nep-ino New Economics Papers
on Innovation
Issue of 2010‒12‒18
twenty papers chosen by
Steffen Lippert
Massey University, Albany

  1. The Escape-Infringement Effect of Blocking Patents on Innovation and Economic Growth By Chu, Angus C.; Pan, Shiyuan
  2. Do cooperative R&D subsidies stimulate regional innovation efficiency? Evidence from Germany By Tom Broekel
  3. How Do Different Motives for R&D Investment in Foreign Locations Affect Domestic Firm Performance? An Analysis Based on Swiss Panel Micro Data By Spyros Arvanitis; Heinz Hollenstein
  4. Package licenses in patent pools with basic and optional patents By Kenji Azetsu; Seiji Yamada
  5. What Determines the Innovation Capability of Firm Founders? By Spyros Arvanitis; Tobias Stucki
  6. Combinatoric innovation: environments for creation and mobilization of intellectual capital. By Iske, Paul Louis
  7. Universities look beyond the patent policy discourse in their intellectual property strategies By Andersen Birgitte; Rossi Federica
  8. Changes to university IPR regulations in Europe and the impact on academic patenting By Geuna Aldo; Rossi Federica
  9. Insights into the Determinants of Innovation of Energy Efficiency By Marius Ley
  10. Intellectual Property Governance and Knowledge Creation in UK Universities By Andersen Birgitte; Rossi Federica
  11. Vertical Integration, Innovation and Foreclosure By Marie-Laure Allain; Claire Chambolle; Patrick Rey
  12. The role of emotional climates of joy and fear in team creativity and innovation By Véronique Tran
  13. Knowledge Production in European Union: Evidence from a National Level Panel Data By Pinto, Hugo
  14. Who leads research productivity change? Guidelines for R&D policy-makers By Jiménez, Fernando; Zabala-Iturriagagoitia, Jon Mikel; Zofío, José Luis
  16. Il finanziamento degli investimenti in R&S. Gli effetti sulla crescita e sulla struttura finanziaria By Garofalo, Giuseppe; Morganti, Patrizio
  17. Second-Best Trade Policies, R&D Spillovers and Government (In)ability to Precommit in an Intra-Industry Trade Framework By Kresimir Zigic
  18. A full participation agreement on global emission reduction through strategic investments in R & D. By Kratzsch, Uwe; Sieg, Gernot; Stegemann, Ulrike
  19. A Importância da I&D e da Variedade de Capitalismo na Capitalização em Bolsa: Evidência Econométrica das Maiores Empresas Europeias em 2008 By Gonçalves, Vitor; Pinto, Hugo
  20. Technological Change and New Actors: Debate on Returns and Regulations By Sachin Chaturvedi

  1. By: Chu, Angus C.; Pan, Shiyuan
    Abstract: This study develops a Schumpeterian growth model to analyze the effects of different patent instruments on innovation. We first analyze patent breadth that captures the traditional positive effect of patent rights on innovation. Then, we consider a profit-division rule between entrants and incumbents. Given the division of profit, increasing the share of profit assigned to incumbents reduces entrants' incentives for innovation. This aspect of blocking patents captures the recently proposed negative effect of patent rights on innovation. Finally, blocking patents generate a non-monotonic effect on innovation when the step size of innovation is endogenous due to a novel escape-infringement effect. Calibrating the model to aggregate data, we find that a marginal increase in the blocking effect of patent protection is likely to raise economic growth.
    Keywords: economic growth; innovation; intellectual property rights
    JEL: O34 O31 O40
    Date: 2010–12
  2. By: Tom Broekel
    Abstract: The paper investigates the impact of R&D subsidies on regional innovation efficiency. Building on a rich panel data set covering 270 German labor market regions and four industries, it is particularly shown that subsidies for R&D cooperation are a suitable policy measure for stimulating the innovation efficiency of regions. The empirical findings moreover suggest that regions with low innovation capacities benefit from subsidized inter-regional cooperation involving partners with diverse industrial and sectoral backgrounds. Establishing inter-regional cooperation that give access to related knowledge and skills is more important for regions with large innovation capacities.
