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on Innovation |
| By: | Spyros Arvanitis (KOF Swiss Economic Institute, ETH Zurich, Switzerland); Martin Wörter (KOF Swiss Economic Institute, ETH Zurich, Switzerland); Pierre Mohnen (Maastricht University); Boris Lokshin (Maastricht University) |
| Abstract: | There is growing evidence that firms increasingly adopt open innovation practices. In this paper we investigate the impact of two such external knowledge acquisition strategies, ‘buy’ and ‘cooperate’, on firm’s product innovation performance. Taking a direct (productivity) approach, we test for complementarity effects in the simultaneous use of the two strategies, and in the intensity of their use. Our results based on large panels of Dutch and Swiss innovating firms, suggest that while both ‘buy’ and ‘cooperate’ have a positive effect on innovation, there is little statistical evidence that using them simultaneously leads to higher innovation performance. Results from the Dutch sample provide some indication, that there are positive economies of scope in doing external and cooperative R&D simultaneously conditional on doing internal R&D. |
| Keywords: | Open innovation, R&D collaboration, make, buy strategies |
| JEL: | O31 O32 |
| Date: | 2013–01 |
| URL: | http://d.repec.org/n?u=RePEc:kof:wpskof:13-325&r=ino |
| By: | ITO Banri; TANAKA Ayumu |
| Abstract: | This paper empirically examines the relation between a firm's productivity and its joint decision of research and development (R&D) strategy and exporting, based on Japanese firm-level data and the simple theoretical framework that extends the firm heterogeneity model so that both internal and external (outsourcing or technology purchase) R&D strategies are taken into account. The empirical results from nonparametric and semiparametric methods show that exporting firms engaged in R&D activities are more productive than non-exporters and exporters with no R&D, regardless of whether internal or external R&D strategy is adopted, and that exporters which employ both R&D strategies are the most productive. The results suggest that an open innovation strategy is complementary to an in-house R&D strategy and is crucial for further promoting innovation for internationalized firms. |
| Date: | 2013–02 |
| URL: | http://d.repec.org/n?u=RePEc:eti:dpaper:13006&r=ino |
| By: | Marco Ceccagnoli; Matthew J. Higgins; Vincenzo Palermo |
| Abstract: | Even though management consultants increasingly recommend that in-house research be outsourced, little is known about the conditions favoring substitution or complementarity between internal R&D and external technology acquisition. In this paper, we attempt to provide a deeper understanding of the firm-level drivers of complementarity between these two types of investments through the structural estimation of a flexible innovation production function, such as the translog. Our empirical analysis is based on a unique panel dataset on the R&D and in-licensing expenditures of 94 global pharmaceutical firms active in drug development between 1997 and 2005. Our results suggest that internal R&D and in-licensing in the pharmaceutical industry were neither complements nor substitutes during the study period. However, we find that the degree of complementarity is enhanced for firms with stronger absorptive capacity, economies of scope, and past licensing experience. |
| JEL: | L24 L65 O31 O32 |
| Date: | 2013–02 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:18795&r=ino |
| By: | Isabel Maria Bodas Freitas; Nick von Tunzelmann |
| Abstract: | This study is aimed at a better understanding of the interaction between design of public support for innovation at different levels of policy-making, and firms’ innovation activities. How do firms respond to the incentives offered by various policies? We propose an analytical framework to examine the alignment of technology and innovation policy objectives from a demand-side perspective, that is, from the perspective of firms that benefit from policy support. The framework builds on existing policy design frameworks, and proposes that firms’ use of the public support relates to their strategies for innovation development in terms of innovation paths and forms of organising interaction with external actors, and their specific technological and market learning loci. We apply this framework empirically using 1998-2000 and 2002-2004 Community Innovation Survey data for France and the UK. |
| Keywords: | Innovation policy; Policy alignment; Innovation strategies |
| JEL: | O30 O31 O38 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:aal:abbswp:13-02&r=ino |
| By: | Shiyuan Pan (Center for Research of Private Economy and School of Economics, Zhejiang University); Mengbo Zhang (School of Economics, Zhejiang University); Heng-fu Zou (Central University of Finance and Economics, CEMA) |
