nep-ino New Economics Papers
on Innovation
Issue of 2011‒07‒27
eighteen papers chosen by
Steffen Lippert
University of Otago, Dunedin

  1. Competitive Price Coordination in Technology Sharing Agreements By Gallini, Nancy
  2. Patent regimes, firms and the commodification of knowledge By Benjamin Coriat; Olivier Weinstein
  3. Imported intermediary inputs, R&D and Firm's Productivity: Evidence from Indian Manufacturing By Sharma, Chandan
  4. Carbon emission and production technology: evidence from the US By Dinda, Soumyananda
  5. How do demand fluctations and credit constraints affect R&D? Evidence from Central, Southern and Eastern Europe. By Kadri Männasoo; Jaanika Meriküll
  6. Categorisation of OECD Regions Using Innovation-Related Variables By Giulia Ajmone Marsan; Karen Maguire
  7. R&D in boom and boost : evidence from the World Bank Financial Crisis Survey By Kadri Männasoo; Jaanika Meriküll
  8. Patent Protection, Technological Change and Wage Inequality By Shiyuan Pan; Heng-fu Zou; Tailong Li
  9. Productivity of Japanese Firms and Innovation System: Bolstering growth potential (Japanese) By NAGAOKA Sadao
  10. An insight into the patent systems of fast developing asian countries By Anh Vu Tuan
  11. Improving the Performance of Co-Innovation Alliances. By Stel, F.
  12. The geography of innovation in the Luxembourg metropolitan region: an intra-regional approach By DAUTEL Vincent; WALTHER Olivier
  13. Firm collaboration and modes of innovation in Norway By Fitjar, Rune Dahl; Rodríguez-Pose, Andrés
  14. Export Behaviour and Propensity to Innovate in a Developing Country: The Case of Tunisia By Mohieddine Rahmouni; Murat Yildizoglu; Mohamed Ayadi
  15. Convergence of Romanian R&D System within Innovation Union By Sandu, Steliana
  16. [2010-2011 WTO Case Review Series No. 2]China—Measures for Protection and Enforcement of Intellectual Property Rights (WT/DS362/R): Concerning Disciplinary Rules on Enforcement Under the TRIPS Agreement (Japanese) By SUZUKI Masabumi
  17. Evolution of Globalised business R&D: Features, drivers, impacts By Pietro Moncada-Paterno-Castello; Peter Voigt; Marco Vivarelli
  18. Companies' growth in the ES: What is research and innovation policy's role? By Pietro Moncada-Paterno-Castello

  1. By: Gallini, Nancy
    Abstract: This paper examines technology-sharing arrangements, the incentives to join them and the type of products that develop when they are anticipated. Particular attention is given to patent pools that admit members with overlapping ownership; that is, patentees with a stake in both complementary pooled inputs and downstream products that do not depend on the pool but compete with products that do. We ask whether this ownership structure under which pool members are vertically and horizontally related, facilitates anticompetitive price collusion. In a Bertrand framework it is shown that if the downstream products inside and outside the pool are strategic complements, then technology-sharing agreements are both privately and socially efficient in making the market more competitive, although prices increase in the degree to which pool members are involved in competing products. For strong substitutes and asymmetric outside ownership, efficient patent pools may not be profitable in which case allowing full coordination in which the pool sets the prices of both inside and outside products owned by its members will encourage the formation of efficient pools and, possibly, the selection of more complementary products. In analyzing the efficiencies of cooperative agreements for sharing technologies, this paper makes a case for incorporating private incentives to cooperate, as well as to innovate and litigate, into the debate on effective systems for encouraging innovation and its diffusion.
