nep-ino New Economics Papers
on Innovation
Issue of 2011‒08‒15
fourteen papers chosen by
Steffen Lippert
University of Otago, Dunedin

  1. Temporal and spatial relations between patents and scientific journal articles: the case of nanotechnologies By Finardi Ugo
  2. Immigration and Innovation in European Regions By Ceren Ozgen; Peter Nijkamp; Jacques Poot
  3. Product variety, product quality, and evidence of Schumpeterian endogenous growth: a note By Francesco Venturini
  4. Assessing Private Sector Agriculture Research and Innovation in South Africa By Kirsten, Johann F.; Haankuku, Choolwe; Stander, Ruan
  5. Open Source Government: Applying New Concepts of Research & Development (R&D) in Public Administration By Irimia, Sergiu Ioan; Matei, Ani
  6. Cognitive Capital and Islands of Innovation: The Lucas Growth Model from a Regional Perspective By Andrea Caragliu; Peter Nijkamp
  7. Are R&D subsidies provided optimally? Evidence from a simulated agency-firm stochastic dynamic game By Cerulli Giovanni
  8. A responsiveness-based (composite) indicator with an application to countries’ innovative performance By Cerulli Giovanni
  9. Optimal Climate Change Policies When Governments Cannot Commit By Alistair Ulph; David Ulph
  10. Knowledge Virtualiazation and Local Connectedness among Smart High-tech Companies By Marina van Geenhuizen; Peter Nijkamp
  11. "Interregional mobility, productivity and the value of patents for prolific inventors in France, Germany and the U.K" By William Latham; Dmitry Volodin; Christian Le Bas; Riad Bouklia Hassane
  12. Endogenous Enforcement of Intellectual Property, North-South Trade, and Growth By Andreas Schäfer; Maik T. Schneider
  13. The design of licensing contracts: Chemicals, Pharmaceuticals, and Electrical Engineering in Imperial Germany By Carsten Burhop; Thorsten Luebbers
  14. Long-Term Barriers to the International Diffusion of Innovations By Enrico Spolaore; Romain Wacziarg

  1. By: Finardi Ugo (Università di Torino - Dipartimento di Chimica I.F.M. and NIS - Centre of Excellence)
    Abstract: Patent citations have been widely used in order to study inter-technology and science-technology relations. The present work aims at: i) exploring time relations and distance between technical/innovative activities and scientific knowledge, using journal articles citations in patents as a proxy; ii) exploring the origin of the knowledge cited in patents. The study is performed on a field particularly relevant both on the scientific and technological side, that of nanosciences and nanotechnologies. In parallel a field less on the edge of research (polymers) is studied in order to compare results and shed better light on what is happening in nanotech. Studied items show a common behaviour and a higher rate of citations and a shorter time lag between citing patents and cited articles for nanotechnologies rather than for polymers. Knowledge cited in patents shows in many cases a common origin with that of citing documents. Conclusions on these behaviours are drawn.
    Keywords: Patent-research relations, Patent, Journal Article, Nanoscience, Nanotechnologies, Polymers, Technological trajectories, Data mining, Innovation, Knowledge diffusion
    JEL: L6 O31 O33
    Date: 2010–12
  2. By: Ceren Ozgen (VU University Amsterdam); Peter Nijkamp (VU University Amsterdam); Jacques Poot (National Institute of Demographic and Economic Analysis (NIDEA), University of Waikato, Hamilton, New Zealand)
    Abstract: The concentration of people with diverse socio-cultural backgrounds in particular geographic areas may boost the creation of new ideas, knowledge spillovers, entrepreneurship, and economic growth. In this paper we measure the impact of the size, skills, and diversity of immigration on the innovativeness of host regions. For this purpose we construct a panel of data on 170 regions in Europe (NUTS 2 level) for the periods 1991-1995 and 2001-2005. Innovation outcomes are measured by means of the number of patent applications per million inhabitants. Given the geographical concentration and subsequent diffusion of innovation activity, and the spatial selectivity of immigrants' location choices, we take account of spatial dependence and of the endogeneity of immigrant settlement in our econometric modelling. We use the location of McDonald's restaurants as a novel instrument for immigration. The results confirm that innovation is clearly a function of regio nal accessibility, industrial structure, human capital, and GDP growth. In addition, patent applications are positively affected by the diversity of the immigrant community beyond a critical minimum level. An increase in the fractionalization index by 0.1 from the regional mean of 0.5 increases patent applications per million inhabitants by about 0.2 percent. Moreover, the average skill level of immigrants (proxied by global regions of origin) also affects patent applications. In contrast, an increasing share of foreigners in the population does not conclusively impact on patent applications. Therefore, a distinct composition of immigrants from different backgrounds is a more important driving force for innovation than the sheer size of the immigrant population in a certain locality.
