nep-ino New Economics Papers
on Innovation
Issue of 2013‒08‒05
sixteen papers chosen by
Steffen Lippert
University of Otago, Dunedin

  1. Technology Platforms in Europe: an empirical investigation By Lisa De Propris; Carlo Corradini
  2. International Technology Diffusion of Joint and Cross-border Patents By Michael McAleer; Chia-Lin Chang; Ju-Ting Tang
  3. The Machine Tool Industry in Italy: Industrial Innovations and Performances By Fabio Campanini; Serena Costa; Paolo Rizzi
  4. Asymmetric Trade Liberalisation, Sector Heterogeneity and Innovation By Antonio Navas Ruiz
  5. The dynamics of pharmaceutical regulation and R&D investments By Rosella Levaggi; Michele Moretto; Paolo Pertile
  6. R&D and Credit Rationing in SMEs By Maria Luisa Mancusi; Andrea Vezzulli
  7. The strategic use of fuzziness in patent specifications By Zaby, Alexandra K.; Heger, Diana
  8. Approche relationnelle de la coopération d'innovation inter-entreprises : proposition de modèle conceptuel By Romaric Servajean-Hilst
  9. Optimal Licensing of Uncertain Patents in the Shadow of Litigation By Rabah Amir; David Encaoua; Yassine Lefouili
  10. Empirical Studies of Trade Marks: The Existing Economic Literature By Philipp Schautschick; Christine Greenhalgh
  11. Endogeneous matching in university-industry collaboration: Theory and empirical evidence from the UK By Albert Banal-Estañol; Inés Macho-Stadler; David Pérez-Castrillo
  12. Can Institutions explain cross country differences in Innovative Activity? By Cong Wang
  13. Innovation in the energy sector By Klaus Friesenbichler
  14. The Impact of Patenting Activity on the Financial Performance of Malaysian Firms By Farha Ghapar; Robert Brooks; Russell Smyth
  15. Optimal Project Selection Mechanisms By Tania Bar; Sidartha Gordon
  16. Positive Effects of Ageing and Age-Diversity in Innovative Companies Ð Large Scale Evidence on Company Productivity By Uschi Backes-Gellner; Stephan Veen

  1. By: Lisa De Propris; Carlo Corradini
    Abstract: In the last decades, innovation activity has been defined by an increasing complexity and a faster pace of the underlying technological change. Accordingly, several studies have shown that competitive systems of innovation benefit from being able to build upon a wide but integrated spectrum of technological capabilities characterised by a sustained dynamism in the level of inter-sectoral technology flows. In this context, technological platforms – defined as knowledge and scientific launching pads that spin out of key enabling technologies - may create the opportunity for technological externalities to take place across a set of related sectors through a swarm of increasingly applied and incremental innovations. In this report, we look at the presence and determinants of these technological platforms across EU Countries and explore the mechanisms through which these influence inter sectoral technology spillovers, thus fostering technological shifts and technological synthesis within the broader economy. Using data on patents and patent citations obtained from the PATSTAT-CRIOS database, covering all patent applications made to the European Patent Office (EPO), we try to model the systemic nature of technology platforms. In particular, our aim is to provide empirical evidence that the presence of key enabling technologies at the base of the platform may lead to a more sustained interaction across second tier innovations characterised by a “distant” knowledge base. Then, we endeavour to investigate the relationship that may take place between this process and the role played by the national dimension.
    Keywords: Clusters, ecological innovation, industrial innovation, innovation, innovation policy, new technologies, patents, socio-ecological transition, sustainable growth
    JEL: O3 O31 O32 O33 O38
    Date: 2013–07
  2. By: Michael McAleer; Chia-Lin Chang; Ju-Ting Tang (University of Canterbury)
    Abstract: With the advent of globalization, economic and financial interactions among countries have become widespread. Given technological advancements, the factors of production can no longer be considered to be just labor and capital. In the pursuit of economic growth, every country has sensibly invested in international cooperation, learning, innovation, technology diffusion and knowledge. In this paper, we use a panel data set of 40 countries from 1981 to 2008 and a negative binomial model, using a novel set of cross-border patents and joint patents as proxy variables for technology diffusion, in order to investigate such diffusion. The empirical results suggest that, if it is desired to shift from foreign to domestic technology, it is necessary to increase expenditure on R&D for business enterprises and higher education, exports and technology. If the focus is on increasing bilateral technology diffusion, it is necessary to increase expenditure on R&D for higher education and technology.
