nep-ino New Economics Papers
on Innovation
Issue of 2010‒12‒04
fifteen papers chosen by
Steffen Lippert
Massey University, Albany

  1. Patent Policy, Patent Pools, And The Accumulation Of Claims In Sequential Innovation By Gastón Llanes; Stefano Trento
  2. Standards, Innovation Incentives, and the Formation of Patent Pools By Klaus M. Schmidt
  3. R&D Subsidies, Spillovers and Privatization in Mixed Markets By Maria José Gil-Moltó; Joanna Poyago-Theotoky; Vasileios Zikos
  4. Defensive Strategies in the Quality Ladders By Ivan Ledezma
  5. The Patenting Behavior of Academic Founders By Walter, Sascha G.; Schmidt, Arne; Walter, Achim
  6. Policy Complements to the Strengthening of IPRS in Developing Countries By Ricardo H. Cavazos Cepeda; Douglas C. Lippoldt; Jonathan Senft
  7. Firms’ R&D cooperation strategies: the partner choice By Chiara Franco; Manuela Gussoni
  8. Intellectual Property Protection, Regulation and Innovation in Developing Economies: The Case of Indian Pharmaceutical Industry By Rakesh Basant
  9. SMEs; Virtual research and development (R&D) teams and new product development: A literature review By Ale Ebrahim, Nader; Ahmed, Shamsuddin; Taha, Zahari
  10. Subsidy Policy for Innovation: A way to reach objectives of both higher growth and equity? By Benjamin Montmartin
  11. Too Big to Innovate? Scale (dis)economies and the Competition-Innovation Relationship in U.S. Banking By Bos Jaap; Lamoen Ryan van; Economidou Claire
  12. Virtual R&D teams and SMEs growth: A comparative study between Iranian and Malaysian SMEs By Ale Ebrahim, Nader; Ahmed, Shamsuddin; Taha, Zahari
  13. Human Capital Dispersion and Incentives to Innovate By Maurizio Iacopetta
  14. From Data to Celebration of Cultural Heritages: Preservations, Acquisitions, and Intellectual Property Regulations By Situngkir, Hokky
  15. Financial system, innovation and regional development: a study on the relationship between liquidity preference and innovation in Brazil By João Prates Romero; Frederico G. Jayme Jr

  1. By: Gastón Llanes; Stefano Trento
    Abstract: We present a dynamic model where the accumulation of patents generates an increasing number of claims on sequential innovation. We compare innovation activity under three regimes -patents, no-patents, and patent pools- and find that none of them can reach the first best. We find that the first best can be reached through a decentralized tax-subsidy mechanism, by which innovators receive a subsidy when they innovate, and are taxed with subsequent innovations. This finding implies that optimal transfers work in the exact opposite way as traditional patents. Finally, we consider patents of finite duration and determine the optimal patent length.
    Keywords: Sequential Innovation, Patent Policy, Patent Pools, Anticommons, Double Marginalization, Complementary Monopoly
    JEL: L13 O31 O34
    Date: 2010–11–25
  2. By: Klaus M. Schmidt (University of Munich)
    Abstract: Technolgical standards give rise to a complements problem that affects pricing and innovation incentives of technology producers. In this paper I discuss how patent pools can be used to solve these problems and what incentives patent holders have to form a patent pool. I offer some suggestions how competition authorities can foster the formation of welfare increasing patent pools.
    Keywords: Patent pools, standard setting organisations, innovation, complements problem, patent thicket
    JEL: L15 L24 O3
    Date: 2010–09
  3. By: Maria José Gil-Moltó; Joanna Poyago-Theotoky; Vasileios Zikos
    Abstract: We examine the use of subsidies to R&D in a mixed and a private duopoly market. We show that the socially optimal R&D subsidy is increasing in the degree of spillovers but it is lower in the private duopoly. The optimal R&D subsidy leads to an increase in total R&D and production, however, it does not lead to the equalisation of per fi?rm output and therefore to an efficient distribution of production costs. We also find that privatization of the public firm reduces R&D activity and welfare in the duopoly market. This result stands even when optimal R&D subsidies are provided.
