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on Innovation |
| By: | Junichi Nishimura; Yosuke Okada |
| Abstract: | We examine how R&D portfolios of drug pipelines affect pharmaceutical licensing, controlling firm size, diversity, and competitors in R&D and product markets. The data collected comprises 329 license-outs and 434 license-ins closed by 54 Japanese pharmaceutical companies between 1997 and 2007. We pay special attention to stage-specific licensing by dividing the innovation process into an early stage and a late stage. Estimates from the fixed-effect GMM model reveal that drug pipelines significantly affect stage-specific licensing. Particularly, the state of drug pipelines is leveled off by license-outs at the early stage and license-ins at the late stage. Theoretical implications are also discussed. |
| Keywords: | R&D portfolios, licensing, pharmaceutical industry, drug pipelines |
| JEL: | C13 L24 L65 |
| Date: | 2010–11 |
| URL: | http://d.repec.org/n?u=RePEc:hst:ghsdps:gd10-155&r=ino |
| By: | Hattori, Keisuke |
| Abstract: | In this paper, we characterize optimal environmental policy in a case where innovation in clean production technologies is developed and provided by a monopoly. Two policy instruments are considered: an emission tax on downstream polluting firms and an R& D subsidy for an upstream innovator in clean technologies. We find that (i) a higher emission tax may increase (decrease) R&D investment when the burden of the tax payment in the polluters' marginal costs and the price-elasticity of the demand for polluting goods are rather small (large), (ii) the social optimum can be achieved by the combined implementation of an emission tax that is smaller than an ex-ante Pigouvian rate and a subsidy that is equal to the rate of emission reduction due to the new technology, and (iii) if the policy instrument is limited to the emission tax, the second-best tax rate lies between the first-best rate and the ex-ante Pigouvian rate. We test our model by numerical simulation and demonstrate the possibility of a type of ``double dividend'' due to the emission tax. Three extensions of the model are then considered: Cournot competition in the polluting industry, a subsidy to polluters who adopt the new technology, and technology spillovers. |
| Keywords: | Environmental Tax; R&D; Environmental Damages; Patent |
| JEL: | L51 L13 Q55 Q53 Q58 |
| Date: | 2011–01–30 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:28837&r=ino |
| By: | Francesco Bogliacino (European Commission); Mario Pianta (Department of Economics, Università di Urbino "Carlo Bo") |
| Abstract: | The links between three interconnected elements of the Schumpeterian sources of economic change are explored, conceptually and empirically, in this paper: the commitment of industries to invest profits in cumulative R&D efforts; the ability of industries’ R&D to lead to successful innovations; the impact of new products and processes on high entrepreneurial profits. We consider the nature and variety of innovative efforts – distinguishing in particular between strategies of technological and cost competiveness – and we introduce the role of demand in pulling technological change and supporting profits. We develop a simultaneous three-equation model and we test it at industry level – for 38 manufacturing and service sectors – on eight European countries over two time periods from 1994 to 2006. The results show that the model effectively accounts for the dynamics of European industries and highlights the interconnections between the different factors contributing to growth. |
| Keywords: | R&D, Innovation, Profits, Demand, System Three Stages Least Squares. |
| JEL: | L6 L8 O31 O33 O52 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:urb:wpaper:11_01&r=ino |
| By: | Matteo Lucchese (Università di Urbino "Carlo Bo"); Mario Pianta (Department of Economics, Università di Urbino "Carlo Bo") |
| Abstract: | This paper explores the way economic cycles influence the relationship between innovation and growth. A large literature has investigated this link in the long waves of development,focusing on the emergence of radical innovations and new technological paradigms; a parallel stream of research has examined differences in sectoral patterns of innovation and in industries’ technological regimes, emphasising their stability and persistence over time. We build on these approaches and we investigate whether the ups and downs of cycles, with changes in demand dynamics, alter the possibility to exploit the technological opportunities of sectors. Within industries’ innovative efforts, we identify on the one hand efforts based on R&D expenditure, focusing on new products and aiming at technological competitiveness and, on the other hand, investment in innovative machinery focusing on new processes and aiming at cost competitiveness.A model that explains sectoral growth in value added by combining technological and demand factors is proposed. The empirical test is based on data for six major European countries Germany, France, Italy, the UK, the Netherlands and Spain - at the level of 20 manufacturing sectors. Two upswings are considered - 1996-2000 and 2003-2007 – and their patterns are contrasted with that emerging from the downswing of 2000-2003. Results show that in upswings faster economic (and productivity) growth in industries is sustained by efforts to develop new products, while in downswings, due to a shortage of demand, process innovations aiming at restructuring result more relevant in supporting the increase in value added (or in containing its fall). |
