nep-ino New Economics Papers
on Innovation
Issue of 2013‒03‒02
nineteen papers chosen by
Steffen Lippert
University of Otago, Dunedin

  1. Does Partner Type Matter in R&D Collaboration for Environmental Innovation? By Gunnar Pippel
  2. The Performance Effect of Environmental Innovations By Martin Wörter; Tobias Stucki; Christian Soltmann
  3. Cooperation Events, Ego-Network Characteristics and Firm Innovativeness – Empirical Evidence from the German Laser Industry By Muhamed Kudic; Katja Guhr
  4. (In)determinacy, bargaining, and R&D policies in an economy with endogenous technological change By Lai, Chung-hui
  5. R&D Co-operation in European Post-transition Economies By Andrea Gauselmann
  6. The Impact of Venture Capital on the Persistence of Innovation Activities of Swiss Start-ups By Spyros Arvanitis; Tobias Stucki
  7. Market value of the firms and R&D investment: Theoretical overview and empirical estimation for the panel of countries By Josheski, Dushko; Magdinceva Sopova, Marija
  8. Properties of knowledge base and firm survival: Evidence from a sample of French manufacturing firms By Alessandra Colombelli; Jackie Krafft; Francesco Quatraro
  9. Mobility, Productivity and Patent Value for Asian Prolific Inventors: China, Japan, Korea and Taiwan, 1975 – 2010 By William Latham; Christian Le Bas; Dmitry Volodin
  10. Does participation in innovation networks improve firms' relational abilities? Evidence from a regional policy framework By Annalisa Caloffi; Federica Rossi; Margherita Russo
  11. Promoting alternative, environmentally friendly passenger transport technologies: Directed technological change in a bottom-up/top-down CGE model By Veronika Kulmer
  12. A Trapped Factors Model of Innovation By Nicholas Bloom; Paul Romer; Stephen Terry; John Van Reenen
  13. Developing a potential business model for the automotive and the energy industry By Benad, Holger; Bode, Martin; Hack, Andreas; Kleine-Möllhoff, Peter; Wagner, Hanna
  14. Public education, technological change and economic prosperity By Klaus Prettner
  15. L'innovation par l'hybridation By Gilbert Giacomoni; Rémi Jardat
  16. Regional autonomy with regard to innovation policy: A differentiated illustration of the European status quo By Baier, Elisabeth; Kroll, Henning; Zenker, Andrea
  17. Standard Essential Patents: who is really holding up (and when) ? By Vilen Lipatov, Gregor Langus, Damien Neven
  18. Patterns of technology transfer in Chinese hotspots of innovative development: The perspective of the recipient firms By Kroll, Henning; Schricke, Esther
  19. Pharmaceutical Portfolio Management: Global Disease Burden and Corporate Performance Metrics By Rutger P. Daems PhD; Edith L. Maes DBA

  1. By: Gunnar Pippel
    Abstract: In the literature on environmental innovations R&D collaborations have been identified as a critical determinant of a firm’s environmental innovation performance. However, the literature suggests that R&D collaboration is not always beneficial. Therefore, a more elaborated analysis of the effects of R&D collaborations on a firm’s environmental innovation performance is necessary. This paper investigates the impact of R&D col-laborations with different partner types such as customers, competitors, suppliers, uni-versities, governmental research institutes, consultants and other firms within the same firm group on a firm’s environmental innovation performance. In addition, this paper addresses the question of whether the diversity of R&D collaboration partners is im-portant for the environmental innovation performance. Firm-level data from 2,337 Ger-man service and manufacturing firms are used in the regression analysis. The results suggest that R&D collaboration with suppliers, customers, universities, governmental research institutes, consultants and other firms within the same firm group has a signifi-cantly positive impact on a firm’s environmental innovation performance, whereas col-laboration with competitors has no significant impact. The diversity of R&D collaboration partners has a significantly positive impact on a firm’s environmental innovation performance.
