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on Innovation |
| By: | Abiodun A. Egbetokun (Friedrich-Schiller University, Graduate College "Economics of Innovative Change", and National Centre for Technology Management (Federal Ministry of Science and Technology), Obafemi Awolowo University, Nigeria) |
| Abstract: | Analysing the relationship between firms' openness to external knowledge and their innovation performance is nothing new. What is new is studying how this relationship fares in latecomer economic contexts such as Nigeria, and that is the focus of this paper. Using unique micro-level innovation data, it is shown, as the existing literature suggests, that firms are more likely to innovate when they access external knowledge either through formal or through informal interactions. However, innovative firms that exploit external knowledge do not necessarily enjoy greater innovation benefits than those that do not. Thus, while openness to external knowledge might help firms to become better at innovating, it does not assist them in reaping the benefits derivable from their innovation efforts. Moreover, different innovation types are essentially the same with respect to the effect that network resources have on them. Thus, it makes little sense to engage network partners selectively for certain innovation types at the expense of others. |
| Keywords: | innovation, networking, openness, collaboration, external knowledge, Nigeria, manufacturing industry |
| JEL: | O31 L14 L60 |
| Date: | 2012–07–09 |
| URL: | http://d.repec.org/n?u=RePEc:jrp:jrpwrp:2012-037&r=ino |
| By: | Erika Badillo (Faculty of Economics, University of Barcelona); Rosina Moreno (Faculty of Economics, University of Barcelona) |
| Abstract: | In this paper we analyse the heterogeneity in firms’ decisions to engage in R&D cooperation, taking into account the type of partner (other companies from the same group, suppliers or customers, competitors, and research institutions) and the sector to which the firm belongs (industrial or services). We use information from the Technological Innovation Panel (PITEC) for the years 2006-2008 and estimate multivariate probit models corrected for endogeneity. We find that the determinants of R&D cooperation differ between sectors. In the industrial sector, the perception of risk as an obstacle to innovation reduces the likelihood of cooperating with companies in the same group and competitors, while in the service sector it reduces cooperation with suppliers or customers. For its part, the possibility of accessing additional human resources has a significantly positive effect on cooperation with all types of partner in the service sector, but not for manufactures.. |
| Keywords: | R&D cooperation; Choice of partners; Industrial sector; Service sector; Innovative Spanish firms. JEL classification: O30; O32; L24; L60; L80. |
| Date: | 2012–07 |
| URL: | http://d.repec.org/n?u=RePEc:ira:wpaper:201213&r=ino |
| By: | Wignaraja, Ganeshan (Asian Development Bank Institute) |
| Abstract: | This paper assesses factors driving firm-level export performance in Asia’s super exporter—The People’s Republic of China (PRC). While early studies suggested that innovation was important, there has been little research on opening up the black box of technology at firm-level in the PRC, the author undertakes econometric analysis of innovation, learning, and exporting in automobiles and electronics firms in the PRC using a large-scale dataset to identify the most appropriate innovation proxy. Drawing on recent literature on innovation and learning in developing countries, it tests two alternative proxies: (i) a technology index (TI) to capture a variety of minor activities involved in using imported technologies efficiently; and (ii) the research and development (R&D)-to-sales ratio, which represents formal technological efforts to create new products and processes, often at world frontiers. |
| Keywords: | prc; innovation; automobiles; electronics |
| JEL: | F23 L63 O31 O32 O57 |
| Date: | 2012–07–04 |
| URL: | http://d.repec.org/n?u=RePEc:ris:adbiwp:0365&r=ino |
| By: | Andrew Sharpe; Blair Long |
| Abstract: | Innovation is an important driver of productivity growth, which in turn is a major source of improvement in living standards. Given the growing importance of the natural resources sector in the Canadian economy, innovation in this sector is particularly relevant. This report, using a systems-of-innovation approach, analyzes the innovation performance of the Canadian natural resources sector by comparing it to that of the Canadian business sector as a whole. Among the many indicators discussed, the report looks at R&D expenditures, workers’ education and skills, machinery and equipment investment, and the use of information and communication technologies. The key conclusion of the report is that the overall innovation performance of the Canadian natural resources sector is strong and has improved in recent years. However, there is still room for improvement, especially in terms of R&D intensity and labour force skills. |
