nep-ino New Economics Papers
on Innovation
Issue of 2013‒05‒19
ten papers chosen by
Steffen Lippert
University of Otago, Dunedin

  1. Defensive Disclosure under Antitrust Enforcement By Ajay Bhaskarabhatla; Enrico Pennings
  2. OVER-INDEBTEDNESS AND INNOVATION: SOME PRELIMINARY RESULTS By Damiana Giuseppina Costanzo; Damiano Bruno Silipo; Marianna Succurro
  3. Skilled Immigration, Innovation and Wages of Native-born American By Asadul Islam; Faridul Islam; Chau Nguyen
  5. In Defense of Trusts: R&D Cooperation in Global Perspective By Jeroen Hinloopen; Grega Smrkolj; Florian Wagener
  6. Information Acquisition and Innovation under Competitive Pressure By Andrei Barbos
  7. Gender Differences in Access to Private Investment Funding to Support the Development of New Technologies By Bradley, Samantha R.; Gicheva, Dora; Hassell, Lydia; Link, Albert N.
  8. How Substitutable are Fixed Factors in Production? Evidence from Pre-industrial England By Joshua Wilde
  9. Inovação e biotecnologia: atributos urbanos e estrutura científica By Rodrigo Ferreira Simões; Agda Martins
  10. A brief future of Time in the monopoly of scientific knowledge By Asongu, Simplice A

  1. By: Ajay Bhaskarabhatla (Erasmus University Rotterdam); Enrico Pennings (Erasmus University Rotterdam)
    Abstract: We formulate a simple model of optimal defensive disclosure by a monopolist facing uncertain antitrust enforcement and test its implications using unique data on defensive disclosures and patents by IBM during 1955-1989. Our results indicate that stronger antitrust enforcement leads to more defensive disclosure, that quality inventions are disclosed defensively, and that defensive disclosure served as an alternative but less successful mechanism to patenting at IBM in appropriating returns from R&D.
    Keywords: Antitrust, Defensive Disclosure, Patent, IBM
    JEL: K21 L40 M10 O32 O34
    Date: 2012–02–09
  2. By: Damiana Giuseppina Costanzo; Damiano Bruno Silipo; Marianna Succurro (Dipartimento di Scienze Economiche, Statistiche e Finanziarie, Università della Calabria)
    Abstract: The paper studies the impact of firms’ over-indebtedness on innovation. First, we build up an over-indebtedness index which takes account of the firm’s level and structure of the debt as well as of its sustainability. Secondly, we investigate to what extent over-indebtedness explains firms’ innovative activity by focusing on Italian manufacturing firms over the 2003-2010 period. Empirical evidence suggests that indebtedness plays a significant role in explaining firms’ innovative activity, both in the Centre-North and in the South of Italy. Highly indebted firms are also more innovative, but more innovative firms are also less capable to sustain their debts out of current profits. With respect to the Centre-North, empirical results confirm the significant role played by other forms of indebtedness in explaining innovation also when we focus only on high-tech sectors and on over-indebted firms. With respect to the South, the relationship between debt and innovation is confirmed, but it is stronger for the over-indebted firms in the high tech industries.
    Keywords: Over-indebtedness, Innovation, PCA
    JEL: C10 D22 G20 G30 O30
    Date: 2013–04
  3. By: Asadul Islam; Faridul Islam; Chau Nguyen
    Abstract: The paper examines the effects of skilled immigration on US wages that are due to innovation. We extend the studies by Hunt & Gauthier-Loiselle (2010), and Hunt (2011) to explore the immigration-innovation-wages nexus. Using the National Survey of College Graduates (NSCG) and the US Census datasets we find a significant positive effect of immigration on wages that are attributable to immigrants‘ contribution to innovation. Our findings suggest that as the share of skilled immigrants increases in a particular group, the wages of both natives and immigrants in that group get a positive boost. The effects are more pronounced through immigrants‘ impact on patent granted and patent commercialized, compared with their impact on other measures of innovations. The results also show that the immigrants are more likely to present a paper at a conference or publish in professional journals, primarily because they are more educated or concentrated in the related occupation compared to the natives. Our findings indicate that immigrants make a substantial contribution to the host economy‘s innovation which is a major driver of productivity growth.
