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on Innovation |
| By: | Isabel Busom; Beatriz Corchuelo; Ester Martínez-Ros |
| Abstract: | The measurement of the effects that public support to private R&D has on R&D investment and output has attracted substantial empirical research in the last decade. The focus of this research has mostly focused on testing for possible crowding out effects. There is virtually no study aiming at understanding how and why these effects may or may not be occurring. In addition, the effects of the two most common tools of public support, direct funding through grants and loans, and tax incentives, have been studied separately. We contribute to existing work by focusing on the determinants of the use by firms of these two mechanisms and their potential link to sources of market failures. We think this is an important step to assess impact estimates. Using firm-level data from the Spanish Community Innovation Survey (CIS), we find that firms that face financial constraints, as well as newly created firms, are less likely to use R&D tax credits and more likely to apply for and obtain direct public funding. We also find that large firms that care about knowledge protection are more likely to apply for and obtain direct funding, while SMEs are more likely to use tax incentives. Our results show that direct funding and tax credits, as currently designed, are not perfect substitutes because firms are heterogeneous, and suggest that from a social perspective, and provided that crowding out effects can be ruled out for both instruments, some combination of both may be preferable to relying on only one |
| Keywords: | R&D subsidies, R&D tax credits, R&D, CIS, Policy evaluation |
| JEL: | H25 L60 O38 O31 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:cte:idrepe:id-11-03&r=ino |
| By: | Moonsung Kang (KIEP - Korea Institute for International Economic Policy) |
| Abstract: | This paper provides a theoretical framework to explain why governments seek restrictions on IPR protection and allow R&D subsidies through multilateral trade agreements such as the TRIPS Agreement and the Agreement on Subsidies and Countervailing Measures. After 7 years of discussion, the Uruguay Round extends GATTs trade-liberalizing philosophy to worldwide use of subsidies as a secondary means to intervene in international trade. Through the Agreement on Subsidies and Countervailing Measures the WTO tries to preserve one of basic principles of GATTs philosophy: Fair Competition. The principle of Fair Competition is of particular importance in understanding the WTO. To harness GATTs trade liberalizing philosophy, the WTO as a successor of GATT takes this principle as objectives that are pursued through the enforcement and implementation of other principles, for instance the nondiscrimination and reciprocity. As an example of the fair competition principle, the WTO prohibited any type of export subsidies through the Agreement on Subsidies and Countervailing Measures, but allowed R&D subsidies. The allowance of R&D subsidies by the WTO is a puzzle because it is well known that R&D subsidization forms the prisoners dilemma when governments are active to set R&D policy. In order to find any reasonable logic to explain this puzzle, we focus on the interaction between strategic trade policy tools: R&D subsidization and IPR protection. Indeed, at an international level IPR protection has been a major focus of negotiations along with R&D subsidies. The WTO also requires member countries to strongly enforce patent protection through the TRIPS Agreement. In our analysis, it turns out that it is globally optimal to perfectly disseminate knowledge without IPR protection and to subsidize inventive firms by solving a problem that the weak IPR protection damages firms incentive to invest in R&D activities. However, current trade agreements do not match with our global optimum. We show that exporting countries may benefit at the expense of importers from a trade agreement to demand stronger enforcement on IPR protection because exporting countries experience the prisoners dilemma problem when both countries free ride on the rival firms R&D outcome. Therefore we conclude that it is possible to understand the TRIPS Agreement as an inefficient victory of the interests of northern exporting countries over those of southern importing countries. |
| Keywords: | Trade Policy Mix, TRIPS, R&D subsidies, Agreements on Subsidies, Countervailing Measures |
| JEL: | O32 O34 F13 |
| Date: | 2011–11 |
| URL: | http://d.repec.org/n?u=RePEc:eab:tradew:21758&r=ino |
| By: | Mohammad Movahedi, University of Caen Basse-Normandie - CREM-CNRS, France; Olivier Gaussens, University of Caen Basse-Normandie - CREM-CNRS, France |
| Abstract: | This paper presents an analysis of the relationship between innovation, productivity and exports regarding the SMEs. The main research aim of this study consists in analyzing the hypothesis of firms’ conscious self-selection in the export markets. To measure innovation, we consider the dimensions of technological as well as non technological innovation, as defined by the Oslo Manual (2005). To achieve this, we use the database of SMEs obtained from the survey conducted in the project IDEIS. First, we highlight the existence of export as well as innovation apparent premium, i.e. the advantage of exporting (innovative) firms versus non-exporting (not innovative) ones in terms of productivity. In addition, we demonstrate the effectiveness of the export premium for firms carried out process and organization innovations with the enough exportation. Finally we show the firms’ conscious self-selection in export markets in endogenizing productivity through innovation. |
| Keywords: | Innovation, Productivity, Exportation, Conscious self-selection |
| JEL: | F1 O3 D2 L25 C14 C3 |
| Date: | 2011–09 |
| URL: | http://d.repec.org/n?u=RePEc:tut:cremwp:201123&r=ino |
| By: | Audretsch, David B. (Indiana University); Link, Albert N. (University of North Carolina at Greensboro, Department of Economics) |
| Abstract: | The purpose of this paper is to identify and unravel the disparate views toward innovation prevalent within the economic community and to link them to the various public policy approaches. These various schools of thought, or ways of thinking about the economy in general and the role of entrepreneurship and innovation in particular, not only shape how innovation and entrepreneurial activity are valued, but also the overall policy debate concerning innovation and entrepreneurship. Unraveling of these views sets highlights the disparate way in which entrepreneurial activity leading to innovation is valued. |