    Keywords: R&D, collaboration, environment, innovation
    JEL: O31 O32
    Date: 2013–02
  2. By: Martin Wörter (KOF Swiss Economic Institute, ETH Zurich, Switzerland); Tobias Stucki (KOF Swiss Economic Institute, ETH Zurich, Switzerland); Christian Soltmann (Swiss Federal Institute of Intellectual Property, Switzerland)
    Abstract: While recent literature has focused on explaining the determinants of green innovations, it is not well understood how such innovations affect performance. To analyse the relationship between green innovation and performance, new industry-level panel data were exploited: these include 12 OECD countries, the whole manufacturing sector and a period of 30 years. The results show that green inventions are U-shape related to performance. However, the turning point is quite high and hence only relevant for a few industries. This indicates that - given the current level of green promotion - market incentives alone are not sufficient to allow the green invention activities of industries to rise considerably.
    Keywords: Innovation, R&D, patents, environment, technological change, performance
    JEL: O30 O34 Q55
    Date: 2013–02
  3. By: Muhamed Kudic; Katja Guhr
    Abstract: We study how firm innovativeness is related to individual cooperation events and the structure and dynamics of firms’ ego-networks employing a unique panel dataset for the full population of 233 German laser source manufactures between 1990 and 2010. Firm innovativeness is measured by yearly patent applications as well as patent grants with a two year time-lag. Network measures are calculated on the basis of 570 knowledge-related publicly funded R&D alliances. Estimation results from a panel data count model with fixed effects are suggestive of direct innovation effects due to individual cooperation events, but only as long as structural ego-network characteristics are neglected. Innovativeness is robustly related to ego-network size and ego-network brokerage whereas ego-network density reveals some surprising results.
    Keywords: R&D cooperation, ego-networks, firm innovativeness
    JEL: L25 O32 D85
    Date: 2013–02
  4. By: Lai, Chung-hui
    Abstract: In this paper, the author shows how the introduction of a bargaining game structure into a standard R&D endogenous growth model can be a potential source of local indeterminacy. He also shows that on a high-growth path, the government, by directly engaging in R&D activities and using R&D subsidies, may not enhance economic growth. On a low-growth path, the government, by directly engaging in R&D activities and using R&D subsidies, may enhance economic growth. --
    Keywords: government R&D,innovation,endogenous growth,bargaining,indeterminacy
    JEL: O30 O41 L00
    Date: 2013
  5. By: Andrea Gauselmann
    Abstract: Innovation systems abroad become more and more important to multinational enterprises (MNEs) as sources of knowledge and technology. On the other hand, MNEs’ foreign subsidiaries can be considered agents of technological and economic development in their target location region. Applying a logit estimation, this discussion paper investigates which firm- and region-specific determinants influence cooperations in the area of research and development (R&D) between the foreign subsidiary and the regional innovation system. Results suggest that especially the foreign subsidiary’s mandate in terms of R&D and management, its size and the regional knowledge stock are positively associated with these co-operations. The analysis focuses on posttransition economies, using the example of five selected CEE countries and East Germany. We exploit a unique dataset – the IWH FDI Micro Database – which holds information on 1,245 foreign subsidiaries in this region.
    Keywords: foreign direct investment, Central East Europe, East Germany, R&D-cooperations
    JEL: F23 O30 P13 P20
    Date: 2013–02
  6. By: Spyros Arvanitis (KOF Swiss Economic Institute, ETH Zurich, Switzerland); Tobias Stucki (KOF Swiss Economic Institute, ETH Zurich, Switzerland)
    Abstract: In this study we investigate the impact of early stage venture capital on innovation activities of Swiss start-ups. This is done based on a cohort of start-ups that is representative of all firms founded in Switzerland in 1996/97 as recorded by a census of the Swiss Federal Statistical Office for this period. We analyze not only the impact of early stage venture capital on innovation performance 3 years after firm foundation but also 6 and 9 years after firm start, respectively, for those firms that survived so long and reported continuously innovation activities (persistence of innovation). The results support neither the hypothesis of a positive impact on initial innovation activities nor the hypothesis of a positive time-persistent effect on innovation performance of start-ups.
