nep-ino New Economics Papers
on Innovation
Issue of 2011‒01‒16
eight papers chosen by
Steffen Lippert
Massey University, Albany

  1. How SMEs Exploit Their Intellectual Property Assets: Evidence from Survey Data By Gaétan de Rassenfosse
  2. Do Business Subsidies Facilitate Employment Growth? By Heli Koski; Mika Pajarinen
  3. Breakthrough innovations and welfare: The role of innovators' loss aversion and experience. By Daniela Grieco
  4. Franchise Fee, Tax/Subsidy Policies and Economic Growth By Wang, Vey; Lai, Chung-Hui
  5. Do Firms Benefit from Being Present in Multiple Technology Clusters? An Assessment of the Technological Performance of Biopharmaceutical Firms By Catherine Lecocq; Bart Leten; Jeroen Kusters; Bart Van Looy
  6. The Dynamics of the Inventor Network in German Biotechnology: Geographical Proximity versus Triadic Closure By Anne L.J. Ter Wal
  7. The Impact of Technology Licensing Payment Mechanisms on Firms' Innovative Performance By Jung Eun Lee; Younghoon Kim; Yeonbae Kim; Donghyuk Choi
  8. Energy innovation in Latin America: R&D effort, deployment, and capability accumulation By Francisco Aguayo; Kelly Sims Gallagher; Kevin P. Gallagher