    Keywords: International Technology Diffusion, Exports, Imports, Joint Patent, Cross-border Patent, R&D, Negative Binomial Panel Data
    JEL: F14 F21 O30 O57
    Date: 2013–07–20
  3. By: Fabio Campanini (DISCE, Università Cattolica); Serena Costa (DISCE, Università Cattolica); Paolo Rizzi (DISCE, Università Cattolica)
    Abstract: The machine tool industry has a leading role in the Italian manufacturing system, above all in Northern Italy. This industrial branch is a strategic intermediate point in many manufacture dies, with an average innovation intensity higher than that of many other industrial branches. This work investigates if and in which way the innovation and the R&D processes carried out in the sector firms affect their productivity. We built a significant sample, which answered a questionnaire based on the CIS (Community Innovation Survey). Also a regional geographic dimension is used, to test the presence of specific local effects. Results show a positive and strong contribution from human capital to productivity, while, in the short term, physical capital have a negative impact, a result probably influenced by the economic crisis.
    Keywords: Innovation; Machine tool industry; Firm productivity; Regions.
    JEL: L1 L64 O3
    Date: 2013–05
  4. By: Antonio Navas Ruiz (Department of Economics, The University of Sheffield)
    Abstract: Innovation, mark-ups and the degree of trade openness vary substantially across sectors. This paper builds a multi-sector endogenous growth model to study the influence of asymmetric trade liberalisation and sectoral differences in the degree of product market competition on the effect that trade has on R&D investments at a firm level. I find that differences in the degree of competition generate large differences in firm innovative responses to trade liberalisation. A movement from autarky to free trade promotes innovation and productivity growth in those sectors which are initially less competitive. However, when the initial tariff level is common across sectors, a homogeneous tariff reduction promotes innovation in those sectors which are initially more competitive. The paper suggests that trade liberalisation could be a source of industry productivity divergence: firms that are located in industries with greater exposure to foreign trade, invest a greater amount in R&D contributing to industry productivity growth. Finally the paper outlines the importance of reallocation effects within industry and across industries that are the result of these asymmetries. An asymmetric trade liberalisation has a small but negative impact on aggregate productivity growth.
    Keywords: sectorial productivity, international trade, innovation
    JEL: F12 O43
    Date: 2013
  5. By: Rosella Levaggi (; Michele Moretto (; Paolo Pertile (Department of Economics (University of Verona))
    Abstract: The paper uses a real option approach to investigate the potential impact of performance-based risk-sharing agreements for the reimbursement of new drugs in comparison with standard cost-effectiveness thresholds. The results show that the exact definition of the risk-sharing agreement is key in determining its economic effects. In particular, despite the concerns expressed by some authors, the incentive for a firm to invest in R&D may be the same or even greater than under cost-effectiveness thresholds, if the agreement is sufficiently mild in defining the conditions under which the product is not (fully) reimbursed to the firm. In this case, patients would benefit from earlier access to innovations. The price for this is less value for money for the insurer at the time of adoption of the innovation.
    Keywords: pharmaceutical regulation, real options, R&D, risk-sharing
    JEL: I18 L51 C61
    Date: 2013–08
  6. By: Maria Luisa Mancusi; Andrea Vezzulli
    Abstract: We study the effects of credit rationing on Research and Development (R&D) investment using survey and accounting data on a large representative sample of manufacturing small and medium size enterprises (SMEs). Our econometric model accounts for the endogeneity of our credit rationing indicator and employs an innovative theory based identification strategy. We find that credit rationing has a significantly negative effect on both the probability to set up R&D activities and on the level of R&D spending (conditioned on the R&D decision), but the overall estimated reduction in R&D spending is largely to be associated with the first effect.