    Keywords: Patent Pools, Intellectual Property, Antitrust Policy
    JEL: L2 L44
    Date: 2011–07–14
  2. By: Benjamin Coriat; Olivier Weinstein
    Abstract: This paper analyses the evolution of the intellectual property regime (IPR), and more precisely the patent regime, in the USA since the 19-th century. To do so, we consider intellectual property laws within the context of wider changes in capitalism, focusing on two main historical phases: firstly, the period covering the formation and development of 'corporate capitalism' dominated by large corporations and then the new phase, which opened up in the 1980s, marked by the rise to power of finance. From a perspective of institutional complementarities, we seek to show how the characteristics and implications of patent regimes can only be understood in relation to changes in the main institutional forms of capitalism: forms of the firm, the status of labour (the 'wage-labour nexus') and market forms.
    Keywords: firms, financialization, institutional complementarities, knowledge based economy, labor law, property rights
    JEL: O34 P1
    Date: 2011–07–19
  3. By: Sharma, Chandan
    Abstract: This paper examines dynamic as well as static effects of imported intermediary inputs and inhouse R&D on productivity growth using firm-level panel data for Indian technology-intensive manufacturing industries for the period 2000-2009. For this purpose, the present study adopts two empirical frameworks: production function and growth accounting method. Although we do have some comprehensible evidence to conclude that imported inputs have positive and significant impact on the productivity of firms, but the overall findings are rather mixed. Specifically, the results from the production function framework suggest that impact of imported intermediary goods on output is reasonably sizable. Surprisingly, however, the role of R&D activities under this framework is found to be insignificant across industries in various estimation specifications. On the other hand, the analysis based on the growth accounting model some yields positive results, which suggest that TFP of firms are closely linked with import and R&D activities. Firms that engage in these activities have 8% to 12% higher TFP than other firms across the industries. However, labor productivity is found to be insulated from these activities. --
    Keywords: imported intermediary,R&D,Firms' productivity
    JEL: D24 F10 O30
    Date: 2011
  4. By: Dinda, Soumyananda
    Abstract: Production technology is the main driving force of economic growth while upgraded technology reduces carbon emission. This paper investigates the long run relation with short run dynamics using the USA data for the period of 1963 -2007. This paper observes that production technology is the cause of reduction of CO2 emission only in short run. The impulse response of production technology suggests shortening the patent protection right that might encourage redesigning low carbon production processes to curve down carbon emission with raising income. Continuous change and adaption of production technology is the main driving force for sustainable development.
    Keywords: Production Technology; Innovation; Design Patent; Patent Right; Technological Progress; Co-integration; Causality; Carbon Emission; Income; CO2 Emission; Impulse Response; R&D
    JEL: O11 C32 O51 Q53 O33 O14
    Date: 2011–02–26
  5. By: Kadri Männasoo; Jaanika Meriküll
    Abstract: The opportunity cost approach suggesting a countervailing cyclical effect between R&D and short-term investments is the subject of theoretical and empirical debate. We extend the discussion by investigating the impact of demand fluctuations and credit constraints on firms\' R&D in ten new EU member states from Central, Southern and Eastern Europe (CSEE). Using membership of the OECD as a proxy for the country\'s level of development we find more counter-cyclicality amongst the firms in non-OECD CSEE countries, while a similar but somewhat less accentuated counter-cyclical pattern of R&D behaviour emerges in the more advanced OECD-CSEE countries. Surprisingly, any adverse effect from credit constraints on firm\'s engagement in R&D is largely absent in CSEE countries
    Keywords: R&D cyclicality, demand shocks, credit constraints, Central and Eastern Europe
    JEL: G31 E32 O30 O52
    Date: 2011–07–19
  6. By: Giulia Ajmone Marsan; Karen Maguire