    Keywords: Innovation, immigration, wages
    JEL: J15 J31
    Date: 2013–05
  4. By: Sunil Kanwar (Department of Economics, Delhi School of Economics, Delhi, India)
    Abstract: This paper studies the innovation, production efficiency and productivity responses to the stronger protection of intellectual property post-Trade Related Intellectual Property Rights (TRIPs) agreement, with specific reference to manufacturing industry in the BRIC economy of India. Using the fact that the post-TRIPs strengthening of intellectual property rights in developing countries was largely exogenous, we are able to correct for any endogeneity biases that may obtain in the estimation. Using a large panel data set for Indian firms in the manufacturing sector spanning the period 1995-2011, we find that intellectual property reform is associated with a significant increase in the rates of technical change, production efficiency change, and productivity growth. Thus, the annual rate of technological growth spurted by about 3 percentage points or more, production efficiency grew by almost 8 percentage points, and consequently total factor productivity growth accelerated by about 0.8 percentage points in the post-reform period. This holds promise for other similar reforming countries, and helps to set at rest the misgivings one might have for the tightening of intellectual property protection.
    Keywords: Innovation, Efficiency, Productivity, IPRs
    JEL: O34 O33 O31 O11
    Date: 2013–04
  5. By: Jeroen Hinloopen (University of Amsterdam); Grega Smrkolj (University of Amsterdam); Florian Wagener (University of Amsterdam)
    Abstract: We examine the trade-off between the benefits of allowing firms to cooperate in R&D and the corresponding increased potential for product market collusion. For that we utilize a dynamic model of R&D whereby we consider all possible initial marginal cost levels (technologies), including those that exceed the choke price. This global analysis yields four possibilities: initial marginal costs are above the choke price and this technology is, or is not, developed further, and initial marginal costs are below the choke price and the technology is, or is not, (eventually) taken off the market. We show that an extension of the cooperative agreement towards collusion in the product market is not necessarily welfare reducing: if firms collude, they (i) develop further a wider range of initial technologies, (ii) invest more in R&D such that process innovations are pursued more quickly, and (iii) abandon the technology for a smaller set of initial marginal costs. We also dis cuss the implications of our analysis for antitrust policy.
    Keywords: Antitrust policy, Bifurcations, Collusion, R&D cooperatives, Spillovers
    JEL: D43 D92 L13 L41 O31 O38
    Date: 2013–03–15
  6. By: Andrei Barbos (Department of Economics, University of South Florida)
    Abstract: This paper studies information acquisition under competitive pressure and proposes a model to examine the relationship between product market competition and the level of innovative ac- tivity in an industry. Our paper offers theoretical support for recent empirical results that point to an inverted-U shape relationship between competition and innovation. The model presents an optimal timing decision problem where a firm endowed with an idea trades the benefits of waiting for additional information on whether this idea can be converted into a successful project against the cost of delaying innovation: a given firm's profit following innovation is decreasing in the number of firms that invested at earlier dates. By recognizing that a firm can intensify its innovative activity on two dimensions, a risk dimension and a quantitative dimension, we show that firms solve this trade-off precisely so as to generate the inverted-U shape relationship.
    Keywords: Innovation, Information Acquisition, Timing Games, Preemption
    JEL: D40 L10
    Date: 2013–01
  7. By: Bradley, Samantha R. (University of North Carolina at Greensboro, Department of Economics); Gicheva, Dora (University of North Carolina at Greensboro, Department of Economics); Hassell, Lydia (University of North Carolina at Greensboro, Department of Economics); Link, Albert N. (University of North Carolina at Greensboro, Department of Economics)
    Abstract: Our descriptive analysis of a random sample of businesses that received Phase II Small Business Innovation Research (SBIR) program awards shows that female-owned businesses are disadvantaged, compared to male-owned businesses, in their ability to attract alternative investment funding to commercialize their technology-based innovations. Differences in the probability of receiving such financial support are most evident in the West and Northeast Census region states. Respectively, in states in those regions female-owned businesses are 17 and 9 percentage points less likely to attract alternative investment funding.