    Keywords: R&D, credit rationing, Whited and Wu index, bivariate probit, IV Tobit
    JEL: G21 D82 O32 C35
    Date: 2013–07
  7. By: Zaby, Alexandra K.; Heger, Diana
    Abstract: Innovators seek to protect their intellectual assets by patenting them, at the same time trying to avoid any disclosure of critical knowledge. Given that a patent specification has to include a clear description of the patented matter so that anybody skilled in the art is enabled to reproduce the invention, the non-disclosure intention seems contradictory to patent law. This paper provides a model identifying the incentives for firms to deliberately obscure their inventive knowledge in a patent specification. --
    Keywords: patent specification,disclosure requirement,strategic firm behavior,fuzzy patents
    JEL: O31 O34 L24 D21
    Date: 2013
  8. By: Romaric Servajean-Hilst (CRG - Centre de recherche en gestion - Polytechnique - X - CNRS : UMR7176)
    Abstract: Les coopérations d'innovation se sont multipliées depuis une trentaine d'année, et avec elles les travaux de recherche s'y rapportant. Dans notre communication, nous développons un modèle conceptuel pour nous intéresser à ces coopérations sous l'angle de la relation entre deux entreprises, au-delà des projets et programmes d'innovation qu'elles sont amenées à réaliser ensemble. Afin de comprendre comment ces entreprises peuvent maximiser la performance de leur relation, nous formulons des propositions sur les interactions entre les différents éléments de ce modèle qui sont (I) la gouvernance de la relation, (II) sa performance, (III) son niveau de développement et (IV) le degré d'innovation des projets ou programmes menés en collaboration. Cette communication s'appuie sur un travail de recherche mené de manière abductive. 35 entretiens ont été réalisés, auprès de praticiens travaillant sur le développement des relations inter-entreprises, en parallèle avec une revue de littérature portant sur les relations interentreprises et sur l'innovation ouverte. Pour cela, nous avons constamment navigué entre les données issues de ces entretiens et la recherche de nouvelles théories pour construire le modèle proposé dans cette communication. Ainsi, nous nous sommes appuyés sur le modèle relationnel proposé par l'IMP group (Håkansson & IMP Project Group 1982 ; Paliwoda 2011) pour décrire les éléments constitutifs de la coopération d'innovation. Et, nous avons choisi un cadre théorique fondé sur la théorie des coûts de transaction et sur la resource based-view (RBV), en particulier la knowledge based view (Grant 1996), pour saisir la nature des interactions entre les différents éléments de notre modèle. Selon nos propositions, la performance d'une relation de coopération d'innovation est impactée par les mécanismes de gouvernance mis en œuvre au sein des entreprises et entre elles (P1). Et, pour ne pas la réduire, les mécanismes de gouvernance de chaque entreprise doivent être alignés (P3) tout en étant ajustés mutuellement au cours du temps (P2). Par ailleurs, nous proposons que chaque niveau de développement d'une telle relation corresponde à un niveau croissant de performance (P4) ainsi qu'à une configuration caractéristique de ses mécanismes de gouvernance (P5). Et, comme le type d'innovation ciblé dans chaque projet d'innovation mené en commun impacte la configuration de la gouvernance (P6), cela nous permet de suggérer aux praticiens de porter une attention particulière à la cohérence des mécanismes de gouvernance de leurs coopérations d'innovation pour en maximiser les retombées pour leurs entreprises. Les résultats de notre travail doivent être confirmées et enrichies par des recherches supplémentaires que nous proposons dans cette communication. Quoiqu'il en soit, nous suggérons que le cadre conceptuel présenté ici participe au développement de la recherche portant sur l'innovation ouverte en proposant d'envisager de la sorte les coopérations d'innovation avec une unité d'analyse dyadique, et non pas du point de vue d'une seule organisation. Par ailleurs, notre appel à une approche relationnelle de la coopération d'innovation inter-entreprises permet d'envisager la place de la rente relationnelle comme facteur clef de réussite des coopérations d'innovation, du fait de la construction d'une capacité d'innovation et de collaboration spécifique à la dyade.