    Keywords: Keywords: mixed duopoly, process innovation, R&D subsidies, privatization, spillovers.
    JEL: L31 L32 O38 L13 L50
    Date: 2010–10
  4. By: Ivan Ledezma (Université Paris Dauphine, LEDa UMR 225 DIAL, IRD)
    Abstract: (english) This paper analyses the potentially defensive behaviour of patent race winners and its effect on aggregate R&D effort. It proposes a quality-ladders model that endogenously determines leaders technology advantages and who innovates. Product market regulation can have either a positive or a negative effect on R&D intensity. The negative effect is likely to be observed in highly deregulated economies. The positive influence arises in more regulated environments and it is stronger for larger innovative jumps. These steady-state equilibrium outcomes are consistent with puzzling and contrasting patterns stemming from data on manufacturing industries for 14 OECD countries during the period 1987-2003. _________________________________ (français) Dans cet article nous étudions le comportement potentiellement défensif des innovateurs et son effet sur l’effort agrégé d’innovation. Un modèle à échelles de qualité est proposé afin d’analyser l’émergence d’avantages technologiques qui, in fine, déterminent qui innove (le leader ou ses concurrents). Dans ce contexte, la réglementation de marché peut avoir un effet positif ou négatif sur l’intensité en R&D. Elle peut être négativement associée à l’effort d’innovation dans des environnements hautement dérèglementés. Par contre, en économies qui dépassent un certain seuil de réglementation, susceptible de limiter effectivement la construction de barrières stratégiques, la réglementation induit des incitations à innover. Ces prédictions sont cohérentes avec des tests empiriques menés sur un échantillon d’industries appartenant à 14 pays de l’OCDE durant la période 1987-2003.
    Keywords: Innovative leaders, quality ladders, product market regulation, R&D, Leaders innovants, modèle à échelles de qualité, réglementation.
    JEL: L13 O31 O33
    Date: 2010–09
  5. By: Walter, Sascha G.; Schmidt, Arne; Walter, Achim
    Abstract: This study explores why academic entrepreneurs patent their inventions before and after creating a firm. Drawing on start-up data combined with patent data, we specifically examine the impact of five, relatively under-researched factors (scientific field, pace of technological development, technological uncertainty, entrepreneurial orientation, and patent effectiveness. The study shows that some scientific fields, technological uncertainty, and patent effectiveness are positively related to patent propensity, both before and after founding. The effects of pace of technological development and entrepreneurial orientation were timespecific. Our study suggests that patenting by academic entrepreneurs is driven by special rationales and that prior research on full-time scientists and established firms does not necessarily generalize to them. We discuss the implications of our findings both in terms of contribution to the current literature and technology transfer policies. --
    Keywords: academic patenting
    Date: 2010–08–02
  6. By: Ricardo H. Cavazos Cepeda; Douglas C. Lippoldt; Jonathan Senft
    Abstract: The past two decades have witnessed an active period of global reform with respect to policies concerning Intellectual Property Rights (IPRs). This paper examines – from an empirical, economic perspective – policies that complement the generally strengthened framework for IPRs in developing countries. The analytical approach involves three complementary levels of analysis: macro, micro and country case studies. Across all three approaches, the results point to a tendency for IPR reform to deliver positive economic results. Reforms concerning patent protection have tended to deliver the most substantial results, but the results for copyright reform and trademark reform were also positive and significant. Overall, the policy complements that were found to be most important in facilitating positive results were those related to inputs for innovative and productive processes and to the ability to conduct business. These include policies that influence the macro-environment for firms as well as the availability of resources (e.g. related to education), the legal and institutional conditions and the fiscal incentives.