    Keywords: venture capital, start-ups, innovation performance
    JEL: L20 O31
    Date: 2013–02
  7. By: Josheski, Dushko; Magdinceva Sopova, Marija
    Abstract: The aim of this paper is to investigate the issue of R&D investment and the market value of the firm. This idea dating back from Arrow paper, later developed by Paul Romer but in the area of economic growth. Zvi Griliches (1979), first introduced the production function, which later would be used in a vast literature from this area (Market value of the firms and R&D investment). In the theoretical section of this paper we are describing Tobin’s original model, and Abel’s (1984) model, this models relates Tobin’s quotient with intangible assets of the company. In the empirical part we develop cross-section time series model (Feasible Generalized Least Squares Model), for a panel of countries in Europe including UK and Turkey, in total of 11 panels. Later we test that model by estimating the marginal effects of R&D investment with Tobin’s q on a small economy such as R. Macedonia. The results exert positive and statistically significant relationship between market value of the firms and R&D investment. --
    Keywords: Tobin’s q,R&D,knowledge absorption
    JEL: D9 D46
    Date: 2013–01–31
  8. By: Alessandra Colombelli (GREDEG - Groupe de Recherche en Droit, Economie et Gestion - Université Nice Sophia Antipolis (UNS) - CNRS : UMR6227); Jackie Krafft (GREDEG - Groupe de Recherche en Droit, Economie et Gestion - Université Nice Sophia Antipolis (UNS) - CNRS : UMR6227); Francesco Quatraro (GREDEG - Groupe de Recherche en Droit, Economie et Gestion - Université Nice Sophia Antipolis (UNS) - CNRS : UMR6227)
    Abstract: The paper analyzes the effects of the properties of firms' knowledge base on the survival likelihood of firms. Drawing upon the analysis of the patterns of co-occurrence of technological classes in patent applications, we derive the coherence, variety and cognitive distance indexes, accounting respectively for technological complementarity, differentiation and (dis)similarity in the firms' patent portfolios. The results of our analysis are in line with the previous literature, showing that innovation enhances the survival likelihood of firms. In addition, we show that the search strategies at work in the development of firms' knowledge base matter in reducing the likelihood of a failure event. Knowledge coherence and variety appear to be positively related to firms' survival, while cognitive distance exerts a negative effect. We conclude that firms able to exploit the accumulated technological competences have more chances to be successful in competing durably in the market arena, and derive some policy implications concerning the role of public intervention in the orientation of search efforts in local contexts.
    Keywords: Knowledge coherence; variety; cognitive distance; firms' survival
    Date: 2013–01–21
  9. By: William Latham (Department of Economics, University of Delaware, Newark, DE 19711, USA); Christian Le Bas (Université de Lyon, Lyon, F-69007, France ; CNRS, GATE Lyon St Etienne,F-69130 Ecully, France); Dmitry Volodin (HDR Inc., Silver Spring, MD, USA)
    Abstract: Dans ce texte nous décrivons et comparons les systèmes d’innovation de quatre grands pays asiatiques (Chine, Corée, Japon, Taiwan) à partir de quelques caractéristiques des inventeurs les plus productifs de ces pays. On mobilise le modèle évolutionniste de production de connaissance par recombinaisons pour expliquer la productivité, la mobilité et la valeur des inventions de ces inventeurs prolifiques. Les données de brevets de la base du NBER permettent d’estimer une série de relations. Nos principaux résultats sont : validité pour tous les pays de la loi expliquant la valeur des inventions par la productivité de l’inventeur, la mobilité inter firmes ne joue aucun rôle sur la productivité des inventeurs au Japon et en Corée, elle a un impact positif sur leur productivité en Chine et à Taiwan, la mobilité internationale des inventeurs prolifiques joue un rôle dans la détermination de la valeur des inventions à Taiwan.