    Keywords: coopération d'innovation inter-entreprises ; gouvernance ; relation
    Date: 2013–06–10
  9. By: Rabah Amir (University of Arizona - University of Arizona); David Encaoua (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris I - Panthéon-Sorbonne, EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris); Yassine Lefouili (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris I - Panthéon-Sorbonne)
    Abstract: The paper investigates the choice of a licensing mechanism by the holder of a patent whose validity may be challenged. Focusing fi…rst on weak patents, i.e. patents that have a high probability of being invalidated by a court if challenged, we show that the patent holder fi…nds it optimal to use a per-unit royalty contract if the strategic effect of an increase in a potential licensees unit cost on the equilibrium industry profi…t is positive. The latter condition ensures the superiority of the per-unit royalty mechanism independently of whether the patent holder is an industry insider or outsider, and is shown to hold in a Cournot (resp. Bertrand) oligopoly with homogeneous (resp. differentiated) products under general assumptions on the demands faced by fi…rms. We then examine the optimal licensing of patents that are uncertain but not necessarily weak. As a byproduct of our analysis, we contribute to the oligopoly literature by offering some new insights of independent interest regarding the effects of cost variations on Cournot and Bertrand equilibria.
    Keywords: Licensing mechanisms, Uncertain patents, Patent litigation, Cost comparative statics.
    Date: 2013–05–24
  10. By: Philipp Schautschick (Ludwig Maximilians University, Munich; and Munich Center for Innovation and Entrepreneurship at the Max Planck Institute for Intellectual Property and Competition Law); Christine Greenhalgh (Oxford Intellectual Property Research Centre and St Peter's College, Oxford)
    Abstract: This paper surveys empirical studies employing trade mark data that exist in the economic literature to date. Section 1) documents the use of trade marks by firms in several advanced countries including Australia, the United Kingdom and the United States, 2) reviews different attempts to gauge the function of a trade mark as indicator of innovation and product differentiation, and 3) provides an overview of the association of trade marks with dimensions of firm performance and productivity. Sections 4) and 5) give accounts of studies that focus on the social costs and value of trade marks, namely their importance for firm survival, their impact on demand, and firms' incentives to innovate but also to raise rivals' costs. Section 6) covers first endeavours to investigate the interplay between different types of intellectual property rights, while 7) briefly concludes.
    Keywords: Intellectual property, trade marks, empirical studies
    JEL: O33 O34
    Date: 2013–07
  11. By: Albert Banal-Estañol; Inés Macho-Stadler; David Pérez-Castrillo
    Abstract: We develop a two-sided matching model to analyze collaboration between heterogeneous academics and firms. We predict a positive assortative matching in terms of both scientific ability and affinity for type of research, but negative assortative in terms of ability on one side and affinity in the other. In addition, the most able and most applied academics and the most able and most basic firms shall collaborate rather than stay independent. Our predictions receive strong support from the analysis of the teams of academics and firms that propose research projects to the UK's Engineering and Physical Sciences Research Council.
    Keywords: matching, industry-science links, research collaborations, basic versus applied research, complementarity
    JEL: O32 I23
    Date: 2013–07
  12. By: Cong Wang
    Abstract: Motivated by theoretical arguments that assert a positive impact of R&D on institutions, this paper aims to provide some empirical analysis on the relationship between these two variables. In particular this paper has found a significant direct effect of institutions on R&D intensity. Countries with better institutions qualities as captured by the World Banks’ Worldwide Governance Indicators (WGI) tend to attract more scientists and engineers into the research field and to spend more on R&D as well. This paper has also found evidence that the effect of institutions varies in different economies characterized by different levels of financial development and human capital accumulation, but stays relatively unchanged across countries with different levels of trade openness.
