nep-ino New Economics Papers
on Innovation
Issue of 2011‒05‒24
twenty-six papers chosen by
Steffen Lippert
Massey University, Albany

  1. Unraveling the Role of Public Researcher Mobility for Industrial Innovation By Ejsing, Ann-Kathrine; Kaiser, Ulrich; Kongsted, Hans Christian
  2. An Experimental Contribution to the Revision of the Guidelines on Research and Development Agreements By Christoph Engel
  3. Innovation decision of Tunisian service firms: an empirical analysis By Sdiri, Hanen; Ayadi, Mohamed
  4. Modeling Agricultural Innovation in a Rapidly Developing Country: The Case of Chinese Pesticide Industry By Shi, Guanming; Pray, Carl
  5. Immigration and Innovation By David C Maré; Richard Fabling; Steven Stillman
  6. Are Exporters More Likely to Introduce Product Innovations? By Massimiliano Bratti; Giulia Felice
  7. Innovation and Production Offshoring: Implications on Welfare By Nuttapon Photchanaprasert
  8. R&D, demand fluctuations and credit constraints: comparative evidence from Europe. By Kadri Männasoo; Jaanika Meriküll
  9. Vertical Integration, Innovation and Foreclosure By Allain, Marie-Laure; Chambolle, Claire; Rey, Patrick
  10. A Hidden Role of Public Subsidy in University-Industry Research Collaborations By Hiroyuki Okamuro; Junichi Nishimura
  11. Protection of Intellectual Property while Outsourcing By Sen Gupta, Rajorshi; Love, H. Alan
  12. The Environment, Trade and Innovation with Heterogeneous Firms: A Numerical Analysis By Cui, Jingbo; Ji, Yongjie
  13. Global interactions between firms and universities: Global Innovation Networks as first steps towards a Global Innovation System By Eduardo da Motta e Albuquerque; Gustavo Britto; Otávio Silva Camargo; Glenda Kruss
  14. Products, patents and productivity persistence: A DSGE model of endogenous growth By Holden, Tom
  15. Impact of University Intellectual Property Policy on the Performance of University-Industry Research Collaboration By Hiroyuki Okamuro; Junichi Nishimura
  16. Beyond product architecture: Division of labour and competence accumulation in complex product development By Markus C. Becker; Francesco Zirpoli
  17. Entrepreneurial innovations and taxation By Haufler, Andreas; Norbäck, Pehr-Johan; Persson, Lars
  18. A changing role for universities in the periphery By Wilson Suzigan; Márcia Siqueira Rapini; Eduardo da Motta e Albuquerque
  19. Trade costs, wage difference, and endogenous growth By Akinori Tanaka; Kazuhiro Yamamoto
  20. University-Industry interactions and knowledge transfer mechanisms: a critical survey By Azele Mathieu
  21. Pharmaceutical Use Following Generic Entry: Paying Less and Buying Less By Peter J. Huckfeldt; Christopher R. Knittel
  22. What motivates academic scientists to engage in research commercialization: ‘gold’, ‘ribbon’ or ‘puzzle’? By Lam, Alice
  23. Entrepreneurs from low-skilled immigrant groups in knowledge-intensive industries - company characteristics, survival and innovative performance By Mueller, Elisabeth
  24. The Impact of Public and Private R&D n Farmers' Production Decisions: 1960-2004 By Schuring, Jessica; Huffman, Wallace E.; Fan, Xing
  25. Enforcing IPR through Informal Institutions: The possible role of religion in fighting software piracy By Nora Elbialy; Moamen Gouda
  26. Show Me the Right Stuff: Signals for High Tech Startups By Annamaria Conti; Marie C. Thursby; Frank Rothaermel

  1. By: Ejsing, Ann-Kathrine (Danish Insurance Association); Kaiser, Ulrich (University of Zurich); Kongsted, Hans Christian (University of Copenhagen)
    Abstract: We estimate the relative contribution of mobile scientists who leave academia for the private sector on the subsequent innovative performance of the firms they join. We use data on the population of Danish firms and their R&D workers for the period 1999-2004 and measure innovation performance by the (value-adjusted) number of patent applications at the European Patent Office. We compare the efficacy of mobile former university scientists to the effects of mobile workers hired from other firms as well as immobile workers on the innovation performance of their employer. Our main result is that mobile university scientists contribute substantially more to innovation than R&D workers hired from other firms who, in turn, contribute slightly less to industrial innovation than recent university graduates. By contrast, immobile workers add little to the innovative activity of their employer. We also find that the contribution of mobile R&D workers to innovation depreciates fairly rapidly. These findings provide us with three main managerial implications: Firstly, hiring scientists from universities is a way of boosting a firm's innovative activity. Secondly, because hires from academia receive lower wages on average than hires from private sector firms, this implies that hiring R&D workers from academia may be a cost-effective way of improving innovation performance. Thirdly, firms need to take measures in order to further public-private researcher interaction to prevent the depreciation of the knowledge stock of their employees.