| Keywords: | Entrepreneurship; Innovation; Economic Theory |
| JEL: | E10 L26 O31 |
| Date: | 2011–11–08 |
| URL: | http://d.repec.org/n?u=RePEc:ris:uncgec:2011_019&r=ino |
| By: | Juan Carlos Barcena-Ruiz (UPV/EHU); Maria Begoña Garzon (UPV/EHU) |
| Abstract: | The literature on foreign direct investment has analyzed firms' location decisions when they invest in R&D to reduce production costs. Such firms may set up new plants in other developed countries while maintaining their domestic plants. In contrast, here we considerer firms that close down their domestic operations and relocate to countries where wage costs are lower. Thus, we assume that firms may reduce their production costs by investing in R&D and also by moving their plants abroad. We show that these two mechanisms are complementary. When a firm relocates it invests more in R&D than when it does not change its location and, therefore, its production cost is lower in the first case. As a result, investment in R&D encourages firms to relocate. When firms do not invest in R&D on relocation, R&D discourages firms to relocate since the investment made by the firms that remain in the country partially offsets the labor cost advantage obtained by the firms that move their plants abroad. |
| Keywords: | Relocation, R&D, Trade Unions, Social welfare, Imperfect competition |
| JEL: | D6 F16 J51 L13 |
| Date: | 2011–11–14 |
| URL: | http://d.repec.org/n?u=RePEc:ehu:ikerla:201152&r=ino |
| By: | Ippoliti, Roberto |
| Abstract: | The target of this work is to support the thesis that pharmaceutical companies' testing phase would be treated like any other form of production in a globalization process, that is to say, a specific phase of pharmaceutical R&D could be localized where the cost of clinical evidence is lower. Considering Europe, an empirical analysis in order to support the main hypothesis is performed. Taking trials of phases II and III, funded by Industry (dependent variable) and the main macroeconomic features (independent variables) of each nation into account, the empirical work is implemented via regression analysis on panel data (2000 - 2007). The sample analyzed considers EU-27 plus the candidate states (Croatia, the Former Yugoslav Republic of Macedonia, Turkey), Norway, Switzerland and Iceland. Results suggest the appropriateness of this process since clinical research is clearly affected by economic conditions, regardless of the scientific purpose. |
| Keywords: | Pharmaceutical Company R&D; Human experimentation; Medical Researcher; Research Subject; |
| JEL: | I11 |
| Date: | 2011–11 |
| URL: | http://d.repec.org/n?u=RePEc:uca:ucaiel:7&r=ino |
| By: | Jan Fagerberg (Centre for Technology, Innovation and Culture, University of Oslo); Koson Sapprasert (Creative Entrepreneurship Development Institute, Bangkok University) |
| Abstract: | The term ‘national innovation systems’ surfaced for the first time in print during the late 1980s and, in the years that followed, several important contributions on this topic appeared. This paper investigates the role that this new literature plays within innovation studies and the world of science more generally and discusses the sources for its emergence. With the help of expert assessments, the three most important contributions to the ‘national innovation systems’ literature are identified. Then the citations to these works in scholarly journals in the Web of Science are presented and the characteristics of the ‘national innovation systems’ literature, as compared with other areas of research, are analyzed. |
| Date: | 2011–11 |
| URL: | http://d.repec.org/n?u=RePEc:tik:inowpp:20111115&r=ino |
| By: | Comanor, William S. (UCLA and University of CA, Santa Barbara); Scherer, F. M. (Harvard University) |
| Abstract: | The U.S. pharmaceutical industry has experienced in recent years two dramatic changes: stagnation in the growth of new molecular entities approved for marketing, and a wave of mergers linking inter alia some of the largest companies. This paper explores possible links between these two phenomena and proposes alternative approach to merger policy. It points to the high degree of uncertainty encountered in the discovery and development of new pharmaceutical entities and shows how optimal strategies entail the pursue of parallel research and development paths. Uncertainties afflict both success rates and financial gains contingent upon success. A new model simulating optimal strategies given prevalent market uncertainties is presented. Parallelism can be sustained both within individual companies' R&D programs and across competing companies. The paper points to data showing little parallelism of programs within companies and argues that inter-company mergers jeopardize desirable parallelism across companies. |
| Date: | 2011–11 |
| URL: | http://d.repec.org/n?u=RePEc:ecl:harjfk:rwp11-043&r=ino |
| By: | Jan Fagerberg (Centre for Technology, Innovation and Culture, University of Oslo); Maryann Feldman (University of North Carolina, Chapel Hill); Martin Srholec (CERGE-EI, Charles University and Economics Institute of the Academy of Sciences of the Czech Republic) |
| Abstract: | This paper analyzes factors that shape the technological capabilities of individual U.S. states and European countries, which are arguably comparable policy units. The analysis demonstrates convergence in technological capabilities from 2000 to 2007. The results indicate that social capabilities, such as a highly educated labor force, an egalitarian distribution of income, a participatory democracy and prevalence of public safety, condition the growth of technological capability. The analysis also considers other aspects of territorial dynamics, such as the possible effects of spatial agglomeration, urbanization economies, and differences in industrial specialization and knowledge spillovers from neighboring regions. |
| Keywords: | innovation, technological capabilities, European Union, United States |
| Date: | 2011–11 |
| URL: | http://d.repec.org/n?u=RePEc:tik:inowpp:20111114&r=ino |
| By: | Martinho, Vítor João Pereira Domingues |
| Abstract: | Much has been said lately about entrepreneurship, so it seems important to leave here some personal analysis on this topic. The issues outlined here result from a work in about a year in which because a personal and professional obligations it was doing some research on these issues. This is an interesting topic that has not yet expired and on which there is much to research, do it is an area where there are many challenges. -- |
| Keywords: | entrepreneurship,entrepreneurs,innovation |
| JEL: | O55 O32 L26 M13 O31 |
| Date: | 2011–11–02 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:esprep:50907&r=ino |