a statistically and economically significantly positivestrategic effect on incumbent patenting which is attenuated by the geographical distancebetween entrant and incumbent. |
| Keywords: | Patents, market entry, incubators, spillover |
| JEL: | L22 L26 O34 |
| Date: | 2010–09 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp1002&r=ino |
| By: | Santiago-Rodriguez, Fernando (International Development Research Centre, UNU-MERIT); Dutrenit, Gabriela (UAM-Xochimilco) |
| Abstract: | Interactive learning, particularly between firms and public research organizations (PRO), nurtures the dynamics of systems of innovation. Limited interaction contributes to explain poor performance in R&D and ultimately, in innovation by developing countries. But why this is so? Based on evidence from the pharmaceutical industry in Mexico, this paper identifies some determinants of PRO-industry interaction for pharmaceutical R&D. Particular attention is granted to factors hindering such interactions; arguably the barriers differ throughout the diverse stages of the R&D process. The paper decomposes the Research and Development processes, thus it is possible to identify determinants to interactions in each of those instances. Drug development is further split in two stages: clinical research and drug manufacturing. The analysis indicates that macroeconomic and business environments, firms' strategies, ethical considerations, incentives and perceptions of PRO-industry interaction among the agents in the system, support/hinder interactivity in pharmaceutical R&D. |
| Keywords: | Public research organizations, pharmaceutical industry, university-industry collaboration, pharmaceuticals, R&D, Mexico |
| JEL: | O31 O54 L65 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:unumer:2010053&r=ino |
| By: | Czarnitzki, Dirk; Lopes Bento, Cindy |
| Abstract: | This study focuses on the effect of public funding on internal R&D investment and on total innovation intensity on a cross-country comparative level. Using harmonised micro data from five different countries, this study analyzes the heterogeneity of the use of policy instruments. Applying a nonparametric matching method to identify the treatment effect, we find that on average firms would have invested significantly less if they would not have received subsidies. On similar grounds, our estimation also takes into account the 'treatment effects on the untreated'. This estimation enables us to assess whether or not governments could further foster R&D activities by extending innovation policies to currently not supported firms. With the exception of one country, all the governments of the sample would benefit from an extension of their subsidy policies. Finally, these two matching results can be combined in order to test for misallocation of public funds. Our analysis does not uncover any systematic misallocation of public funding for the countries under review. -- |
| Keywords: | Innovation,Policy Evaluation,Treatment Effects,Cross-country comparison |
| JEL: | O38 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:10073&r=ino |
| By: | Sharif, Naubahar (Division of Social Science, The Hong Kong University of Science and Technology); Huang, Can (UNU-MERIT, Maastricht University) |
| Abstract: | Based on a survey adapted from the Fourth European Community Innovation Survey (CIS-4), this study finds that, in the changing manufacturing environment of Guangdong province in China, Hong Kong-owned businesses that generate a higher share in new product sales as a percentage of total sales or engage in R&D or collaborative innovation activities in China are more likely to survive and remain in Guangdong. The study fills a gap in the literature by investigating the effects of innovation on the survival and relocation of Hong Kong-owned manufacturing firms in Guangdong. The results support policy initiatives that strengthen collaborative ties among key innovation system actors. |
| Keywords: | Innovation, Survival, Relocation, Community Innovation Survey, Asia, China |
| JEL: | D21 L25 L52 O31 R11 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:unumer:2010052&r=ino |
| By: | Iraj Hashi; Nebojsa Stojcic |
| Abstract: | The impact of innovation on firm performance has been a matter of significant interest to economists and policy makers for decades. Although innovation is generally regarded as a means of improving the competitiveness of firms and their performance on domestic and foreign markets, this relationship has not been supported unambiguously by empirical work. Innovative activities of firms influence their performance not necessarily directly but through the production of useful innovations and increased productivity. Therefore, in recent years, the relationship between innovation and firm performance has been modelled by a multistage approach. However, the findings from existing studies differ in many respects which suggests that there is the need for further research. In this paper we employ firm level data from the fourth Community Innovation Survey (CIS4), covering some 90,000 firms in 16 West and East European countries in order to assess the drivers of the innovation process in two different institutional settings, a number of mature market economies of Western Europe and a number of advanced transition economies from Central and Eastern Europe. A four-equation model, originating in the work of Crepon et al., (1998), has been used to link the innovation decision of firms to their performance through the impact of innovation input on innovation output and the innovation output on productivity and better performance. Our findings confirm the positive relationship between innovation activities and productivity at the firm level and provide further evidence on the relationship between size and innovation activities. |