    Keywords: labor mobility, technology transfer, innovation, patents
    JEL: O33 O34 C23
    Date: 2011–05
  2. By: Christoph Engel (Max Planck Institute for Research on Collective Goods, Bonn)
    Abstract: The European Commission is working on a revision of its Guidelines on Research and Development Agreements. On this occasion, this note surveys the existing experimental evidence. Experiments add a number of additional arguments to the normative assessment. R&D agreements have a much smaller effect on later competition in the product market if they serve as a substitute for incomplete (legal) protection of innovation effort. They may help firms settle the resulting fairness issue, and stay away from investment wars. Using the results from 107 published experiments on oligopoly, a meta-study shows that clearing an R&D agreement can be beneficial since it removes the additional collusion incentive resulting from fear that, through successful innovation, competitors might gain an advantage. This is the case if the opposite market side has countervailing power, and the more market conditions are stable. By contrast, the meta-data suggests that R&D agreements increase the risk of collusion in the product market if products are substitutes, if capacity cannot immediately be extended, if market participants may communicate, and if they are experienced; the latter two conditions are very likely to hold in the field.
    Keywords: Antitrust, Innovation, research and development agreements, block exemption, oligopoly experiments, meta-study
    JEL: D43 K21 L13 L41 O31 O34
    Date: 2010–12
  3. By: Sdiri, Hanen; Ayadi, Mohamed
    Abstract: Innovation is widely recognised as a key driver of economic growth and competitiveness. But, some works focus especially on analyzing the determinants and the effects of innovation while distinguishing between its various types (product innovation, process innovation, radical innovation and incremental innovation). The analysis of the determinants is certainly important, but few research efforts testing the way in which firms make the decision to innovate. Based on a sample of 108 Tunisian service firms, the purpose of the paper is to explain the way in which firms make the decision to innovate: simultaneous (one-stage model) or sequential (two-stage model). We find that the two-stage model has a statistically-significant advantage in predicting the innovation. In practice, the sequential model illustrates well the innovation making-decision procedures.
    Keywords: Innovation; Decision making; Service sector.
    JEL: O32 O31 L80
    Date: 2011
  4. By: Shi, Guanming; Pray, Carl
    Abstract: Technology and innovation play an increasingly important role in the economic development of both developed and developing countries. We investigate how policy and market factors influence firmsâ (or other potential innovatorsâ) decisions on innovation or imitation by developing a conceptual model and then empirically testing it using pesticide innovation data from a rapidly developing country, China. We find that the government encouraged local innovation by opening regions to more international trade, more investment in public research and education, strengthening intellectual property right (IPR) enforcement, and limiting the role of foreign inventors. However, the role of the extension of patent life in the early 1990s has little impact. Theory and some of our measures of market size suggest that this factor also is important, but the empirical evidence is mixed. The results suggest that the government policies for openness, public research and education and IPR enforcement can encourage innovation. Limiting foreign invention could encourage more local patenting but might limit Chinese farmersâ access to new technology.
