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on Innovation |
| By: | Enrico Guzzini (Università degli Studi e-Campus, Italy); Donato Iacobucci (Dept. of Information Engineering Università Politecnica delle Marche, Italy) |
| Abstract: | Several empirical papers have shown that firms belonging to business groups have a higher propensity to engage in R&D. The purpose of the paper is to demonstrate that this higher propensity depends on the ownership share of controlled companies, besides the presence of co-ordination mechanisms. We develop an analytical model and we empirically test the predictions of the model using a dataset of Italian manufacturing firms. From the development of this model we derive three main implications: a) that there is no difference in R&D propensity between stand-alone firms and firms at the bottom of business groups; b) that head and intermediate firms have a higher R&D propensity compared to stand-alone and firms at the bottom of the group; c) that the intensity of R&D depends on the ownership shares in controlled companies. Overall the results of the empirical analysis are in accordance with the implications of the model. |
| Keywords: | business groups; R&D investment; knowledge spillovers. |
| JEL: | L2 O32 |
| Date: | 2012–10 |
| URL: | http://d.repec.org/n?u=RePEc:cme:wpaper:1205&r=ino |
| By: | Alessandro Nuvolari; James Sumner |
| Abstract: | This paper examines the relationship between patents, appropriability strategies and market for technologies in the English brewing industry before 1850. Previous research has pointed to the apparent oddity that large-scale brewing in this period was characterized both by a self-aware culture of rapid technological innovation, and by a remarkably low propensity to patent. Our study records how brewery innovators pursued a wide variety of highly distinct appropriability strategies, including secrecy, selective revealing, patenting, and open innovation and knowledge-sharing for reputational reasons. All these strategies could co-exist, although some brewery insiders maintained a suspicion of the promoters of patent technologies which faded only in the nineteenth century. Furthermore, we find evidence that sophisticated strategies of selective revealing could support trade in inventions even without the use of the patent system. |
| Date: | 2012–10–23 |
| URL: | http://d.repec.org/n?u=RePEc:ssa:lemwps:2012/18&r=ino |
| By: | Frédéric Olland |
| Abstract: | This paper studies the impact of trade liberalization on the productivity growth of two asymmetric countries in a R&D driven growth model with heterogeneous firms. The Melitz’s reallocation of production induces positive but asymmetric productivity gains. Growth is also affected in an asymmetric way because trade liberalization reduces innovation incentives with a different strength in the two countries. A more productive country suffers a higher slowdown in the productivity growth rate. |
| Keywords: | heterogeneous firms, trade and endogenous growth, productivity gap. |
| JEL: | F43 O47 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:ulp:sbbeta:2012-16&r=ino |
| By: | Rob Aalbers; Victoria Shestalova; Viktoria Kocsis |
| Abstract: | <p>This paper discusses policy instruments for redirecting technical change within the electricity sector to mitigate climate change.</p><p>First, we unravel the mechanism behind directed technical change, explaining why markets may underprovide innovations in expensive renewable technologies in comparison to innovations in energy-efficient fossil-fuel generators. Subsequently, we characterize technical change in electricity generation technologies, stressing the heterogeneity of knowledge spillovers both within and between clean electricity generation technologies. We argue that there exists a rationale for a portfolio approach to innovation in the electricity sector, i.e., optimal innovation policies are neither fully generic nor fully specific; and they need to be adapted, in response to new information learned by the government. The existing innovation literature does not, however, provide a clear-cut answer for designing such a policy. We compare policy instruments and argue that public R&D support to clean technologies, either in the form of subsidies or prizes, seems to be the prime candidate for implementing non-generic innovation policy.</p> |
| JEL: | Q48 Q55 |
| Date: | 2012–10 |
| URL: | http://d.repec.org/n?u=RePEc:cpb:discus:223&r=ino |
| By: | Raquel Ortega-Argilés (Instituto Superior Técnico, Lisboa, Portugal); Mariacristina Piva (DISCE, Università Cattolica); Marco Vivarelli (DISCE, Università Cattolica) |