    Keywords: innovation policy, regional innovation efficiency, R&D subsidies, cooperation networks, knowledge networks
    JEL: O18 O38 R58 R12
    Date: 2010–12
  3. By: Spyros Arvanitis (KOF Swiss Economic Institute, ETH Zurich, Switzerland); Heinz Hollenstein (KOF Swiss Economic Institute, ETH Zurich, Switzerland)
    Abstract: The aim of this article is to investigate the differences between specific motives of R&D investment in foreign locations with respect to the factors influencing the likelihood of foreign R&D and to the impact of foreign presence on the parent firms’ innovativeness and productivity. An econometric analysis of Swiss firm panel data shows, firstly, that factors related to firm-specific knowledge-oriented advantages are more important for explaining the likelihood of foreign R&D activities than factors reflecting disadvantages related to home location. Secondly, knowledge-oriented motives of foreign R&D are positively correlated to innovation performance of domestic firms, whereas market-oriented and resource-oriented strategies correlate positively with productivity.
    Keywords: Research and development (R&D), Foreign R&D, Motives of foreign R&D, Home effects of foreign R&D, Firm performance
    JEL: O31 F23
    Date: 2010–05
  4. By: Kenji Azetsu (Osaka University of Health and Sport Sciences); Seiji Yamada (Graduate School of Economics, Kobe University)
    Abstract: Recently, patent pools have been often established by the patent holders in order to promote research and development (R&D) and set technological standards. Patent pools are one of the administration methods for licensing, whereby many patent holders assemble their own patents and the administrator of the patent pools offers the licenses to users. This paper investigates the patent holders' incentive to form a patent pool, the patent pool's licensing behavior, and the anticompetitive effect of a patent pool. Our model is characterized by the following two features. First, we consider different two types of patent: basic and optional. Second, we consider not only a patent pool that offers a single package license, but also a patent pool that offers multiple package licenses. The single package license includes both basic and optional patents in the patent pool. The multiple package licenses involve two licenses: one includes only basic patents, whereas the other includes both basic and optional patents. The results of our analysis yield some implications for a patent pool that is characterized by the strength of complementarity between basic and optional patents.
    Keywords: patent pools, multiple package licenses, antitrust laws, bundling goods
    JEL: K11 K21 L4
    Date: 2010–12
  5. By: Spyros Arvanitis (KOF Swiss Economic Institute, ETH Zurich, Switzerland); Tobias Stucki (KOF Swiss Economic Institute, ETH Zurich, Switzerland)
    Abstract: Innovative start-ups, not start-ups in general, seem to be important drivers of economic growth. However, little is known about how such firms look like. As activities of start-ups are strongly related to firm founders, we investigate this question focusing on the innovation capability of firm founders. We find that the combination of different founder characteristics such as university education (at best a combination of technical and commercial education), prior experience in R&D, and strong motivation to realize own innovative ideas increases innovative activities of start-ups by more than 40%.
    Keywords: Start-ups, innovation, founder characteristics
    JEL: M13 L26 O30
    Date: 2010–09
  6. By: Iske, Paul Louis (Maastricht University)
    Date: 2010
  7. By: Andersen Birgitte; Rossi Federica (University of Turin)
    Abstract: In recent years, much emphasis has been placed in the policy discourse on the patenting of academic research outcomes. However, universities produce a wide variety of IP, not all of which is suitable to be patented, or which universities may choose not to patent. The present article, building upon an original survey of 46 universities (about 27% of total) in the United Kingdom, investigates universities’ knowledge transfer processes through the exchange of a variety of forms of IP: patents, copyright, open source and non-patented innovations. The analysis concerns: (i) the extent to which universities exchange these forms of IP; (ii) whether they are used in a complementary or substitute way; and how relatively (iii) strategic effective and (iv) market efficient they are, in allowing universities to reach certain objectives (relating to knowledge transfer, competitive positioning, innovation and financial gain). We find that most universities perceive a variety of types of IP to be effective, usually in order to reach different strategic objectives. Certain forms of IP are use more than others for particular purposes, and no IP exchanges in the marketplace are exempt from institutional problems. Our results challenge the Bayh-Dole Act (now adopted in many OECD countries and elsewhere); i.e. whether patents and patent markets are the best tool for knowledge dissemination from research base into use, and other benefits, and whether instead it would be more appropriate to encourage universities to a variety of IP
    Date: 2010–11
  8. By: Geuna Aldo; Rossi Federica (University of Turin)