| Keywords: | innovation, firm performance, multi-stage model, Community Innovation Survey 4 |
| JEL: | O31 L25 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:sec:cnstan:0410&r=ino |
| By: | Rennings, Klaus; Rammer, Christian |
| Abstract: | The impact of environmental innovations on firm performance is ambiguous. On the one hand, regulatory-driven environmental innovation may impose additional costs to firms and lower their profits. On the other hand, eco-innovators could profit from lower uncertainty in innovation due to regulatory standards and demand-generating effects of regulation. In this paper we analyse (a) whether regulation-driven environmental innovation generate similar innovation success compared to other types of product and process innovation, and (b) whether regulation-driven environmental innovation increase or decrease firm success (as measured by return on sales). Using firm data from the German innovation survey, we find that both product and process innovations driven by environmental regulation generate similar success in terms of sales with new products and cost savings as other innovations do. However, we find different effects when looking on the field of environmental regulation that triggered innovations. Regulations in favour of sustainable mobility contribute to higher sales with market novelties while regulations in the field of water management lower this type of innovation success. With regard to a firm’s price-cost margin, new processes implemented in order to comply with environmental regulation requirements lower profitability, indicating higher costs for this type of innovation which cannot be passed on prices. Higher profit margins can be observed for firms with innovations triggered by regulations on recycling and waste management as well as on resource efficiency. -- |
| JEL: | Q55 Q58 L51 O31 L25 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:10065&r=ino |
| By: | Baghana, Rufin (Ministère des Finances, Québec) |
| Abstract: | This paper analyses empirically the impacts of public R&D grants on private R&D investments and on the productivity growth of the manufacturing firms in a context where fiscal incentives are present. Using the conditional semiparametric differenceindifferences estimator on longitudinal data from Quebec we show that firms that use public grants for R&D in conjunction with tax credits for R&D perform better in terms of R&D input additionality than firms that use only tax credits for R&D. We then use a production function to assess the effectiveness of public R&D grants in the productivity growth of firms. We find that for each additional dollar of public R&D grant, output increases by 0.134 dollars. We conclude that the additional return of direct subsidies is positive but lower than the return on the R&D financed by own funds or R&D tax credits. |
| Keywords: | R&D, Public subsidies, Quebec, Productivity, Difference-in-differences |
| JEL: | H25 O32 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:unumer:2010055&r=ino |
| By: | Lööf, Hans (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology); Johansson, Börje (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology) |
| Abstract: | Firms display persistent differences as regards both internal and external characteristics, and these differences correspond to asymmetries in the performance of firms with regard to productivity level and growth as well as innovativeness. This paper focuses on one internal characteristic and one external factor by distinguishing between firms with persistent R&D efforts and other firms and firms located in a metropolitan region versus firms with other locations. Applying Swedish data on individual firms and their location, the paper shows that firms that follow a strategy with persistent R&D efforts have a distinctly higher level of productivity across all types of location. In addition, the productivity level of firms with persistent R&D is augmented in a significant way when such firms have a metropolitan location and, in particular, a location in a metropolitan city |
| Keywords: | R&D; innovation-strategy; productivity; metropolitan; externalities |
| JEL: | C23 O31 O32 |
| Date: | 2010–11–04 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:cesisp:0242&r=ino |
| By: | Ullberg, Eskil (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology) |