    Keywords: immigration; cultural diversity; economic growth; innovation; spatial autocorrelation
    JEL: J61 O31 R23
    Date: 2011–08–09
  3. By: Francesco Venturini
    Abstract: Using US manufacturing industry data, this paper re-examines empirical evidence of first- and second-generation Schumpeterian models of endogenous growth focusing on innovation (patent) quality. It shows that semi-endogenous growth models behave better than the other strands of Schumpeterian theory especially in the knowledge-intensive section of the economy.
    Keywords: fully endogenous growth theory, semi-endogenous growth theory, innovation quality, US manufacturing, high-tech industries.
    JEL: O3 O4
    Date: 2011–07–01
  4. By: Kirsten, Johann F.; Haankuku, Choolwe; Stander, Ruan
    Abstract: Reliable data on private sector agricultural research and development is globally scarce, particularly in developing countries. In South Africa, it has been observed that research performance by the public sector via the Agricultural Research Council has declined in recent years and consequently, the private sector has embarked on a much larger role in South Africaâs agriculture research than before. However, the extent of this engagement remains unknown as data quantifying private sector agricultural R&D is limited. This study identified 51 private firms that perform agriculture related research activities and attempts to gather primary data to determine the nature and extent of private R&D in South Africa. However due to the large number of non-responses, the study covers only 19% of these firms. Nevertheless, the study found that the participation of the private sector in agriculture research in the past decade has increased; in terms of research expenditure by more than 100% and number of research personnel by more than 50%. It emerged that the nature of research done by the private sector locally is mainly adaptive research - focused on testing imported technology to ensure registration and certification for use on the local market as opposed to developing âownâ innovations. The most influencing government policy initiatives in the participation of the private sector in South Africaâs agriculture R&D have been deregulation of agriculture markets and liberalization of agricultural trade, which have increased the spill-in of agriculture technologies to South Africa. The study recommends that, in order to ensure sustainability and efficiency of private sector research, collaboration between the public sector and private sector as well as international organizations will be crucial.
    Keywords: Private sector agriculture Research and Development, innovations, Research and Development/Tech Change/Emerging Technologies,
    Date: 2010–09
  5. By: Irimia, Sergiu Ioan; Matei, Ani
    Abstract: This paper is intended as an introduction to the concept of "open source government". It presents the late as it draws from the open source software development. Starting from the identification of the open source (OS) model in a new generation of R&D management, the main objective is to examine the feasibility of introducing innovations based on this new production model in public administration. In this regard, we argue that open source (OS) can become a modus operandi for the continuation of the processes of administrative decentralization and streamlining the exchange of information between suppliers and users of public services.
    Keywords: administrative decentralization; generation of R&D management; open source model; open source software; open source government
    Date: 2011–08–06
  6. By: Andrea Caragliu (Politecnico di Milano); Peter Nijkamp (VU University Amsterdam)
    Abstract: Knowledge triggers regional growth. Evidence suggests that skilled labour force concentrates in islands of innovation, determining an advantage for innovative regions and a challenge for lagging ones. We address the role of knowledge in shaping effective markets for skilled labour. Estimates are based on the Lucas (1988) model, with EVS and EUROSTAT data. The externality driving growth in the model is cognitive capital. Empirical tests show that a higher endowment of cognitive capital generates increasing returns to knowledge, favouring the emergence of islands of innovation; regions with a high endowment of cognitive capital attract knowledge spillovers from neighbours.
