nep-ino New Economics Papers
on Innovation
Issue of 2012‒09‒22
eleven papers chosen by
Steffen Lippert
University of Otago, Dunedin

  1. Innovation and Technology Transfer across Countries By Neil Foster
  2. Innovation at the Firm Level across Countries with Different Economic and Technological Capacity By Andreas Reinstaller; Fabian Unterlass
  3. An "extended" knowledge production function approach to the genesis of innovation in the European regions By Sylvie Charlot; Riccardo Crescenzi; Antonio Musolesi
  4. R&D Determinants: accounting for the differences between research and development By Barge-Gil, Andrés; López, Alberto
  5. Fostering innovation in Russian companies in the post-crisis period: Opportunities and constraints By Simachev, Yuri; Kuzyk, Mikhail; Ivanov , Denis
  6. Are reforms productive? Explaining productivity and efficiency in the Indian manufacturing By Marie-Ange VEGANZONES-VAROUDAKIS; Arup MITRA; Chandan SHARMA
  7. Getting Patents and Economic Data to Speak to Each Other: An 'Algorithmic Links with Probabilities' Approach for Joint Analyses of Patenting and Economic Activity By Travis J. Lybbert; Nikolas J. Zolas
  8. Globalization and Regional Innovation in China By Hein Roelfsema; Yi Zhang
  9. Innovation and performance in KIBS: The moderating role of standard and modular services By Anna Cabigiosu; Diego Campagnolo
  10. Regional innovation performance in Europe By Marta Foddi; Stefano Usai
  11. Balancing customization and standardization in knowledge intensive business services: The use of modular service architectures By Anna Cabigiosu; Diego Campagnolo; Andrea Furlan; Giovanni Costa

  1. By: Neil Foster (The Vienna Institute for International Economic Studies, wiiw)
    Abstract: Innovation is considered to be an important determinant of performance at the firm, industry and country level. This view is supported by empirical evidence showing the importance of innovative activities on firm and industry performance and country growth rates. The majority of the world’s R&D is concentrated in a handful of countries however, meaning that domestic innovation is of little importance for most countries. Such countries can benefit from innovation conducted elsewhere however, if knowledge and technology is diffused across borders. In this paper we survey existing literature on innovation and technology diffusion and discuss descriptive statistics on the extent of innovation and technology diffusion across countries to provide insights into the likely developments in innovation and diffusion.
    Keywords: Innovation, technology diffusion, R&D internationalization
    JEL: O3
    Date: 2012–08
  2. By: Andreas Reinstaller (WIFO); Fabian Unterlass (WIFO)
    Abstract: This paper presents an analysis of innovation behaviour at the firm level across countries with different levels of technological capabilities and economic development. Using data from the Community Innovation Survey for 20 European countries the paper shows that the impact of total innovation expenditures – including next to R&D also outlays for technology transfer, the market introduction of innovations or new designs – increases monotonically across countries with their level of technological capabilities. R&D investments instead have a significant impact on the generation of innovations only for firms located in countries with higher levels of technological capabilities. Firm specific competencies to suggest or contribute to innovation projects have a more significant effect on the innovation output the higher the level of economic development of the countries in which firms are located. Finally, the paper presents also evidence that R&D does not generally increase the absorptive capabilities of firms.
    Keywords: Innovation decision, Catching up, Technological capabilities, R&D
    Date: 2012–09–14
  3. By: Sylvie Charlot; Riccardo Crescenzi; Antonio Musolesi
    Abstract: The paper looks at the genesis of innovation in the EU regions in order to shed light on the link between innovative inputs (R&D and Human Capital) and the genesis of economically valuable knowledge. The "traditional" regional Knowledge Production Function (KPF) is innovatively developed in three complementary directions. First, the KPF is "augmented" in order to control for all possible "unobservable" and "immeasurable" time varying factors that influence the genesis of innovation (i.e. localised institutional and relational factors, regional innovation policies). Second, a semi-parametric approach that relaxes any arbitrary assumption on the "shape" of the KPF is adopted. Finally, the assumption of homogeneity in the impact of R&D and Human Capital is relaxed by explicitly accounting for the differences between "core" and "peripheral" regions. The econometric results confirm the importance of accounting for time varying unobserved heterogeneity through the adoption of a "random growth" specification: R&D efforts exert a significant influence on innovation only after controlling for regional specific time varying unobserved factors. In addition the semi-parametric approach uncovers significant threshold effects for both R&D expenditure and Human Capital and highlights a strong complementary between these two factors. However, "core" regions benefit from a persistent advantage in terms of the "productivity" of their innovation inputs. This has important implications for the EU innovation policies at the regional level.
