nep-ino New Economics Papers
on Innovation
Issue of 2010‒12‒11
twenty-one papers chosen by
Steffen Lippert
Massey University, Albany

  1. Different competences, different modes in the globalization of innovation?. A comparative study of the Pune and Beijing regions By Plechero, Monica; Chaminade, Cristina
  2. Innovation, R&D Investment and Productivity in Chile By Roberto Alvarez; Claudio Bravo-Ortega; Lucas Navarro
  3. Policy Complements to the Strengthening of IPRS in Developing Countries - China’s Intellectual Property Environment: A Firm-Level Perspective By Minyuan Zhao
  4. From Basic Research to Innovation: Innovation policies for development: towards a systemic experimentation based approach By Chaminade, Cristina; Lundvall, Bengt-Ake; Vang-Lauridsen, Jan; Joseph, KJ
  5. Induction and Evolution in the Origin of Inventions: Evidence from Smoking Cessation Products By Adam Jaffe; Seth Werfel
  6. Appropriability and Incentives with Complementary Innovations By Massimo D'Antoni; Maria Alessandra Rossi
  7. A three-stage model of the Academy-Industry linking process: the perspective of both agents By De Fuentes, Claudia; Dutrénit, Gabriela
  8. Do direct R&D subsidies lead to the monopolization of R&D in the economy? By Czarnitzki, Dirk; Ebersberger, Bernd
  9. Evaluation of the Norwegian R&D tax credit scheme By Ådne Cappelen, Erik Fjærli, Frank Foyn, Torbjørn Hægeland, Jarle Møen, Arvid Raknerud and Marina Rybalka
  10. Innovation and Foreign Ownership By Maria Guadalupe; Olga Kuzmina; Catherine Thomas
  11. Foreign acquisitions, domestic multinationals, and R&D By Bandick, Roger; Görg, Holger; Karpaty, Patrik
  12. Building a "creative culture" for sustainable innovation By Miller, Paddy; Brankovic, Azra
  13. Environmental Policy Design Characteristics and Technological Innovation: Evidence from Patent Data By Nick Johnstone; Ivan Hascic; Margarita Kalamova
  14. Public Procurement of Innovation Diffusion: Exploring the Role of Institutions and Institutional Coordination By Rolfstam, Max; Phillips, Wendy; Bakker, Elmer
  15. Who leads Research Productivity Change? Guidelines for R&D policy makers By Jiménez-Sáez, Fernando; Zabala, Jon Mikel; Zofío, José L.
  16. Comparing systems approaches to innovation and technological change for sustainable and competitive economies: an explorative study into conceptual commonalities, differences and complementarities By Coenen, Lars; Díaz López , Fernando J
  17. Innovation in symbolic industries: the geography and organisation of knowledge sourcing By Martin, Roman; Moodysson, Jerker
  18. Intellectual Property Protection, Regulation and Innovation in Developing Economies - The Case of Indian Pharmaceutical Industry By Basant, Rakesh
  19. Drivers of Academic Research and Patenting in India: Econometric Estimation of the Research Production Function By Amit Shovon Ray; Sabyasachi Saha
  20. Knowledge Enclosures, Forced Specializations and Investment Crisis By Filippo Belloc; Ugo Pagano
  21. Heterogeneous Exits: Evidence from New Firms By Kato, Masatoshi; Honjo, Yuji

  1. By: Plechero, Monica (ATPS, Tanzania); Chaminade, Cristina (CIRCLE, Lund University)
    Abstract: Since the seminal work of Archibugi and Michie (1995) on the globalization of innovation, several authors have tried to understand the complex relationship between innovation and internationalization, mainly using firm or sectoral level data. However, most of them tend to focus on just one form of globalization of innovation – exploitation of technology, research collaboration or offshoring of R&D – and often One traditional indicator of innovation, like patents or R&D investments, thus ignoring the complexity of the phenomenon. Furthermore, little attention has been paid to the interplay of the micro characteristics of firms, the region in which they are embedded and different forms of globalization of innovation. Our paper is based on three distinct modes of globalization of innovation: global exploitation of innovation, global sourcing of technology and global research collaboration, thus adapting Archibugi and Michie’s taxonomy to a developing country context. We then use this taxonomy to explore empirically the linkages of firm-level competences, the nature of the international activities and the region in which the firms are located: Pune in India and Beijing in China. We use primary data on the two regions to show that the Pune region is specialized in the three types of globalization of innovation, and in particular in the exploitation of innovation more than Beijing. A deeper analysis of the micro characteristics of the firms shows that the three modes of globalization of innovation are associated to different competences. Firms with technological and organizational competences show a higher propensity to develop international linkages, while firms with a high level of educated human resources seems to focus more on the domestic market.
