nep-ino New Economics Papers
on Innovation
Issue of 2013‒04‒27
thirty-two papers chosen by
Steffen Lippert
University of Otago, Dunedin

  1. Innovation and productivity: An update By Mohnen, Pierre; Hall, Bronwyn H.
  2. Heterogeneity in innovation strategies, evolving consumer preferences and market structure: An evolutionary multi-agent based modelling approach By Cevikarslan, Salih
  3. Optimal patent length and patent breadth in an R&D driven market with evolving consumer preferences: An evolutionary multi-agent based modelling approach By Cevikarslan, Salih
  4. The Radical Innovation Investment Decision Refined By Bilkic, Natasa; Gries, Thomas; Naudé, Wim
  5. On the Origins of the Worldwide Surge in Patenting: An Industry Perspective on the R&D-patent Relationship By Jérôme Danguy; Gaétan de Rassenfosse; Bruno Van Pottelsberghe
  6. Conceptualizing the Innovation Process – Trends and Outlook By Kotsemir, Maxim; Meissner, Dirk
  7. Related Variety, Unrelated Variety and Technological Breakthroughs: an analysis of U.S. state-level patenting By Carolina Castaldi; Koen Frenken; Bart Los
  8. Patent Trading Flows of Small and Large Firms By Nicolas Figueroa; Carlos J. Serrano
  9. Gestion collective et droits dans les biotechnologies : une analyse économique By Trommetter, M.
  10. Working Paper 01-13 - The impact of subsidies and fiscal incentives on corporate R&D expenditures in Belgium (2001-2009) By Michel Dumont
  11. Recombinant Innovation and Endogenous Transitions By Koen Frenken; Luis R. Izquierdo; Paolo Zeppini
  12. Fast-tracking “green” patent applications: an empirical analysis By Antoine Dechezleprêtre
  13. Service innovation in the drive-recorder business By Nagata, Junji; Shinohara, Takeshi; Kunishi, Teruo
  14. Optimal production channel for private labels: Too much or too little innovation? By Claire Chambolle; Clémence Christin; Guy Meunier
  15. Empirical study on ICT use and business strategy for innovation among Japanese SMEs By Idota, Hiroki; Bunno, Teruyuki; Tsuji, Masatsugu
  16. Towards a General Theory of Innovation: Civic Entrepreneurship and the Making of a Cultural Cluster in Ashland, Oregon By Henry Etzkowitz
  17. Determinants of Demand for Technology in Relationships with Complementary Assets in Japanese Firms By KANI Masayo; MOTOHASHI Kazuyuki
  18. The butterfly and the elephant: local social innovation, the welfare state and new poverty dynamics By Stijn Oosterlynck; Yuri Kazepov; Andreas Novy; Pieter Cools; Eduardo Barberis; Florian Wukovitsch; Tatiana Saruis; Bernhard Leubolt
  19. Patterns of Innovation in SaaS Networks: Trend Analysis of Node Centralities By Kibae Kim; Wool-Rim Lee; Jorn Altmann
  20. The impact of patent litigation on shareholder value in the IT industry By Nam, Sangjun; Nam, Changi
  21. Signaling and the Ownership of Academic Patents By Nicolas CARAYOL; Valerio STERZI
  22. Firm's cooperation activities: The relevance of public research, proximity and personal ties - A study of technology-oriented firms in East Germany By Charlotte Schlump; Thomas Brenner
  23. Innovation diffusion in networks: the microeconomics of percolation By Paolo Zeppini; Koen Frenken; Luis R. Izquierdo
  24. Endogenous growth and intellectual property rights: a North-South modelling proposal By Mónica L. Azevedo; Óscar Afonso; Sandra T. Silva
  25. Regional Effects of a Cluster-oriented policy measure. The Case of the InnoRegio program in Germany By Thomas Brenner; Carsten Emmrich; Charlotte Schlump
  26. Innovation and Production in the Global Economy By Costas Arkolakis; Natalia Ramondo; Andrés Rodríguez-Clare; Stephen Yeaple
  27. Working Paper 02-13 - Machines that go ‘ping’: medical technology and health expenditures in OECD countries By Michel Dumont; Peter Willemé
  28. Linking ICT related Innovation Adoption and Productivity: results from micro-aggregated data versus firm-level data. By Van Leeuwen, George; Polder, Michael
  29. Just-in-time inventions and the development of standards: How firms use opportunistic strategies to obtain standard-essential patents (SEPs) By Byeongwoo Kang; Rudi Bekkers
  30. Exploring mobile pricing strategies and innovations in the Thai mobile communications market By Srinuan, Chalita; Srinuan, Pratompong; Bohlin, Erik
  31. Institutional Complementarities and Property Rights-Technology Equilibria under Knowledge Intensive Technology By Erkan Gurpinar
  32. The Shapley value as a guide to FRAND licensing agreements. By Pierre Dehez; Sophie Poukens

  1. By: Mohnen, Pierre (UNU-MERIT, and SBE, Maastricht University); Hall, Bronwyn H. (University of California at Berkeley, NBER, UNU-MERIT, and SBE, Maastricht University.)