    Keywords: Innovation, Regions, Knowledge production function, Europe, Semi-parametric models
    JEL: O32 R11 C14 C23
    Date: 2012–09–06
  4. By: Barge-Gil, Andrés; López, Alberto
    Abstract: The determinants of R&D are an important topic of industrial economics. The classical Schumpeterian hypotheses about the influence of size and market power have been complemented with the role played by industry determinants, such as demand pull, technological opportunity and appropriability, in determining R&D investments. However, R&D has always been considered as a whole, even though research and development are different activities with different purposes, knowledge bases, people involved and management styles. We take advantage of a new panel database of innovative Spanish firms (PITEC) to distinguish between research and development efforts of firms. We analyze the role jointly played by traditional R&D determinants in driving research and development, accounting for the differences between both activities. Results show that demand pull and appropriability have a higher effect on development, while technological opportunity is more influential for research. Differences are statistically significant, important in magnitude, and robust to the use of different indicators for demand pull, technological opportunity and appropriability and to several robustness checks.
    Keywords: R&D Determinants; Schumpeterian hypotheses; Demand pull; Technological opportunity; Appropriability
    JEL: O3
    Date: 2012–09–12
  5. By: Simachev, Yuri; Kuzyk, Mikhail; Ivanov , Denis
    Abstract: In recent years the Russian innovation policy has made a significant progress that manifests in developing its ‘tool kit’, increasing resource base, etc. However it has not yet succeeded in improving business innovation activities that remain local thus not giving prerequisites to transform the general macroeconomic context. Basing on a survey of more than 600 Russian industrial enterprises the authors analyze key features of innovation in Russian companies under economic recovery, as well as stimuli and obstacles for innovation activities. In particular, the paper shows that lack of competition is the key factor discouraging innovation and that the most limiting constraints to business innovation activities are instable economic environment and intra-corporate bureaucratization. Significant attention is paid to the analysis of the use of various instruments of state support for innovation and their beneficiaries. One of the findings is that Russian innovation policy is "neutral" to the size of companies, but there is a lack of instruments engaging new companies in innovation activities. The authors also discuss two possible models of government support for innovation: the former relies on international innovation spillover and the latter on domestic innovation and import-substitution.
    Keywords: industrial innovation; research and development; innovation policy
    JEL: O38 O31
    Date: 2012–09–07
  6. By: Marie-Ange VEGANZONES-VAROUDAKIS (Centre d'Etudes et de Recherches sur le Développement International); Arup MITRA; Chandan SHARMA
    Abstract: India's economic liberalization in the 1990s provides scope for research on the effect of policy reforms on economic performance. This paper addresses the question of some of these policy changes and their impact on firms' productivity and efficiency. We test specifically the role of export, import (total, intermediary and capital goods), R&D, technology transfer and infrastructure endowment over the period 1994-2008. Result of the analysis suggests that infrastructure is a crucial determinant of manufacturing performance in India. This is true for a wide range of variables such as transport, energy and information & communication technology (ICT). This result is important in the Indian context of infrastructure bottlenecks. Empirical results also suggest that knowledge transfers through exports are more important than through imports. Other findings indicate that R&D is not a productivity-enhancing activity in India and that firms rely more on purchase of foreign technology. This outcome does not come as a surprise because Indian firms are known for low in-house research and innovation-oriented activities.
    JEL: F43 O3 O53 D24 H54 L60
    Date: 2012
  7. By: Travis J. Lybbert; Nikolas J. Zolas
    Abstract: International technological diffusion is a key determinant of cross-country differences in economic performance. While patents can be a useful proxy for innovation and technological change and diffusion, fully exploiting patent data for such economic analyses requires patents to be tied to measures of economic activity. In this paper, we describe and explore a new algorithmic approach to constructing concordances between the International Patent Classification (IPC) system that organizes patents by technical features and industry classification systems that organize economic data, such as the Standard International Trade Classification (SITC), the International Standard Industrial Classification (ISIC) and the Harmonized System (HS). This ‘Algorithmic Links with Probabilities’ (ALP) approach incorporates text analysis software and keyword extraction programs and applies them to a comprehensive patent dataset. We compare the results of several ALP concordances to existing technology concordances. Based on these comparisons, we select a preferred ALP approach and discuss advantages of this approach relative to conventional approaches. We conclude with a discussion on some of the possible applications of the concordance and provide a sample analysis that uses our preferred ALP concordance to analyze international patent flows based on trade patterns.
    Date: 2012–09
  8. By: Hein Roelfsema; Yi Zhang
    Abstract: This paper explores the connection between the external opening of China and differences in innovation across Chinese regions. Controlling for locational advantages and fixed regional characteristics, for the period 1995-2010 overall we find that regions that have increased most the connections to the world market have become more innovative when compared to other regions. By interacting regional characteristics with openness, we find a U-shaped relation between regional income levels and innovation, where both the lower middle-income and the most advanced regions gain from globalization in terms of increased innovation and productivity. In relative terms, the higher middle-income regions gain less from globalization than the other regions. By examining the nature of international activities across regions, we conjecture that differences in the ownership structures of foreign investments and the nature of linkages between foreign and domestic firms are at the hart of this finding, as the higher middle-income regions have higher outsourcing levels and thus benefit less from foreign technology transfers.
