nep-ino New Economics Papers
on Innovation
Issue of 2014‒08‒20
fifteen papers chosen by
Steffen Lippert
University of Auckland

  1. Knowledge Complementarity of a Firm’s Internal and External R&D Capabilities By Koski, Heli; Svento, Rauli
  2. Energy prices, technological knowledge and green energy innovation: A dynamic panel analysis of patent counts By Kruse, Juergen; Wetzel, Heike
  3. Paradigm Shift or Business as Usual? Dynamic Complementarities in Innovation Strategies By James H. Love; Stephen Roper; Priit Vahter
  4. Agglomeration and Innovation By Gerald Carlino; William R. Kerr
  5. Stimulating industrial ecosystems with sociotechnical imaginaries: The case of Renault Innovation Community By Sophie Hooge; Laura Le Du
  6. Una comparación del comportamiento innovador entre Cooperativas de Trabajo y Empresas Capitalistas en Uruguay By Sebastián Berazategui; Emilio Landinelli; Daniel Ramírez
  7. Governance, Firm Size and Innovative Capacity: Regional Empirical Evidence for Germany By Berlemann, Michael; Jahn, Vera
  8. Institutional Environment, Economic Performance and Innovation in Turkey By Erkan Erdil; M. Teoman Pamukçu; Dilek Çetin
  9. Fostering a Creative Economy to Drive Korean Growth By Randall S. Jones
  10. Comment piloter la performance du transfert de connaissances dans le processus d'innovation des entreprises technologiques By Michel Pendaries; Hector Castaneda
  11. Carbon Dioxide reducing Environmental innovations, sector upstream/downstream integration and policy. Evidence from the EU. By Massimiliano Mazzanti; Giovanni Marin; Susanna Mancinelli; Francesco Nicolli
  12. Global Investment Decisions and Patent Protection: Evidence from German Multinationals By Nabokin, Tatjana
  13. An Experimental Approach to Industrial Policy Evaluation: The case of Creative Credits By Hasan Bakhshi; John Edwards; Stephen Roper; Judy Scully; Duncan Shaw; Lorraine Morley; Nicola Rathbone
  14. Remix Rights and Negotiations Over the Use of Copy-Protected Works By Joshua S. Gans
  15. Unintended triadic closure in social networks: The strategic formation of research collaborations between French inventors By Nicolas CARAYOL; Lorenzo CASSI; Pascale ROUX

  1. By: Koski, Heli; Svento, Rauli
    Abstract: We use data from over 1500 Finnish companies for the years 2006-2008 and 2008-2010 to explore complementarity of a firm’s R&D strategy with its external knowledge acquisition and innovation collaboration strategies. We define knowledge complementarity (tacit knowledge complementarity) of R&D capabilities to exist when increase in investments in R&D also increases marginal returns from broader external knowledge search (deeper innovation collaboration with external partners). Our estimation results provide support for knowledge complementarity of external R&D. Instead, our data provide no evidence on tacit knowledge complementary of external R&D generally. However, our empirical results concerning the separate types of external R&D suggest that a firm’s acquisition of new technology (i.e., advanced machinery, equipment or software) for innovation purposes appears to be tacit knowledge complementary.
    Keywords: open innovation, external knowledge search, complementarity
    JEL: D83 O3 L2
    Date: 2014–08–06
  2. By: Kruse, Juergen (Energiewirtschaftliches Institut an der Universitaet zu Koeln); Wetzel, Heike (Energiewirtschaftliches Institut an der Universitaet zu Koeln)
    Abstract: We examine the effect of energy prices and technological knowledge on innovation in green energy technologies. In doing so, we consider both demand-pull effects, which induce innovative activity by increasing the expected value of innovations, and technology-push effects, which drive innovative activity by extending the technological capability of an economy. Our analysis is conducted using patent data from the European Patent Office on a panel of 26 OECD countries over the period 1978-2009. Utilizing a dynamic count data model for panel data, we analyze 11 distinct green energy technologies. Our results indicate that the existing knowledge stock is a significant driver of green energy innovation for all technologies. Furthermore, the results suggest that energy prices have a positive impact on innovation for some but not all technologies and that the effect of energy prices and technological knowledge on green energy innovation becomes more pronounced after the Kyoto protocol agreement in 1997.