    Keywords: Innovation, Pesticide, China, Patent, Agribusiness, Agricultural and Food Policy, Crop Production/Industries, International Development, Research and Development/Tech Change/Emerging Technologies, O31, O34, O38,
    Date: 2011
  5. By: David C Maré (Motu Economic and Public Policy Research); Richard Fabling (Reserve Bank of New Zealand); Steven Stillman (Motu Economic and Public Policy Research, IZA and CReAM)
    Abstract: We combine firm-level innovation data with area-level Census data to examine the relationship between local workforce characteristics, especially the presence of immigrants and local skills, and the likelihood of innovation by firms. We examine a range of innovation outcomes, and test the relationship for selected subgroups of firms. We find a positive relationship between local workforce characteristics and average innovation outcomes in labour market areas, but this is accounted for by variation in firm characteristics such as firm size, industry, and research and development expenditure. Controlling for these influences, we find no systematic evidence of an independent link between local workforce characteristics and innovation.
    Keywords: Innovation; Immigration; Local labour market
    JEL: O31 R30
    Date: 2011–05
  6. By: Massimiliano Bratti (University of Milan and IZA); Giulia Felice (University of Milan and Centro Studi Luca d\'Agliano)
    Abstract: We analyze the relationship between a firm\'s export status and its product innovation activity by using a rich firm-level survey on Italian manufacturing. We find that the positive association between exporting and product innovativeness is robust to controlling for many sources of firm\'s observable heterogeneity. Use of an instrumental variables strategy allows us also to conclude that this association can be qualified as a causal relation: a firm\'s export status induces product innovations (learning by exporting). This effect emerges over and above the correlation accounted for by some of the main channels commonly emphasized by the existing literature. In the light of this evidence, we discuss the sources from which the residual effect of exporting on product innovation that we observe may originate.
    Keywords: Exporters, Firms, Italy, Manufacturing, Product Innovation
    JEL: F1 L2 O3
    Date: 2011–05–09
  7. By: Nuttapon Photchanaprasert
    Abstract: I theoretically analyze the effects of a strengthening IPR protection and an improvement of technology of innovation of offshoring on the rate of innovation offshoring, rate of imitation, rate of innovation, relative wages, real wages and domestic welfare. A North-South dynamic general equilibrium model of trade with endogenous imitation and innovation and production offshoring is constructed. To trade with lower Southern wages, Northern firms confront the problem of information leakage to the Southern firms and monitoring costs if they do offshore innovation and production. The model predicts that a strengthening of IPR protection decreases the rate of innovation and the rate of imitation but increases the rate of innovation offshoring. Northern real wages also decrease with a strengthening of IPR protection but Southern real wages increase. It may hurt the North but benefit the South. An improvement in technology of innovation offshoring increases the rate of innovation, the rate of imitation and the rate of innovation offshoring. Northern relative real wages decrease with such improvement but Southern real wages increase. It may benefit the North and the South.
    Keywords: offshoring, innovation, information leakage, productivity gap, welfare, trade policies
    JEL: F12 F13 F21 F23 D43 O31
    Date: 2011–03
  8. By: Kadri Männasoo; Jaanika Meriküll
    Abstract: This paper contributes to the literature by investigating whether the cyclicality of R&D differs across countries with different levels of development. The paper uses micro-data from the World Bank/EBRD Business Environment and Enterprise Performance survey from 2001- 2007 and estimates bivariate probit model of firms\' R&D conditioned on credit constraints. The main results are: (1) The likelihood of a firm conducting R&D increases with sales growth and decreases with credit constraints. (2) R&D by firms is counter-cyclical to exogenous industry output and a negative industry demand shock has a stronger countercyclical effect on R&D than a positive industry demand shock does. (3) R&D is more counter-cyclical to demand shocks the further the country is from the technological frontier
    Keywords: R&D cyclicality, demand fluctuations, credit constraints, comparative study
    JEL: G31 E32 O30 O52
    Date: 2011–05–13
  9. By: Allain, Marie-Laure; Chambolle, Claire; Rey, Patrick
    Date: 2011–03–10
  10. By: Hiroyuki Okamuro; Junichi Nishimura
    Abstract: Contractual and organizational characteristics of university-industry research collaboration (hereafter UIC) are keys to its success. In this respect, government can play essential roles in UIC: Public subsidy for research and development (hereafter R&D) is not only an important financial support for UIC, but may also be a useful channel to promote trust along with contractual agreements and information sharing among the members, which results in effective coordination and thus the success of UIC. However, few empirical studies investigate the latter role of public R&D subsidy in UIC. Thus, using original survey data, this paper empirically examines and find that public R&D subsidy improves coordination in UIC, including trust formation, contractual agreements, and communication quality between the partners as well as commitment by the partners.