| Date: | 2012–06 |
| URL: | http://d.repec.org/n?u=RePEc:sls:resrep:1206&r=ino |
| By: | Chu, Angus C.; Cozzi, Guido |
| Abstract: | R&D investment has well-known liquidity problems, with potentially important consequences. In this paper, we analyze the effects of monetary policy on economic growth and social welfare in a Schumpeterian model with cash-in-advance (CIA) constraints on consumption, R&D investment, and manufacturing. Our results are as follows. Under the CIA constraints on consumption and R&D (manufacturing), an increase in the nominal interest rate would decrease (increase) R&D and economic growth. So long as the effect of cash requirements in R&D is relatively more important than in manufacturing, the nominal interest rate would have an overall negative effect on R&D and economic growth as documented in recent empirical studies. We also analyze the optimality of Friedman rule and find that Friedman rule can be suboptimal due to a unique feature of the Schumpeterian model. Specifically, we find that the suboptimality or optimality of Friedman rule is closely related to a seemingly unrelated issue that is the overinvestment versus underinvestment of R&D in the market economy, and this result is robust to alternative versions of the Schumpeterian model. |
| Keywords: | economic growth; R&D; quality ladders; cash-in-advance; monetary policy; Friedman rule |
| JEL: | O30 O40 E41 |
| Date: | 2012–07 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:39778&r=ino |
| By: | Luiz Flavio Andrade (Gate-Groupe d'analyse théorique et économique) |
| Abstract: | Pharmaceutical firms have been criticized for concentrating their efforts of R&D on the so called “me-too” or “follow-on” drugs. There have been many comments against and favourable to the dissemination of these incremental innovations but few papers have broached the subject from an empirical point of view, possibly because identification of “me-too” is not so obvious. This paper focuses on the impact of entry order on “follow-on” drugs competition in the French market between years 2001 and 2007. More precisely, this study examines the effects on market share of first entrants in the follow-on drug market and how this possible competitive advantage changes over time. Our results are coherent with theoretical microeconomic issues concerning the importance of being first. We find evidence that first movers in the follow on drug market have the ability to capture and maintain greater market share for a long period of time. The hierarchical market position of follow on drugs does not seem to be affected by generic drugs emergence. From a dynamic perspective, our analysis shows that market share is positively correlated with the ability of follow on drugs to set prices higher than the average follow-on drug price in a specific therapeutic class (ATC) which means that market power remains considerably important for first movers. Finally we found that the optimum level of innovation to maximize market share is the highest one. |
| Keywords: | Incremental innovation; Follow-on drugs; Entry timing; Market share. |
| JEL: | I18 I12 L65 L51 |
| Date: | 2012–06 |
| URL: | http://d.repec.org/n?u=RePEc:irh:wpaper:dt49&r=ino |
| By: | Roman Stöllinger (The Vienna Institute for International Economic Studies, wiiw) |
| Abstract: | Technology is a key element for long-term growth and economic development. Given the stark concentration of innovation activities in a few countries most countries have to rely on the international diffusion of newly developed technologies. Some countries may fail to successfully perform the task of technology adaption leading to a tripartite segmentation of countries into an innovation club, an imitation club whose members are capable of absorbing technologies developed by the former and a stagnation group that lack the capability to absorb foreign technologies. We test the role of the technology gap for growth as suggested by the technology club hypothesis in a threshold regression framework using human capital as the threshold variable. Using this approach, which is related to Benhabib-Spiegel type growth regressions, we are able to identify two distinct thresholds giving rise to three country groupings. As suggested by the theory of technology clubs we find the strongest effects from the catch-up term on economic growth for the intermediate group (imitation club). |