| Abstract: | The literature has pointed to different causes to explain the productivity gap between Europe and United States in the last decades. This paper tests the hypothesis that the lower European productivity performance in comparison with the US can be explained not only by a lower level of corporate R&D investment, but also by a lower capacity to translate R&D investment into productivity gains. The proposed microeconometric estimates are based on a unique longitudinal database covering the period 1990-2008 and comprising 1,809 US and European companies for a total of 16,079 observations. Consistent with previous literature, we find robust evidence of a significant impact of R&D on productivity; however – using different estimation techniques - the R&D coefficients for the US firms always turn out to be significantly higher. To see to what extent these transatlantic differences may be related to the different sectoral structures in the US and the EU, we differentiated the analysis by sectors. The result is that both in manufacturing, services and high-tech sectors US firms are more efficient in translating their R&D investments into productivity increases. |
| Keywords: | R&D, productivity, embodied technological change, US, EU |
| JEL: | O33 |
| Date: | 2012–09 |
| URL: | http://d.repec.org/n?u=RePEc:ctc:serie2:dises1284&r=ino |
| By: | Joanna Poyago-Theotoky (School of Economics, La Trobe University); Huw Edwards (School of Business and Economics, Loughborough University, U.K.) |
| Abstract: | We investigate the imposition of a horizontal technical barrier to trade (HTBT) in a symmetric, cross-hauling duopoly. Tariffs and subsidies are ruled out, but, in the absence of a mutual recognition agreement, it is possible for governments to impose HTBTs, so long as firms apply different technologies. If firms are first movers, this possibility may induce them to avoid technical collaboration, in order to tempt governments into creating national monopolies, except where spillovers and R&D effects are high. This exacerbates the costs of regulatory protection, compared to standard models without R&D or spillovers. |
| Keywords: | Research and development, spillovers, trade, protection |
| JEL: | F10 F19 L13 L50 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:trb:wpaper:2012.05&r=ino |
| By: | Mikko Packalen; Jay Bhattacharya |
| Abstract: | Intelligently allocating research effort and funds requires deciding whether to build on recent advances or on more established knowledge. When recent advances create superior opportunities for invention, their adoption as research inputs in the invention process promotes technological progress. The gains from pursuing such innovative research paths may, however, be very limited, due to the undeveloped nature of new knowledge, quick obsolescence of fast-improving knowledge, and the vast scope of the existing knowledge base. In this paper, we first develop a new approach to identifying research inputs in invention. Next, we estimate the value of pursuing innovative research paths that are created by the arrival of new research inputs. We identify research inputs based on a natural language analysis of 10 billion word and word sequence patent pairs in 6 million patents granted during 1920-2010. This novel textual analysis empirically reveals which single and general purpose technologies and scientific discoveries have been popular as research inputs in invention. We estimate the value of innovative research by comparing patents that mention these research inputs early against the value of other patents. For this comparison, we develop also a new measure of patent value. The measure distinguishes between citations that reflect the cumulative nature of invention and citations that may merely reflect similarity. |
| JEL: | I1 O31 O32 O33 |
| Date: | 2012–10 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:18494&r=ino |
| By: | Valentina Bosetti (Fondazione Eni Enrico Mattei and CMCC); Cristina Cattaneo (Fondazione Eni Enrico Mattei and CMCC); Elena Verdolini (Fondazione Eni Enrico Mattei and CMCC) |
| Abstract: | This paper analyses the effect of skilled migration on two measures of innovation, patenting and citations of scientific publications, in a panel of 20 European countries. Skilled migrants positively contribute to the knowledge formation in host countries as they add to the pool of skills in destination markets. Moreover, they positively affect natives' productivity, as new ideas are likely to arise through the interaction of diverse cultures and diverse approaches in problem solving. The empirical findings we present support this prediction. Greater diversity in the skilled professions are associated with higher levels of knowledge creation, measured either by the number of patents applied for through the Patent Cooperation Treaty or by the number of citations to published articles. This finding is robust to the use of different proxies for both the explanatory variables and the diversity index in the labour force. Specifically, we first measure diversity with a novel indicator which uses information on the skill level of foreigners’ occupations. We then check our results by following the general literature, which measures skills by looking at the foreigners’ level of education. We show that cultural diversity consistently increases the innovation performance of European Countries. |