    Keywords: pubic subsidy, R&D, research collaboration, university, contract, trust
    Date: 2011–03
  11. By: Sen Gupta, Rajorshi; Love, H. Alan
    Abstract: Food and Beverage companies need to share their Intellectual Property (IP) when they outsource production and/or R&D to contract agents. IP sharing can facilitate misappropriation and the contractor may eventually start competing with the client. We design an incentive compatible contract that can protect company IP. A two-pronged strategy is proposed: Companies should share less know-how and give high incentive payments to deter IP misappropriation. Strategies like product differentiation may be highly useful to deter piracy.
    Keywords: Intellectual Property Protection, Outsourcing, Product Differentiation, R&D, Agribusiness, Industrial Organization, Risk and Uncertainty, L14, L21, L23, L66, 031, 032, 034,
    Date: 2011–05
  12. By: Cui, Jingbo; Ji, Yongjie
    Abstract: We employ a two-sector heterogeneous firms model in the presence of endogenous innovation and environmental constraints. We perform simple numerical simulations concerning the implication of a stringent environmental policy and trade cost differences between dirty and clean inputs. Our objective is to highlight the effects of these policy proposals on the process innovation, trade pattern, and productivity dynamics.
    Keywords: Cap and Trade, Heterogeneous Firms, Process Innovation, Trade Pattern, Environmental Economics and Policy, International Relations/Trade, Research and Development/Tech Change/Emerging Technologies, F18, Q55, Q56, C63,
    Date: 2011–05
  13. By: Eduardo da Motta e Albuquerque (Cedeplar-UFMG); Gustavo Britto (Cedeplar-UFMG); Otávio Silva Camargo (Cedeplar-UFMG); Glenda Kruss (HSRC-SA)
    Abstract: This paper aims to broaden the horizon as well as to shed further light on the studies of interaction between firms and universities in a global context. Its starting point is thus a review of two different strands of the literature on innovation. First, the literature on interaction by Klevorick et al (1995) and Nelson (1993), and second, the more recent literature on Global Innovation Networks (GINs) by Ernst ( 2006) and The Economist Intelligence Unit ( 2007). These strands share a common problem: each has a blind spot in relation to the core focus of the other strand. The literature on interaction does not consider the international dimension in any depth, and the GINs literature does not integrate the university dimension adequately. This paper addresses the common weakness through a combination of the two approaches, searching for interactions between firms and universities globally. In doing so, the paper also puts forward a tentative framework on global interaction between firms and universities.
    Keywords: interactions between firms and universities, National Innovation Systems, Global Innovation Networks.
    JEL: O30
    Date: 2011–05
  14. By: Holden, Tom
    Abstract: This paper builds a dynamic stochastic general equilibrium (DSGE) model of endogenous growth that is capable of generating substantial degrees of endogenous persistence in productivity. When products go out of patent protection, the rush of entry into their production destroys incentives for process improvements. Consequently, old production processes are enshrined in industries producing non-protected products, resulting in aggregate productivity persistence. Our model also generates sizeable delayed movements in productivity in response to preference shocks, providing a form of endogenous news shock. Finally, if we calibrate our model to match a high aggregate mark-up then we can replicate the negative response of hours to a positive technology shock, even without the inclusion of any frictions.
    Keywords: productivity persistence; patent protection; oligopoly; research and development
    JEL: E32 E37 L16 O31 O33 O34
    Date: 2011–05
  15. By: Hiroyuki Okamuro; Junichi Nishimura
    Abstract: Despite various expected advantages, university-industry research collaboration (UIC), a relationship between two different worlds, often faces serious difficulties. Thus, the performance of UIC depends on the research partners' strategies to bridge the gaps between them according to the institutional environment. In Japan, UIC has developed rapidly since the late 1990s based on drastic institutional changes regarding universities. We pay special attention to the role of the university intellectual property (IP) policy introduced after 2003 and empirically examine its impact on the performance of UIC projects. A clear and equitable IP policy that can be applied flexibly to the needs of partners would be optimal for a UIC to be efficiently managed. Otherwise, the project might face serious conflicts of interests and low incentive for cooperation. Using a sample of Japanese firms from our original survey, we find that the IP policy of partner universities indeed has a positive and significant impact on various performances of UIC projects, controlling for firm and project characteristics and considering potential selection bias from UIC participation.