    Keywords: system of innovation, inventor, mobility, patent value
    JEL: O11 O15 O3 O53
    Date: 2013
  10. By: Annalisa Caloffi; Federica Rossi; Margherita Russo
    Abstract: We contribute to the debate on the assessment of the behavioural effects of policies by investigating which features of policy interventions in support of innovation networks, if any, improve the firms’ ability to form subsequent relationships. In order to do so, we analyse the evolution of dyadic relationships within a set of policy interventions implemented by the Italian region of Tuscany between 2002 and 2008, aimed at supporting innovation projects performed by networks of heterogeneous agents. Our analysis shows that the observed policies have changed the relational pattern of the firms, pushing them to collaborate – often in a stable way – with a number of agents. We find that a large sectoral heterogeneity among agents is generally associated with a lower probability of networking; and that the presence of specialized intermediaries increases the firms’ ability to network with universities.
    Keywords: Evaluation; innovation networks; dyadic relationships; behavioural effects; innovation policy
    JEL: D85 H43 L14
    Date: 2013
  11. By: Veronika Kulmer (Wegener Center for Climate and Global Change, University of Graz, Austria)
    Abstract: This paper evaluates policy options that foster the progress of alternative, environmentally friendly passenger transport technologies in order to reduce greenhouse gas emissions viable technological switch. For the example of Austria, we develop a dynamic computable general equilibrium model which explicitly considers passenger transport technologies comprising "internal combustion engine” (ICE), “plug-in hybrid electric vehicle” (PHEV), “electric vehicle” (EV) and “fuel cell electric vehicle” (FCEV). Regarding technological progress we also incorporate labor augmenting, directed technological change. For policy analysis, we study the effects of (i) a phase out of ICE and subsidy in R&D, (ii) a fuel tax and subsidy in R&D and (iii) an output subsidy on FCEV. We find that in terms of overall emission reduction, in the given time scale from 2005 to 2050, the continuous phase-out of ICE in combination with a subsidy in R&D is the most effective policy measure. The fuel tax in combination with a subsidy in R&D shows the smallest emission reduction. However, in terms of costs, impacts on consumption of private goods are the smallest among all policy instruments. Moreover, domestic output of economic sectors is boosted. Finally, results show, that the competitiveness of FCEV implies a considerable fall in emissions and favors production of several economic sectors, such as electrical machinery and chemical products. However, in order to ensure competitiveness the output subsidy on FCEV is extremely high, impacting private consumption strongly.
    Keywords: technology policy, directed technological change, computable general equilibrium
    JEL: O31 O38 Q55 Q58
    Date: 2013–02
  12. By: Nicholas Bloom; Paul Romer; Stephen Terry; John Van Reenen
    Abstract: When will reducing trade barriers against a low wage country cause innovation to increase in high wage regions like the US or EU? We develop a model where factors of production have costs of adjustment and so are partially "trapped" in producing old goods. Trade liberalization with a low wage country reduces the profitability of old goods and so the opportunity cost of innovating falls. Interestingly, the "China shock" is more likely to induce innovation than liberalization with high wage countries. These implications are consistent with a range of recent empirical evidence on the impact of China and offers a new mechanism for positive welfare effects of trade liberalization over and above the standard benefits of specialization and market expansion. Calibrations of our model to the recent experience of the US with China suggests that there will be faster long-run growth through innovation in the US and that, in the short run, this is magnified by the trapped factor effect.