    Keywords: Entrepreneurship; Innovation; Technology
    JEL: L26 O31 O32
    Date: 2013–05–15
  8. By: Joshua Wilde (Department of Economics, University of South Florida)
    Abstract: The extent to which fixed factors of production such as land constrain per-capita income growth has been a widely discussed topic in economics since at least Malthus (1798). Whether fixed factors limit growth depends crucially on two variables: the substitutability of fixed factors in production, and the extent to which innovation will be biased towards land-saving technologies. However, there are few estimates of either variable, and most models assume this elasticity of substitution is unity out of con- venience. This paper attempts to fill that gap in the literature. Using the timing of plague epidemics as an instrument for labor supply, this paper estimates the elasticity of substitution between fixed and non-fixed factors in pre-industrial England. I find that the elasticity of substitution between land and other factors during this period was signicantly less than one, which implies that the Malthusian effects of population on income were stronger than current models predict. In addition, I am able to esti- mate the direction and magnitude of induced innovation. I find evidence that denser populations -- and hence higher land scarcity -- induced innovation towards land-saving technologies. Specically, I find that a doubling of population density in England from its year 1500 level raises the difference in the growth rates of land- and labor-enhancing productivity by 0.22% per year.
    Keywords: Land, Substitution, Population, England, Industrial Revolution, Demographic Transition, Induced Innovation, Plagues, Malthus
    JEL: E00 N13 N33 N53 O11 O12 O14 O31 O41 O43 O44 O47 O52
    Date: 2013–02
  9. By: Rodrigo Ferreira Simões (Cedeplar-UFMG); Agda Martins
    Abstract: This article analyzes how investments in transportation infrastructure made by the PROACESSO program affected employment and wages of the municipalities of Minas Gerais, using data on employment and earnings from 2000 to 2010. For this, we use a differences-in-differences strategy that explores variations in the time that the municipalities received investments of the program. First, we discussed how investments in transportation infrastructure can have adverse effects on the peripheral regions. Next, we analyzed the program´s impact on local employment and wages. The results indicate that the greater accessibility favored industries that sell to other locations (industry) and buy inputs produced elsewhere (trade and industry) but hurt the service sector which suffers from increased competition of more diversified and competitive services produced in central locations.
    Keywords: urban attributes; biotechnology; innovation; patent; Zero-Inflated Poisson Model; Brazilian cities.
    JEL: O32 R00 O30
    Date: 2013–04
  10. By: Asongu, Simplice A
    Abstract: This seminal paper provides global empirical evidence on catch-up processes in scientific and technical publications. Its purpose is to model the future of scientific knowledge monopoly in order to understand whether the impressive growth experienced by latecomers in the industry has been accompanied by a similar catch-up in scientific capabilities and knowledge contribution. The empirical evidence is based on 41 catch-up panels which together consist of 99 countries. The richness of the dataset allows us to disaggregate countries into fundamental characteristics based on income-levels (high-income, lower-middle-income, upper-middle-income and low-income), legal-origins (English common-law, French civil-law, German civil-law and, Scandinavian civil-law) and, regional proximity (South Asia, Europe & Central Asia, East Asia & the Pacific, Middle East & North Africa, Latin America & the Caribbean and, Sub-Saharan Africa). Three main issues are investigated: the presence or not of catch-up processes, the speed of the catch-up processes and, the time needed for full (100%) catch-up. The findings based on absolute and conditional catch-up patterns broadly show that advanced countries will continue to dominate in scientific knowledge contribution. Policy implications are discussed.
    Keywords: Research and Development; Catch-up
    JEL: F42 O10 O30 O38 O57
    Date: 2013–05–01

This nep-ino issue is ©2013 by Steffen Lippert. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.