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on Innovation |
| By: | Claudio Bravo-Ortega; Jose Miguel Benavente; Álvaro González |
| Abstract: | Since long ago economists have shown that research and development (R&D) and business innovation are key factors for the growth of firms and the development of the economies. There is also some consensus that greater degrees of trade openness are beneficial for the long-term growth of countries. Nonetheless, there is still no evidence on the combined impact of both factors even though the link between them seem of particular relevance, especially for developing countries. This article examines the relationship between productivity, expenditure in R&D and exports at a plant level for the case of Chile. The main results show that firms that actually spend on R&D are considerably more likely to export but the reverse is not true. Moreover, we observe that both R&D and exports have a joint effect on the improvement in productivity in the Chilean plants. These results allow us to recover the private return to R&D and to learning by exporting across different sectors. |
| Date: | 2012–12 |
| URL: | http://d.repec.org/n?u=RePEc:udc:wpaper:wp371&r=ino |
| By: | Marco Marini (Department of Computer, Control and Management Engineering, Universita' degli Studi di Roma "La Sapienza"); Maria Luisa Petit (Department of Computer, Control and Management Engineering, Universita' degli Studi di Roma "La Sapienza"); Roberta Sestini (Department of Computer, Control and Management Engineering, Universita' degli Studi di Roma "La Sapienza") |
| Abstract: | We present a model of endogenous formation of R&D agreements among firms in which also the timing of R&D investments is made endogenous. The purpose is to bridge two usually separate streams of literature, the endogenous formation of R&D alliances and the endogenous timing literature. This allows to consider the formation of R&D agreements over time. It is shown that, when both R&D spillovers and investment costs are sufficiently low, firms may find difficult to maintain a stable agreement due to the strong incentive to invest noncooperatively as leaders. In such a case, the stability of an R&D agreement requires that the joint investment occurs at the initial stage, thus avoiding any delay. When instead spillovers are sufficiently high, cooperation in R&D constitutes a profitable option, although firms also possess an incentive to sequence their investment over time. Finally, when spillovers are asymmetric and the knowledge mainly leaks from the leader to the follower, to invest as follower becomes extremely profitable, making R&D alliances hard to sustain unless firms strategically delay their joint investment in R&D. |
| Keywords: | R&D Investment; Spillovers; Endogenous Timing; R&D Alliances; Endogenous Research Cartels |
| Date: | 2012–07 |
| URL: | http://d.repec.org/n?u=RePEc:aeg:report:2012-07&r=ino |
| By: | Lorena M. D'Agostino; Grazia D. Santangelo |
| Abstract: | R&D offshoring has increasingly involved emerging countries as host locations and promoted a greater fragmentation of R&D activities across borders. As a result, a subtle international division of labor in knowledge production has yielded a fine-slicing of R&D activities with the highest valueadded activities located in the most advanced countries and the lowest value-added activities in emerging countries. However, no study, to our knowledge, has investigated whether finely sliced foreign R&D activities complement each other in terms of greater knowledge production at home. Drawing on a rich dataset, we estimate a regional knowledge production function and apply a direct complementarity test. Our results suggest that the global fragmentation of R&D activities produces synergic effects on the knowledge production of the home investing OECD regions when R&D activities are optimally rather than randomly located. |
| Keywords: | R&D fine-slicing; R&D optimal location; home region knowledge production; emerging countries |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:aal:abbswp:12-06&r=ino |
| By: | Alberto Marzucchi (Catholic University of Milan); Davide Antonioli (University of Ferrara); Sandro Montresor (JRC-IPTS) |
| Abstract: | The paper aims to show how policy makers can stimulate firms' cooperation with research organisations in innovation. We argue that the administration of an R&D subsidy can be effective. Furthermore, this should be more so for extra-regional than intra-regional cooperation. The firms' propensity to extend cooperation across the region is assumed to increase with the amount of support. However, the support must overcome a threshold, for firms to cover the fixed costs of distant interactions. These research hypotheses are tested with respect to a sample of firms in a region of Italy. Propensity score matching is applied to identify the impact of the subsidy receipt. A generalised propensity score technique is employed to investigate the effect of an increasing amount of support. All the hypotheses are not rejected. Firms' cooperation is policy sensitive, but the size of the support is crucial for its effects. |