    Abstract: This paper reviews the existing evidence regarding the effects of technological and non-technological innovations on the productivity of firms and the existence of possible complementarities between these different forms of innovation.
    Keywords: innovation, productivity
    JEL: O30 O31 O33 O40
    Date: 2013
  2. By: Cevikarslan, Salih (UNU-MERIT, and SBE, Maastricht University)
    Abstract: The aims of this paper are twofold. The first is to analyse the interaction between research and development (R&D) activities of firms and heterogeneous consumer preferences in structuring the evolution of an industry. The second is to explore the heterogeneity in firms' innovation strategies. Is heterogeneity sustainable in the long-term and what happens to the market shares of firms having different innovation strategies when a structural market characteristic (market size) or a behavioural rule (R&D intensity) is changed? To answer these research questions, an evolutionary, multi-agent based, sector-level innovation model is designed. The model addresses supply and demand sides of the market simultaneously with the co-evolution of heterogeneous consumer preferences, heterogeneous firm knowledge bases, and technology levels at the micro level.
    Keywords: Heterogeneity, innovation strategies, evolutionary economics, agent-based modelling
    JEL: B52 L11 O33
    Date: 2013
  3. By: Cevikarslan, Salih (UNU-MERIT, and SBE, Maastricht University)
    Abstract: The aims of this paper are twofold. The first is to analyse the interaction between research and development (R&D) activities of firms and heterogeneous consumer preferences in structuring the evolution of an industry. The second is to explore the effects of patent life and patent breadth on market outcomes. To answer these research questions, an evolutionary, multi-agent based, sector-level cumulative innovation model is designed. The model addresses supply and demand sides of the market simultaneously with the co-evolution of heterogeneous consumer preferences, heterogeneous firm knowledge bases and technology levels at the micro level. In line with the evolutionary modelling tradition, we have a search algorithm-innovation and imitation of products by firms - a selection of algorithm-revealed preferences of the consumers - and a population of objects in which variation is expressed and on which selection operates: namely, firms (Windrum, 2004). Firms compete on quality and price of their products in an oligopolistic market whereas consumers, constrained by their computational limits, act to maximize their utility with their product choices in a boundedly rational way. There is continuous firm entry and exit depending on the competitive performance of the firms.
    Keywords: Patents, industrial dynamics, evolutionary economics, agent-based modelling
    JEL: B52 L11 O34
    Date: 2013
  4. By: Bilkic, Natasa (University of Paderborn); Gries, Thomas (University of Paderborn); Naudé, Wim (Maastricht School of Management)
    Abstract: We refine modelling of the radical innovation decision in this paper by extending real option theory to include non-marginal stochastic jump processes. From the model analytics we determine that the average magnitude and frequency of non-marginal stochastic jump processes are the most important parameters in this highly uncertain decision process. We show that these stochastic shocks imply that investment in radical innovation may very often be too time consuming and/or expensive to remain attractive for private entrepreneurs.
    Keywords: radical innovation, innovation, entrepreneurship, investment, R&D, risk, real option theory, technology
    JEL: D92 D81 L26
    Date: 2013–04
  5. By: Jérôme Danguy; Gaétan de Rassenfosse; Bruno Van Pottelsberghe
    Abstract: This paper decomposes the R&D-patent relationship at the industry level to shed light on thesources of the worldwide surge in patent applications. The empirical analysis is based on aunique dataset that includes 5 patent indicators computed for 18 industries in 19 countriescovering the period from 1987 to 2005. The analysis shows that variations in patentapplications reflect not only variations in research productivity but also variations in theappropriability and filing strategies adopted by firms. The results also suggest that the patentexplosion observed in several patent offices can be attributed to the greater globalization ofintellectual property rights rather than to a surge in research productivity.