    Keywords: human capital; cognitive capital; knowledge spillovers; islands of innovation
    JEL: C21 E24 R11
    Date: 2011–08–09
  7. By: Cerulli Giovanni (Ceris - Institute for Economic Research on Firms and Growth, Rome, Italy)
    Abstract: By means of a simulated funding-agency/supported-firm stochastic dynamic game, this paper firstly shows that not only the level of R&D performed by firms is underprovided (as maintained by traditional literature on the subject), but also the level of the subsidy provided by the funding (public) agency (used to correct exactly for the corporate R&D shortage). This event is due to externalities generated by the agency-firm strategic relationship. Two versions of the model are simulated and compared: one assuming rival behaviors between companies and agency, and one associated to the Social-planner (or cooperative) strategy. Secondly, the paper looks at what “welfare” implications are associated to different degree of funding effect’s persistency. Three main conclusions are drawn: (i) the relative quota of subsidy to R&D is undersized in the rival compared to the Social-planner model; (2) the rivalry strategy generates distortions that favor the agency compared to firms; (3) when passing from less persistent to more persistent R&D additionality/crowding-out effect, the lower the bias the greater the variance is and vice versa. As for the management of R&D funding policies, all the elements favouring greater collaboration between agency and firm objectives can help current R&D support to reach its social optimum.
    Keywords: R&D subsidies, Rivalry vs. cooperation, Dynamic-stochastic games, Simulations
    JEL: O38 H2 C73 C63
    Date: 2010–12
  8. By: Cerulli Giovanni (Ceris - Institute for Economic Research on Firms and Growth, Rome, Italy)
    Abstract: The aim of this paper is twofold: on one hand, from a methodological-statistical perspective, it develops a responsiveness-based index for a series of input factors on a specific target variable (assumed to capture the phenomenon the analyst wishes to look at), by means of an extended version of a random coefficient regression approach; on the other hand, it applies this methodology to the case of countries’ innovation performance, where the target variable is the country number of patents (as proxy of “innovativeness”), and where inputs are chosen according to the literature dealing with the measurement of country technological capabilities. The novelty of the approach presented in the paper regards the possibility of extracting from data a country-specific “reactivity effect” or “responsiveness” (that is, mathematically, a derivative) to each single input feeding into the regression. Thus, the paper provides a promising approach for ranking countries according to their responsiveness to specific inputs, an approach that can be complementary to the analysis on “level” performed, for instance, in the canonical composite indicators’ literature. As for results on countries’ innovation function, besides a (new) ranking of countries, this approach allows also for testing - in an original and straightforward way - the (possible) presence of increasing (decreasing) returns. Two years are considered and compared, 1995 and 2007, on 42 countries. Our tests conclude that in both years innovative increasing returns are at work, although in 2007 their strength drops considerably compared to 1995. According to a huge literature on the subject (both neoclassical and evolutionary), we conclude that a self-reinforcing mechanism in new knowledge production, absorption and diffusion is at the basis of these results. As for the structural change found between 1995 and 2007, we deem it to depend on the growing globalization of production and innovation processes and on the brilliant growth of some developing countries worldwide, with a remarkable role played – according to our results – by post-communist economies.
    Keywords: Responsiveness, Country indicators, Random coefficient regression, Innovation function
    JEL: C21 O31 Q01
    Date: 2010–12
  9. By: Alistair Ulph; David Ulph
    Abstract: We analyse the optimal design of climate change policies when a government wants to encourage the private sector to undertake significant immediate investment in developing cleaner technologies, but the relevant carbon taxes (or other environmental policies) that would incentivise such investment by firms will be set in the future. We assume that the current government cannot commit to long-term carbon taxes, and so both it and the private sector face the possibility that the government in power in the future may give different (relative) weight to environmental damage costs. We show that this lack of commitment has a significant asymmetric effect: it increases the incentive of the current government to have the investment undertaken, but reduces the incentive of the private sector to invest. Consequently the current government may need to use additional policy instruments – such as R&D subsidies – to stimulate the required investment.