    Keywords: intellectual property, research collaboration, small business, Japan
    JEL: D23 L24 O32 O34
    Date: 2011–05
  16. By: Markus C. Becker (Strategic Organization Design Unit, University of Southern Denmark); Francesco Zirpoli (Department of Management, Universitˆ Ca' Foscari Venezia)
    Abstract: This paper considers the trade-off between leveraging external sources of innovation by outsourcing design and engineering activities and the ability to develop internal product development competences. The trade-off arises because the division of labor within and across firms' boundaries has a crucial role in shaping competence development processes, especially because the division of labor also influences opportunities for learning by doing. In new product development projects, learning by doing appears to be both a key determinant of competence development and a difficult-to-substitute form of learning. While the division of development tasks is often considered as guided by product architecture, we show that by decoupling the decisions concerning the product architecture and the allocation of development tasks, firms can realize the benefits of outsourcing such tasks while developing new internal competences. Drawing on a longitudinal case study in the automotive industry, we also identify a new organizational lever for shaping competence development paths and for designing firm boundaries. This lever consists in alternating different task allocation schemes over time for different types of development projects. We show why this is a novel solution, what its underlying logic is, and how it enables alleviating the trade-off between the benefits of leveraging external sources of innovation and the opportunities for competence development provided by in-house design and engineering. We discuss implications for theories of organizational boundary design and innovation management.
    Keywords: innovation management; organizational boundaries; outsourcing; product architecture; modularity; new product development; template process; automotive industry; Fiat
    JEL: L22 L62 M10 O32
    Date: 2011–05
  17. By: Haufler, Andreas; Norbäck, Pehr-Johan; Persson, Lars
    Abstract: In many countries entrepreneurship is promoted through tax reductions for small businesses and by various government support schemes. We analyze the effects of such policies to subsidize small businesses in a setting where both the risk-return characteristics of the selected innovation project and the mode of commercialization chosen by entrepreneurs (market entry versus sale to an incumbent firm) are endogenous. We show that government programs to support small businesses foster market entry by entrepreneurs but, at the same time, give an incentive to choose low risk projects, due to the existence of limited loss o®set provisions. This points to a basic trade-off be- tween the goals of raising competition in technology-intensive markets and the desire of governments to foster risky `breakthrough' innovations.
    Keywords: business taxation; innovation; market entry
    JEL: H25 L13 M13 O31
    Date: 2011–05
  18. By: Wilson Suzigan (DPCT-Unicamp); Márcia Siqueira Rapini (Cedeplar-UFMG); Eduardo da Motta e Albuquerque (Cedeplar-UFMG)
    Abstract: An international research on interactions between universities and firms is an opportunity to investigate this subject beyond the developed countries. This project involves 12 countries from three continents: Africa (South Africa, Nigeria and Uganda), Asia (South Korea, China, India, Thailand and Malaysia) and Latin America (Mexico, Costa Rica, Argentina and Brazil). This paper introduces a theoretical framework to deal with this broad set of countries, their different levels of NSI formation and their different levels of development. This framework may help public policies to understand the role of universities for a country search for an “active insertion in the international division of labor”.
    Keywords: interactions between firms and universities, National Innovation Systems, catch up processes.
    JEL: O30
    Date: 2011–05
  19. By: Akinori Tanaka (Graduate School of Economics, Osaka University); Kazuhiro Yamamoto (Graduate School of Economics, Osaka University)
    Abstract: In this paper, we develop an endogenous growth model with two coun- tries in which the international trade of differentiated goods requires dif- ferent trade costs and equilibrium wages in the two countries. If the labor productivity in one country's agricultural sector is higher than that of the other country, the wages will also be higher. In this model, there is a case in which the small country has a higher share of manufacturing firms than the larger country, and the innovation sector locates in the small country, since the cost for production of the manufacturing sector and innovation sector is higher in the large country than in the small country. First, when trade costs are high, the share of manufacturing firms in a large country increases with a decline in trade costs. However, the share then decreases with a decline in trade costs when trade costs are low. Finally, all firms agglomerate in the small country with lower production costs. If trade costs are very high, the innovation sector will locate in the small country. If trade costs take an intermediate value, it will locate in the large country. If trade costs become very low, it will re-locate in the small country. The growth rate moves non-monotonously in a W-shaped curve when there is a reduction in trade costs. This happens because the growth rate is affected by the number of manufacturing firms and the location of the innovation sector.
