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on Innovation |
| By: | Chu, Angus C.; Cozzi, Guido; Galli, Silvia |
| Abstract: | This study develops an R&D-based growth model with vertical and horizontal innovation to shed some light on the current debate on whether patent protection stimulates or stifles innovation. We analyze the effects of patent protection in the form of blocking patents. We show that patent protection changes the direction of innovation by having asymmetric effects on vertical innovation (i.e., quality improvement) and horizontal innovation (i.e., variety expansion). Calibrating the model and simulating the transition dynamics, we find that strengthening the effect of blocking patents stifles vertical innovation and decreases economic growth but increases social welfare due to an increase in horizontal innovation. In light of this finding, we argue that in order to properly analyze the growth and welfare implications of patents, it is important to consider their often neglected compositional effects on vertical and horizontal innovation. |
| Keywords: | economic growth; innovation; intellectual property rights |
| JEL: | O34 O31 O40 |
| Date: | 2010–11 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:31019&r=ino |
| By: | Gabriele Pellegrino (DISCE, Università Cattolica); Mariacristina Piva (DISCE, Università Cattolica); Marco Vivarelli (DISCE, Università Cattolica) |
| Abstract: | This paper discusses the determinants of product innovation in young innovative companies (YICs) by looking at in-house and external R&D and at the acquisition of external technology in its embodied and disembodied components. These ‘innovative’ input-output relationships are tested on a sample of 2,713 innovative Italian firms. A sample-selection approach is applied to study both the determinants of product innovation and the factors affecting the intensity of innovation. Results show that in-house R&D is linked to the propensity to introduce product innovation both in mature firms and YICs; however, innovation intensity in the YICs is mainly dependent on embodied technical change from external sources, while in-house R&D does not play a significant role. |
| Keywords: | R&D; Embodied technological change; Product innovation; New firms; Sample selection |
| JEL: | O31 |
| Date: | 2010–12 |
| URL: | http://d.repec.org/n?u=RePEc:ctc:serie2:dises1068&r=ino |
| By: | Ashish Arora; Sharon Belenzon; Luis A. Rios |
| Abstract: | We study the relationship between decentralization of R&D, innovation and firm performance using a novel dataset on the organizational structure of 1,290 American publicly-listed corporations, 2,615 of their affiliate firms, as well as characteristics of 594,903 patents that they hold. We explore the tension between centralization and decentralization of R&D, which trades off between responsiveness to immediate and local business needs and the type of research that can benefit the firm as a whole. To do this, we develop two novel measures of decentralization. First, using intra-firm patent assignments, we distinguish between patents that are assigned to the inventing unit rather than to corporate headquarters. Second, we exploit the variation between firms which posses a central corporate R&D labs and those that do not. We find that centralized R&D tends be more scientific, broader in scope, and have more technical impact, while being more likely in firms that operate within a narrower range of businesses, in complex technologies, or that are less reliant upon acquisitions. Additionally, we find that firms with a more decentralized structure, on average, invest less in R&D, generate fewer patents per R&D, and exhibit greater sales growth and higher market value. We discuss several theories that can explain these relationships, as well as potential avenues for future research. |
| JEL: | D23 D83 L22 O32 |
| Date: | 2011–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:17013&r=ino |
| By: | Pierre M. Picard (CREA, University of Luxembourg (Luxembourg), and CORE, Université catholique de Louvain (Belgium).); Bruno van Pottelsberghe de la Potterie (Université Libre de Bruxelles (ULB), SBS-EM, ECARES, CEB, DULBEA, CEPR and Bruegel) |
| Abstract: | The present paper discusses the role of quality in patent systems from the perspective of patent offices' behavior and organization. After documenting original stylized facts, the paper presents a model in which patent offices set patent fees and the quality level of their examination processes. Various objectives of patent offices' governors are considered. We show that the quality of the patent system is maximal for the patent offices that maximises either the social welfare or its own proffit. Quality is lower for the self-funded patent office maximizing the number of patent applications and even smaller for the self-funded patent office maximizing the number of granted patents. A labor union improves examination quality and may compensate for the potentialy inappropriate objectives of patent office management. |
| Keywords: | Patent system, quality, intellectual property, public firm organization |
| JEL: | L30 O30 O31 O34 O38 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:luc:wpaper:11-06&r=ino |