| Keywords: | Cultural Diversity, Innovation, Skilled Migration, Knowledge Production Function, Europe |
| JEL: | F22 J24 O31 |
| Date: | 2012–09 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2012.69&r=ino |
| By: | Aldaba, Rafaelita M. |
| Abstract: | <p>What is the impact of the removal of barriers to trade on the firms` innovative activities? Does the increase in competition arising from trade reforms lead to increases in innovation? This paper attempts to examine the link between trade liberalization and innovation using firm panel data on the Philippine manufacturing industry. With the framework of Impulliti and Licandro (2009, 2010) as guide, a two-stage approach is tested where trade and innovation are linked via competition. A reduction in tariffs leads to an increase in competition as price cost margins fall due to the increase in the number of players in the domestic market. With the reduction in price cost margins, profits fall and increases the productivity threshold above which firms can operate profitably. This forces inefficient firms out of the market and resources are reallocated from exiting firms to the higher productivity surviving firms which innovate at a faster pace. The results show that trade liberalization has significant positive impact on innovation through competition.</p><p>Given the crucial role of competition in the relationship between trade liberalization and innovation, it is important for the government to maintain the contestability of markets. The presence of trade barriers or government regulations that limit market entry can create inefficiencies leading to reduced long-term growth. These weaken competition and prevent structural changes from taking place resulting in resources being tied to low-productivity industries. Weak competition reduces the pressure on firms to adopt new technology or innovate, resulting in low growth of productivity and a loss of competitiveness. Despite the two decades of implementing liberalization policy, competition and productivity growth remained weak not only due to the presence of structural and behavioral barriers to entry, but also to the country`s inadequate physical and institutional infrastructure. Due to the fundamental weakness of competition in a lot of major economic sectors, the gains from liberalization remained limited and slowed down the country`s economic growth.</p> |
| Keywords: | competition, innovation, Philippines, trade, Philippine manufacturing |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:phd:dpaper:dp_2012-06&r=ino |
| By: | Alessia LO TURCO (Universit… Politecnica delle Marche, Dipartimento di Scienze Economiche e Sociali); Daniela MAGGIONI (Universit… Politecnica delle Marche, Dipartimento di Scienze Economiche e Sociali) |
| Abstract: | Making use of an original firm-product level dataset for Turkish manufacturing, we dissect the role of importing, exporting and the joint involvement in both activities on the firm product scope and new product introduction. Within the bulk of overall exports, we identify and focus on foreign sales of own produced goods. From the comparison between a single and a multiple treatment approach, it emerges that the simultaneous entry in the import and export markets delivers the highest innovation rate. Even if we disclose the existence of important complementarities between the two trade activities, starting to export appears as the real driver of firm product innovation. On the contrary and differently from previous evidence, when moving to a multi-treatment setting, the impact of importing fades away. |
| Keywords: | Firm trade, Multiple Propensity Score Matching, Single Propensity ScoreMatching, product innovation |
| JEL: | D22 F14 |
| Date: | 2012–10 |
| URL: | http://d.repec.org/n?u=RePEc:anc:wpaper:384&r=ino |
| By: | Koskinen, Yrjö; Mæland, Jøril |
| Abstract: | In our model multiple innovators compete against each other by submitting investment proposals to an investor. The investor chooses the least expensive proposal and when to invest in it. Innovators have to provide costly effort and they learn privately the cost of investing. Multiple efforts have to be compensated for, but competition helps to erode innovators' informational rents, since innovators are more likely to lose the competition if they inflate investment costs. Consequently, competition leads to faster innovation, because the investor has less of a need to delay expensive investments. The investor's payoff sensitivity also increases with competition, thus enabling the investor to capture more of the upside of innovative activity. |