    Abstract: National policy makers have shown a growing interest in the regional dimension of innovation processes, and regional policy makers are seeking to promote their own competitiveness by supporting innovation. To advance the OECD quantitative research on regions and innovation, a categorisation of regions was developed using socio-demographic, economic, and innovation-related variables. Many different categorisations are possible depending on the purpose of the peer group comparisons. This categorisation was developed with the main goal of highlighting the diversity of regional profiles across OECD regions. Similar types of analysis have been performed with regions of the European Union. This analysis identifies eight groups of regions based on the similarity of their performance on the 12 variables used in the statistical cluster analysis. These eight groups were then classified into three macro categories based on relevance for policy recommendations. Possibilities for further research to develop different forms of regional peer groupings are discussed.<BR>Les responsables politiques nationaux montrent un intérêt croissant envers la dimension régionale des processus d’innovation, et les responsables politiques régionaux cherchent à promouvoir leur propre compétitivité en soutenant l’innovation. Afin d’améliorer la recherche quantitative de l’OCDE sur les régions et l’innovation, une catégorisation des régions a été développée en utilisant des variables socio-démographiques, économiques et liées à l’innovation. De nombreuses catégorisations sont possibles en fonction de l’objectif des comparaisons entre « groupes de pairs ». La présente catégorisation a été développée avec l’objectif principal de mettre en évidence la diversité des profils régionaux au sein des régions de l’OCDE. Des types d’analyse similaires ont été réalisés avec les régions de l’Union européenne. Cette analyse identifie huit groupes de régions sur la base de la similitude de leur performance dans les 12 variables utilisées pour l’analyse statistique en « cluster ». Ces huit groupes ont ensuite été classés en trois macro-catégories suivant leur pertinence pour les recommandations politiques. Les possibilités de continuer les recherches pour développer différentes formes de groupes de pairs régionaux sont également abordées.
    Keywords: economic development, innovation policy, regional development, regional innovation strategies, regional competitiveness, Cluster Analysis
    JEL: D2 L2 O2 O31 O32 R3 R5
    Date: 2011–07
  7. By: Kadri Männasoo; Jaanika Meriküll
    Abstract: The full implications of the global financial crisis of 2008-2009 are yet to be revealed. The crucial question is whether a crisis of such severe magnitude will set \"cleansing mechanisms\" into motion as suggested by the opportunity cost argument of R&D, or rather destroy the long-term productivity enhancing incentives? The World Bank Financial Crisis Survey collects direct self-reported measures of firms\' credit frictions and R&D during 2009-2010 from six countries: Bulgaria, Latvia, Lithuania, Hungary, Romania and Turkey. Employing this dataset, we seek evidence of how the firms\' R&D responded to the negative demand shock and credit contraction at the time of the crisis. Looking at two distinct episodes, the sustained economic growth in 2001-2007 and the sudden slump in 2009-2010, we observe a paradigm shift in firms\' R&D decisions: whilst the R&D is counter-cyclical during the pre-crisis period, a pro-cyclical pattern emerges during the crisis
    Keywords: R&D cyclicality, demand shocks, credit constraints, financial crisis
    JEL: G31 E32 O30 O52
    Date: 2011–07–13
  8. By: Shiyuan Pan (School of Economics and Center for Research of Private Economy, Zhejiang University); Heng-fu Zou (Central University of Finance and Economics CEMA; Wuhan University IAS; Peking University; China Development Bank); Tailong Li (School of Economics & Management, Zhejiang Sci-Tech University)
    Abstract: We develop a directed-technological-change model to address the issue of the optimal patent system and investigate how the optimal patent system influences the direction of technological change and the inequality of wage, where patents are categorized as skill- and labor-complementary. The major results are: (i) Finite patent breadth maximizes the social welfare level; (ii) Optimal patent breadth increases with the amount of skilled (unskilled) workers; (iii) Optimal patent protection is skill-biased, because an increase in the amount of skilled workers increases the dynamic benefits of the protection for skill-complementary patents via the economy of scale of skill-complementary technology; (iv) Skill-biased patent protection skews inventions towards skills, thus increasing wage inequality; And, (v) international trade leads to strong protection for skill-complementary patents, hence increasing skill premia.