    Keywords: Globalization, Innovation, Regional Development, China
    JEL: F14 F21 F23 O33 O53
    Date: 2012–09
  9. By: Anna Cabigiosu (Department of Management, Università Ca' Foscari Venezia); Diego Campagnolo (Department of Economics and Management, Università di Padova)
    Abstract: In this paper we study the relationship between service innovation and firm's performances in the KIBS domain. In line with previous works, we maintain that service innovation positively impacts firm's performances but we also claim that this relationship is likely to be moderated by how the service firm conceives its service configuration. Particularly, we point out that service configurations based on standard and modular services positively moderate the positive relationship between innovation and performance. Using a sample of 239 Italian KIBS firms, we empirically test our model. Results confirm that service innovation is positively associated with firmÕs performances both as market size and, albeit weakly, as ROI growth. Results also confirm the positive moderating role of standard services while the moderating role of modular services is only marginal. Overall, we contribute to the existing literature of KIBS and service innovation showing that service innovation and service customization should be considered as separate and that KIBS firms can experience increasing returns if they are able to combine service innovation and service standardization.
    Keywords: Services, Innovation, Performance, Standard services, Modular services
    JEL: O32 O33
    Date: 2012–05
  10. By: Marta Foddi; Stefano Usai
    Abstract: Europe 2020 strategy and the initiative “Innovation Union” call for a particular attention at the territorial dimension of innovation and knowledge creation. The heterogeneity across regions in their capacity to create knowledge and innovation, but also in their abilities to exploit ideas and technologies available across the European territory, motivates in-depth analyses of the territorial dimension of the knowledge economy. This paper investigates the nature of knowledge production and diffusion among regions in 29 EU countries and tries to assess its effectiveness. The analysis follows a two-step analytical route. Firstly, as a preliminary analysis, we estimate a knowledge production function (Griliches, 1979 and many others) with the usual parametric methods, in order to find out which are the main determinants of knowledge production at the regional level in Europe. Secondly, based on these findings, we apply DEA to assess the degree of efficiency of European regions in their use of internal and external inputs for the production of new knowledge and ideas. This allows to provide a ranking of the innovative performance of EU regions for two points in time, the beginning of the current century and the second part of this decade. Such rankings will be evaluated thanks to the Malmquist productivity index in order to assess the relative importance of its main components. According to the Data Envelopment Analysis, we found further evidence of a dualistic (centre vs periphery) pattern in the regional innovation activities, with the highest efficient territories located in the most central or economically strategic areas of the continent. On the contrary, the application of the Malmquist productivity index shows that productivity dynamics has been extremely differentiated across regions in terms of both magnitude and intrinsic features. We, again, observe important differences between the core and periphery of Europe and most specifically between the countries which are rich and industrialized and form the so called “Old Europe” and those which are relatively poor and have entered the European Union quite recently.
    Keywords: innovation; human capital; spatial spillovers; European regions; DEA
    JEL: C13 C61 O33 R11
    Date: 2012
  11. By: Anna Cabigiosu (Department of Management, Università Ca' Foscari Venezia); Diego Campagnolo (Department of Economics and Management, Università di Padova); Andrea Furlan (Department of Economics and Management, Università di Padova); Giovanni Costa (Department of Economics and Management, Università di Padova)
    Abstract: While the mainstream literature on knowledge-intensive business services (KIBS) has long emphasized their customized nature and their role in exploring new knowledge to satisfy each client's needs, recent research has argued that competition is inducing KIBS firms to standardize their offer. In this paper, we concentrate on a particular type of KIBS firms, third-party logistic service providers (TPLs), and analyze how two TPLs face the customization-standardization trade-off by using service architectures. We find that TPLs do not trade off customization for standardization, instead they manage to pursue both simultaneously relying on modular services, which constitutive elements are standard procedures. Service modularity enables the TPL to exploit its existing knowledge base while only some knowledgeable clients prompt TPLs to explore new procedures. Overall, our results suggest that service customization and knowledge exploration can be separated. TPLs should manage their customer relationships using a portfolio approach, balancing supply relationships in which they replicate existing services with partnership-based relationships with competent customers in which they develop new procedures. Managing the temporal separation between exploration and exploitation consequently becomes a core competence.
    Keywords: Services, Innovation, Performance, Standard services, Modular services
    JEL: O32 O33
    Date: 2012–09

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