    Keywords: economic development, innovation, intellectual property rights, patents, policy reforms, copyrights, trademarks
    Date: 2010–09–14
  7. By: Chiara Franco; Manuela Gussoni
    Abstract: The aim of this paper is to provide empirical evidence on the issue of ?rms’ R&D cooperation strategies, examining the topic from the point of view of the partner choice. Literature has deeply analyzed the motivations inducing ?rms to form research joint ventures, instead, the investigation of partner selection strategies is disregarded even though it is one of the most critical decisions for a ?rm when forming an alliance. For this reason, by making use of data coming from the fourth Italian innovation survey (2002- 2004), we contribute to the the literature by estimating, through the use of a multinomial logistic model, the determinants that a?ect the ?rms’ choice among di?erent types of potential R&D cooperation partners. We di?erentiate among three cooperation strategies that are: (i) cooperation with only market partners; (ii) with only science partners; and (iii) with both of them. Our ?ndings provide support to the hypothesis that di?erent variables determine di?erent partner choices according to the sector analyzed. In the manufacturing sector, for example, foreign multinational companies or export oriented ?rms prefer to cooperate only with market partners. In the services, ?rms receiving public subsidies for innovation prefer science cooperations to all the other cooperation arrangements leaving room for policy implications.
    Keywords: R&D cooperations; partner selection; industry-university linkages;service sector.
    JEL: O32 L10 L8 L6 D78
    Date: 2010–09–10
  8. By: Rakesh Basant
    Abstract: Historically, nations have modified their IP policies to support their development agenda. With the advent of TRIPS, the ability of countries to choose between different IP policy options has reduced considerably but some flexibility remains. Countries have tried to utilize this flexibility for their advantage but in certain respects the choices are difficult. In recent years, certain elements of the new IP regime in India have been vigorously debated in the context of the TRIPS mandated IP policy changes. Given the complex interface between economic development and IP regimes, a variety of arguments have been deployed to argue in favour or against these elements. The paper argues that an evaluation of the IP regime and regulation in developing countries needs to be done in the context of how they facilitate capability building especially through participation of domestic firms in global R&D and production networks. [W.P. No. 2010-11-02]
    Keywords: policies, development, countries, economic, favour, global R&D
    Date: 2010
  9. By: Ale Ebrahim, Nader; Ahmed, Shamsuddin; Taha, Zahari
    Abstract: Small and medium-sized enterprises (SMEs) are indeed the engines of global economic growth. Their continued growth is a major subject for the economy and employment of any country. Towards that end, virtual research and development (R&D) could be a viable option to sustain and ease the operations of SMEs. However, literature shows there has not been a great deal of research into the diverse characteristic of virtual R&D teams in SMEs. This article provides a comprehensive literature review on different aspects of virtual R&D teams collected from the reputed publications. The purpose of the literature review is to provide an outline on the structure and dynamics of R&D collaboration in SMEs. Specifying the rationale and relevance of virtual teams, the relationship between virtual R&D team for SMEs and new product development (NPD) has been examined. It concludes with identifying the gaps and feebleness in the existing literature and calls for future research in this area. It is argued to form of virtual R&D team deserves consideration at top level management for venturing into the new product development within SMEs.
    Keywords: Virtual teams; small and medium enterprises; new product development; R&D
    JEL: M5 L17 O32 M12 O1 M11 M1 M54 P42 P23 O3
    Date: 2010–05–20
  10. By: Benjamin Montmartin (GATE Lyon Saint-Etienne - Groupe d'analyse et de théorie économique - CNRS : UMR5824 - Université Lumière - Lyon II - Ecole Normale Supérieure Lettres et Sciences Humaines)
    Abstract: Since the Lisbon Agenda (2000), the European Union policies are in- creasingly oriented towards innovation as attested to by the deep change of the new Regional Policy. This paper proposes an analysis of an innovation subsidy policy in an agglomeration and growth model à la Martin and Ottaviano (1999). In this two-regions model, we assume that the policy is implemented by a central authority that taxes the profit of industrial firms to subsidy employment in innovative activities. We show that the positive effects on growth and equity of such a policy, as highlighted by Martin (1999), hold in the case where the policy is not geographically differentiated. In the case where the government however grants larger subsidies to the poorer region in order to reduce the concentration of the innovative sector, we show that the policy can be inefficient if it is not of sufficient magnitude.