    Keywords: appropriability; complexity; patent explosion; propensity to patent; research productivity; strategic patenting
    JEL: O30 O34 O38
    Date: 2013–04
  6. By: Kotsemir, Maxim; Meissner, Dirk
    Abstract: This paper introduces the evolving understanding and conceptualization of innovation process models. From the discussion of different approaches towards the innovation process understanding and modeling two types of approaches to the evolution of innovation models are developed and discussed. First the so-called innovation management approach which focuses on the evolution of the company innovation management strategies in different socioeconomic environments. Second is the analysis the evolution of innovation models themselves in conceptual sense (conceptual approach) as well as analysis of theoretical backgrounds and requirements for these models. The main focus of analysis in this approach is on advantages and disadvantages of different innovation models in their ability to describe the reality of innovation processes. The paper focuses on the advantages and disadvantages as well as potentials and limitations of the approaches and also proposes potential future developments of innovation models as well as the analysis of driving forces that underlie the evolution of innovation models recently.
    Keywords: innovation models; innovation process; generations of innovation models; process dimension of innovation; innovation models evolution; innovation management
    JEL: O14 O30 O31 O32 O33 Q55
    Date: 2013–04–12
  7. By: Carolina Castaldi; Koen Frenken; Bart Los
    Abstract: We investigate how variety affects the innovation output of a region. Borrowing arguments from theories of recombinant innovation, we expect that related variety will enhance innovation as related technologies are more easily recombined into a new technology. However, we also expect that unrelated variety enhances technological breakthroughs, since radical innovation often stems from connecting previously unrelated technologies opening up whole new functionalities and applications. Using patent data for US states in the period 1977-1999 and associated citation data, we find evidence for both hypotheses. Our study thus sheds a new and critical light on the related-variety hypothesis in economic geography.
    Keywords: recombinant innovation, regional innovation, superstar patents, technological variety, evolutionary economic geography
    JEL: O31 R11
    Date: 2013–02
  8. By: Nicolas Figueroa; Carlos J. Serrano
    Abstract: This article presents the results of an analysis of the patent trading flows of small and large firms and the determinants of these firm's patent sale and acquisition decisions. We also examine whether these transactions lead to an excessive concentration of patent rights. We show that small firms disproportionately sell and acquire more patents than large firms, and find no evidence that patent trading brings about a significant concentration of patent rights in the hands of large firms. We find that the match between new patented innovations and the original inventor's patent portfolio plays an important role in how successful firms are at generating value from their patents, and in the decision to sell a patent. And among the traded patents, we show that patent acquisitions respond to complementarities between the acquired patented innovation and the buyer's technological capabilities to adopt it. Our empirical analysis uses a new, comprehensive data set that matches information on patent trades and the identity of patent owners over a patent's lifetime.
    JEL: L22 L24 O32 O34
    Date: 2013–04
  9. By: Trommetter, M.
    Abstract: De manière générale, les incitations à innover dépendent d'un certain nombre de caractéristiques : coût de la R&D, nature de l'innovation, financement de la R&D... Dans ce cadre d'analyse, on peut montrer qu'il n'existe pas une relation simple entre un type d'innovation et son financement. C'est pourquoi, dans ce papier, l'auteur analyse d'abord les caractéristiques des innovations et, en particulier, la capacité de l'innovateur à pouvoir exclure de l'accès et à limiter ou non des rivalités entre les usages. Ensuite, il rappelle brièvement l'histoire des biotechnologies agricoles. Dans un troisième temps, il présente les divers modes de gestions collectives qui ont été mises en oeuvre. Enfin, il analyse l'organisation de la recherche en sélection génomique et met en évidence la création d'un nouveau type de biens : les biens communs.
    JEL: O31 O34 K11
    Date: 2013
  10. By: Michel Dumont
    Abstract: This paper presents the results of an initial evaluation of federal fiscal incentives in support of Research and Development (R&D) by companies in Belgium. The impact of regional subsidies and the partial exemption from advance payment for R&D personnel is estimated for the period 2001-2009. The results show that the existing measures of public support have stimulated companies to carry out additional R&D activities.