  1. By: Gaétan de Rassenfosse (Melbourne Institute of Applied Economic and Social Research, and Intellectual Property Research Institute of Australia, The University of Melbourne)
    Abstract: This paper seeks to understand how motives to patent affect the use of the patent portfolio with a particular focus on motives aimed at the monetization of intellectual property (IP). The analysis relies on data from an international survey conducted by the European Patent Office (EPO). The main results can be summarized as follows. First, small and medium-sized enterprises (SMEs) exhibit a much stronger reliance on ‘monetary patents’ than large companies and nearly half of the SMEs in the sample patent for monetary reasons. Second, SMEs tend to use their patents more actively than large firms. Third, smaller companies generally have a higher proportion of their portfolio that is licensed but the licensing rate is significantly higher in the U.S. An American SME is twice as likely as a European SME to have a high share of its portfolio that is actually licensed, witnessing a fragmented market for technology in Europe.
    Keywords: Financing constraint, intellectual property strategy, market for technology, motives to patent, multivariate ordered models, technology licensing
    JEL: O32 O34 O38 G21 G24
    Date: 2010–12
  2. By: Heli Koski; Mika Pajarinen
    Abstract: We use data from 15508 Finnish companies with 10 or more employees for the years 2003-2008 to explore the relationship between employment growth and three endogenously determined business subsidy types (i.e. employment subsidy, R&D subsidy and other business subsidies). We find a positive contemporary relationship between all business subsidy types and employment growth. Our findings suggest that R&D subsidies further contribute to the firms’ employment for one year after and employment and other subsidies for three years after the reception of subsidies. After that, the differences between the subsidized and non-subsidized firms vanish. We further find, in line with the empirical studies of Harrison et al. (2008) and Hall et al. (2008), that both product innovation and sales growth from a firm’s old products contribute to the firm’s employment growth. Process innovation, instead, does not seem to have any significant effect on employment.
    Keywords: public subsidies, technology policy, employment growth, Finland
    JEL: J23 L10 O33 O38
    Date: 2011–01–04
  3. By: Daniela Grieco (Department of Economics (University of Verona))
    Abstract: Technological refinements appears to be much more frequent than breakthrough innovations. We argue that this could be the result of an optimizing choice when the innovation revenues are exposed to Knightian uncertainty and innovators are loss-averse. The innovator's choice between breakthrough and incremental innovations is analyzed in the context of a neo-Schumpeterian growth model that accounts for the introduction of new goods and related sunk costs. The results show that the welfare generated by breakthrough innovations drops dramatically when agents are uncertainty-averse and/or loss-averse, but rises as innovators' experience increases.
    Keywords: Incremental innovation, Breakthrough innovation, Uncertainty, Loss aversion, Experience
    JEL: D60 D81 O32
    Date: 2010–12
  4. By: Wang, Vey; Lai, Chung-Hui
    Abstract: In this paper, we take a new look at the effects of the subsidy policy and the government’s R&D activities in an R&D-based growth model. The government not only subsidizes the R&D cost of the firms but also engages in R&D activities and, in addition, levies a specific tax on the firms producing the final and the intermediate goods, respectively, in order to finance the expenditure. We find that in the economy there exist two balanced equilibrium growth paths. In an economy with a high growth path, the government’s subsidy policy and its R&D activities will crowd out the private R&D activities, and hence the fiscal policies are of no help to the economic growth. In other words, the intermediate goods firms play an important role in driving the economic growth. By contrast, in an economy with a low growth path, the government that directly engages in R&D activities plays an important role in economic growth. The fiscal policies of the government have a positive effect on the economic growth.
    Keywords: Government’s R&D activities; Specific tax; Subsidy policy; Endogenous growth; R&D
    JEL: O30 O40 L00
    Date: 2010–06–27
  5. By: Catherine Lecocq; Bart Leten; Jeroen Kusters; Bart Van Looy
    Abstract: Firms active in knowledge-intensive fields are increasingly organizing their R&D activities on an international scale. This paper investigates whether firms active in biotechnology can improve their technological performance by developing R&D activities in multiple technology clusters. Regions in the US, Japan and Europe, that host a concentration of biotechnology activity are identified as clusters. Fixed-effect panel data analyses with 59 biopharmaceutical firms (period 1995-2002) provides evidence for a positive, albeit diminishing (inverted-U shape) relationship between the number of technology clusters in which a firm is present and its overall technological performance. This effect is distinct from a mere multi-location effect.
    Keywords: region, clusters, biotechnology, technology clusters
    JEL: O30 R12 R30
    Date: 2010–12
  6. By: Anne L.J. Ter Wal
    Abstract: Economic geography has developed a stronghold analysing how geography impacts innovation. Yet, despite increased interest in networks, a critical assessment of the role of geography in the evolution of networks is still lacking. This paper juxtaposes geographical proximity with the network of prior ties as alternative mechanisms for tie formation. Analysing the evolution of inventor networks in German biotechnology, the paper theoretically argues and empirically demonstrates that - as the technological regime of an industry changes over time - inventors increasingly rely on network resources by forming links to partners of partners, whilst the direct impact of geographical proximity on tie formation decreases.
    Keywords: network evolution, geographical proximity, triadic closure, inventor networks
    JEL: D85 L14 L65 R11
    Date: 2011–01
  7. By: Jung Eun Lee; Younghoon Kim; Yeonbae Kim (Technology Management, Economics, and Policy Program (TEMEP), Seoul National University); Donghyuk Choi (Technology Management, Economics, and Policy Program (TEMEP), Seoul National University)
    Abstract: Although numerous papers have examined the ways in which firms can improve their innovative performance through technology alliances, empirical research on the effect of contract structures in technology licensing has been scarce. This study provides evidence that the payment mechanisms agreed upon in licensing contracts affect the licensee firms¡¯ innovative performance. Based on a dataset of technology licensing contracts concluded by small- and medium-sized enterprises around the world, this paper analyzes the influence of fixed-fee payments and ongoing payments?including royalty, milestone, and equity payments?on firm performance. The findings reveal that ongoing payments are more likely to positively influence the innovative performance of licensee firms. The results also suggest that equity grants to the licensor would not impact the licensee¡¯s performance as much as fixed-fee payments. These outcomes provide crucial insights into the ways in which small high-tech firms can utilize their external technology resources.
    Keywords: Technology licensing, payment mechanism, innovative performance, small-and-medium-sized enterprises.
    JEL: L24 O31 C35
    Date: 2010–12
  8. By: Francisco Aguayo (El Colegio de México); Kelly Sims Gallagher (Harvard University); Kevin P. Gallagher (Boston University)
    Abstract: Ibero-America, just as the rest of the world, faces an increasing urgency to transform existing energy systems. In the past, incentives to develop energy systems were induced mainly by changes in demand (derived from industrialization and urbanization) and by price shocks in fuels. Diversification of energy sources followed a growing need of use of particular energy forms. For developing countries, innovating in energy systems meant fundamentally gaining control over natural resources and moving away from primary, export-oriented enclaves into industrial integration, as well as improving energy security. Today, however, environmental constraints and the pressing need to reduce energy poverty forge additional challenges and set new directions to change the ways in which we use and produce energy. Improving current technologies along the same trajectory is simply not enough. Fundamental changes must take place in our economic systems in order to combine energy efficiency with low-carbon, sustainable energy sources, for which new abilities and solutions need to be targeted.
    Keywords: energy innovation; Latin America
    JEL: Q53 Q42 Q56 N76
    Date: 2010–12

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