    Keywords: Institutions, innovative activity, economic growth
    JEL: F1 N7 O1
    Date: 2013–07
  13. By: Klaus Friesenbichler
    Abstract: This study analyses the diffusion of renewable energy (RE) technologies. It analyses the transition dynamics as the sector broadens its energy mix and changes its capital stock. This shift is found to be desirable from an environmental, geopolitical and economic perspective. Yet, it greatly increases the technical and industrial complexity, and is not Pareto-efficient. We focus on wind and solar power, and discuss their promoted deployment against the energy policy principles of the EU. Put drastically, the promotion of ‘sustainability’ undermined ‘competitive’ mechanisms. This has potentially adverse effects on the ‘security of supply’ due to the market design that seeks to keep prices low. RE outperforms conventional facilities. Emergency capacities, however, are also exiting, especially in Germany. If markets are seen as one, there seems to be a threshold of wind and solar power that the current back-up system can incorporate without risking the security of supply. The policy relevant crux lies in conflicting mechanisms: the top-down promotion and planning policies undermine the bottom-up market selection. Then again, without interventions the market does not provide the socially desired outcomes. If tensions aggravate further, the implementation of the new technology base is likely to stall. In addition, the generous promotion resulted in the fast deployment of RE, which may have shortened the ‘formative phase’ of the diffusion process. A longer formative phase would have created more learning effects and fostered more incremental innovations. In addition, costs of subsidies are allocated differently across countries. Mechanisms that allocate costs to the public budget have greater acceptance rates than budget neutral ones that assign costs to consumers. The latter affect households asymmetrically across income classes. Also ownership structures changed; a large number of actors now constitute the energy sector. Citizens increasingly appeared as producers and investors, which stimulated the social acceptance of RE, and in some cases unlocked initially unfavourable vested interests.
    Keywords: Cost incidence, diffusion, ecological innovation, economic strategy, electricity, European economic policy, industrial innovation, industrial policy, innovation, innovation policy, institutional reforms, multi-level governance, new technologies, ownership, policy options, renewable energy, security of supply, smart meter, social construction of technology, social innovation, sustainable growth, technology promotion
    JEL: O31 O33 P48 Q48 Q58
    Date: 2013–07
  14. By: Farha Ghapar; Robert Brooks; Russell Smyth
    Abstract: This study analyzes the relationship between patenting activity and financial performance at the Malaysian firm level for firms that have been granted patents in Malaysia and the United States of America. We adopt the patent renewal and profit maximization model as our theoretical underpinning for this study. The patenting activity variables are measured based on the patent renewal system and the financial performance variables are measured based on the profit margin. The sample is divided into manufacturing and non-manufacturing firms. We utilize a panel dataset spanning from 1994 to 2008 and the model is estimated using panel least squares, fixed effects, random effects and generalized method of moments with various types of effects specifications and transformations. The key finding from the empirical study is that there is a significant relationship between patenting activity and financial performance at the Malaysian firm level, but that the impact is rather small and that the signs on the coefficients are mixed. This result may reflect the level of competition that the firms faced over the period of the study, even though patenting is well known for giving firms some monopoly power.
    Keywords: Patenting, patent renewal, firm financial performance, panel data model
    Date: 2013–07
  15. By: Tania Bar (University of Connecticut); Sidartha Gordon (Département d'économie)
    Abstract: We study mechanisms for selecting up to m out of n projects. Project managers’ private information on quality is elicited through transfers. Under limited liability, the optimal mechanism selects projects that maximize some function of the project’s observable and reported characteristics. When all reported qualities exceed their own project-specific thresholds, the selected set only depends on observable characteristics, not reported qualities. Each threshold is related to (i) the outside option level at which the cost and benefit of eliciting information on the project cancel out and (ii) the optimal value of selecting one among infinitely many ex ante identical projects.
    Keywords: adverse selection, information acquisition, mechanism design, project selection, limited liability, R&D.
    JEL: D82 O32
    Date: 2013–07
  16. By: Uschi Backes-Gellner (Department of Business Administration, University of Zurich); Stephan Veen (Disney Research Zurich)
    Abstract: This paper investigates how age diversity within a companyÕs workforce affects company productivity. It introduces a theoretical framework that helps to integrate results from a broad disciplinary spectrum of ageing and diversity research to derive empirically testable hypotheses on the effects of age diversity on company productivity. It argues that first the balance between costs and benefits of diversity determines the effect of age diversity on company productivity and that second the type of task performed acts as a moderator. To test these hypotheses, it uses a large-scale employer-employee panel data set (the LIAB.) Results show that increasing age diversity has a positive effect on company productivity if and only if a company engages in creative rather than routine tasks.
    Keywords: Age Diversity, Company Performance, Productivity in Innovative Industries, Aging Societies
    Date: 2013–08

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