    Keywords: Green energy technologies; innovation; patents; demand-pull; technology-push; dynamic count data model
    JEL: C33 O31 Q40 Q42 Q55
    Date: 2014–07–31
  3. By: James H. Love (Aston University Business School); Stephen Roper (Warwick University Busines School); Priit Vahter (University of Tartu)
    Abstract: We investigate claims of a ‘paradigm shift’ towards firms using open innovation as a conscious strategic choice. Such a claim implicitly involves two elements: first, there should be some evidence that firms are increasingly likely to use a combination of internal and external knowledge in their innovation activity, and second, there should evidence that firms derive a systematic advantage from so doing. Using a panel of Irish manufacturing plants over the period 1991-2008 we develop four archetypal innovation strategies. We find little evidence, either from considering successive cross-sectional waves of comparable surveys, or in terms of the strategy switch choices of specific plants, that there has been a systematic move towards the use of an ‘open’ innovation strategy. We then test for the presence of complementarities in the joint use of internal R&D and external innovation linkages. In static terms we find no evidence of complementarity, but in dynamic terms find evidence that strategy switches by individual plants towards an open innovation strategy are accompanied by increased innovation outputs.
    Keywords: innovation strategies; dynamic complementarities; open innovation; Ireland
    JEL: O31 O33 D92
    Date: 2013–06–03
  4. By: Gerald Carlino; William R. Kerr
    Abstract: This chapter reviews academic research on the connections between agglomeration and innovation. We first describe the conceptual distinctions between invention and innovation. We then describe how these factors are frequently measured in the data and some resulting empirical regularities. Innovative activity tends to be more concentrated than industrial activity, and we discuss important findings from the literature about why this is so. We highlight the traits of cities (e.g., size, industrial diversity) that theoretical and empirical work link to innovation, and we discuss factors that help sustain these features (e.g., the localization of entrepreneurial finance).
    JEL: J2 J6 L1 L2 L6 O3 O4 R1 R3
    Date: 2014–08
  5. By: Sophie Hooge (CGS - Centre de Gestion Scientifique - MINES ParisTech - École nationale supérieure des mines de Paris); Laura Le Du (CGS - Centre de Gestion Scientifique - MINES ParisTech - École nationale supérieure des mines de Paris)
    Abstract: Facing the necessity to increase their innovation capabilities in a more and more holistic context, companies are creating new collaborative organizations aiming to collectively explore potential radical innovation fields. In this paper, we propose to study the nature of these new collectives for innovation through two managerial patterns: objects of collaboration and organizational mechanisms of coordination. Based on longitudinal collaborative research with the French carmaker Renault, the research analyses the case of the Renault Innovation Community, which involved members in original collaboration features to stimulate the industrial ecosystem of mobility and to support the potential emergence of new ecosystems. The main results of the empirical research underlined that: (1) objects of collaboration surpassed the detection of societal expectations to focus on sociotechnical imaginaries stimulation and dissemination; and (2) organizational mechanisms of collaboration exceed open innovation logics to focus on the collective building of favorable emergence conditions for new industrial ecosystems.
    Keywords: sociotechnical imaginaries; industrial ecosystem; innovation community
    Date: 2014–06–07
  6. By: Sebastián Berazategui (Universidad de la República (Uruguay). Facultad de Ciencias Económicas y de Administración.); Emilio Landinelli (Universidad de la República (Uruguay). Facultad de Ciencias Económicas y de Administración.); Daniel Ramírez (Universidad de la República (Uruguay). Facultad de Ciencias Económicas y de Administración.)