    Keywords: market size, wage differential, growth rates, innovation sector.
    JEL: F0 O31
    Date: 2011–05
  20. By: Azele Mathieu
    Abstract: This article reviews the literature on knowledge transfer mechanisms (KTMs) used in university-industry interactions. The literature may be articulated around four dimensions: (i) the relative importance of KTM as perceived by the involved stakeholders, (ii) the factors affecting the organisation of university-industry interactions, (iii) the interrelatedness of different KTMs and, (iv) the impact of increased university-interactions on traditional academic missions. An outstanding fact stemming from this review is that spin-offs and patents are not considered by the university and the industry as the most important KTMs. Traditional KTMs, such as publications or collaborative research however, are perceived as more significant ways of transferring knowledge. A large variety of factors influence the use of a KTM (for instance, characteristics of researchers or of the involved firms). While some trends may be outlined, not much is known so far about the interweaving of different KTMs. Consequently, no simple model of knowledge transfer between universities and the business sector is possible, and should certainly not be restricted to “new” KTMs. As regards to the risks of increased reliance of university on the business sector, I suggest that those risks could be limited under some conditions.
    Keywords: Knowledge transfer mechanisms; University-industry interactions; Impact on academic research
    JEL: L30 O31 O34
    Date: 2011–05
  21. By: Peter J. Huckfeldt; Christopher R. Knittel
    Abstract: We study the effects of generic entry on prices and utilization using both event study models that exploit the differential timing of generic entry across drug molecules and cast studies. Our analysis examines drugs treating hypertension, high blood pressure, type 2 diabetes, and depression using price and utilization data from the Medical Expenditure Panel Survey. We find that utilization of drug molecules starts decreasing in the two years prior to generic entry and continues to decrease in the years following generic entry, despite decreases in prices offered by generic versions of a drug. This decrease coincides with the market entry and increased utilization of branded reformulations of a drug going off patent. We show case study evidence that utilization patterns coincide with changes in marketing by branded drug manufacturers. While the reformulations---often extended-release versions of the patent-expiring drug---offer potential health benefits, the FDA does not require evidence that the reformulations are improvements over the previous drug in order to grant a patent. Indeed, in a number of experiments comparing the efficacies of the patent-expiring and reformulated drugs do not find statistical differences in health outcomes calling into question the patent-extension policy.
    JEL: I18 L11 M3 O31 O38
    Date: 2011–05
  22. By: Lam, Alice
    Abstract: This paper employs the three concepts of ‘gold’ (financial rewards), ‘ribbon’ (reputational/career rewards) and ‘puzzle’ (intrinsic satisfaction) to examine the extrinsic and intrinsic aspects of scientists’ motivation for pursuing commercial activities. The study is based on 36 individual interviews and an on-line questionnaire survey of 735 scientists from five major UK research universities. It finds that there is a diversity of motivations for commercial engagement, and that many do so for reputational and intrinsic reasons and that financial rewards play a relatively small part. The paper draws on self-determination theory in social psychology to analyse the relationship between scientists’ value orientations with regard to commercial engagement and their personal motivations. It finds that those with traditional beliefs about the separation of science from commerce are more likely to be extrinsically motivated, using commercialization as a means to obtain resources to support their quest for the ‘ribbon’. In contrast, those identify closely with entrepreneurial norms are intrinsically motivated by the autonomy and ‘puzzle-solving’ involved in applied commercial research while also motivated by the ‘gold’. The study highlights the primacy of scientists’ self motivation, and suggests that a fuller explanation of their commercial behaviour will need to consider a broader mix of motives to include the social and affective aspects of intrinsic motivation. In conclusion, the paper argues that policy to encourage commercial engagement should build on reputational and intrinsic rather than purely financial motivations.