    Keywords: globalization; innovation; regions; competences; China; India
    JEL: O30
    Date: 2010–03–01
  2. By: Roberto Alvarez; Claudio Bravo-Ortega; Lucas Navarro
    Abstract: This paper uses two sources of information and different methodologies to analyze the causal effect of product and process innovation on productivity in the Chilean manufacturing industry during the past decade. In general, the evidence suggests there is not a contemporaneous effect of product innovation on productivity, but there is a positive effect of process innovation. This notsignificant effect of product innovation contrasts with evidence of studies for other countries. However, the results show the presence of lagged effects product innovation on productivity two years after innovation. Compared with the case of developed countries, this evidence might be consistent with a very slow process of “learning by doing” on the part of Chilean firms with regard to mastering new technologies. These slow and frequently uncertain gains in productivity could help to explain the low levels of investment in research and development (R&D) activities by Chilean firms.
    Keywords: Productivity, Innovation, Investment, Research and development, Chile
    JEL: D24 D92
    Date: 2010–10
  3. By: Minyuan Zhao
    Abstract: Along many dimensions, China has made progress in strengthening the protection of intellectual property (IP) and expanding its research and development (R&D) base over the past two decades. Meanwhile, people’s understanding of IP has gone beyond a mechanical interpretation of patent law or copyright law. Instead, with years of experience in innovation, imitation and knowledge management, firms have begun to realize that IP protection is part of a complex business environment including various cultural, economic and strategic factors. This study takes a firm-level perspective and addresses two related topics. First, the paper examines the IP environment faced by various firms. In particular, the importance of IP protection and the strength of protective measures vary widely depending on the firms’ ownership structures and industry characteristics. Second, the paper analyzes firms’ strategic responses to the perceived IP environment. Firms not only adjust their R&D strategies, but also product and marketing strategies based on their assessment of the IP environment, which may have significant implications for China’s economic development in general. The paper concludes that momentum for IP reform is related to the economic potential in China. Such reform is an on-going system project involving not only patent, trademark and copyright laws, but also privatization policies, trade and FDI policies, as well as the role of the government in China’s innovation strategy.
    Keywords: economic development, innovation, intellectual property rights, patents, China, policy reforms, copyrights, trademarks
    Date: 2010–09–14
  4. By: Chaminade, Cristina (University of Bristol); Lundvall, Bengt-Ake (CBS, Aalborg University); Vang-Lauridsen, Jan (Copenhagen Institute of Technology, Aalborg University); Joseph, KJ (Centre for Development Studies (CDS))
    Abstract: This paper sheds light on how to address, conceptualize and design innovation policies taking into account the specific characteristics of innovation systems in developing countries. The main purpose is to reflect on the policy implications of adopting the innovation system perspective to the particularities of developing countries
    Keywords: innovation systems; innovation policies; developing countries
    JEL: O38
    Date: 2010–01–30
  5. By: Adam Jaffe (Department of Economics, Brandeis University); Seth Werfel (Federal Reserve Bank of New York)
    Abstract: Neoclassical economic theory predicts that policies that discourage the consumption of a particular good will induce innovation in a socially desirable substitute. Evolutionary theory emphasizes the possibility of innovation waves associated with the identification of new dominant designs. We incorporate both of these possibilities in a model of the invention of new smoking cessation products, based on a new dataset of patents on such products from 1951-2004. We find that an increase in cigarette tax levels and smoking bans had no discernable impact on the industry-wide rate of invention in smoking cessation products. It does appear, however, that dominant designs did have substantial positive innovation effects. More specifically, the introduction of the nicotine gum and patch are estimated to have increased the rate of patenting activity in smoking cessation products by 60 and 79 percent, respectively, subject to a 10 percent rate of decay. Finally, these products had larger innovation effects at the firm level than among individual inventors.