| Keywords: | Agency costs; Auctions; Innovation; Investment timing; Real options |
| JEL: | D44 D82 G24 G31 O31 O32 |
| Date: | 2012–10 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:9187&r=ino |
| By: | Popp, David |
| Abstract: | By reducing the costs of environmental protection, technological change is important for promoting green growth. This entails both the creation of new technologies and more widespread deployment of existing green technologies. This paper reviews the literature on environmentally friendly technological change, with a focus on lessons relevant to developing countries. It begins with a discussion of the data available for measuring the various steps of technological change. It continues with a discussion of sources of environmental innovation. Given that most innovation is concentrated in a few rich countries, this leads to a discussion of the remaining role for lower-income countries, followed by a discussion of technology transfer. Because of the importance of market failures, the paper discusses the role of both technology policy and environmental policy for promoting environmentally friendly technological change. The review concludes with a discussion of what environmental economists can learn from other fields. |
| Keywords: | Environmental Economics&Policies,ICT Policy and Strategies,Technology Industry,E-Business,Climate Change Mitigation and Green House Gases |
| Date: | 2012–10–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:6239&r=ino |
| By: | Erdogdu, Erkan |
| Abstract: | Since the early 1980s, electricity industry reforms have been initiated in more than half of the countries in the world. Among the primary targets of these reform schemes, there has been an increase in efficiency of the sector; and it is implicitly assumed that government support to energy technology R&D will progress in line with the reform process as the former is required to sustain improved efficiency in the middle and long run. The paper reviews the relation between reform process in electricity markets and government support to energy R&D. Using panel data from 27 countries covering the period from 1974 to 2008, this study aims at finding out to what extent the expected correlation between reform process and government support to energy R&D has in practice been materialized so far. The findings suggest that, contrary to expectations, the progress toward electricity market reform is associated with reduced government support to a variety of energy R&D activities, which threatens sustainable efficiency improvements in the power industry. |
| Keywords: | Economics of Regulation and Liberalization; Research and Development; Government Policy; Electricity Industry; Panel Data Modeling |
| JEL: | O38 L51 Q48 O13 O32 |
| Date: | 2013–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:42148&r=ino |
| By: | Garant, Jean-Philippe; Herman, Hannah; Hunt, Jennifer; Munroe, David |
| Abstract: | We investigate women's underrepresentation among holders of commercialized patents: only 5.5% of holders of such patents are female. Using the National Survey of College Graduates 2003, we find only 7% of the gap in patenting rates is accounted for by women's lower probability of holding any science or engineering degree, because women with such a degree are scarcely more likely to patent than women without. Differences among those without a science or engineering degree account for 15%, while 78% is accounted for by differences among those with a science or engineering degree. For the latter group, we find that women's underrepresentation in engineering and in jobs involving development and design explain much of the gap. |
| Keywords: | Gender; Innovation |
| JEL: | J15 O31 |
| Date: | 2012–10 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:9185&r=ino |
| By: | Fabio Cerina; F. Manca |
| Abstract: | This paper presents a theoretical and empirical investigation of the relationship between human capital composition and economic growth. From the theoretical point of view, we generalize Vandenbussche et al. (2006) by allowing for non-constant returns to scale in imitation and innovation activities and we find that - unlike the previous work and for a wide range of parameters’ values - the impact of skilled workers on growth increases at lower stages of development. As for empirical evidence, we estimate Vandenbussche et al. (2006) the size using a 85 countries 1960-2000 panel with developed and developing countries using System GMM technique to address the problem of endogeneity. The analysis supports the model predictions in providing robust evidence of an increasing impact of tertiary education as the economy moves farther away from the frontier. Results are robust to different proxies of human capital and different specifications. |
