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on Innovation |
| By: | Yuezhou Cai, Aoife Hanley |
| Abstract: | Should inputs such as bank finance affect innovation in BRICS vs. developed countries similarly? Arguably these elasticities may depend on a country’s economic progress (Gerschenkron, 1962; Liu and White, 2001). Applying a combination of DEA and Tobit to a sample of 22 countries, we show how innovation (measured patents, scientific publications and high-tech sectoral output) responds favourably to private-sector R&D. No significant differences are recorded for BRICS countries. Differences emerge between BRICS and non-BRICS for the elasticity of innovative efficiency to banking inputs |
| Keywords: | BRICS countries, National Innovation System (NIS), innovation, DEA |
| JEL: | O30 |
| Date: | 2012–08 |
| URL: | http://d.repec.org/n?u=RePEc:kie:kieliw:1788&r=ino |
| By: | Khadidja Benallou (Phd student - UFR de sciences économiques et de gestion, Université de Caen Basse-Normandie, CREM-CNRS, UMR 6211); Jean Bonnet (UFR de sciences économiques et de gestion, University of Caen Basse-Normandie - CREM-CNRS, France); Mohammad Movahedi (Phd student - UFR de sciences économiques et de gestion, Université de Caen Basse-Normandie, CREM-CNRS, UMR 6211) |
| Abstract: | In the present study, we define synthetic and relevant indicators of organizational innovation and measure the link of these indicators with various types of technological innovations (product innovation, process innovation, and hybrid innovations). They are constructed from sixteen variables reflecting organizational innovation with the aid of multiple correspondence analysis (MCA) method. The variables are grouped in five categories corresponding to different aspects of organizational changes, such as training & qualification, knowledge management, production management, quality, and market transaction. We then use a regression to estimate the link between organizational innovation indicators and technological innovations (product, process and their interaction). The original database exploited is part of the IDEIS project and relates to a representative sample of 90 SMEs in Lower Normandy - France. Our estimated indicators interpret the Intensity of the implementation of the Organizational Changes (IOC) and the orientation of the Organizational Innovation Strategies adopted (OIS). We find a positive and significant link between IOC and technological innovation (product innovation, process innovation, and hybrid innovations), particularly so for product innovation. However, we find no clear link between the choice of the OIS and technological innovation. |
| Keywords: | Indicators of organizational innovation, product and process innovation, innovation strategy, quality of human resources, training. |
| JEL: | D23 O33 C81 C2 |
| Date: | 2012–07 |
| URL: | http://d.repec.org/n?u=RePEc:tut:cremwp:201229&r=ino |
| By: | Gordon M. Phillips; Alexei Zhdanov |
| Abstract: | We provide a model and empirical tests showing how an active acquisition market affects firm incentives to innovate and conduct R&D. Our model shows that small firms optimally may decide to innovate more when they can sell out to larger firms. Large firms may find it disadvantageous to engage in an "R&D race" with small firms, as they can obtain access to innovation through acquisition. Our model and evidence show that the R&D responsiveness of firms increases with demand, competition and industry merger and acquisition activity. All of these effects are stronger for smaller firms than for larger firms. |
| JEL: | G20 G3 G34 L11 L22 L25 O31 O34 |
| Date: | 2012–08 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:18346&r=ino |
| By: | Colin Davis (The Institute for the Liberal Arts, Doshisha University); Ken-ichi Hashimoto (Graduate School of Economics, Kobe University) |
| Abstract: | This paper develops a two country model to investigate the effects of national R&D subsidies on aggregate product variety and endogenous productivity growth without scale effects. In particular, monopolistically competitive firms invest in process innovation with the aim of lowering production costs. With imperfect knowledge dispersion, the larger of the two countries has a larger share of firms and a greater level of productivity. The higher concentration of relatively productive firms increases the size of knowledge flows between firms, leading to an increase in firm-level employment in innovation. As a result, an economy with asymmetric countries produces a faster rate of growth than one with countries of similar size. The larger scale of firm-level innovation activity reduces market entry, however, and overall product variety falls. Using this framework, we find that a national R&D subsidy has a positive effect on the industry share, relative productivity, and wage rate of the implementing country. Moreover, if the smaller country introduces an R&D subsidy, overall product variety rises but the rate of productivity growth falls. Alternatively, if the larger country introduces an R&D subsidy, the rate of productivity growth rises, but overall product variety may rise or fall. Finally, we briefly consider the effects of a national R&D subsidy on national and world welfare levels. |