    Keywords: Patents, Technological Change, Smoking Cessation Products, Cigarette Taxes
    JEL: O31 O38 H23 I18
    Date: 2010–11
  6. By: Massimo D'Antoni; Maria Alessandra Rossi
    Abstract: This article analyzes the effects on ex ante incentives to invest in the development of complementary innovations of two alternative appropriability strategies: a strategy of exclusion of third parties from access (through active enforcement of IPRs or technical means) vis-a-vis an openness strategy, i.e. an ex-ante commitment not to exclude. Assuming that the complementary innovations constitute a common input and that agents make complementary investments in its private exploitation, we find that, when complementarities are sufficiently strong, a commitment to openness may provide greater incentives than an exclusion strategy. The theoretical framework is used to provide an interpretation of Open Source Software licenses and the “Open Science” system.
    Keywords: incentives to innovation, complementarity, intellectual property rights, open source software, open science.
    JEL: L17 O34
    Date: 2010–11
  7. By: De Fuentes, Claudia (CIRCLE, Lund University); Dutrénit, Gabriela (Universidad Autónoma Metropolitana-Xochimilco)
    Abstract: Interactions between public research organizations and industry can be conceptualized in three main stages: the engagement in collaboration, the knowledge transfer during collaboration, and the benefits perceived from collaboration. Both agents differ in terms of the incentives to collaborate and the behaviors they adopt along these three stages. Following a three stages model based on Crépon, Duguet and Mairesse (1998), this paper discusses the impact of drivers to collaborate on channels of interaction, and the impact of channels of interaction on benefits for both agents -researchers and firms, and discusses the policy implications. The study is based on original data collected by two surveys carried out in Mexico during 2008, to R&D and product development managers of firms and to academic researchers. Our results show different perceptions from both agents across the three stages of the linking process; the main drivers for firms’ collaboration are largely related to behavioral characteristics (formalization of R&D activities, fiscal incentives for R&D and openness strategy), while for researchers they are associated with individual (academic degree, members of a team, type of research -basic science and technology development) and institutional factors (affiliation to public research centres. All channels of interaction play an important role in determining benefits for researchers and firms; however, R&D projects & consultancy channel play a particular important role for long-term benefits, while the information & training channel is particularly important for short-term benefits. Usually policies do not discriminate much between agents’ perception at each stage of the linking process and introduce general programs that look for stimulating interaction by both agents; this unique incentive to promote interaction will probably fail to change agents’ behavior. Thus, a better understanding of the different perspectives will contribute to more efficient policy programs.
    Keywords: university-industry interactions; collaboration drivers; channels of interaction; benefits; innovation policy; developing countries; Mexico
    JEL: O30
    Date: 2010–10–01
  8. By: Czarnitzki, Dirk; Ebersberger, Bernd
    Abstract: This paper explores the impact of R&D subsidies on the concentration of R&D in an economy. First, governments are often criticized of subsidizing predominantly larger firms and thus contribute to persistence of leadership in markets and higher barriers to entry, and, hence, reduced competition eventually. Second, theoretical literature, such as endogenous growth literature, has also shown that governmental intervention in the market for R&D affects the distribution of R&D which finally affects product market concentration. We test the relationship between R&D subsidies and R&D concentration employing treatment effects models on data of German and Finnish manufacturing firms. The data and estimations allow calculating concentration indices for the population of firms for both the actual situation where some selected companies receive R&D subsidies and the counterfactual situation describing the absence of subsidies. We find that R&D subsidies do not lead to higher concentration of R&D. On the contrary, we even find that R&D concentration is significantly reduced because of subsidies. This result may be attributed to the fact that technology policy maintains special funding schemes for small and medium-sized companies. The fact that the larger companies benefit from a higher likelihood of a subsidy receipt is offset by the phenomenon that smaller firms may be completely deterred from any R&D activity if they would not receive governmental support. --
    Keywords: R&D Concentration,R&D Subsidies,Treatment Effects,Policy Evaluation
    JEL: O31 O32 O38
    Date: 2010
  9. By: Ådne Cappelen, Erik Fjærli, Frank Foyn, Torbjørn Hægeland, Jarle Møen, Arvid Raknerud and Marina Rybalka (Statistics Norway)
    Abstract: We find that the Norwegian R&D tax credit scheme introduced in 2002 mainly works as intended. The scheme is cost-effective and it is used by a large number of firms. It stimulates these firms to invest more in R&D, and, in particular, the effect is positive for small firms with little R&D experience. The returns on the R&D investments supported by the scheme are positive and generally not different from the returns to other R&D investments. We have found examples of what can be interpreted as tax motivated adjustments to the scheme, but to some extent this must be accepted as a cost to subsidy and support schemes intended for use by a large number of economic agents. This is particularly so when attempts are made to keep administrative expenditures and control routines at a low level.