    JEL: H32 O32 O38
    Date: 2013–01–25
  11. By: Koen Frenken; Luis R. Izquierdo; Paolo Zeppini
    Abstract: We propose a model of technological transitions based on two different types of innovations. Branching innovations refer to technological improvements along a particular path, while recombinant innovations represent fusions of multiple paths. Recombinant innovations create “short-cuts” which reduce switching costs allowing agents to escape a technological lock-in. As a result, recombinant innovations speed up technological progress allowing transitions that are impossible with only branching innovations. Our model replicates some stylized facts of technological change, such as technological lockin, experimental failure, punctuated change and irreversibility. Furthermore, an extensive simulation experiment suggests that there is an optimal rate of innovation, which is strongly correlated with the number of recombination innovations. This underlines the pivotal role of technological variety as a seed for recombinant innovation leading to technological transitions.
    Keywords: variety, network externalities, lock-in, switching costs, recombinant innovations, transition, punctuated change
    JEL: C15 O33
    Date: 2012–01
  12. By: Antoine Dechezleprêtre
    Abstract: This paper presents the first empirical analysis of programmes to fast-track ‘green’ patent applications in place in seven Intellectual Property offices around the world. We find that only a small share of green patent applications (between 1% and 20% depending on the patent office) request accelerated examination, suggesting that patent applicants have a strong incentive to keep their patent applications in the examination process for as long as possible. Fast-tracking programmes reduce the examination process by several years compared to patents going through normal examination procedure and have seemingly accelerated the diffusion of technological knowledge in green technologies. In addition, we find that applicants require accelerated examination for patents of relatively higher value and that fast-tracking programmes seem to be particularly appealing to start-up companies in the green technology sector that are currently raising capital but still generate small revenue.
    Date: 2013–02
  13. By: Nagata, Junji; Shinohara, Takeshi; Kunishi, Teruo
    Abstract: Trend toward service economy is growing even stronger in society and industry as well as each company. Frameworks of service innovation become vital not only for analysis but also for stimulating the innovation systematically.In this paper, we focus on the drive-recorder business which is comparatively niche but is evolving in a unique way as a part of transportation- telematique industry. We analyzed the drive-recorder industry. Two factors are mainly considered hereby. The first one is consumerization and the other ecosystem . Both are characteristic factors for the innovation in the sector.We also propose the framework for innovation taking account of these factors. And this framework make us possible to approach systematically toward innovation. We also evaluate and compared this framework among others. --
    Date: 2012
  14. By: Claire Chambolle (INRA, UR1303 ALISS and Department of Economics Ecole Polytechnique, France); Clémence Christin (Normandie University, Caen, Faculty of Economics and Business Administration - CREM-CNRS UMR6211, France); Guy Meunier (INRA,UR1303 ALISS and Department of Economics Ecole Polytechnique, France)
    Abstract: We analyze the impact of the private label production channel on innovation. A retailer may either choose a competitive fringe or rely on a brand manufacturer to produce its private label. The trade-o between the two channels is a choice between too much or too little innovation, i.e. quality investment, on the private label. On the one hand, when choosing the competitive fringe, the retailer over-invests to increase its buyer power. On the other hand, when the brand manufacturer is selected, a hold-up e ect leads to under-investment. In addition, selecting the brand manufacturer may create economies of scale that spur innovation.
    Keywords: Private label, vertical relations, buyer power, innovation
    JEL: L14 L15 L42
    Date: 2013–04
  15. By: Idota, Hiroki; Bunno, Teruyuki; Tsuji, Masatsugu
    Abstract: ICT is expected to play an important role for innovations in Japanese SMEs. In this paper, how ICT use promotes innovation is clarified. In addition, what kind of business strategy SMEs should follow is attempted to achieve innovation by focusing on the behavior of the top management as well as employees. A mail survey was conducted in February 2012 to innovative SMEs. An ICT advancement index is constructed based on the sales management system, groupware, internal SNS and SCM. Logistic regression analysis is applied for verifying the four hypotheses by using the ICT index. The results obtained reveals that SNEs that used ICT for new product development such as collecting customers' needs achieve more product as well as process innovation. And it is confirmed that SMEs which positively share information using ICT achieve more process innovation. And top management should demonstrate the leadership, and manage the product innovation process through top-down including the promotion of ICT use. On the other hand, not only the manager but also the employees have to act flexibly and autonomously to share information by ICT are important in the process innovation that is required to restructure existing business processes. --
    Date: 2012
  16. By: Henry Etzkowitz (Human Sciences and Technologies Advanced Research Institute (H-STAR), Stanford University)
    Date: 2013–04
  17. By: KANI Masayo; MOTOHASHI Kazuyuki
    Abstract: There is a growing trend of open innovation in the new product development process, while technology insourcing has not been investigated very well as compared to technology outsourcing in empirical literature. In this paper, we examine the factors that determine whether to acquire external knowledge and how to assimilate it in the process of new product development by using novel dataset at the product level, conducted by RIETI in 2011. We distinguish whether technology partners are also business partners such as suppliers or customers, and show their distinct patterns. In the case that technology partners are not business partners, patents play an important role in moderating transaction costs in the partnership, while co-specialization of technology and its complementary assets with partners is found for cases in which technology partners are also business partners.