| Abstract: | We build a growth model with status preference to explore the effects of patent protection on innovation, inequality and social welfare. The main results are as follows. There is a non-monotonic relationship between patent protection and innovation. In addition, the effect of patent protection on social welfare is non-monotonic when the strength of status preference is small, whereas patent protection lowers social welfare when the strength of status preference is large. Finally, strengthening patent protection enlarges wealth inequality when agents have different time and status preferences. |
| Keywords: | Patent Protection, Status Preference, Innovation, Inequality, Social Welfare |
| JEL: | O31 O34 O40 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:cuf:wpaper:574&r=ino |
| By: | Arai, Yasuhiro; Moriya, Fumitoshi |
| Abstract: | This article compares two hypotheses, sequential innovation and legal action, and theoretically obtains the testable implications to specify which hypothesis is crucial in empirical evidence. Our main results are that we distinguish between the two hypotheses based on i) whether the cross-term coefficient of the number of patents and the dummy of patent law are positive or negative and ii) whether the variance of the patent distribution is decreased. |
| Keywords: | Intellectual Property Rights, Sequential Innovation, Multitask |
| JEL: | D42 K39 L86 |
| Date: | 2013–02 |
| URL: | http://d.repec.org/n?u=RePEc:hit:hjbswp:163&r=ino |
| By: | Thomas Brenner (Philipps-Universität Marburg); Charlotte Schlump (Philipps-Universität Marburg) |
| Abstract: | It has been repeatedly shown that universities and public research institutes contribute to local innovation generation and facilitation. The mechanisms behind this contribution are well discussed in the literature. However, detailed empirical examinations are missing. We analyse the impact of universities and public research on regional innovation output. Thereby we analyse separately 19 technologies and distinguish whether university education and public research are rather innovation generators or innovation facilitators. All analyses are conducted on German data. |
| Keywords: | regional innovation systems, innovation output, university, public research |
| JEL: | C13 I25 O31 R12 |
| Date: | 2013–02–08 |
| URL: | http://d.repec.org/n?u=RePEc:pum:wpaper:2013-03&r=ino |
| By: | Huergo, E.; Trenado, Mayte / M.; Ubierna, Andrés / A. |
| Abstract: | Our objective is to estimate the effect of low-interest loans for R&D projects on business R&D. We take into account that the participation of firms in this kind of public programme probably depends on the same characteristics that determine their investment decisions. We also consider the possibility of persistence in R&D expenditures over time. The estimations provide evidence of the effectiveness of low-interest loans, being the stimulus effect larger for SMEs than for large firms and also higher for manufacturing than for services. Participants are approximately 25 percentage points more likely to self-finance their R&D investments than non-supported firms. The effect is quite relevant if we consider that the probability of self-financing R&D activities is 53.2 percentage points higher when the firm has invested in R&D activities in the previous year. This result suggests that firms can be induced persistently to perform R&D activities by means of loans. |
| Keywords: | Low-interest credits; R&D projects; impact analysis |
| JEL: | O38 H81 L24 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:44221&r=ino |
| By: | Bastian Rake |
| Abstract: | Recent empirical contributions emphasize the importance of (potential) market size for the development of new pharmaceuticals. At the same time many scholars point out the importance of of scientific advances for the industry’s R&D activities. Against this background I analyze the relationship between (potential) market size, technological opportunities, and the number of new pharmaceuticals in the United States. Technological opportunities are operationalized as growth rates of the relevant knowledge stock as proposed by Andersen (1999, 1998). I analyze a unique dataset by using an “entry stock” Poisson quasi-maximum likelihood estimator. The results reveal a rather robust and significantly positive response of the number of new pharmaceuticals, i.e., new molecular entities or new drug approvals, to market size and technological opportunities. |
| Keywords: | Determinants of Innovation; Pharmaceuticals; Demand; Technological Opportunities |
| JEL: | O31 J10 J20 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:aal:abbswp:13-03&r=ino |
| By: | Simone Strambach (Philipps-Universität Marburg) |