    Keywords: economic geography; endogenous growth; public policy; subsidies; Regional Policy
    Date: 2010
  11. By: Bos Jaap; Lamoen Ryan van; Economidou Claire (METEOR)
    Abstract: This paper examines whether large U.S. banks have become ''too big to innovate''. We extend the theoretical work of Aghion et al. (2005b) by relaxing their assumption that unit costs are independent from output levels in order to investigate the effect of scale (dis)economies on the competition-innovation nexus. With our model we can derive conditions under which the innovation behavior of firms with scale diseconomies becomes more or less responsive to competitive changes. Our empirical results show that decreases in thelevel of competition lead to very large drops in innovation. Large banks, already operating beyond the minimum efficient scale, have indeed become ''too big to innovate''.
    Keywords: Industrial Organization;
    Date: 2010
  12. By: Ale Ebrahim, Nader; Ahmed, Shamsuddin; Taha, Zahari
    Abstract: This paper explores potential advantages of using virtual teams for small and medium-sized enterprises (SMEs) with a comprehensive review on various aspects of virtual teams. Based on the standing of the pertinent literature, attempt has been made to study the aspects by online survey method in Iran and Malaysia. In both countries, SMEs play an important role in their economies, employments, and capacity building. Virtual R&D team can be one of the means to increase SMEs efficiency and competitiveness in their local as well as global markets. In this context, surveys have been conducted to evaluate the effects of virtuality to the growth of SMEs. The study addresses some differences between two countries in engaging virtual research and development (R&D) teams in their SMEs. It is observed that there is a significant difference between the SMEs turnover that employed virtual team and that did not employ the virtual team. The way for further studies and recommend improvements are proposed.
    Keywords: Virtual R&D team, small and medium enterprises, survey, developing countries.
    JEL: O47 F23 O32 L2 M11 M1 O43 M54 R11 O3
    Date: 2010–07–01
  13. By: Maurizio Iacopetta (Observatoire Français des Conjonctures Économiques)
    Abstract: Do policies that alter the allocation of human capital across individuals affect the innovation capacity of an economy? To answer this question, I extend Romer's (1990) growth model to allow for individual heterogeneity. I find that the value of an invention rises with equality. If skills and talents are evenly distributed, inventions are more widely adopted in production and users are willing to bid a higher price. Therefore, more equality is associated with a larger share of the population employed in the business of invention. However, inventors of an equal society are not as creative as those of an unequal one. As a result an inverted-U curve relating inequality and the innovation rate emerges, indicating that departures from extreme forms of equality or inequality are growth-enhancing. I discuss evidence that agrees with the main implications of the analysis, namely that the market size and the number of inventors are negatively affected by inequality. Finally, a calibration exercise suggests that in recent decades the U.S. has been in the ascending portion of the inequality-growth curve.
    Keywords: human capital, inequality, innovation JEL Classification: O15; O31; O41; H52; J24.
    Date: 2010–11
  14. By: Situngkir, Hokky
    Abstract: The articles discusses the management of the cultural diversity in Indonesian archipelago by incorporating the web 2.0 and participatory database documentation system. Things related to the reports and researches that have been brought related to the on going collecting data is discussed, economy-wise and scientific-wise. The high diversity of elasticities in Indonesia is not only exotic for performance, watch, and wear. They might also be able to tell us about who we are.
    Keywords: Culture; Wipo; Intellectual Property Rights; Indonesia; Patent; Intangible Culture
    JEL: L82 M14 O38 Z1 O34 A13 P35 Z11
    Date: 2010–11–26
  15. By: João Prates Romero (Cedeplar-UFMG); Frederico G. Jayme Jr (Cedeplar-UFMG)
    Abstract: This paper discusses and assesses the features of the Brazilian Financial System, as well as the impacts of Liquidity Preference on Regional Development in Brazil. In the post-Keynesian literature, money is considered endogenous to the economic system, introduced in the economic activity through the credit provided by banks. Taken as non-neutral, banks are economic agents which can present lower or higher liquidity preference. Because of that, banks are also particularly important to the development process. Precisely, we tested the influence of credit and the role of banks in regional development. We estimate a panel across states in Brazil in order to test the impact of liquidity preference and other financial variables on Brazilian states’ number of patents, aiming at testing the importance of the bank system to technological progress and regional development. Conclusions confirm both hypotheses.
    Keywords: Monetary System, National Innovation System, Credit, Brazil
    JEL: R10 G21 O30
    Date: 2010–11

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