    Abstract: Most European countries since the end of the 1990s have been moving away from inventor ownership of patent rights towards different systems of institutional ownership. This shift is based on the objectives of policymakers to make conditions similar to those in the US, where the 1980 Bayh–Dole Act allows universities to retain intellectual property rights (IPR) over inventions that come out of federally funded research. This article challenges the view that direct comparisons with US experience will enable us to predict the effects of the implementation of institutional IPR ownership systems in Europe. We provide an overview of the current state of regulation on academic patent ownership in selected European countries which shows that, despite the changes to institutional ownership that have been implemented, there is wide diversity in national systems and several important differences with the US framework. Our analysis of patterns of ownership of academic patents shows that there has not been a general increase in university patenting since 1990, and seeming increases may be due to more complex dynamics in academic patenting and academic patents ownership. The paper concludes with a discussion of how changes in IPR regulations and management of technology transfer by universities, and public policies supporting technology transfer are affecting academic patenting and research activities in universities
    Date: 2010–11
  9. By: Marius Ley (KOF Swiss Economic Institute, ETH Zurich, Switzerland)
    Abstract: Given the increasing interest in understanding (and supporting by means of public policy) innovative activity related to energy efficient technology (EET), I attempt to identify firm-level determinants of innovation and research in this field. A novel dataset of Swiss firms has been assembled by means of a survey in 2009, resulting in more than 2300 observations featuring various indicators of innovative activity and success. Applying standard econometric methodology, I find sizeable differences of the explaining factors of energy efficiency related innovation as compared to overall innovation. In particular, market environment related variables important for overall innovative activity seem to have little explanatory power for EET related innovation, raising the question whether such innovation sufficiently responds to current and potential future demand.
    Keywords: Innovation, Energy, Energy Efficiency
    JEL: O31 Q49
    Date: 2010–09
  10. By: Andersen Birgitte; Rossi Federica (University of Turin)
    Abstract: The public discourse advocating increased patenting of academic discoveries, which has led to the approval of legislative measures (such as the Bayh Dole Act, which is now adopted world-wide in various forms) is based on a set of theoretical arguments, mainly related to knowledge transfer and financial reward. Using an original survey of 46 universities (about 27%) in the United Kingdom, we investigate whether some of these arguments are supported by evidence. We focus on the extent to which patents, as opposed to other forms of intellectual property (IP) protection mechanisms, enhance knowledge circulation, and especially contribute to universities’ own knowledge creation processes. We also investigate whether universities consider the markets for ideas and creative expressions to function efficiently. We find that universities use all forms of IP intensively in order to transfer their knowledge to industry or government. However, they mainly rely on non-proprietary IP (open source and no-patent strategies) when aiming to enhance their own knowledge creation processes. Also, universities do not find that markets for patents or copyrights function more smoothly than non-proprietary IP marketplaces. The results challenge the orthodox theories on the rationales for patents and other proprietary intellectual property rights (IPRs). Thus, we question the assumptions and arguments underpinning the implementation of patents on academic research outcomes via political reforms since the 1980s
    Date: 2010–11
  11. By: Marie-Laure Allain (CREST - Centre de Recherche en Économie et Statistique - INSEE - École Nationale de la Statistique et de l'Administration Économique, Department of Economics, Ecole Polytechnique - CNRS : UMR7176 - Polytechnique - X); Claire Chambolle (Department of Economics, Ecole Polytechnique - CNRS : UMR7176 - Polytechnique - X, ALISS - Alimentation et sciences sociales - INRA : UR1303); Patrick Rey (Toulouse School of Economics - Toulouse School of Economics)
    Abstract: This paper studies the potential effects of vertical integration on downstream firms' incentives to innovate. Interacting efficiently with a supplier may require information exchanges, which raises the concern that sensitive information may be disclosed to rivals. This may be particularly harmful in case of innovative activities, as it increases the risk of imitation. We show that vertical integration exacerbates this threat of imitation, which de facto degrades the integrated supplier's ability to interact with unintegrated competitors. Vertical integration may thus lead to input foreclosure, thereby raising rivals' cost and limiting both upstream competition and downstream innovation. A similar concern of customer foreclosure arises in the case of downstream bottlenecks.