    Keywords: Patent Breadth, Skill-Biased Patent Protection, Skill-Biased Technological Change, Wage Inequality, Growth
    JEL: O31 O34 J31
    Date: 2010–08–14
  9. By: NAGAOKA Sadao
    Abstract: This publication is in Japanese. Neither an English translation of the publication nor an English abstract is available.
    Date: 2011–01
  10. By: Anh Vu Tuan
    Abstract: The aim of this paper is to describe the patent systems of fast developing Asian countries (China, Indonesia, Philippines, Thailand and Vietnam) and understand the factors that drive the demand for patent in these countries. Patent systems in these countries have strengthened to a large extent, the number of patent applications has increased drastically, although at very different pace across countries. The policy mixes that seem to be associated with a strong increase in demand for patents are: i) policies aiming at attracting FDI; ii) low relative costs (or fees); and iii) a relatively low quality of the examination processes. The significant differences in the patent systems of fast developing countries echo the differences observed between the patent systems in Europe, the USA and Japan.
    Keywords: patent cost; patent quality; patent systems; fees,; FDI
    JEL: P14 P51 O34
    Date: 2011–07
  11. By: Stel, F. (Universiteit van Tilburg)
    Date: 2011
  12. By: DAUTEL Vincent; WALTHER Olivier
    Abstract: The main objective of the paper is to analyse the local determinants of innovation in the Luxembourg metropolitan region. We are particularly interested in the impact of the local milieu and characteristics of firms. Our paper addresses two specific research questions. Firstly, we examine the extent to which geographic space is a determinant of innovation for five intra-regional units based on an aggregation of municipalities. Secondly, we investigate whether innovation is dependent on accessibility to the mean centre. In both cases, we examine innovation propensity and innovation output using microdata from the Community Innovation Survey (CIS 2006) carried out in Luxembourg. The paper shows that space matters both in terms of spatial units and accessibility within the intra-regional context of Luxembourg. It provides, in particular, first evidence of a close link between the effects on innovation at the intra-regional level of firms? profiles and agglomeration externalities. Both favour innovation for firms from Luxembourg-City and, to a lesser extent, from the Suburban Area.
    Keywords: intra-regional innovation; firms' profile; location factors; local polynomial regression; Luxembourg metropolitan region
    JEL: C14 O31 O38 R11 R12
    Date: 2011–07
  13. By: Fitjar, Rune Dahl; Rodríguez-Pose, Andrés
    Abstract: This paper examines the sources of firm product and process innovation in Norway. It uses a purpose-built survey of 1604 firms in the five largest Norwegian city-regions to test, by means of a logit regression analysis, Jensen et al.’s (2007) contention that firm innovation is both the result of ‘science, technology and innovation’ (STI) and ‘doing, using and interacting’ (DUI) modes of firm learning. The paper classifies different types of firm interaction into STI-mode interaction (with consultants, universities, and research centres) and DUI-mode interaction, distinguishing between DUI interaction within the supply-chain (i.e. with suppliers and customers) or not (with competitors). It further controls for the geographical locations of partners. The analysis demonstrates that engagement with external agents is an important source of firm innovation and that both STI and DUI-modes of interaction matter. However, it also shows that DUI modes of interaction outside the supply chain tend to be irrelevant for innovation, with frequent exchanges with competitors having a detrimental effect on a firm’s propensity to innovate. Collaboration with extra-regional agents is much more conducive to innovation than collaboration with local partners, especially within the DUI mode.