| Abstract: | By applying the evolutionary economic geography approach and focusing on the organizational dimension of the knowledge-based theory of the firm the paper intends to make both a conceptual and an empirical contribution to understand the ways in which knowledge dynamics unfold in time and space and lead to innovative change. The article focuses on the connections of cumulative and combinatorial knowledge dynamics at the micro level of firms and other organizations. The empirical results base on the quantitative and qualitative meta-analysis of case studies in Europe that were obtained by the instrument of innovation biographies. |
| Keywords: | Micro-dynamics of Knowledge, Innovation, Institution, territorial Organization |
| JEL: | D83 O4 O31 O32 R11 |
| Date: | 2013–02–08 |
| URL: | http://d.repec.org/n?u=RePEc:pum:wpaper:2013-01&r=ino |
| By: | Luca Berchicci; Jeroen P.J. de Jong; Mark Freel |
| Abstract: | It is generally recognized that firms’ innovative performance can be enhanced by collaborating with remote partners. However, remote collaborations are not without challenges, as geographical distance may frustrate tacit knowledge transfer and inter-organizational learning. We investigate the moderating role of absorptive capacity by proposing that the higher firms’ R&D intensity, the stronger the relationship between remote collaboration and their share of new product revenues. Drawing on survey data of 250 Dutch high-tech small firms, it is confirmed that remote collaboration is associated with innovative performance, but at low values of R&D intensity this relationship disappears. |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:aal:abbswp:13-01&r=ino |
| By: | Roman, Monica; Suciu, Christina |
| Abstract: | By this paper we intend to analyze the existing gap in the efficiency of R&D investment, at European level. The method employed in this respect is Data Envelopment Analysis (DEA). The evaluation of the performance in R&D in European countries, in terms of technical efficiency (TE) thus constitutes the main goal of this research. Small European economies (i.e. Luxemburg and Sweden) have high levels of research efficiency, while some of the larger ones, namely, United Kingdom, France, and Spain, show lower TE scores. Romania is characterized by a very low rate of knowledge production, suggesting that they are still in the phase of imitating and replicating existing technologies, while only little effort made to innovate. |
| Keywords: | R&D; Data Envelopment Analysis; technical efficiency |
| JEL: | C61 O31 R11 |
| Date: | 2012–07 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:44000&r=ino |
| By: | Lars Lindholt (Statistics Norway) |
| Abstract: | We perform an empirical analysis of the extent to which ongoing technological change through R&D activity has offset the effect of ongoing depletion on the cost of finding additional reserves of oil in eight global regions. We introduce a finding cost function that among other factors depends on the cumulative number of past R&D expenses and cumulative past production, measuring technological change and depletion, respectively. For all our regions we find significant effects of both depletion and technological change on oil finding costs from 1981 to 2009, barring cyclical variations in finding costs that could come from changes in factor prices. For almost all regions technology more than mitigated depletion until around the mid-nineties. However, we find that depletion outweighed technological progress over the last decade. |
| Keywords: | Oil; depletion; technological change; R&D; finding costs |
| JEL: | L71 Q31 |
| Date: | 2013–01 |
| URL: | http://d.repec.org/n?u=RePEc:ssb:dispap:732&r=ino |
| By: | Dutz, Mark A.; O'Connell, Stephen D. |
| Abstract: | This study investigates the impact of key business environment indicators on productivity, innovation, and growth in Sri Lanka through a cluster-level productivity analysis, a firm-level total factor productivity analysis, and a firm-level innovation analysis. For the cluster-level productivity analysis (as measured by output and value added per worker), it combines two established data sources in a novel way by importing average'industry-size-location'cluster-level business environment variables from the World Bank Enterprise Survey to the comprehensive Sri Lanka Census of Industry productivity data available for similar clusters of enterprises. For the firm-level total factor productivity analysis, it compares data from the 2011 World Bank Enterprise Survey with those from 2004. For the firm-level innovation analysis, it compares findings from the 2011 World Bank Enterprise Survey with a representative sample of enterprises collected as part of the Sri Lanka Longitudinal Survey of Enterprises. The empirical findings highlight the importance -- for cluster-level productivity, firm-level total factor productivity, and innovation -- of connectivity to global knowledge (reflected by one or more of export participation, directly imported inputs, foreign ownership, and use of the internet), availability of skills, access to finance, and competition. The paper also presents evidence, under the assumption that the samples are statistically representative, that both allocative and average technical efficiency have improved, with allocative efficiency increasing roughly four-fold between 2003 and 2010, and accounting for the overwhelming share of the aggregate increase in total factor productivity over this time period. Most of the improvement in allocative efficiency has occurred among larger firms, and in large rather than small cities. |