    Keywords: R&D tax credit; R&D subsidies; Innovation policy; Norway
    JEL: H25 O38
    Date: 2010–12
  10. By: Maria Guadalupe; Olga Kuzmina; Catherine Thomas
    Abstract: This paper uses a rich panel dataset of Spanish manufacturing firms (1990-2006) and a propensity score reweighting estimator to show that multinational firms acquire the most productive domestic firms, which, on acquisition, conduct more product and process innovation (simultaneously adopting new machines and organizational practices) and adopt foreign technologies, leading to higher productivity. We propose a model of endogenous selection and innovation in heterogeneous firms that jointly explains the observed selection process and the innovation decisions. Further, we show in the data that innovation on acquisition is associated with the increased market scale provided by the parent firm.
    JEL: D21 F23 O31
    Date: 2010–12
  11. By: Bandick, Roger (Department of Economics); Görg, Holger (Kiel Institute for the World Economy); Karpaty, Patrik (Swedish Business School)
    Abstract: The aim of this paper is to evaluate the causal effect of foreign acquisition on R&D intensity in targeted domestic firms. We are able to distinguish domestic multinationals and non-multinationals, which allows us to investigate the fear that the change in ownership of domestic to foreign multinationals leads to a reduction in R&D activity in the country, as headquarter activities are relocated to the new owner’s home country. We use unique and rich firm level data for the Swedish manufacturing sector and different micro-econometric estimation strategies in order to control for the potential endogeneity of the acquisition dummy. Overall, our results give no support to the fears that foreign acquisition of domestic firms lead to a brain drain of R&D activity in Swedish MNEs. Rather, this paper finds robust evidence that foreign acquisitions lead to increasing R&D intensity in acquired domestic MNEs and non-MNEs.
    Keywords: No keywords;
    JEL: A10
    Date: 2010–12–01
  12. By: Miller, Paddy (IESE Business School); Brankovic, Azra (IESE Business School)
    Abstract: Innovation has shifted from being about one-off phenomena to being a continuous effort requiring creative engagement and alert responsiveness from organizational actors. As more companies face the need to build a system-wide and sustainable capacity for innovation, creating a "culture of innovation" is becoming a priority. The concept of an "innovation culture" remains undertheorized in the literature, however. We offer a conceptual and practical framework for building an innovation culture in an organization. Specifically, we show how a cultural infrastructure that orients actors in the practices of creativity and improvisation combines with individual meaning-making processes to simultaneously generate innovation and an innovation culture across an organization.
    Keywords: innovation; organizational culture; creativity; improvisation;
    Date: 2010–09–07
  13. By: Nick Johnstone; Ivan Hascic; Margarita Kalamova
    Abstract: This paper focuses on the issue of innovation and technology transfer in the areas of air pollution abatement, wastewater effluent treatment, solid waste management, and climate change mitigation. The paper describes the trends in innovative activity related to selected areas of pollution abatement and control technologies and their transfer internationally. It also discusses characteristics of environmental policy regimes that are amenable to encouraging innovation of environmental technologies, and provides empirical evidence on the role of various determinants (including general characteristics of countries' environmental policy regimes) in encouraging innovation.<BR>Ce document se concentre sur la question du transfert d’innovation et de technologie dans les domaines de la réduction de pollution atmosphérique, du traitement d’effluent d’eau usagée, de la gestion de déchets solides, et de l’atténuation de changement climatique. Il décrit les tendances dans l’activité innovatrice relative aux technologies de réduction de la pollution et de leur transfert international. Il identifie également les caractéristiques des régimes de politique environnementale favorables à l’innovation environnementale, et établit le lien empirique sur le rôle des diverses causes déterminantes (y compris les caractéristiques générales de la politique environnementale des pays) dans l’innovation environnementale.