    Keywords: Competitors; Customers; DUI; Firms; Innovation; Norway; STI; Suppliers; Universities
    JEL: L14 O31 O32
    Date: 2011–07
  14. By: Mohieddine Rahmouni (GREThA - Groupe de Recherche en Economie Théorique et Appliquée - CNRS : UMR5113 - Université Montesquieu - Bordeaux IV); Murat Yildizoglu (GREQAM - Groupement de Recherche en Économie Quantitative d'Aix-Marseille - Université de la Méditerranée - Aix-Marseille II - Université Paul Cézanne - Aix-Marseille III - Ecole des Hautes Etudes en Sciences Sociales (EHESS) - CNRS : UMR6579); Mohamed Ayadi (ISG - Institut supérieur de gestion - Université de Tunis, Ecole Supérieure des Sciences Economiques et Commerciales de Tunis - Université de Tunis)
    Abstract: The relation between export behaviour and the propensity to innovate is an important question for a developing economy. This article dedicated to this question through the analysis of the first innovation survey of Tunisian firms. We analyze the relationship between the export behaviour and the innovation propensity of the firms as it can be qualified using econometric estimations (mainly probit models) and non-parametrical regression trees on the results of the first community innovation survey in Tunisia. Our results show that firms that address both the domestic and foreign demands (partial- exporters) have the highest propensity to innovate, and they better benefit from external knowledge sources, as well as a diversified demand. We find that external knowledge sources, internal R&D efforts and some types of cooperative agreements are complementary for product innovations, but the first play an essential role, in the sense that firms must benefit from at least one external knowledge source to attain a significant innovation propensity. We show that innovation behaviour of three subsets of firms are strongly contrasted: pure exporters who only address the foreign demand, pure domestic firms, and partial exporters.
    Keywords: Innovation; exports; openness; development; absorptive capacity
    Date: 2011–07–12
  15. By: Sandu, Steliana
    Abstract: The convergence of Romanian R&D and Innovation system within the European Research Area has been an important goal of policy measures taken within the last decade, aiming to increase its performance and catching up the more developed EU countries. The process of decision and policy design have been strongly influenced by policy developments in the EU taking into account the priorities at EU level, Framework Programmes or key policy documents issued by the European Commission. Romanian policy documents such as the National Strategy of R&D and Innovation (2007-2013), the National Plan for RDI (2007-2013), other National Reform Strategies have an overall emphasis on similar to many of the main strands of EU policy in the research and innovation field. Starting with 2000 year, the European Research Area has become a key reference point for research policy in Europe, aiming to overcome the fragmentation of research activities, programmes and policies across Europe. The globalisation of economy and communications, technological progress and its social implications led to the creation of the European Research Area , as a base for the convergence of national RD&I systems. Starting with 2000, the European Research Area has played a consistent role in determining the R&D policy in Romania regarding both of them, to mobilization of resources and to excellence and exploitability of research results. The advantages offered by the integration into ERA are directly related to the participation of Romania in the single labour market for researchers, benefiting from a high quality R&D infrastructure, sharing knowledge and optimising programmes and priorities. The R&D related objectives inserted in different national strategies offer answers, more or less suitable, to the requirements of the Lisbon Agenda. This has given a strong impetus to increase the share of R&D expenditures in GDP, as an important target, inserted in each of mentioned strategies. The Lisbon Strategy 2010 also, have offered a set of benchmarks for the measurement of competitiveness, as well as best practices, which aim at avoiding risks for the R&D activity. The European initiative of creation of Innovation Union is a new challenge for Romanian research and innovation system, confronted with serious weaknesses during the crisis, which affects its performance and the governance of research activity, especially in the private sector. The paper is focused on the analysis of the present Romanian R&D and innovation performance, evaluating the gaps in comparison with average EU and with the best performers, using a system of relevant indicators. The paper analyses the progress made in the last ten years in achieving the convergence of European RD&I systems, the factors that have accelerated or slowed down the process, laying the stress on Romania's position in closing the gaps that separate it from European average and from the leaders in this area. The conclusion of this paper could be used by policy makers in order to a better design, monitoring, coordination and implementation of the policies directed to reach the strategic goals of the Innovation Union.