| Keywords: | R&D Subsidy, Knowledge Dispersion, Productivity Growth, Scale Effect |
| JEL: | F43 O30 O40 |
| Date: | 2012–08 |
| URL: | http://d.repec.org/n?u=RePEc:koe:wpaper:1214&r=ino |
| By: | Hakim Hammadou; Sonia Paty; Maria Savona |
| Abstract: | The aim of this paper is to test the presence of strategic interactions in government spending on Research and Development (R&D) among EU-15 countries. We add to the literature on public choice strategic interactions in general, and to work on R&D spending in particular. We take account of traditional and some overlooked factors related to countries' public R&D spending, including (i) the international context -- i.e. Lisbon strategy; (ii) country characteristics - the National System of Innovation, and more specifically national similarities in relation to (a) trade and economic size and (b) sectoral specialization. Sectoral specialization is likely to affect government spending, depending on the mechanisms of complementarity or substitution between public and private R&D. Using a spatial dynamic panel model in which spatial matrices are specified both in terms of traditional Euclidean distance, and sectoral specialization proximity, we confirm the existence of strategic interactions on R&D spending among European countries with similar economic size, international trade and sectoral structure. Unlike the results emerging from the literature on strategic interactions in public choice, geographic proximity seems not to affect interactions related to public spending on R&D. |
| Keywords: | Public spending strategic interactions, Public R&D expenditures, National Systems of Innovation, Complementarity public and private R&D, Spatial interactions, EU countries, spatial dynamic panel data |
| Date: | 2012–08–27 |
| URL: | http://d.repec.org/n?u=RePEc:ssa:lemwps:2012/14&r=ino |
| By: | Anna Lejpras |
| Abstract: | The literature argues that research spin-offs (RSOs)-enterprises originating from a university or research institute-appear to have higher innovative potential and capabilities than other start-ups, at least in the early stages of their development. Yet, little is known about the innovative performance of these companies at later development phases. Thus, the main goal of this study is to investigate whether there are any differences in R&D and innovation behavior between established and/or mature RSOs and otherwise created firms and, if so, to what extent they are driven by networking and cooperation activities as suggested by some scholars. To this end, we employ probit regression analysis and a matching approach using survey data on more than 6,000 East German firms, among which are 179 RSOs. Our first findings suggest that established RSOs engage in R&D and innovation activities more frequently than companies whose genesis was of another type. Nevertheless, the results obtained when accounting for collaboration measures show that the precedence of RSOs in further development stages over otherwise created firms in terms of innovativeness is related to their higher intensity of cooperation activity and close, face-to-face interactions with universities, and not to type of firm creation. Moreover, our findings reveal that cooperating in various fields may be of different importance for specific inputs and outputs of the innovation activity. Finally, based on our results, we draw some implications both for practicing managers and public policymakers. |
| Keywords: | Spin-Offs, R&D, innovation, cooperation |
| JEL: | O30 M20 L20 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwwpp:dp1237&r=ino |
| By: | Yair Tauman (Department of Economics, Stony Brook University); Debrapiya Sen (Department of Economics, Ryerson University, Toronto, ON, Canada.) |
| Abstract: | This article considers the problem of patent licensing in a Cournot oligopoly under a class of general demand functions. We consider two cases, the case where the innovator is an outsider and the one where it is one of the incumbent rms. The licensing policies considered are upfront fees, royalties and combinations of the two. It is shown that (i) for generic values of magnitudes of the innovation, a royalty policy is better than fee or auction provided the industry size is relatively large, (ii) under combinations of fees and royalties, provided the innovation is relatively signicant (or the industry size is relatively large), (a) there is always an optimal policy where the innovation is licensed to practically all rms of the industry and (b) any optimal combination includes a positive royalty. |
| Date: | 2012–08 |
| URL: | http://d.repec.org/n?u=RePEc:nys:sunysb:12-05&r=ino |
| By: | Alexander Vogel (Leuphana University Lueneburg, Germany); Joachim Wagner (Leuphana University Lueneburg, Germany) |
| Abstract: | This paper uses newly available data for German business services firms to test a hypothesis derived by Bustos (AER 2011) in a model that explains the decision of heterogeneous firms to export and to engage in R&D. Using a non-parametric test for first order stochastic dominance it is shown that, in line with this hypothesis, the productivity distribution of firms with exports and R&D dominates that of exporters without R&D, which in turn dominates that of firms that neither export nor engage in R&D. These results are in line with findings for firms from manufacturing industries. The model, therefore, seems to be useful to guide empirical work on the relation between exports, R&D and productivity for services firms, too. |