    Keywords: environmental policy, innovation, technology, politique environnementale, innovation, technologie
    JEL: O31 O33 Q55 Q56 Q58
    Date: 2010–03–16
  14. By: Rolfstam, Max (Sønderborg Participatory Innovation Research Centre, University of Southern Denmark); Phillips, Wendy (Centre for Research in Strategic Purchasing and Supply, School of Management, University of Bath); Bakker, Elmer (Centre for Research in Strategic Purchasing and Supply, School of Management, University of Bath)
    Abstract: The role of the public agency as a pacer of private sector innovation has been emphasised over the recent years, especially in the context of the EU. The general ambition has been to encourage public agencies to actively stimulate private sector innovation by requesting innovation instead of procuring currently existing products. This has also triggered an increased interest among researchers and practitioners to identify examples of best practice where public agencies have successfully procured innovation. Rather than addressing this demand-oriented perspective this paper focuses on the public agency as an adopter of private-sector innovation, and how this mechanism can contribute to innovation in general. The theoretical point of departure is diffusion theory, with an emphasis on the role of institutions as identified in systemic approaches to innovation studies. A particular concern of this paper is those institutions that hinder or enable adoption of an innovation in an organisational context. The paper draws on an explorative case study looking at the introduction of a new catheter into the English National Health Service supply chain and its diffusion among NHS trusts in England. Different institutional factors are identified which have had an affect on the adoption and diffusion.
    Keywords: public procurement; innovation diffusion; institutions; England
    JEL: O30
    Date: 2010–06–01
  15. By: Jiménez-Sáez, Fernando (INGENIO (CSIC-UPV), Institute of Innovation and Knowledge Management, Univ. Polytechnic of Valencia); Zabala, Jon Mikel (CIRCLE, Lund University); Zofío, José L. (Department of Economic Analysis, Autonomous University of Madrid, Spain)
    Abstract: Relying on efficiency analysis we evaluate to what extent policy makers have been able to promote the establishment of consolidated and comprehensive research groups to contribute to the implementation of a successful innovation system for the Spanish food technology sector, oriented to the production of knowledge based on an application model. Using data envelopment analysis techniques and Malmquist productivity indices we find pervasive levels of inefficiency and a typology of different research strategies. Among these, in contrast to what has been assumed, established groups do not play the pre-eminent benchmarking role; rather, partially oriented, specialized and "shooting star" groups are the most common patterns. These results correspond with an infant innovation system, where the fostering of higher levels of efficiency and promotion of the desired research patterns are ongoing.
    Keywords: Innovation Policy; Management; Productivity Change; Malmquist Index; Distance Function
    JEL: C43 D24 O47
    Date: 2010–10–30
  16. By: Coenen, Lars (CIRCLE, Lund University); Díaz López , Fernando J (TNO Innovation and Environment)
    Abstract: This paper makes a distinction between three theoretical frameworks that have been highly influential in the discourse on innovation, competitiveness and sustainability: sectoral systems of innovation (SSI), technological innovation systems (TIS) and sociotechnical systems (ST-Systems). These frameworks share a common systems approach to innovation but are often positioned as different bodies of literature that correspond to different epistemic communities. This paper is explorative and conceptual in nature. It presents a systematic comparative review of SSI, TIS and ST-Systems based on the following analytical dimensions: (1) system boundaries, (2) actors and networks, (3) institutions, (4) knowledge, and (5) dynamics. In the concluding section commonalities and differences, of the three approaches are presented and suggestions for complimentarily are made.
    Keywords: Innovation Policy; Innovation System; Governmental Activism; Governmental Experimentalism
    JEL: O30
    Date: 2010–11–01
  17. By: Martin, Roman (CIRCLE, Lund University); Moodysson, Jerker (CIRCLE, Lund University)
    Abstract: This paper deals with geographical and organisational patterns of knowledge flows in the media industry of southern Sweden, an industry that is characterised by a strong ‘symbolic’ knowledge base. Aim is to address the question of the local versus the non-local as the prime arena for knowledge exchange, and to examine the organisational patterns of knowledge sourcing with specific attention paid to the nature of the knowledge sourced. Symbolic industries draw heavily on creative production and a cultural awareness that is strongly embedded in the local context; thus knowledge flows and networks are expected to be most of all locally configured, and firms to rely on informal knowledge sources rather than scientific knowledge or principles. Based on structured and semi-structured interviews with firm representatives, these assumptions are empirically assessed through social network analysis and descriptive statistics. Our findings show that firms rely above all on knowledge that is generated in project work through learning-by-doing and by interaction with other firms in localised networks. The analysis contributes to transcending the binary arguments on the role of geography for knowledge exchange which tend to dominate the innovation studies literature.