    Date: 2013–04
  18. By: Stijn Oosterlynck; Yuri Kazepov; Andreas Novy; Pieter Cools; Eduardo Barberis; Florian Wukovitsch; Tatiana Saruis; Bernhard Leubolt
    Abstract: This paper surveys the literature on localized socially innovative policies and actions aimed at overcoming poverty and social exclusion. The authors show how these local forms of social innovation emerged in the late 1970s against the backdrop of the crisis and transformation of the Western welfare state, the emergence of new social risks and the transition from the Fordist to the knowledge based economy. The paper aims to learn about new or older but as yet too often overlooked poverty and social exclusion dynamics from the locally embedded and collective responses to it by civil society associations, local state institutions and/or social entrepreneurs. The paper first develops a definition of social innovation as it applies to the fight against poverty and social exclusion. In a second part the authors put social innovation in its historical context by discussing three different strands of social innovation research and practice, namely: (1) social innovation as a critique of the territorial innovation model underlying the knowledge-based economy; (2) social innovation as a critique on the bureaucratic nature of the welfare state; and (3) socially innovative forms of neighbourhood development as a response to the urban crisis. The third section of the paper then zooms in on the process dimensions of social innovation for each of the three strands discussed in the second part. The authors propose the metaphor of ‘the elephant and the butterfly’ to think through the relationship between localized forms of socially innovative actions and initiatives on the one hand and the macro-level institutions of the welfare state and dialectical interplay between state institutions and civil society associations on the other. The paper concludes with a preliminary list of social needs, trends in poverty and the reconfiguration of welfare institutions and policies that are revealed by place-based socially innovative practices.
    Keywords: Europe, Social innovation, welfare state, urban crisis, knowledge-based economy, poverty, social exclusion
    JEL: D31 O52
    Date: 2013–04
  19. By: Kibae Kim (Technology Management, Economics, and Policy Program, College of Engineering, Seoul National University); Wool-Rim Lee (Technology Management, Economics, and Policy Program, College of Engineering, Seoul National University); Jorn Altmann (Technology Management, Economics, and Policy Program, College of Engineering, Seoul National University)
    Abstract: As software vendors provide their software as a service (SaaS) and allow users to access the software functions via open interfaces, the innovation style has shifted from local innovation of a software user, to collective innovation of an entire system of users and software. This new innovation trend directs the innovation research to the structural and evolutionary patterns of SaaS networks, in which a node represents a software service and a link the combined use of two software services for provisioning a new service. However, prior research concentrates only on the static properties of network structure and the position of nodes in the network, but misses the dynamics in the evolution context. In this paper, we close this gap by investigating the trend of centralities of five representative software services in a SaaS network. The data has been obtained from Our results suggest that each software service of a SaaS network follows the typical life cycle from growth to decline. In addition to this, the innovation trend shifts from image services to social networking services, involving a transition of network structure. Our results also show the necessity of innovation studies that investigate the changing patterns of evolving innovation networks.
    Keywords: Open Innovation, Centralities, Composite Services, Software-as-a-Service.