    Keywords: Trade, innovation, China
    JEL: O33 F16 O38 J33
    Date: 2013–02
  13. By: Benad, Holger; Bode, Martin; Hack, Andreas; Kleine-Möllhoff, Peter; Wagner, Hanna
    Abstract: This paper aims to present a sustainable business model for eMobility. In order to achieve this goal four different working packages are created. First of all different types of innovation are studied and defined focusing on disruptive innovations. Next different definitions of business models are analyzed and a modified business model is designed which includes eight main components - strategy, value proposition, financial aspects, resources, processes, environment, networks & channels as well as customer & market scope. In the following part the company Hilti, a supplier of the construction industry is researched and analyzed regarding its business model and the possible disruptive innovation fleet management. Then based on previous analyses a business model for eMobility is developed. The proposed business model aims at propagating eMobility, making effective advertising and testing different technologies in the field. Therefore the paper is introducing a business model for a taxi company and defining each component in detail. It presents potentials of eMobility in general and facts about the taxi industry to generate a better view of the overall situation. The paper closes with an outlook on further potentials of the proposed business model. --
    Date: 2013
  14. By: Klaus Prettner
    Abstract: We introduce publicly funded education in R&D-based economic growth theory. The framework allows us to i) incorporate a realistic process of human capital accumulation for industrialized countries, ii) reconcile R&D-based growth theory with the empirical evidence on the relationship between economic prosperity and population growth, iii) revise the policy invariance result of semi-endogenous growth frameworks, and iv) show that the transitional effects of an education reform tend to be qualitatively different from its long-run impact.
    Keywords: human capital accumulation; technological progress; scale-free economic growth; public education policy
    JEL: I25 J24 O11 O31 O41
    Date: 2013–01–14
  15. By: Gilbert Giacomoni (CGS - Centre de Gestion Scientifique - École Nationale Supérieure des Mines - Paris (ParisTech), IRG - Institut de Recherche en Gestion - Université Paris XII - Paris Est Créteil Val-de-Marne : EA2354 - Université Paris-Est Marne-la-Vallée); Rémi Jardat (ISTEC - Institut supérieur des Sciences, Techniques et Economie Commerciales - ISTEC, CNAM Paris - Conservatoire National des Arts et Métiers - Conservatoire National des Arts et Métiers (CNAM))
    Abstract: D'après l'Organisation Mondiale de la Propriété Intellectuelle et l'Organisation Mondiale du Commerce, un élément de nouveauté inclut des caractéristiques nouvelles ne faisant pas partie du fond de connaissances existantes dans le domaine technique considéré. Nous partons de l'idée qu'un concept d'objet, de procédés, d'organisations ou de marchés est novateur quand il y a survenance d'un processus d'hybridation de fonds de connaissances jusque-là indépendants à l'issue duquel, de nouvelles identités émergent sur un nouveau fond de connaissance. Nous proposons une théorie générale pour concevoir de telles hybridations au cours d'un processus d'exploration sélective impliquant la rationalité, l'imaginaire, la mémoire, l'analogie et la réflexivité.
    Keywords: innovation, invention, création, conception, mémoire, imaginaire, hybridation, analogie, réflexivité,
    Date: 2013
  16. By: Baier, Elisabeth; Kroll, Henning; Zenker, Andrea
    Abstract: The EU wide differences in regional autonomy that we can observe today are based on comparatively recent developments which have occurred in parallel in a number of nations. In general, we found that the conception of a relevant quantitative reference framework for future research is not an easy task. Against this background, the main merit of our analysis may not lie in the overall index as such but in its composite parts. Moreover, our findings have been complemented by an illustration of different national cases to underline that the constitution of regional autonomy is a dynamic process that develops against different backgrounds and in different directions. (...) --
    Date: 2013
  17. By: Vilen Lipatov, Gregor Langus, Damien Neven (Graduate Institute of International Studies)
    Abstract: This paper analyzes the effect of injunctions on royalty negotiations for standard essential patents. We develop a model in which courts grant injunctions only when they have sufficient evidence that the prospective licensee is unwilling, in line with the way we understand Courts to operate in Europe. In such a framework the prospective licensee has a powerful strategic tool: the offers that he makes to the patent holder will affect the royalty rate that the Court may adopt as well as the probability of being subject to injunctions (and the liability for litigation costs). We find that despite the availability of injunctions, the holder of a sufficiently weak patent will end up accepting below FRAND rates, in particular when litigation cost are high. We also find that the prospective licensee will sometimes prefer to litigate and the holder of a sufficiently strong patent will always end up in litigation by rejecting offers below FRAND. This arises in particular when the prospective licensee has little to fear from being found unwilling, namely when the trial takes time (so that the threat of injunctions is less powerful), and when litigation costs are low. Importantly, we thus find that hold up (royalties above the fair rate) as well as reverse hold up (royalties below the fair rate) may arise in equilibrium.