    Keywords: knowledge base; cultural industry; regional innovation system; network analysis; Sweden
    JEL: O30
    Date: 2010–12–01
  18. By: Basant, Rakesh
    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. Opportunities for domestic firms to participate in global networks depend on a variety of inter-related factors like emerging technology regimes, changes in global industrial structures, strategies followed by MNCs and capabilities and strategies of domestic firms with respect to innovation. Consequently, the fine-tuning of the IP regime would require an understanding of these developments as well, often in the context of a specific sector. The paper uses this broad heuristic framework to analyze emerging IP policy needs for the Indian pharmaceutical sector and the role of other types of regulation. In the process it also provides some insights on how developing countries with decent technological capabilities can exploit regulatory flexibilities available in the post-TRIPS scenario.
    Date: 2010–11–22
  19. By: Amit Shovon Ray; Sabyasachi Saha (Indian Council for Research on International Economic Relations)
    Abstract: In this paper we attempt to provide a comprehensive understanding of the drivers of academic research and patenting in India. Academic research is conceptualised as a research production process where research inputs (like research time and number of research scholars) are transformed into research outputs in the form of publications and patents. We expect research inputs by a faculty member to be an outcome of his/her own decision-making process, which in turn determine his/her research outputs. Exogenous parameters, like faculty background, faculty attitude, research sponsorship and institutional factors, are expected to influence both set of endogenous variables (research inputs and outputs). We specify this production function as a recursive simultaneous equation model and estimate the structural parameters using standard econometric methods. Our results clearly identify several drivers of academic research and patenting in India, in terms of faculty background, faculty attitude and other parameters, from which we arrive at concrete policy lessons for patenting of academic research in India. In particular, we argue that putting in place institutional structures will not serve the purpose without addressing the fundamental issues of research environment, culture and attitude in the first place. In a sense, therefore, introducing an IPR legislation alone may not act as an instant magic formula to energise Indian academic research for commercial application.
    Keywords: Academic Research, Patents, Bayh-Dole Act, India
    JEL: O31 O34 O38 I23 C51
    Date: 2010
  20. By: Filippo Belloc; Ugo Pagano
    Abstract: Like land before the industrial revolution, much knowledge is being enclosed in private hands. These enclosures have become a major factor in specialization among firms and among countries: both are forced to specialize in the fields that are not restricted by the enclosures of the others. This forced specialization is highly asymmetric and involves strong self-reinforcing innovation patterns: we show that it is mainly driven by the existing knowledge enclosures, and that it polarizes investment opportunities among firms and, even more so, among countries. Moreover, also the world economy as a whole suffers from this restriction of investment opportunities, which, in our view, is one of the factors contributing to the present crisis.
    Keywords: IPRs, innovation, knowledge enclosure, technological specialization
    JEL: F14 L20 O34 P17
    Date: 2010–10
  21. By: Kato, Masatoshi; Honjo, Yuji
    Abstract: This paper explores heterogeneous exits-bankruptcy, voluntary liquidation, and merger-by focusing on new firms. Using a sample of approximately 16,000 firms founded in Japan during 1997-2004, we examine the determinants of new-firm exit according to forms of exit. Regarding industry-specific characteristics, our findings indicate that new firms in capital-intensive and R&D-intensive industries are less likely to go bankrupt. In industries characterized by large amounts of capital and low price-cost margins, new firms are more likely to exit through voluntary liquidation and merger. Region-specific characteristics, such as regional agglomeration and unemployment rate, have significant effects on the hazards of exit, and their effects vary across different forms of exit. Moreover, we provide evidence that firm-specific characteristics, such as the number of employees, and entrepreneur-specific characteristics, such as educational background and age, play significantly different roles in determining each form of exit.
    Keywords: New firm, exit, bankruptcy, voluntary liquidation, merger, competing risks proportional hazards model
    Date: 2010–10

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