| By: | Fabling, Richard (Reserve Bank of New Zealand); Stillman, Steven (Motu Economic and Public Policy Research); Maré, David. C (Motu Economic and Public Policy Research) |
| 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 |
| URL: | http://d.repec.org/n?u=RePEc:mtu:wpaper:11_05&r=ino |
| By: | Heike Belitz; Marius Clemens; Christian von Hirschhausen; Jens Schmidt-Ehmcke; Axel Werwatz; Petra Zloczysti |
| Abstract: | We develop a composite indicator measuring the performance of national innovation systems. The indicator takes into account both "hard" factors that are quantifiable (such as R&D spending, number of patents) and "soft" factors like the assessment of preconditions for innovation by managers. We apply the methodology to a set of 17 industrialized countries on a yearly basis between 2007 and 2009. The indicator combines results from public opinion surveys on the process of change, social capital, trust and science and technology to achieve an assessment of a country's social climate for innovation. After calculating and ranking the innovation indictor scores for the 17 countries, we group them into three classes: innovation leader, middle group and end section. Using multiple sensitivity analysis approaches, we show that the indicator reacts robustly to different weights within these country groups. While leading countries like Switzerland, the USA and the Nordic countries have an innovation system with high scores and ranks in every sub indicator, the middle group consisting among others of Germany Japan, the UK and France, can be characterized by higher variation within ranks. In the end section, countries like Italy and Spain have bad scores for almost all indicators. |
| Keywords: | National systems of innovation, composite indicators, ranking |
| JEL: | O30 C81 H52 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwwpp:dp1129&r=ino |
| By: | Kaz Miyagiwa; Aminata Sissoko |
| Abstract: | In this paper we empirically investigate the factors determining the durations of research joint ventures (RJVs). Our theoretical model predicts that greater innovation values allow the partners to cooperate in R&D for longer durations. We test this hypothesis using data from the European Eureka program. Applying proportional hazards models and using RJV costs as a proxy for unobservable innovation values, we find support for the theory's main prediction. It is also found that RJVs with more partners tend to have longer durations and that firm-initiated RJVs have shorter durations than non-firm initiated RJVs. |
| Date: | 2011–05 |
| URL: | http://d.repec.org/n?u=RePEc:emo:wp2003:1108&r=ino |
| By: | Batabyal, A.A.; Nijkamp, P. |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:vuarem:2011-7&r=ino |
| By: | Fulvio, Castellacci |
| Abstract: | This paper introduces service innovation in the proximity-concentration trade-off model of trade and FDI (Helpman, Melitz and Yeaple, 2004). The idea is that innovation will have two main effects on service firms’ choice between exports and FDI. First, innovative firms will on average have higher productivity levels than non-innovative enterprises. Secondly, innovators will have to pay a higher relational distance cost for undertaking export activities, and they will therefore prefer to avoid (or reduce) these costs by choosing a FDI strategy instead. We test the empirical relevance of this idea on a new survey dataset for a representative sample of firms in all business service sectors in Norway. The results show that firms are more likely to choose FDI rather than export the greater their productivity level and the higher the relational distance costs they face. |
| Keywords: | Service sectors; innovation; export; FDI; firm heterogeneity; survey data |
| JEL: | F15 F10 O33 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:31002&r=ino |
| By: | ITO Banri; TOMIURA Eiichi; WAKASUGI Ryuhei |
| Abstract: | This paper empirically examines the effects of knowledge capital on offshore outsourcing choices based on original survey data of Japanese firms. The results of a multinomial logit model demonstrate that firms' offshoring is positively correlated with knowledge capital measured by their R&D activities or patenting, even after controlling for other firm characteristics including productivity, capital intensity, firm age, and export status. Further, knowledge-intensive firms are more inclined to choose foreign insourcing rather than outsourcing, suggesting that firms tend to internalize their technological knowledge in offshore sourcing. |
| Date: | 2011–05 |
| URL: | http://d.repec.org/n?u=RePEc:eti:dpaper:11052&r=ino |
| By: | Bertschek, Irene; Cerquera, Daniel; Klein, Gordon J. |
| Abstract: | The paper provides empirical evidence for the causal impact of broadband Internet on the economic performance of German firms. Performance is measured in terms of labour productivity and realised process and product innovations. The analysis refers to the early phase of DSL expansion in Germany from 2001 to 2003, when roughly 60 percent of the German firms already used broadband Internet. Identification relies on instrumental variable estimation taking advantage of information on the availability of DSL broadband at the postal code level. The results show that broadband Internet has no impact on firms' labour productivity whereas it exhibits a positive and significant impact on their innovation activity. -- |