| Keywords: | Innovation, Cycles, Growth, Demand. |
| JEL: | L6 L8 O31 O33 O52 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:urb:wpaper:11_03&r=ino |
| By: | Dirk Engel (University of Applied Science Stralsund; RWI); Timo Mitze (RWI; Ruhr University Bochum); Roberto Patuelli (University of Lugano; The Rimini Centre for Economic Analysis (RCEA)); Janina Reinkowski (ifo Munich) |
| Abstract: | In this paper, we evaluate the R&D enhancing effects of two large public grant schemes aiming at encouraging the performance of firms organized in clusters. These are Germany's well known BioRegio and BioProfile contests for which we compare the research performance of winning regions in contrast with non-winning and non-participating comparison regions. We apply Difference-in-Difference estimation techniques in a generalized linear model framework, which allows to control for different initial regional conditions in the biotechnology related R&D activity. Our econometric findings support the view that winners generally outperform non-winning participants during the treatment period, thus indicating that exclusive funding as well as the stimulating effect of being a "winner" seems to work in the short-term. In contrast, no indirect impacts stemming from a potential mobilizing effect of the contest approaches have been detected. Also, we find only limited evidence for long-term effects of public R&D grants in the post-treatment period. The results of our analysis remain stable if we additionally augment the model to account for the particular role of spatial dependence in the R&D outcome variables. |
| Keywords: | Biotechnology, R&D Policies, Cluster, Diff-in-Diff Estimation |
| JEL: | O38 R38 C23 |
| Date: | 2011–02 |
| URL: | http://d.repec.org/n?u=RePEc:lug:wpaper:1105&r=ino |
| By: | Paolo Zeppini (University of Amsterdam); Jeroen C.J.M. van den Bergh (Autonomous University of Barcelona, and VU University Amsterdam) |
| Abstract: | This article presents a model of sequential decisions about investments in environmentally dirty and clean technologies, which extends the path-dependence framework of Arthur (1989). This allows us to evaluate if and how an economy locked into a dirty technology can be unlocked and move towards the clean technology. The main extension involves the inclusion of the effect of recombinant innovation of the two technologies. A mechanism of endogenous competition is described involving a positive externality of increasing returns to investment which are counterbalanced by recombinant innovation. We determine conditions under which lock-in can be avoided or escaped. A second extension is "symmetry breaking" of the the system due to the introduction of an environmental policy that charges a price for polluting. A final extension adds a cost of environmental policy in the form of lower returns on investment implemented through a growth-depressing factor. We compare cumulative pollution under different scenarios, so that we can evaluate the combination of environmental regulation and recombinant innovation. |
| Keywords: | externalities; hybrid technology; lock-in; R&D; sequential decisions |
| JEL: | O33 Q55 |
| Date: | 2010–10–26 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:uvatin:20100107&r=ino |
| By: | Aminata SISSOKO (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES)) |
| Abstract: | This paper attempts to provide a new insight into the relationship between R&D subsidies and firm-level productivity. The empirical analysis evaluates the productivity of firms involved in a European program of public R&D grants called Eureka. The findings suggest that the Eureka firms on average experience productivity gains towards the end of the 3-years grant period. However, the average increase in productivity hides substantial firm heterogeneity. Namely it hides that low productive firms gain more from an R&D subsidy than high productive firms. The empirical analysis is conducted by using propensity score matching and a difference-in-differences estimation method to control for potential endogeneity issues. |
| Keywords: | R&D subsidies, Collaborative Research, Total Factors Productivity and Firm Heterogeneity |
| Date: | 2011–01–28 |
| URL: | http://d.repec.org/n?u=RePEc:ctl:louvir:2011002&r=ino |
| By: | Rune Dahl Fitjar (International Research Institute of Stavanger); Andrés Rodríguez-Pose (IMDEA Social Sciences Institute) |
| Abstract: | The geographical sources of innovation of firms have been hotly debated. While the traditional view is that physical proximity within city-regions is key for the innovative capacity of firms, the literature on 'global pipelines' has been stressing the importance of establishing communication channels to the outside world. This paper uses a specifically tailored survey of the level of innovation of 1604 firms of more than 10 employees located in the five largest Norwegian city-regions (Oslo, Bergen, Stavanger, Trondheim, and Kristiansand) in order to determine a) the geographical dimension of the sources of innovation and b) the factors behind the propensity to innovate in Norwegian firms. The results stress that while interaction with a multitude of partners within Norwegian city-regions or with other national partners has a negligible effect on firm innovation, those firms with a greater diversity of international partners tend to innovate more and introduce more radical innovations. The results also highlight that the roots of this greater innovative capacity lie in a combination of firm – size of firms, share of foreign ownership, and sector – and cultural – the level of open-mindedness of managers – characteristics. |