| Keywords: | technology clubs, threshold regressions, technology spillovers, Schumpeterian growth model, human capital |
| JEL: | O47 O41 I25 O33 |
| Date: | 2012–05 |
| URL: | http://d.repec.org/n?u=RePEc:wii:wpaper:79&r=ino |
| By: | Ritzen, Jo (IZA and Maastricht University) |
| Abstract: | Higher education is in the position to save Europe by rendering a substantial contribution to sustainable economic growth. For that purpose higher education must strengthen its innovative power in entrepreneurship education and by focusing research more on societal problems, while being better empowered and enabled by Governments. Universities must show leadership in resolving or channeling the major societal questions. More European competition between universities in education and research would be helpful. Universities can contribute to recreating hope and optimism through more innovation in the economy. |
| Keywords: | hope, attitudes, Europe, economic growth, higher education, labor market, innovation, competition |
| JEL: | D31 F55 I22 I23 I24 I25 I28 J24 O31 O47 O52 |
| Date: | 2012–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izapps:pp44&r=ino |
| By: | Herbert Dawid (Bielefeld University); Tim Hellmann (Institute of Mathematical Economics, Bielefeld University) |
| Abstract: | In this paper, we study a standard Cournot model where rms are able to form bilateral collaboration agreements which lower marginal cost. While a static analysis of such a model can be found in Goyal and Joshi [5], we introduce an evolutionary model. Stable networks (in the static sense) exhibit the dominant group architecture and can be characterized with respect to the size of the group. However, in contrast to Goyal and Joshi [5], we nd that the group size of connected rms in stochastically stable networks is generically unique and monotonically decreasing in cost of link formation. Further, there exists a lower bound on the group size of connected rms such that a non-empty network can be stochastically stable. |
| Date: | 2012–06 |
| URL: | http://d.repec.org/n?u=RePEc:bie:wpaper:467&r=ino |
| By: | Ashish Arora; Andrea Fosfuri; Thomas Roende |
| Abstract: | Over the last decade, companies have paid greater attention to the management of their intellectual assets. We build a model that helps understand how licensing activity should be organized within large corporations. More specifically, we compare decentralization—where the business unit using the technology makes licensing decisions—to centralized licensing. The business unit has superior information about licensing opportunities but may not have the appropriate incentives because its rewards depend upon product market performance. If licensing is decentralized, the business unit forgoes valuable licensing opportunities since the rewards for licensing are (optimally) weaker than those for product market profits. This distortion is stronger when production-based incentives are more powerful, making centralization more attractive. Growth of technology markets favors centralization and drives higher licensing rates. Our model conforms to the existing evidence that reports heterogeneity across firms in both licensing propensity and organization of licensing. |
| JEL: | L2 L24 O32 |
| Date: | 2012–07 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:18203&r=ino |
| By: | Duleep, Harriet (College of William and Mary); Jaeger, David A. (CUNY Graduate Center); Regets, Mark (National Science Foundation) |
| Abstract: | This paper describes the theoretical underpinnings and provides empirical evidence for a model that predicts a positive impact of immigration on entrepreneurial activity. Immigrants, we hypothesize, facilitate innovation and entrepreneurship by being willing and able to invest in new skills. At the heart of this theoretical prediction is the observation that human capital not immediately valued in the U.S. labor market is useful for learning new skills. Because immigrants face a lower opportunity cost of investing in new skills or methods, this "transfer" of source-specific skills to the U.S. may lead immigrants to be more flexible in their human capital investments than observationally equivalent natives. Areas with large numbers of immigrants (even if they are not self-employed) may prove to be areas in which entrepreneurship and innovation are easier to accomplish. Our theory offers a unique perspective on the contributions of immigrants to economic development beyond traditional perspectives that focus on low-cost immigrant labor or immigrant entrepreneurship. |
| Keywords: | immigration, innovation, entrepreneurship, human capital investment, skill transferability, opportunity cost, learning transferability |
| JEL: | J15 J24 J39 J61 L26 |
| Date: | 2012–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6677&r=ino |