    Keywords: Vertical Integration, Foreclosure, Innovation, Imitation, Firewall.
    Date: 2010–12–08
  12. By: Véronique Tran
    Abstract: This paper examines the role of an emotional climate of joy and of an emotional climate of fear on team creativity and innovation. First, a definition of emotional climate is proposed. Second, a model is proposed combining emotional climate and Farr, Sin, and Tesluk’s (2003) model of team creativity and innovation. Emotional climates of joy and fear are emergent states that will operate both as an input in interaction with non affective inputs, and as an outcome interacting with task-related outcomes, influencing transition, action, and interpersonal processes in a creativity and innovation context. Third, the role of the intensity of emotions composing the emotional climate is addressed. Implications for research and practice are discussed.
    Keywords: Emotional climate; creativity; innovation; teams
    Date: 2010–12
  13. By: Pinto, Hugo
    Abstract: The knowledge production function framework is used to understand how territories transform specific inputs into knowledge outputs. This article focuses knowledge production function estimation at European Union with twenty five member-states using a data panel analysis between 1999 and 2003. The importance of different variables in knowledge production is tested. The econometric results give relevant insights for EU decision-makers and the creation of a more integrated European Research Area and innovation cooperation within Europe.
    Keywords: Knowledge Production Function; Panel Data; European Union
    JEL: C3 O3
    Date: 2010–12–07
  14. By: Jiménez, Fernando (INGENIO (CSIC-UPV)-Universidad Politécnica de Valencia, Valencia, Spain); Zabala-Iturriagagoitia, Jon Mikel (CIRCLE, Centre for Innovation, Research and Competence in the Learning Economy, Lund, Sweden); Zofío, José Luis (Departamento de Análisis Económico (Teoría e Historia Económica). Universidad Autónoma de Madrid.)
    Abstract: We rely on efficiency and productivity analysis based on Malmquist indices to evaluate to what extent policy-makers have been able to promote the creation and consolidation of comprehensive research groups that contribute to the implementation of a successful innovation system. We suggest that this dynamic evaluation offers relevant information to current ex-post policy evaluation methods, helping decision makers to readapt and reorient policies and their associated means, most notably resource allocation (financial schemes), to better respond to the actual needs of promising research groups in their search for excellence (micro-level perspective), and to adapt future policy design to the achievement of medium-long term policy objectives (meso and macro level perspectives). We apply this methodology to the case of the Spanish R&D Food Technology Program finding that a large size and a comprehensive multi-dimensional research output are the key features of the leading groups exhibiting high efficiency and productivity levels. Identifying these groups as benchmark, we conclude that the financial grants allocated by the program, typically aimed at small-sized and partially oriented research group, have no succeeded in reorienting them in time so as to overcome their limitations.
    Keywords: Innovation Policy; Management; Malmquist Index.
    JEL: C43 D24 O47
    Date: 2010–11
  15. By: Tiiu Paas; Helen Poltimäe
    Abstract: This paper bridges two approaches to assess national innovation performance based on European Innovation Scoreboard (EIS) composite indicators and the analysis of the factors that may be behind these indicators. The main focus of the study is on analysing the innovation performance of the Baltic States – small countries with similar post-socialist path dependence. Our aim is to explore what factors have been most influential in developing the different levels of innovation performance in these countries, and whether these differences are also captured by innovation measurement indicators. Our analysis shows that the inability to sufficiently capture the quality of human capital, the small economy effect (i.e. high dependence on single enterprises in a sector) and data availability issues represent remarkable measurement problems. The measurement results may also be biased as a result of self-reporting indicators. This conclusion was confirmed by comparing the EIS evaluations with the results of our assessment via factor analysis. The results are robust. Estonian innovation performance seems to be ahead of the other two Baltic countries; the main causes have been the successful attraction of foreign investment, favourable tax policy and possible positive spillover effects from the Nordic neighbourhood, particularly Finland and Sweden.