| Keywords: | Innovation; radical innovation; interaction; pipelines; partnerships; firms; city-regions; Norway |
| Date: | 2011–02–15 |
| URL: | http://d.repec.org/n?u=RePEc:imd:wpaper:wp2011-05&r=ino |
| By: | Marcel J.L. de Heide (Erasmus University Rotterdam); Amit Kothiyal (Erasmus University Rotterdam) |
| Abstract: | We present a theoretical framework which allows for the comparison of the effectiveness of tax measures, loans and funding, in supporting industry-oriented research. We estimate for each of the instruments the exact contribution required by a firm to decide on investing in R&D, given the costs and probability of success of the project, and the foreseen change in profit following successful implementation of the research results. We apply Prospect Theory to analyse the risk attitude of the firm. By comparing the contribution required, we identify the instrument which is most effective, and therefore preferred by a government. Our analysis indicates that there exists a critical value for the probability of success of the project for which the modality of the most effective instruments changes. For a probability of success smaller than the critical value, a tax measures offering support only in case of successful completion of the project is preferred. For a probability higher than the critical value, a loan is most effective. The value of the critical probability depends on the perception of risk and loss aversion of the firm involved in the research. |
| Keywords: | R&D; innovation; firms; public policy |
| JEL: | D81 O38 |
| Date: | 2011–02–03 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:uvatin:20110021&r=ino |
| By: | Martijn J. Smit (VU University Amsterdam); Maria A. Abreu (University of Groningen, University of Cambridge); Henri L.F. de Groot (VU University) |
| Abstract: | This paper employs firm-level data to analyze the relative importance of firm characteristics and agglomeration externalities in explaining variation in innovation rates across firms. More specifically, we combine micro-data and census data to estimate the probability that a firm will introduce a goods, service or process innovation. We consider internal firm-level characteristics as well as externalities, using information on the regional production structure to test for Marshall-Arrow-Romer, Porter and Jacobs effects. Our results show that most firm-specific variables are highly statistically significant, whereas agglomeration variables are only significant for a few specific sectors, and even then only for some types of innovation. |
| Keywords: | innovation; absorptive capacity; agglomeration externalities; Community Innovation Survey; micro-data; firm behavior |
| JEL: | L20 O30 R11 |
| Date: | 2010–06–21 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:uvatin:20100060&r=ino |
| By: | Krzysztof Szczygielski |
| Abstract: | Services dominate all advanced economies but service innovations are still an underresearched topic. One of the reasons are definitional and measurement difficulties. The goal of the paper is to highlight those by reviewing recent literature and to assess the current state of knowledge and challenges. Theoretical approaches, empirical techniques and selected empirical results are discussed. Apparently the biggest challenge, at this point, is to create a unified conceptual framework, that would encompass both manufacturing ad services. Meeting this challenge will, however, be difficult, given the strong focus on manufacturing, both in the literature and in the way enterprise surveys are designed. |
| Keywords: | innovation, services, manufacturing |
| JEL: | O30 O33 L89 |
| Date: | 2011–02 |
| URL: | http://d.repec.org/n?u=RePEc:sec:cnstan:0422&r=ino |
| By: | Laura de Dominicis (European Commission, Seville); Raymond J.G.M. Florax (Purdue University, W. Lafayette, and VU University Amsterdam); Henri L.F. de Groot (VU University Amsterdam) |
| Abstract: | Finding proper policy instruments to promote productivity growth features prominently on the Lisbon agenda and is central in many national as well as European policy debates. In view of the increased mobility of high-skilled workers in Europe, ongoing globalization and increased interregional and international co-operation, location patterns of innovative activity may be subject to drastic changes. A proper understanding of location patterns of innovative outputs can enhance the effectiveness and efficiency of national and European innovation policies. Building on the literature on the knowledge production function the aim of this paper is to explain the observed differences in the production of innovative output across European regions. Our main research question is whether geographical proximity and social capital are important vehicles of knowledge transmission for the production of innovative output in Europe. Several other variables are used to control for structural differences across European regions. We find support for the hypothesis that both social capital and geographical proximity are important factors in explaining the differences in the production of innovative output across European regions. |
| Keywords: | innovation; knowledge production function; social capital; spatial econometrics; European regions |
| JEL: | C21 I23 O18 O31 |
| Date: | 2011–01–13 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:uvatin:20110009&r=ino |