| Keywords: | Environmental Economics&Policies,E-Business,Labor Policies,Economic Theory&Research,Knowledge for Development |
| Date: | 2013–02–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:6354&r=ino |
| By: | Sergio Giaccaria; Silvana Dalmazzone |
| Abstract: | The paper adopts an epidemic model of innovation diffusion to investigate the influence of regulatory design on the market penetration of wind and photovoltaic energy production. In particular, we test whether the specificity of public incentives by technology and the level of decentralization of energy policy planning and of authorization procedures have influenced the pattern of diffusion of renewable energy technology. Data pertain to the Italian case between 1999 and 2010. Results confirm the existence of an S-shaped Bass diffusion process for RES technologies. We disentangle the contribution of several institutional factors to the diffusion of renewable energy innovations: liberalization of the electricity market, public subsidies, EU support to Objective 1 regions, decentralization of energy planning, complexity of authorization procedures, technology-specificity of incentive design. We also analyze the regional variability in diffusion patterns. |
| Keywords: | Renewable energy, Bass model, induced diffusion, feed-in tariff, decentralization, energy planning, authorization procedures. |
| JEL: | Q47 Q48 Q42 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:cca:wpaper:282&r=ino |
| By: | Tom Broekel (Institue of Economic and Cultural Geography, Leibnitz-University of Hannover); Matte Hartog (Section of Economic Geography, Faculty of Geosciences, Utrecht University) |
| Abstract: | This study investigates the usefulness of exponential random graph models (ERGM) to analyze the determinants of cross-regional R and D collaboration networks. Using spatial interaction models, most research on R and D collaboration between regions is constrained to focus on determinants at the node level (e.g. R and D activity of a region) and dyad level (e.g. geographical distance between regions). ERGMs represent a new set of network analysis techniques that have been developed in recent years in mathematical sociology. In contrast to spatial interaction models, ERGMs additionally allow considering determinants at the structural network level while still only requiring cross-sectional network data. The usefulness of ERGMs is illustrated by an empirical study on the structure of the cross-regional R and D collaboration network of the German chemical industry. The empirical results confirm the importance of determinants at all three levels. It is shown that in addition to determinants at the node and dyad level, the structural network level determinant “triadic closure†helps in explaining the structure of the network. That is, regions that are indirectly linked to each other are more likely to be directly linked as well. |
| Keywords: | cross-regional R and D collaboration, exponential random graph models, network |
| JEL: | R11 O32 D85 |
| Date: | 2013–02–08 |
| URL: | http://d.repec.org/n?u=RePEc:pum:wpaper:2013-04&r=ino |
| By: | Uwe Cantner (School of Economics and Business Administration, Friedrich-Schiller-University Jena); Holger Graf (School of Economics and Business Administration, Friedrich-Schiller-University Jena); Susanne Hinzmann (School of Economics and Business Administration, Friedrich-Schiller-University Jena) |
| Abstract: | The last decades saw a pronounced shift in innovation policy in Germany and many other countries towards increased funding of cooperative R&D. Over the last years, competitions between regional initiatives pushed this trend even further by adding a regional perspective, by increasing the scope of funding, and by fostering interaction between a large number of actors. In 2008 the German ministry for education and research (BMBF) started the "Leading-Edge Cluster competition" ("Spitzencluster-Wettbewerb") in which 15 clusters were selected in three waves (2008, 2010, 2012) and are funded for a five-year period with up to 40 million Euro each. Our paper presents selected results regarding the influence of government funding on cooperation networks within five of the clusters that were successful in the first wave of the "Spitzencluster- Wettbewerb". More specifically, we analyse