| Abstract: | We are well familiar with the economic analysis of a patent system in terms of a temporary monopoly on products, benefitting from marginal process inventions, formulated under conditions of certain future demands. This article develops an experimental and dynamic microeconomic model useful for studying the patent system as a trade system, where patented technology is exchanged in organized competitive markets, under uncertain future demands. An economic system design is developed to study transparent prices of patents, dynamic gains from using a patent in multiple industries and the coordination of invention, intermediary and innovation activities using a linear contract on patents (fixed fee plus royalty on revenues). A trader is introduced together with inventor and innovator agents in order to multiply the value (use) of the technology. Three mechanism designs and two levels of presumption of validity of the underlying patent right are proposed. The analysis differs from previous work on patents, trade and economics in that the focus is on the competitive pricing of the rights themselves, using demand side bidding. An informal theory is outlined to price the dual values of a patent (investing and blocking). Based on this proposition tentative hypothesis are outlined for two initial experiments using the outlined economic system design. |
| Keywords: | patents; organized markets; trade; licensing; technology |
| JEL: | D02 D23 L14 L24 O32 O34 |
| Date: | 2010–08–25 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:cesisp:0229&r=ino |
| By: | Kuhne, Bianka; Gellynck, Xavier; Weaver, R.D. |
| Abstract: | In the New Economy, the network is considered as more important than the firm itself. In this paper the focus is on chain networks which include vertical networks among chain members, horizontal networks with peers, and networking with third parties. Networks have an important role in the diffusion and adoption of innovations, thus they are the locus of innovation. While previous research focused on the firm, we contribute to the understanding of innovations in chain networks, i.e. we investigate the innovation capacity in vertical networks and how networking with peers and third parties is influencing the innovation capacity of the vertical network. We propose that there is a positive relationship between the network connections the direct chain partners have with peers and third parties and the innovation capacity of the vertical network. Data were collected from 90 direct agrifood chains in the traditional food sector. Cluster analysis suggested three clusters of chains corresponding to three distinct levels of innovation capacity: low, medium and high. Via descriptive analysis and binary logistic regression the influence of networking with peers and third parties on the innovation capacity of the vertical network was investigated. Our results confirm our proposition. However, we found that the chain partners are either horizontally or vertically networking for innovation. Nevertheless, more networking within the chain and with peers and third parties is linked to higher levels of innovation capacity. Consequently, our study adds to the research in the field of the New Economy by deepening the understanding of how innovation capacity is developed in vertical networks. We can confirm that the network is very important for the development and implementation of innovations and that the innovation capacity of one firm is linked to the innovation capacity of its chain partners. For future research we propose to investigate the link between networking for innovation and types of innovation which can be achieved. Further, future research should explore further inter-organizational links in the chain network and explore wider networks than the direct chain. |
| Keywords: | SMEs, chain networks, traditional food products, Agribusiness, Agricultural and Food Policy, Community/Rural/Urban Development, Food Consumption/Nutrition/Food Safety, Labor and Human Capital, |
| Date: | 2010–10–27 |
| URL: | http://d.repec.org/n?u=RePEc:ags:eaa116:95050&r=ino |
| By: | Hussinger, Katrin |
| Abstract: | Inventors often experience a low productivity after their company has been subject to a merger or acquisition (M&As). It is of central managerial interest to identify factors facilitating the integration of new inventive staff and thereby counteracting innovation declines after M&As. This paper provides empirical evidence into the role of acquiring firms' absorptive capacity for the post-merger patent productivity of the acquired inventors. Based on a sample of 544 inventors employed by European acquisition targets in the period 2000-2001 it is shown that the post-merger productivity of acquired inventors is significantly higher within acquiring firms with a distinct absorptive capacity. It can be concluded that absorptive capacity is a firm capability that enhances the integration of inventors after firm takeovers. -- |
| Keywords: | M&As,absorptive capacity,inventor productivity |
| JEL: | O30 O32 G34 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:10066&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. |
| Date: | 2010–04 |
| URL: | http://d.repec.org/n?u=RePEc:reg:wpaper:578&r=ino |