    Keywords: standard essential patent, injunctions, hold up, reverse hold up
    JEL: K41 L49 O34
    Date: 2013–02–26
  18. By: Kroll, Henning; Schricke, Esther
    Abstract: In summary, our study has highlighted that technology transfer systems in China may involve more channels, involve more partners, and in global terms be more dynamic than commonly assumed - at least in the case of well-developed urban innovation systems such as Beijing. With certainty, the times where spin-offs had to be set up for a lack of other options are over. Instead, our survey documents a vibrant set of interactions between not only science and industry but also up and down the value chain within industry itself. In terms of quantities, at least, this system does no longer appear inferior or very differently structured than those of technologically more advanced nations. Moreover, most of the surveyed companies could not find fault with many of the commonly assumed obstructions of knowledge exchange in China - such as lack of trust or unfavourable and poorly implemented regulations. --
    Date: 2013
  19. By: Rutger P. Daems PhD (Planet Strategy Group, Brussels, Belgium); Edith L. Maes DBA (Maastricht School of Management, PO Box 1203, 6201 BE Maastricht, The Netherlands)
    Abstract: BACKGROUND Consistent with good corporate citizenship and the role of multinational pharmaceutical corporations in producing social goods, there is a need to clarify the concept of global burden of disease (GBD) and create performance metrics that measure a firm’s contribution to ‘saving lives’ through its current portfolio as well as identify future opportunities for enhanced product/service offering. OBJECTIVE The purpose is to develop besides a conceptual framework an analytic decision-making tool to assess and enhance a firm’s contribution to reducing the burden of disease, and to propose pathways on how this can be accomplished by optimizing the social and business returns on investment thereby maximizing the outcome for all stakeholders (i.e. patient, government, payer and firm). METHODOLOGY Product development and financial parameters are connected in an analytic decision model in combination with disease burden metrics. Through event study methodology, we subsequently explore solutions to a number of market, technology, and system issues leading to a disparity between socially and privately appropriable benefits. This is examined through a series of case studies. The GBD-based theoretical framework provides a general overview and at the same time an assessment of the social return on investment (SRI) as well as the contribution made by any specific compound or project that together constitute the company’s portfolio – now and in the future. The social outcome (SRI) is commonly expressed as Disability Adjusted Life Years (DALYs) averted and the preferred indicator of how successful the burden of disease has been reduced. Simultaneously, the business return on investment (BRI) is computed, capturing the R&D costs and risks in a modular fashion, allowing executives to calculate the profitability index for each product or project. CONCLUSION This paper contributes to the burgeoning literature on medical innovation and the ambition to broaden access to medicines. The relationship between a firm’s product outcomes and its corporate social responsibility is examined in the context of a globalizing world still dominated by different national economies and healthcare needs. To better accommodate these needs a holistic framework is required that captures the demands of those living in high, middle and low-income countries. We believe the suggested framework is able to accomplish this goal and essentially provides a more holistic product portfolio management tool that links the social and business returns of pharmaceutical innovation into a coherent analytic and decision framework, while also providing a dynamic view on how the results obtained along each of the core axes can be improved or optimized.
    Date: 2013–02

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