the extent of policy influence on the network of most important cooperation partners, its geographic reach, and the changes of network structure in general. Our empirical analysis is based on original data that was collected in 2011 with cluster actors (firms and public research) who received government funding. Our results indicate that the program was quite effective in initiating new cooperations between cluster actors and in intensifying existing linkages. The vast majority of the linkages which are influenced by the cluster competition are between actors located in the cluster region. With respect to the influence of the cluster competition on network structure, we find an increase in network centralization. Small and medium sized enterprises used the chance to connect with the local 'stars', but not as much among each other. |
| Keywords: | Cluster, Innovation Policy, Evaluation, Social Network Analysis |
| JEL: | O3 O38 L14 R1 |
| Date: | 2013–02–04 |
| URL: | http://d.repec.org/n?u=RePEc:jrp:jrpwrp:2013-008&r=ino |
| By: | Suma Athreye; Georgios Batsakis; Satwinder Singh |
| Abstract: | We conjecture that the Research and Development (R&D) subsidiary of a Multinational Enterprise (MNE) can be potentially embedded in three different networks viz. the science base of the home country, the science base of the host country, and/or the internal knowledge network of sister subsidiaries and parent MNE. We explore the type of relationship (complementary or substitutive) that exists between the three networks. Further, we develop a set of hypotheses about the factors that are associated with each form of embeddedness. We test these conjectures on data obtained from internationally located MNE R&D subsidiaries. We find that the three types of embeddedness are complementary to each other and the factors associated with each kind of subsidiary embeddedness are different. |
| Keywords: | Multiple embeddedness; Multinational enterprises; R&D subsidiaries; complementarity; Subsidiary Roles; Seemingly unrelated regression |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:aal:abbswp:13-05&r=ino |
| By: | Yasusada Murata (Advanced Research Institute for the Sciences and Humanities, Nihon University); Ryo Nakajima (Department of Economics, Keio University); Ryosuke Okamoto (National Graduate Institute for Policy Studies); Ryuichi Tamura (Center for Economic Growth Strategy, Yokohama National University) |
| Abstract: | We develop a new distance-based test of localized knowledge spillovers that embeds the concept of control patents. Using microgeographic data, we identify localization distance for each technology class while allowing for spillovers across geographic units. We revisit the debate by Thompson and Fox-Kean (2005a,b) and Henderson, Jaffe and Trajtenberg (2005) on the existence of localized knowledge spillovers, and find solid evidence supporting localization even when using fine-grained controls. We further relax the assumption of perfect controls, and show that our distance-based test detects localization for the majority of technology classes unless hidden biases induced by imperfect controls are extremely large. |
| Date: | 2013–01 |
| URL: | http://d.repec.org/n?u=RePEc:ngi:dpaper:12-18&r=ino |
| By: | Hitoshi Matsushima (The University of Tokyo) |
| Abstract: | We examine the impact of financial regulation and innovation on bubbles and crashes due to limited arbitrage by modeling timing games among strategic arbitrageurs whose rationality is not commonly known. An unproductive company raises funds by issuing shares, and for purchasing shares, arbitrageurs borrow money from positive feedback traders. The key concept is awareness heterogeneity: positive feedback traders are unaware of euphoria, but arbitrageurs are aware of it. We show the impact of high leverage ratio depends on whether naked CDS is available, and the impact of naked CDS depends on growth balance between positive feedback traders’ capital and loan. |
| Date: | 2013–02 |
| URL: | http://d.repec.org/n?u=RePEc:cfi:fseres:cf306&r=ino |
| By: | Hitoshi Matsushima (Faculty of Economics, University of Tokyo) |
| Abstract: | We examine the impact of financial regulation and innovation on bubbles and crashes due to limited arbitrage by modeling timing games among strategic arbitrageurs whose rationality is not commonly known. An unproductive company raises funds by issuing shares, and for purchasing shares, arbitrageurs borrow money from positive feedback traders. The key concept is awareness heterogeneity: positive feedback traders are unaware of euphoria, but arbitrageurs are aware of it. We show the impact of high leverage ratio depends on whether naked CDS is available, and the impact of naked CDS depends on growth balance between positive feedback traders' capital and loan. |
| Date: | 2013–02 |
| URL: | http://d.repec.org/n?u=RePEc:tky:fseres:2013cf876&r=ino |