| Keywords: | Technological frontier; innovation; imitation; human capital; skilled; unskilled; growth |
| JEL: | O33 O47 O11 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:cns:cnscwp:201225&r=ino |
| By: | Cristina Cattaneo (Fondazione Eni Enrico Mattei (FEEM)) |
| Abstract: | The paper investigates the determinants of cosmopolitan cities. The hypothesis tested empirically is whether gradual improvements in distant communication boost the generation of ethnically heterogeneous cities. Consequently to easier communication, movers increasingly rely on an enlarged community for identity transmission, rather than on localized peer effects of segregated environment. The empirical estimation provides support to the prediction of the model. A better access to the airports as well as improvements in internet communications are found to increase city ethnic diversity. |
| Keywords: | Multicutural Cities, Ethnic Diversity, Productivity |
| JEL: | R11 F22 |
| Date: | 2012–09 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2012.68&r=ino |
| By: | Francesca Spigarelli (Università degli Studi di Macerata) |
| Abstract: | This paper is an exploratory study on main features and challenges of the Chinese pharmaceutical market. Dramatic changes in the market are due both to the Government policies, changing consumer habits and behaviour, and to the growing competition at firm level. From a demand side perspective, consumptions of pharmaceutical products are booming thanks to a combined effect of economic growth, aging population, urbanization and health system reforms. Key forces shaping the demand are examined in the chapter, with a specific attention to health care reforms as well as to new habits and confidence of Chinese people towards the Western medicine. In this regard, import and export trends, consumption, and expected evolution of the market are examined. From a supply side perspective, two main trends can be highlighted: the increasing interest of foreign investors, and the effort of Chinese pharmaceutical firms to compete in the national market. To better understand the ongoing changes we look at market characteristics, key players, as well as trends and motivation of inward FDI to China are examined. On the basis of this general picture, the paper focuses on IP related aspects, to understand who are the main actors of patenting trends (foreign vs local firms) and for which kind of products patents are registered (raw materials vs basic products vs drugs). Analyzing patent trends and the role of Chinese vs Western firms, we try to define how China is taking its role and position into the national and – potentially - international pharmaceutical market. |
| Keywords: | China, pharmaceutical industry, patents |
| JEL: | F23 L65 O34 |
| Date: | 2012–10 |
| URL: | http://d.repec.org/n?u=RePEc:cme:wpaper:1206&r=ino |
| By: | Richard Woodward; Elzbieta Wojnicka; Wojciech Pander |
| Abstract: | This study surveys the current state of affairs in Poland with regard to the development of knowledge-intensive entrepreneurship (KIE), or new firm creation in industries considered to be science-based or to use research and development (R&D) intensively. We place KIE in Poland in the larger institutional context, outlining the key features of the country’s National Innovation System, and then focus on KIE itself. Our findings are perhaps more optimistic than many previous studies of knowledge-based economy development in Poland. We observe significant progress due to Polish access to the European Union. The frequency with which universities are playing a significant role as partners for firms in the innovation process has increased significantly; moreover, we observe a significant degree of internationalization of innovation-related cooperation. Another optimistic development is that the level of activity of venture capitalists seems to be fairly high in Poland considering the relatively low degree of development of capital markets offering VC investors exit opportunities. Moreover, after almost two decades of decline in the share of R&D spending in GDP, there are signs that this is beginning to rise, and that businesses are beginning to spend more on R&D. While demand-side problems continue to be significant barriers for the development of KIE, due to the relatively low level of education and GDP per capita in the country, the trends here are optimistic, with high rates of economic growth and improvements in the level of education of younger generations. Significant improvement is still needed in the area of intellectual property protection. |
| Keywords: | Knowledge-Based Economy, Entrepreneurship, Transition, Post-Communist, SMEs, Poland |
| JEL: | L26 O31 O52 P27 |
| Date: | 2012–10 |
| URL: | http://d.repec.org/n?u=RePEc:sec:cnstan:0446&r=ino |