| Keywords: | Exports, R&D, productivity, business services firms, Germany |
| JEL: | F14 |
| Date: | 2012–08 |
| URL: | http://d.repec.org/n?u=RePEc:lue:wpaper:247&r=ino |
| By: | Paola Brighi (Department of Management, University of Bologna, Italy; Centro Studi Banca e Finanza (CEFIN), Italy; The Rimini Centre for Economic Analysis (RCEA), Italy); Roberto Patuelli (Department of Economics, University of Bologna, Italy; The Rimini Centre for Economic Analysis (RCEA), Italy); Giuseppe Torluccio (Department of Management, University of Bologna, Italy; Centro Studi Banca e Finanza (CEFIN), Italy) |
| Abstract: | Self-financing has often been seen as an important source for research-and-development (R&D) funding. However, an in-depth comparison between the determinants of self-financing in the case of traditional investments versus those in R&D has not been provided yet. We use a comprehensive data set of Italian manufacturing firms to investigate this issue. We analyse the role of a wide number of financial variables in driving the rate of self-financing of firms, in both traditional and R&D investments, and we focus on public subsidies and firm size as critical factors explaining heterogeneity. First, we perform logit and logistic regressions separately for traditional and R&D self-financing, finding that they are positively correlated, and that the availability of public subsidies reduces self-financing. Subsequent poolability tests show that public subsidies and firm size are crucial discriminating factors for self-financing behaviour. Our main finding is that, in the absence of public subsidies, no internal or external market variable is able to explain the firms’ financing decisions. Furthermore, our analyses generally show that credit constraints and banking relationship variables are relevant in determining traditional investment self-financing, while no clear statistical evidence is found in the R&D case. Credit rationing is not significant for R&D self-financing, which may be explained by rationed firms being left out of our sample. |
| Keywords: | SMEs; R&D investments; Corporate structure; Poolability test |
| JEL: | D45 D82 E51 G21 G32 O32 |
| Date: | 2012–08 |
| URL: | http://d.repec.org/n?u=RePEc:rim:rimwps:61_12&r=ino |
| By: | Güth, Werner; Pull, Kerstin; Stadler, Manfred |
| Abstract: | Innovation economics is usually neglecting the psychological tradition of creativity research. Our study is an attempt to experimentally collect behavioral data revealing in how far personality characteristics like creativity, analytical skills and personality traits on the one hand and innovative capability, the topic of innovation economics, on the other hand are interrelated. We find that participants' performance in innovation games is related to their creativity, risk tolerance and self-control. Other personality traits such as participants' anxiety, independence, tough-mindedness, analytical skills and extraversion at best play a minor role. -- |
| Keywords: | Creativity,Personality traits,Innovation games,Experiments |
| JEL: | C91 L13 O31 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:tuewef:44&r=ino |
| By: | David Pérez-Castrillo; David Wettstein |
| Abstract: | We study innovation contests with asymmetric information and identical contestants, where contestants' efforts and innate abilities generate inventions of varying qualities. The designer offers a reward to the contestant achieving the highest quality and receives the revenue generated by the innovation. We characterize the equilibrium behavior, outcomes and payoffs for both nondiscriminatory and discriminatory (where the reward is contestant-dependent) contests. We derive conditions under which the designer obtains a larger payoff when using a discriminatory contest and describe settings where these conditions are satisfied. |
| Keywords: | contests, auctions, innovations, discrimination |
| JEL: | O31 D44 J71 |
| Date: | 2012–08 |
| URL: | http://d.repec.org/n?u=RePEc:bge:wpaper:654&r=ino |
| By: | Angela Cipollone (Department of Economics and Finance, LUISS Guido Carli University); Paolo E. Giordani (Department of Economics and Finance, LUISS Guido Carli University) |
| Abstract: | This paper proposes and empirically tests a theory of entrepreneurial innovation in order to explain its high degree of concentration in space and time. In the model, a successful entrepreneurial project is the result of a search and matching process between entrepreneurs looking for funds and capitalists looking for new ideas to finance. The resulting strategic complementarity between them gives rise to a multiplier effect, whereby any exogenous shock has a magnified effect on the process of innovation. Moreover, if complementarity is sufficiently strong, multiple equilibria arise, which are characterized by different levels of entrepreneurial activity. Using data from the European and the US business angels markets for the period 1996-2010, we show that (i) a complementarity exists between business angels and the entrepreneurial projects submitted to them, and that (ii) the result of multiple equilibria is empirically plausible. |