    JEL: D85 L86 O33
    Date: 2013–01
  20. By: Nam, Sangjun; Nam, Changi
    Abstract: In recent years, patent lawsuits in the IT industry have become a sensitive issue. While numerous studies have investigated the wealth effect of patent and corporate litigation, few studies have examined the current patent litigation in the IT industry. This paper investigates the wealth effect of patent lawsuits using an event study method. This paper hypothesizes that a firm which initiates a lawsuit experiences more of a positive return than a rival firm when the patent lawsuit filing is announced, as a firm will initiate a lawsuit when they are convinced that they have a vantage position in the patent lawsuit. The empirical results show that a firm which has a vantage position in a patent lawsuit experiences a positive stock price return when they sue a rival firm for patent infringement and that a firm which does not have a vantage position in a patent lawsuit experiences a negative stock price return when they are sued by a rival firm. The empirical results support that a vantage position in patent litigation is the one of the key factors to explain the wealth effect of patent litigation. This paper suggests that action to increase patent competency to reach a vantage position in a patent war is one of the ways to increase shareholder value. --
    Keywords: Patent litigation,Event study,Intellectual property,Litigation cost
    Date: 2012
  21. By: Nicolas CARAYOL; Valerio STERZI
    Abstract: Although in most countries, professors are legally obligated to disclose their inventions to their university\'s technology transfer office, the latter often does not have the real authority to enforce this rule. We here introduce a model that endogenizes a professor\'s decision of a form of transfer for her idea. If she does not disclose the idea to the transfer office, she still faces, on her own, both the difficulty of identifying a good match for her technology with a company and the incomplete information of the company on the quality of her idea. She can, however, signal that quality to the company at some cost which is decreasing with quality. We find four types of pure strategy equilibria of this signaling game. Taking these four types of equilibria into account, the model predicts that the company ownership of academic patents are associated with higher patent quality, greater inventor experience in technology transfer, and lower technology transfer office experience. We estimate the model and confirm its predictions on an original sample of 1,260 patent-professor pairs built on UK data. Specific attention is paid to the control of various forms of potential reverse causality of the type of patent applicant on patent quality.
    Keywords: signaling game, academic patents, technology transfer.
    JEL: O31 O34
    Date: 2013
  22. By: Charlotte Schlump (Philipps-Universität Marburg); Thomas Brenner (Philipps-Universität Marburg)
    Abstract: Cooperation in innovation processes has become crucial for the competitiveness of many firms. This paper focuses on technology-oriented East German firms and analyses details of their cooperation behaviour by studying the relationships between geographic and social proximity, the importance and frequency of cooperative interaction and the attributes of innovation cooperation partners that influence the importance of cooperation. Data is collected in two questionnaires and analysed by regressions. It is found, among other results, that cooperation that is established via personal contacts is, on average, more helpful and important for firms but involves less frequent interaction.
    Keywords: cooperation, firm, East Germany, policy
    JEL: D20 I28 O32 R11
    Date: 2013–04–22
  23. By: Paolo Zeppini; Koen Frenken; Luis R. Izquierdo
    Abstract: We implement a diffusion model for an innovative product in a market with a structure of social relationships. Diffusion is described with a percolation approach in the price space. Percolation shows a phase transition from a diffusion to a no-diffusion regime. This has strong implications for market demand and pricing. We study the effect of network structure on market diffusion efficiency by considering a number of cases, such as one-dimensional and two-dimensional lattices, small worlds, Poisson networks and Scale-free networks. We consider two measures of diffusion efficiency: the size of diffusion and the diffusion time-length. We find that network connectivity “spreading” is the most important factor for the size of diffusion. Clustering is ineffective. This means that societies with higher dimensionality are better markets for diffusion. This result is most evident for the size of diffusion, while a short average path-length is more important for the speed of diffusion. Endogenous learning curves shift the percolation threshold to higher prices, and constitute an endogenous mechanism of price discrimination. The best market strategy of innovation diffusion is to start with high price and allow for a learning curve.
    Keywords: critical transition, demand, learning curves, market efficiency, social networks
    JEL: C63 D42 O33
    Date: 2013–02
  24. By: Mónica L. Azevedo (Faculdade de Economia, Universidade do Porto); Óscar Afonso (CEF.UP, Faculdade de Economia, Universidade do Porto); Sandra T. Silva (CEF.UP, Faculdade de Economia, Universidade do Porto)
    Abstract: In what form should the Intellectual Property Rights (IPR) be treated in an endogenous growth model? What are the effects of introducing IPR into a North-South endogenous growth model? In this paper, we develop a general equilibrium endogenous growth model that emphasizes the IPR enforcement effects on growth, in a scenario of North-South technological knowledge diffusion. The economy consists of three sectors, and firms are engaged in step-by-step innovation. In line with the literature, we introduce an IPR parameter that makes imitation more difficult. We find that, in steady state, the increases in IPR protection result in decreases in the growth rate. This result is in line with the literature, which argues that the enforcement of IPR does not always have a positive effect on economic growth and highlights that there is much more work to be done in this field of study, given that the existing results are not consensual. To sum up, we present some suggestions for future research which can help to clarify the relationship between IPR and endogenous growth.