    Keywords: national innovation performance, innovation measurement problems, composite indicators, the Baltic States
    JEL: O3 O1 C8 I2
    Date: 2010
  16. By: Garofalo, Giuseppe; Morganti, Patrizio
    Abstract: The financing of innovation impacts on economic growth. What’s, among bank-based or market-based system, the best organizational form? The paper supports the view that both forms have to be merged into a unique approach (law and finance view) embracing not only the overall quality of the financial services' supply (financial services view) but also the related legal aspects. In particular, the paper agrees with the thesis that the financial structure of the economy emerges endogenously depending both on the firms’ R&D investment choices and on their initial wealth level. The paper presents also an empirical validation of the financial services and, more specifically, of the law and finance view, carried out over the period 1980-2008. A focus is dedicated to the Chinese case, which shows strong economic growth and increasingly efficient financial sector, in despite of the weakness of the legal system.
    Keywords: R&D investment; finance and growth; financial system and institutions
    JEL: K20 O32 D82 E44 P48 G20
    Date: 2010–03
  17. By: Kresimir Zigic
    Abstract: We introduce an intra-industry setup in order to reconsider the consequences of government (in)ability to precommit to its policies when it is constrained to only one policy instrument (second-best policies). This setup nests the standard frameworks of strategic trade policy—the “third-market” and the “home-market” framework. We also analyze how robust the signs of particular policy instruments (R&D subsidies) are when passing from the “second-best” to the “first-best” policy and show that in the considered setup this issue is closely related to the issue of the government commitment. The policy instruments under consideration are import tariffs and export and R&D subsidies, and there are R&D spillovers from the domestic firm to the foreign firm.
    Keywords: government commitment; optimal tariffs and R&D subsidies; first-best versus second-best strategic policy; R&D spillovers;
    JEL: F13 L11 L13 O31
    Date: 2010–11
  18. By: Kratzsch, Uwe; Sieg, Gernot; Stegemann, Ulrike
    Abstract: If an emission reduction agreement with participation of all players is not enforceable because politicians are too myopic or not able to commit themselves to sustainable policies or costs of reducing emis- sions are too high, strategic investments in research and development (R&D) of green technology, for example sustainable drive-trains, can pave the way for a future treaty. Although no player will rationally reduce emissions on its own, investments in R&D by at least one player can change the strategic situation of negotiations to control emissions: Emission abatement costs will decrease so that a treaty with full par- ticipation can be achieved in future periods through time consistent sustainable policies.
    Keywords: emissions; discount factor; commitment; endogenous technical change; repeated prisoner’s dilemma
    JEL: O30 H41 F53 Q54
    Date: 2010
  19. By: Gonçalves, Vitor; Pinto, Hugo
    Abstract: The article discusses the factors influencing the market capitalization of a company. Using data on the thousand largest companies in Europe, taken from the 2009 EU Industrial R&D Investment Scoreboard, the analysis focuses on the impacts of net sales value of each company, investment in research and development and the number of employees in the valuation of the company in the stock markets. In parallel, there is also tested how the institutional architecture of an economy affects the capitalization of companies in financial markets. The linear regression model estimated suggests the central importance of sales but indicates that the R&D also impacts in the phenomenon studied. Firm size has a negligible explanatory power. There is evidence that companies from liberal market economies have higher growth rates in financial markets.
    Keywords: Capitalization; R&D; Varieties of Capitalism; Regression Analysis
    JEL: O3 L1 C2
    Date: 2010–10–30
  20. By: Sachin Chaturvedi (Research and Information System for Developing Countries)
    Abstract: New technology in the seed sector has brought in new actors and new requirements for regulation. It is important to discuss how far India is working on new opportunities and policy options for effective and rationale regulatory framework. Equally important is to analyze how socio-economic dimension is often overlooked while evolving regulatory frameworks both for biosafety as well as for price control of seeds. There is systemic lack of technological sensitivity in the agricultural R&D system. We fail to appreciate the kind of technological support farmers are looking for and how best a delivery system for new technologies should be put in place. In this regard, India would have to evolve a dynamic innovation and technology policy to address diverse agricultural challenges and growing environmental concerns. There is need to do is to overhaul the institutional set-up and its linkages with ground-level experiences. This includes gearing up of decision making process for newer crops; setting up of necessary infrastructure and trained manpower for any eventuality related to biohazard; and, on top of that, identifying correctly the technological expectations from agricultural R&D systems.
    Keywords: Seed, regulation competition policy, biosafety, India
    JEL: D40 Q18
    Date: 2010

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