    Keywords: Academic scientists; entrepreneurial university; motivation; scientific norms and values; self-determination theory; research commercialization; knowledge transfer
    JEL: L2 I23 O31
    Date: 2010–12
  23. By: Mueller, Elisabeth
    Abstract: This paper analyzes how companies of immigrant entrepreneurs in knowledgeintensive industries differ from companies of native entrepreneurs with respect to start-up characteristics, firm survival and innovative performance. I focus on immigrants from the 'recruitment countries' of south and southeast Europe, who arrived in Germany mainly in the 1970s to fill labor shortages. They are the largest immigrant group in Germany and can be reliably identified via ethnic name coding. Immigrant entrepreneurs are less than half as likely to found a company in a knowledge-intensive industry as native entrepreneurs. Firms owned exclusively by immigrants tend to be smaller and have higher exit rates. After controlling for resources, I found no differences in patenting activity compared to firms owned exclusively by natives. Firms in mixed immigrant/native ownership have no size disadvantage. In that group, exit rates are higher in services but not in manufacturing, and, again, there are no differences in patenting when resources are taken into account. The lower participation of immigrant entrepreneurs in knowledge-intensive industries can be explained by lower education levels, while smaller firm sizes suggest more limited access to capital. --
    Keywords: immigrants,innovation,entrepreneurship,knowledge-intensive industries
    JEL: O32 O34 M13 J15
    Date: 2011
  24. By: Schuring, Jessica; Huffman, Wallace E.; Fan, Xing
    Keywords: Aggregate production, Midwestern agriculture, elasticties of supply and demand, public agricultural research, GM- crop varieties, Agricultural and Food Policy, Demand and Price Analysis, Production Economics, Productivity Analysis, Research and Development/Tech Change/Emerging Technologies, Q11, Q16, Q41,
    Date: 2011–05–02
  25. By: Nora Elbialy (University of Hamburg); Moamen Gouda (University of Marburg)
    Abstract: The existence of formal IPR laws can be considered a prerequisite for having efficient law enforcement but does not imply efficient enforcement in itself. A simple model is constructed to explain the interplay between the IPR law and human behavior within counterfeiting countries. It shows how a politically monitored IPR enforcement strategy is able to alter formal IPR laws or institutions but might not affect informal institutions, or human morals and behavior, to the same extent, hence barely affecting piracy situation. The model shows the essential role of informal institutions and its sanction mechanisms in the enforcement process. The main obstacle of IPR enforcement is that people are still not convinced that IPR violations are unethical. Religion can be considered an informal institution that might support or hinder formal laws issued with regards to IPR and hence influence de facto enforcement of laws, especially in countries with high piracy rate if a high adherence to religion is found. As the Religion-Loyalty Index (RLI) developed by this study shows, Muslim countries have the highest religiosity level among different religions. Consequently, an investigation of how Islamic jurisprudence views IPR piracy is conducted. As Islam generally prohibits IPR piracy, a set of policy recommendations based on new institutional perspective is presented that can effectively help in minimizing IPR piracy in developing countries in general and Muslim ones in specific.
    Keywords: Intellectual Property Rights (IPR), Formal vs. Informal Institutions, New Institutional Economics (NIE), Software Piracy, Religion, Enforcement
    JEL: K39 K42 L86 Z12
    Date: 2011
  26. By: Annamaria Conti; Marie C. Thursby; Frank Rothaermel
    Abstract: We examine the potential for technology startups to use patents and founders, friends and family money (FFF money) as signals to attract business angel and venture capital funds, patents reflect technology quality and FFF money reflects founder commitment. We find that if investors value technology quality more (less) than founder commitment, the optimal mix of signals is a relatively higher (lower) use of patents than FFF money. Regardless of investor preferences, high quality founders should invest more in both signals than in the absence of private information. This investment is inversely related to the opportunity cost of investing in the signals. We test these predictions empirically and find evidence in support of this proposition. When we distinguish between venture capitalist and business angel investment, we find that patents serve as a signal for venture capitalists and FFF money is a signal for business angels (but not vice versa).
    JEL: G24
    Date: 2011–05

This nep-ino issue is ©2011 by Steffen Lippert. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.