    Keywords: Intellectual Property Rights (IPR), economic growth, North-South model
    JEL: O33 O34 O41
    Date: 2013–04
  25. By: Thomas Brenner (Philipps-Universität Marburg); Carsten Emmrich; Charlotte Schlump (Philipps-Universität Marburg)
    Abstract: This paper examines regional effects of the InnoRegio program, which was conducted by the German Federal Ministry of Education and Research. The InnoRegio program has been a new tool of innovation policy with the aim to improve innovativeness in East Germany on the basis of prosperous regional networks. Besides the direct support of networks and innovation activities, the program was meant to trigger the regional development in East Germany. While existing studies examine whether the development of networks or cluster was successful, this paper focuses on the investigation of regional economic development. Using regional data, especially on employment and patents, we examine whether the involved industries have developed better in supported regions than in other (East) German regions. Developments are investigated for a time span including years before, during and after the policy measure. We find some positive effects in the regional development that can be assigned to the InnoRegio program.
    Keywords: cluster policy, InnoRegio program, cluster, networks, region, employment, innovation, policy evaluation
    JEL: C22 O12 O25 O33 R11 R28
    Date: 2013–01–04
  26. By: Costas Arkolakis; Natalia Ramondo; Andrés Rodríguez-Clare; Stephen Yeaple
    Abstract: One feature of globalization is that countries are increasingly specialized in either innovation or in production. To understand the forces behind this specialization and its welfare consequences, we develop a monopolistic competition model of trade and multinational production (MP) in which firms face a tradeoff between producing close to customers and producing in the least-cost location. At the country level, the location of innovation and production is determined by comparative advantage and home market effects that arise from the interaction of trade and MP costs with increasing returns to scale. The model yields simple structural expressions for bilateral trade and MP that we use to calibrate the model across a set of OECD countries. Our counterfactual exercises shed light on the effect of falling MP costs, and the entry of China into world markets, on welfare between and within countries.
    JEL: F1 F23
    Date: 2013–04
  27. By: Michel Dumont; Peter Willemé
    Abstract: While rising health care expenditures as a percentage of national income is a well-known and widely documented feature across the industrialized world, it has proved difficult to quantify the effects of the underlying cost drivers. The main difficulty is to find suitable proxies to measure medical technological innovation, which is believed to be a major determinant of steadily increasing health spending. This paper's main contribution is the use of data on approved medical devices and drugs to proxy for medical technological progress. The effects of these variables on total real per capita health spending are estimated using a panel model for 18 OECD countries covering the period 1981-2009. The results confirm the substantial cost-increasing effect of medical technology, which may account for at least 50% of the explained historical growth of spending. Excluding the approval variables causes a significant upward bias of the estimated income elasticity of health spending and negatively affects some model specification tests. Despite the overall net positive effect of technology, the effect of two subgroups of approvals on expenditure is significantly negative. These subgroups can be thought of as representing ‘incremental medical innovation', while the positive effects are related to radically innovative pharmaceutical products and devices. The results are consistent with those reported in other studies which suggest that some new products, despite their high price when they are introduced, can ultimately save money by reducing spending on other medical interventions.
    Keywords: Ageing, Health care expenditures, Income elasticity, Medical technology
    JEL: C23 H51 I10
    Date: 2013–01–29
  28. By: Van Leeuwen, George; Polder, Michael
    Abstract: E-business systems are increasingly considered as important examples of ICT related innovations embodied in software applications, the adoption of which is essential for capturing the potential fruits of several ICT externalities. For analysing the importance of this type of embodied technological progress several routes are open. One route is to look at the data that can be used. In this paper we apply the same modelling strategy to two different types of data: 1) cross-country-industry micro-aggregated data obtained after applying Distributed Micro data Analysis (DMD) and 2) firm-level data, in this case for the Netherlands. Today, the econometric analysis based on firm-level data is often more advanced and more complicated from an econometric point of view than the analysis on aggregated data. We show that DMD can be extended to enable the estimation of more complicated models that feature recent directions in micro-econometric analysis on firm-level data. Our application concerns the innovative use of E-business systems by firms. Using a rich set of cross-country-industry data constructed and tailored by DMD for this purpose, we analyse the adoption of three E-business systems (Eterprise Resourc Planning, Customer Relationship Management, Supply Chain Management). We investigate the complementarities in joint adoption and the productivity effects of adopting systems simultaneously or in isolation. The same exercise is repeated on firm-level data for the Netherlands. Our example illustrates that international benchmarking with more elaborate models on cross-country-industry panel data is feasible after using DMD to tailor the underlying firm-level data for specific research questions. This is an important result in the light of the restrictions on pooling cross-country micro data due to confidentiality rules. We find that the results are more diverging for the estimation of complementarities at the adoption stage than for the productivity effects of (joint) adoption. This result implies that measurement error and unobservable heterogeneity plays a greater role when explaining adoption pattern at the firm-level than at the aggregate level.