| Keywords: | Industry-Research Cooperation, Regional Innovation Systems, Behavioural Additionality |
| JEL: | O32 O38 R11 R58 |
| Date: | 2012–11 |
| URL: | http://d.repec.org/n?u=RePEc:ipt:wpaper:201204&r=ino |
| By: | Baumann, Florian; Heine, Klaus |
| Abstract: | In this paper, we examine the link between innovative activity on the part of firms, the competitive pressure to introduce innovations and optimal damages awards. While innovative activity brings forth valuable new products for consumers, competitive pressure in the ensuing innovation race induces firms to launch innovations too early, thereby raising the likelihood of severe product risks above the optimal failure rate. Introducing innovations too early may call for the application of punitive damages instead of mere compensation of harm caused, in order to decelerate such welfare-reducing innovation races. The optimal tort system is accordingly highly dependent not only on the expected profits and the effectiveness of time delays with respect to reducing expected harm, but also on the competitive environment in which firms operate. -- |
| Keywords: | competition,innovation,punitive damages,tort law |
| JEL: | K13 L13 O31 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:dicedp:78&r=ino |
| By: | López-Estornell,Manuel; Barberá-Tomás,David; García-Reche,Andrés; Mas-Verdú,Francisco |
| Abstract: | This paper examines the evolution of regional innovation policy in Emilia-Romagna, and Valencia, regions with similar economic features that implemented similar innovation policies in the 1970s and 1980s. We investigate whether their similarities have led to similar targets, policy tools and governance developments. We show that innovation policy in both regions suffered from the effects of privatization, budget constraints and changes to manufacturing during the 1990s and highlight the consequences. Although Emilia-Romagna experienced deeper change to its innovation policy, privatizations and/or the replacement of public funds promoted commercial approaches and induced market failures in both regions. The worst effects of these policies were the implementation of less risky innovation projects, the shift towards extra-regional projects and markets, and the favouring of large firms. |
| Keywords: | innovation policy, industrial district |
| Date: | 2012–11–29 |
| URL: | http://d.repec.org/n?u=RePEc:ing:wpaper:201210&r=ino |
| By: | Frank J. van Rijnsoever; Leon Welle; Sjoerd Bakker |
| Abstract: | The aim of this paper is to empirically examine the influence of different types of credibility on the legitimacy to grant individual actors within consortia an innovation subsidy. Theorizing from the viewpoint of resource dependence theory and the sociology of expectations, we hypothesize that four types of credibility are related to legitimacy: scientific credibility, market credibility, expectation track record, and social capital. We operate on two levels of analysis, the actor and the consortium. We quantitatively analyze the Dutch electric vehicle subsidy program as case. We develop a model that accurately forecasts which consortia are most likely to receive subsidies. We demonstrate that social capital and market credibility positively influence the likelihood of receiving innovation subsidies, while scientific credibility sources and expectation track record have a negative influence. Based on these findings we provide policy recommendations and avenues for further research. |
| Keywords: | Electric Vehicle Technology; Expectations; Resource Dependence Theory; Credibility; Legitimacy; Innovation Policy |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:aal:abbswp:12-07&r=ino |
| By: | Martin Falk |