    Keywords: Climate Change; Emissions Taxes; Impact on R&D; Timing and Commitment
    JEL: H23 Q54 Q55 Q58
    Date: 2011–08
  10. By: Marina van Geenhuizen (Delft University of Technology, Delft); Peter Nijkamp (VU University Amsterdam)
    Abstract: Smart high-tech companies are characterized by knowledge intensity and open innovation. Even when these companies emerge in spatial clusters or dense urban places, they may utilize knowledge networks on a global scale. However, there is not much insight into the factors that shape knowledge networks, the role of virtualization herein and the impact of on global knowledge sourcing on local connectedness. This paper seeks to fill these gaps in understanding, by drawing on a selected sample of young high-technology companies in the Netherlands and application of rough set analysis to identify homogeneous categories of companies in the highly differentiated segment of young high-tech companies. The outcomes suggest that employing mainly local and employing mainly global knowledge networks coexist in city-regions, and that only part of the globalized companies are losing local connectedness, particularly those involved in co-creation with global customers and those acting as learning partners of multinational corporations ('reverse' knowledge transfer). Factors counteracting a weakening of local connectedness are specific local knowledge relationships and the strategy of developing local/regional customer markets.
    Keywords: high-technology companies; open innovation; knowledge networks; strategic focus; dynamic capabilities; virtualization; local connectedness; rough set analysis
    JEL: D21
    Date: 2011–08–09
  11. By: William Latham (Department of Economics,University of Delaware); Dmitry Volodin (Department of Economics,University of Delaware); Christian Le Bas (Laboratoire d'Économie de la Firme et des Institutions, Université Lumière Lyon); Riad Bouklia Hassane (Laboratoire d'Économie de la Firme et des Institutions, Université Lumière Lyon)
    Abstract: Regional creative resources include inventors. Policies conducive to inventors’ productivity or attracting productive inventors promote regional development. We build on prior work on inventor mobility and productivity, analyzing German, French and British patents filed in the US by 7,500 “prolific” inventors (fifteen or more inventions). We measure inventor mobility across regions, companies and technologies. We analyze the relationships among mobility, productivity and value. We find geographic mobility increases inventor productivity in the UK and France but not in Germany and geographic mobility is not related to the value of inventions except in Germany where it has a negative effect.
    Keywords: Patents, inventor mobility, prolific inventors
    JEL: O31 R58
    Date: 2011
  12. By: Andreas Schäfer (University of Leipzig, Germany); Maik T. Schneider (ETH Zurich, Switzerland)
    Abstract: While most countries have harmonized intellectual property rights (IPR) legislation, the dispute about the optimal level of IPR-enforcement remains. This paper develops an endogenous growth framework with two open economies satisfying the classical North-South assumptions to study (a) IPR-enforcement in a decentralized game and (b) the desired globally-harmonized IPR-enforcement of the two regions. The results are compared to the constrained-efficient enforcement level. Our main insights are: The regions’ desired harmonized enforcement levels are higher than their equilibrium choices, however, the gap between the two shrinks with relative market size. While growth rates substiantially increase when IPR-enforcement is harmonized at the North’s desired level, our numerical simulation suggests that the South may also benefit in terms of long-run welfare.
    Keywords: Endogenous Growth, Intellectual Property Rights, Trade, Dynamic Game
    JEL: F10 F13 O10 O30
    Date: 2011–08
  13. By: Carsten Burhop (University of Cologne); Thorsten Luebbers (MPI for Collective Goods Bonn)
    Abstract: We investigate a sample of 180 technology licensing contracts closed by German chemical, pharmaceutical, and electrical engineering companies between 1880 and 1913. Our empirical results suggest that strategic behaviour seems to be relevant for the design of licensing contracts, whereas inventor moral hazard and risk aversion of licensor or licensee seem to be irrelevant. Moreover, our results suggest that uncertainty regarding the profitability of licensed technology influenced the design of licensing contracts. More specifically, profit sharing agreements or producer milestones were typically included into licensing contracts.
    Keywords: Economic History, Germany, pre-1913, Licensing contracts, Technology transfer.
    JEL: N83 O32 L14
    Date: 2011–06
  14. By: Enrico Spolaore; Romain Wacziarg
    Abstract: We document an empirical relationship between the cross-country adoption of technologies and the degree of long-term historical relatedness between human populations. Historical relatedness is measured using genetic distance, a measure of the time since two populations’ last common ancestors. We find that the measure of human relatedness that is relevant to explain international technology diffusion is genetic distance relative to the world technological frontier (“relative frontier distance”). This evidence is consistent with long-term historical relatedness acting as a barrier to technology adoption: societies that are more distant from the technological frontier tend to face higher imitation costs. The results can help explain current differences in total factor productivity and income per capita across countries.
    JEL: F43 O33 O57
    Date: 2011–08

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.