    Keywords: DMD, ICT, innovation, innovation complementarities, productivity
    JEL: D2 D24 D8 L2 L21
    Date: 2013–03–31
  29. By: Byeongwoo Kang; Rudi Bekkers
    Abstract: Recent years have seen large-scale litigation of standard-essential patents between companies like Apple, Samsung, Google, Motorola and Microsoft. Such patents are particular because they are, by definition, indispensable to any company wishing to implement a technical standard. Firms that do not own such patents are prepared to spend billions of dollars purchasing them. It is an interesting question how firms obtain such patents in the first place, and to what degree this depends on those firms’ strategies at the time of standardization. This paper presents an in-depth investigation on the standardization process of the successful W CDMA and LTE standards for mobile telecommunications. We studied the first 77 meetings where these standards took shape, covering a period of over 12 years, and identified the patenting behavior of each of the 939 individual participants attending these meetings, as well as the patenting behavior by non-participants, together resulting in over 14,000 patents for this technology. Our data reveals a strong relationship between patent timing and the occurrence of meetings. We observed a remarkable phenomenon that we call ‘just-in-time-inventions’: the patent intensity of about-to-become claimed essential patents is much higher during or just before these meetings than in other periods. At the same time, they are of considerably lower technical value (‘merit’). This suggests that the just-in-time inventions are only beneficial to their owners, whereas for the public they merely invoke unnecessary costs. Finally, we observed that the phenomenon of just-in-time inventions is highly concentrated among specific types of firms, above all vertically integrated ones, and the incumbent champions of the previous technology standard. We believe our findings have several implications for standard setting organizations and policy makers alike.
    Keywords: essential patents, SEP
    Date: 2013–02
  30. By: Srinuan, Chalita; Srinuan, Pratompong; Bohlin, Erik
    Abstract: This paper aims to explore the price plans offered by Thai mobile operators and analyse the role of demand characteristics in the development of new price plans. The paper also shows how demand affects a firm's degree of innovativeness in terms of the number of new price plans. The empirical qualitative analysis is based on an original data set from several secondary data sources and includes all the price plans offered in the history of the Thai mobile communications market between 2002 and 2010. The results show that mobile operators have introduced several innovative price plans to attract and retain their consumers. Although a greater number of price plans can increase competition among operators, some have complex combinations that may lead to confusion for consumers. A price comparison programme should therefore be implemented by the telecom regulator to ensure that consumers receive correct and complete information about the price plans. Most studies, by far, have not extensively discussed this mobile communications market in detail and the effect of innovation on competition between firms in the mobile communications industry, in particular the development of innovation in developing countries. --
    Keywords: pricing strategies,mobile communications market,innovation,Thailand
    Date: 2012
  31. By: Erkan Gurpinar
    Abstract: The unprecedented development of intellectual property rights (both in scale and scope) has been one of the most important factors in the transformation of the world economy over the last three decades. We argue that, at least in part, economic importance of knowledge has brought an overreaching enclosure movement on it. IPRs regime protecting the knowledge base of firms deprives knowledge workers of owning the intellectual assets developed in the production process. This development, in turn, (a) has damaging consequences on the knowledge workers’ skills; thereby (b) the rise of a virtuous cycle between nonexclusive property rights and workers’ skills is prevented.
    Keywords: Intellectual property rights, knowledge intensive technology, institutional complementarities
    JEL: K11 L23 O34
    Date: 2013–04
  32. By: Pierre Dehez; Sophie Poukens
    Abstract: We consider the problem of specifying Fair, Reasonable And Non-Discriminatory agreements faced by standard-setting organizations. Along with Layne-Farrar, Padilla and Schmalensee (2007), we model the problem as a cooperative game with transferable utility, allowing for patents to be weak in the sense that they have substitutes. Assuming that a value has been assigned to weak patents, we obtain a formula for the Shapley value that gives an insight into what FRAND agreements should look like.
    Keywords: patent licensing, Shapley value, core.
    Date: 2013

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