| Abstract: | This study investigates the determinants of bilateral Greenfield FDI projects and flows in knowledge intensive business services from OECD/BRIC countries to the EU countries for the period 2003-2010. Greenfield FDI projects are distinguished by type of activity: (i) business services, (ii) design, development and testing activities, (iii) headquarters activities and (iv) R&D services. Another aim of this study is to provide new empirical evidence on the patterns of Greenfield investments in knowledge intensive business services over time, source country and destination country. For Austria, the number of Greenfield investments in headquarter functions remains stable over time whereas Greenfield investments in R&D and related activities declined during the sample period. The same holds true for the number of jobs generated through greenfield investments. The results using panel count data models show that wage costs, tertiary education, corporate taxes, having a common border and sharing a common language all play a significant role in determining bilateral Greenfield FDI projects in knowledge intensive services. However, the impact of corporate taxation and labour costs differs widely across the functions and does not play a role in Greenfield investments in R&D and development, design and testing services. |
| Keywords: | Greenfield foreign direct investment, knowledge intensive business services, headquarter functions, R&D activities, gravity equation, panel data, FDI determinants |
| JEL: | F23 |
| Date: | 2012–12 |
| URL: | http://d.repec.org/n?u=RePEc:wsr:ecbook:2010:i:iv-002&r=ino |
| By: | Ajay Bhaskarabhatla; Enrico Pennings |
| Abstract: | We formulate a simple model of optimal defensive disclosure by a dominant firm facing uncertain antitrust enforcement and test its implications using unique data on defensive disclosures and patents by IBM. Our results indicate that stronger antitrust enforcement leads to more defensive disclosure, that quality inventions are also disclosed defensively, and that defensive disclosure served as an alternative, but less successful, mechanism to patenting at IBM in appropriating returns from R&D. We extend our analysis to two other exceptionally large firms with defensive-disclosure activity, AT&T and Xerox, and show that their patenting propensity declined under increased antitrust enforcement relative to other firms in the industry. Overall, we show how these firms used defensive disclosure as a strategy to balance the benefits of patenting with the costs of uncertain antitrust enforcement. |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:aal:abbswp:12-08&r=ino |
| By: | Vanini, Paolo |
| Abstract: | These lecture notes are about financial innovations. We ask why are there some innovation and how is an innovative idea realized. This forces us to consider practical and structural aspects (regulations, taxation, markets) as key drivers of innovations and also basic formal aspects in valuation. Contents: Overview: Taxes and Regulation, Technology, Who Innovates, Life Cycle, Pricing and Hedging Discount Factors and No Arbitrage Investment: Rule Bases, Alpha, Beta, View and Trade, Fund Industry, Portfolio Theory Swaps and Financial Markets: IRS, TRS, ALM, ISDA Retail Structured Products Real Estate Asset Class, Green Banking, Demographic Risk Financial Crisis: Overview Leverage, Systemic Risk, Securitization, Pricing |
| Keywords: | financial innovation; risk transfer; structuring; pricing; regulation; investment; markets |
| JEL: | D50 G12 D81 G18 D52 G10 G21 |
| Date: | 2012–11 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:42536&r=ino |
| By: | López-Estornell, Manuel; Tortajada Esparza, Enrique; Martinez-Chafer, l |
| Abstract: | The paper discusses the development of the industrial district policy in Italy and the different roles of regions in its implementation, and provides an initial assessment of the relationship between regional districts and innovation policies. First, we provide an overview of Italian national legislation on industrial districts since 1991 and the changes that have resulted. Next, we examine the evolution of industrial district policy in Veneto, in the context of the Italian framework. The regional government implemented its industrial district policy in the late 1990s and it has yielded some results which deserve attention. Second, we look at the benefits and limitations of district policy governance in Veneto region and focus on the links between regional district and innovation policies. To achieve a first assessment of district preferences in terms of policy, the paper discusses the specific arrangements in five industrial districts in different sectors, and the support provided by regional government. Our findings show that innovation projects are of limited relevance in strategies of industrial districts. A recommendation for policy is that cluster initiatives should be aligned to the specific economic features of the territory. Problems arise when national governments and international organizations assume that ‘one size fits all’. |
| Keywords: | industrial district policy, innovation policy |
| Date: | 2012–11–29 |
| URL: | http://d.repec.org/n?u=RePEc:ing:wpaper:201211&r=ino |