    Keywords: innovation gaps; convergence of RD&I systems; Innovation Union; European Research Area (ERA)
    Date: 2011
  16. By: SUZUKI Masabumi
    Abstract: Using its accession to the WTO as momentum, China has been rapidly developing its systems related to intellectual property. However, many countries and organizations point out that there are still many problems with intellectual property protection in China. In 2007, the United States made a request for bilateral consultations, and eventually the establishment of a panel, under the WTO dispute settlement procedures, concerning measures for protection and enforcement of intellectual property rights taken by China, and a panel report was adopted on this issue in March 2009. While this issue is noteworthy in the sense that the two superpowers of the United States and China are contesting the intellectual property system in China, which as noted has been attracting considerable international concern, it also has significant implications from a legal perspective, particularly in the way that the WTO panel revealed its interpretation of the enforcement rules under the TRIPS Agreement for the first time. In addition, specific details of the WTO panel report are seen as including matters that should prompt Japan to reexamine its own system. This paper introduces the details of the WTO panel report and discusses their significance.
    Date: 2011–03
  17. By: Pietro Moncada-Paterno-Castello (JRC-IPTS); Peter Voigt (JRC-IPTS); Marco Vivarelli (Facoltà di Economia, Università Cattolica del Sacro Cuore, Piacenza, Italy; SPRU, University of Sussex, Brighton, UK; IZA, Bonn, Germany)
    Abstract: The globalisation of R&D activities has continued to grow as companies are increasingly trying to capture knowledge and market opportunities internationally. The rapid evolution of national economies and the ways to conduct knowledge-intensive businesses has brought researchers and analysts to pursue a deeper understanding of the globalisation of corporate R&D and the related driving factors and impacts. This Working Paper provides an overview of the evolution of globalised business R&D activities and an outline of trends is provided with quantitative information from 2001 to 2009. Thus, the literature on the main drivers and impacts of the research process is reviewed and controversial arguments are discussed and reflected upon in the light of recent empirical observations. In particular, the drivers for firms to undertake R&D in their home country, to internationalise their R&D operations and to select a particular location for R&D implementation are analysed according to both the perspective of S&T supply side and for goods and services demand side. Furthermore, the impact of the internationalisation of business R&D is analysed for firms' host or home countries, with a particular focus on the effects on competitiveness and employment. The conclusions and policy implications from the main results of this work are presented in the last section of the document.
    Keywords: Research and Development [R&D], Business Enterprise Expenditure on R&D [BERD], internationalisation, innovation, investment gap, R&D policies
    JEL: F F L O
    Date: 2011–05
  18. By: Pietro Moncada-Paterno-Castello (JRC-IPTS)
    Abstract: One of the main objectives of the new European research and innovation policy agenda is to favour the positive demographics (creation and growth) of EU companies operating in new/knowledge-intensive industries, especially Small and Medium Enterprises (SMEs). These companies play an important role in shaping the dynamism of the economy’s sectoral composition, favouring the transition towards more knowledge-intensive activities (smart growth) and in contributing to the overall economic growth objectives and more and better jobs. But which kind of companies should be helped by policy? And how? This paper presents a literature review on the economics of research, innovation and competitiveness, focusing on the evidence available regarding the determinants for new and existing company creation and growth and the role played by Research, Development (R&D) and innovation. Furthermore, based on this, it draws a number of policy implications to design future research and innovation support instruments targeting innovative company growth in Europe. The result of this work indicates that: a) EU needs support policies to foster R&D investment in some specific typology of innovative companies and only where there are market failures and clear high social returns; b) the establishment of any targeted support instruments should take into account an integrated set of criteria including: firms' age and size, the sectors where firms operate, the involved risks in and potential for their innovative and commercial activities, the country/techno-economic environment, and the degree of internationalisation; c) to be successful, no matter the new targeted policies and supporting instruments, they should be designed using policy experimentation and its results should be regularly measured and evaluated using appropriate indicators and analyses.
    Keywords: Firm demographics and growth, Small and Medium Enterprises, economic dynamics, corporate research and innovation, EU competitiveness, EU policy.
    JEL: O31 L25 R38
    Date: 2011–07

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