| Keywords: | Entrepreneurship, financing of innovation, search and matching, strategic complementarities, venture capital, business angels. |
| JEL: | D83 C78 L26 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:lui:celegw:1201&r=ino |
| By: | Angela Cipollone (LUISS Guido Carli University, Department of Economics and Finance); Paolo Giordani (LUISS Guido Carli University, Department of Economics and Finance) |
| Abstract: | This paper proposes and empirically tests a theory of entrepreneurial innovation to explain its high degree of concentration in space and time. In the model, a successful entrepreneurial project is the result of a search and matching process between entrepreneurs looking for funds and capitalists looking for new ideas to finance. The resulting strategic complementarity between them gives rise to a multiplier effect. Moreover, if complementarity is sufficiently strong, multiple equilibria arise, which can be ranked in terms of entrepreneurial activity. Using data from the European and the US business angels markets for the period 1996-2010, we show that (ii) a complementarity exists between business angels and the entrepreneurial projects submitted to them, and that (ii) the result of multiple equilibria is empirically plausible. |
| Keywords: | Entrepreneurship, financing of innovation, search and matching, strategic complementarities, venture capital, business angels. |
| JEL: | O32 O38 D83 C78 L26 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:lui:casmef:1210&r=ino |
| By: | Angus C. , Chu; Lei, Ji |
| Abstract: | In this study, we develop a monetary Schumpeterian growth model with endogenous market structure (EMS) to explore the effects of monetary policy on the number of firms, firm size, economic growth and social welfare. EMS leads to richer implications and different results from previous studies in which market structure is exogenous. In the short run, a higher nominal interest rate leads to lower growth rates of innovation, output and consumption and also smaller rm size due to a reduction in labor supply. In the long run, an increase in the nominal interest rate reduces the equilibrium number of firms but has no effect on economic growth and fi rm size because of a scale-invariant property of the model as a result of entry and exit of fi rms. Although monetary policy has no long-run effect on economic growth, an increase in the nominal interest rate permanently reduces the levels of output, consumption and employment. Taking into account transition dynamics, we nd that social welfare is decreasing in the nominal interest rate. Given that a zero nominal interest rate maximizes welfare, Friedman rule is optimal in this economy. |
| Keywords: | monetary policy; economic growth; R&D; endogenous market structure |
| JEL: | O30 O40 E41 |
| Date: | 2012–08–27 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:41027&r=ino |
| By: | Bianco, Dominique; Niang, Abdou-Aziz |
| Abstract: | This study investigates the role of international spillovers in generating productivity gains for a panel of 24 OECD countries during the period between 1971 and 2004. We use recent techniques developed in a common factor framework to characterize the global interdependence implied by international spillovers and the diffusion mechanisms involved. Consistently with some recent studies in this field, the evidence suggests that there are substantial cross-country spillovers mainly related to R&D and human capital variables, which contribute significantly to productivity. |
| Keywords: | Productivity; Spillovers; R&D; Human capital; Common factors |
| JEL: | C23 O31 O40 |
| Date: | 2012–02 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:41046&r=ino |
| By: | Masci, Martín Ezequiel |
| Abstract: | The traditional methods for the valuation of investments are based on the possibility of calculating discount cash flows. The present paper analyses the problem associated to investments on innovative products, which require an important demand of R&D. The mentioned investments present irreversibility, flexibility and uncertainty characteristics. Therefore, it is proposed the Real Options methodology. To carry it out, investigations processes and their relationship with the financial market are described, with the aim of dealing with the irreversibility and the possibilities of making flexible a project. Finally, the different valuation methods are reviewed, focusing on the Black & Scholes formula to consider the options to wait, abandon, expand and suspend. It is necessary to take into account that the mentioned criteria does not replace the traditional valuation methods (especially NPV), but it should be incorporated to them, to appropriately treat the current context. |
| Keywords: | Research and Development; Real Options; uncertainty; Black & Scholes |
| JEL: | D53 D81 O31 |
| Date: | 2012–06–30 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:40970&r=ino |