| Keywords: | labour productivity,innovation,broadband Internet |
| JEL: | L23 O31 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:11032&r=ino |
| By: | Felipe Starosta de Waldemar (Centre d'Economie de la Sorbonne) |
| Abstract: | It has been shown that corruption has a negative effect on firm productivity, but what about its impact on product innovation ? We find that corruption, functioning as a bribe tax, diminishes the probability of new product introduction. We use a World Bank Enterprise Survey from India in 2005, with 1600 firms answering if they introduced a new product to the firm and on the average quantity of bribe paid by firms. Controlling for innovation determinants, firm characteristics, location choice, multi-product firms and other business environment variables, sector-location bribe averages have a negative and significant impact on product innovation. |
| Keywords: | innovation, corruption, firm performance. |
| JEL: | O31 D73 L25 |
| Date: | 2011–05 |
| URL: | http://d.repec.org/n?u=RePEc:mse:cesdoc:11033&r=ino |
| By: | Felipe Starosta De Waldemar (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Panthéon-Sorbonne - Paris I) |
| Abstract: | It has been shown that corruption has a negative effect on firm productivity, but what about its impact on product innovation ? We find that corruption, functioning as a bribe tax, diminishes the probability of new product introduction. We use a World Bank Enterprise Survey from India in 2005, with 1600 firms answering if they introduced a new product to the firm and on the average quantity of bribe paid by firms. Controlling for innovation determinants, firm characteristics, location choice, multi-product firms and other business environment variables, sector-location bribe averages have a negative and significant impact on product innovation. |
| Keywords: | Innovation, corruption, firm performance. |
| Date: | 2011–05 |
| URL: | http://d.repec.org/n?u=RePEc:hal:cesptp:halshs-00595048&r=ino |
| By: | Davide Castellani (Department of Economics, Finance and Statistics, Università di Perugia); Alfredo Jimenez Palmero (Department of Economics and Business Administration, University of Burgos, Spain); Antonello Zanfei (Department of Economics, Society & Politics, Università di Urbino "Carlo Bo") |
| Abstract: | The negative effect of distance is justified by the existence of transport costs which hamper the international exchange of final and intermediate goods, and by higher uncertainty about local markets. We submit that distance plays a remarkably different role in the case of R&D FDIs since they mainly involve the international transfer, absorption and use of knowledge. Using data on bilateral investment projects in R&D, manufacturing and other business activities between 58 countries, we find that geographic distance does not hinder R&D FDIs as much as in the case of production and other investment activities. Furthermore, once we control for institutional and psychic distance, in particular language and religious differences, the negative effect of geographic distance vanishes. |
| Keywords: | Multinational Firms, International Business, Technological Change, Choices and Consequences, Diffusion Processes. |
| JEL: | F23 O33 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:urb:wpaper:11_06&r=ino |
| By: | Tim Leunig; Joachim Voth |
| Abstract: | Economists and economic historians want to know how much better life is today than in the past. Fifty years ago economic historians found surprisingly small gains from 19th century US railroads, while more recently economists have found relatively large gains from electricity, computers and cell phones. In each case the implicit or explicit assumption is that researchers were measuring the value of a new good to society. In this paper we use the same techniques to find the value to society of making existing goods cheaper. Henry Ford did not invent the car, and the inventors of mechanised cotton spinning in the industrial revolution invented no new product. But both made existing products dramatically cheaper, bringing them into the reach of many more consumers. That in turn has potentially large welfare effects. We find that the consumer surplus of Henry Ford's production line was around 2% by 1923, 15 years after Ford began to implement the moving assembly line, while the mechanisation of cotton spinning was worth around 6% by 1820, 34 years after its initial invention. Both are large: of the same order of magnitude as consumer expenditure on these items, and as large or larger than the value of the internet to consumers. On the social savings measure traditionally used by economic historians, these process innovations were worth 15% and 18% respectively, making them more important than railroads. Our results remind us that process innovations can be at least as important for welfare and productivity as the invention of new products. |
| Keywords: | Process innovations, new goods, welfare, consumer surplus, mechanisation, massproduction, automobiles, cotton, industrial revolution, second industrial revolution |
| JEL: | N22 N24 O31 O40 |
| Date: | 2011–05 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp1050&r=ino |