    Abstract: The aim of this paper is to compare the innovative behavior between Worker Managed Firms (WMF) and Capitalists Firms (CF) in Uruguay. Using cross-sectional data from the IECON-ANII-INACOOP (2011) survey this research analyzed, through descriptive and econometric methods, in which way the condition of WMF is associated with the probability of carrying out innovation activities. The results show that while there are no differences between WMF and CF in the realization of technological innovation activities (involving R&D), differences in favor of WMF appear in the practice of organizational innovation activities. The results are interpreted in the light of the self-managed-firm microeconomics and the evolutionary theory of the firm. WMF focus on the development of those innovative activities involving the use of the factor that they control -work- and that do not represent heavy investments in physical capital, establishing new and different routines inside work organization and making use of their members skills in a different way. This article represents a contribution to the scarce international literature on the subject and is the first of its kind for Uruguay.
    Keywords: innovation, worker cooperatives
    JEL: J54 P51 O31
    Date: 2013–06
  7. By: Berlemann, Michael (Helmut Schmidt University, Hamburg); Jahn, Vera (Helmut Schmidt University, Hamburg)
    Abstract: Successful innovation is a precondition for economic prosperity. While various potential determinants of innovative activity have been considered, little empirical evidence is yet available for the influence of firm governance issues. This paper aims at filling this gap in the literature by studying whether the relative importance of owner-managed small and medium sized enterprises has an effect on regional innovative capacity. We therefore combine patent data with data from the firm database of Creditreform, containing information on the governance structure of regional operating enterprises. Using a cross section of German NUTS-3-regions, we identify a significantly positive relation between the relative importance of owner-managed SMEs and innovative capacity. This finding is highly robust when controlling for spatial correlations.
    Keywords: innovation; owner-managed firms; SMEs; Germany
    JEL: C21 D23 O31
    Date: 2014–07–28
  8. By: Erkan Erdil (Department of Economics, Middle East Technical University); M. Teoman Pamukçu (TEKPOL, Science and Technology Policy Studies, Middle East Technical University); Dilek Çetin (Department of Economics, Kırıkkale University)
    Abstract: This paper investigates the relationship between economic performance and innovation in Turkey, while also taking into account the crucial mediating effect of the institutional environment. We carry out an in-depth analysis of the recent shifts in STI policy making in Turkey. The emphasis is on the innovation support policy instruments, and their effectiveness, as well as on the formulation of national STI targets, sector priorities and targets in the field of human resources. A number of concerns are expressed for the effectiveness of policy instruments and for the attainability of national STI targets. In the second part using firm-level data from an innovation survey pertaining to 2008-2010, an econometric exercise is conducted in order to test for the effectiveness of innovation support in Turkey. Innovation support is treated alternatively as an exogenous and endogenous variable. Findings indicate a positive impact innovation support in general. Innovation support granted by local authorities is not effective while EU-funded projects lead to innovation although they constitute an extremely low share of total innovation supports.
    Keywords: Institutional Environment, Science, Technology, Innovation, Economic Performance, CDM Model, Turkey
    Date: 2013–12
  9. By: Randall S. Jones
    Abstract: A creative economy requires innovation-friendly conditions. Korea’s innovation system should be improved by upgrading universities and expanding their role in business R&D, while increasing international collaboration in R&D from its current low level. The returns from Korea’s large investment in innovation should be enhanced by improving framework conditions – easing product market regulations, promoting international competition and enhancing labour market flexibility – to encourage the adoption of new technology. Venture businesses and start-ups should play a key role in commercialising innovation. To make venture investment a growth driver, it is important to expand the role of business angels, activate the merger-and-acquisition market and foster entrepreneurship. A creative economy also depends on making SMEs, which account for 87% of employment, more dynamic. SME policies should be streamlined and improved to promote market-based financing and reduce the negative effects of government funding programmes, which discourage the expansion of SMEs. The growth of small firms also depends on resolving labour market mismatches and taking full advantage of the opportunities afforded by the Internet. This Working Paper relates to the 2014 OECD Economic Survey of Korea ( Promouvoir une économie créatrice comme moteur de la croissance coréenne Une économie créatrice nécessite des conditions propices à l’innovation. Il conviendrait d’améliorer le système d’innovation en modernisant les universités et en renforçant leur rôle dans la R-D des entreprises, tout en multipliant les collaborations internationales, actuellement peu développées, dans ce domaine. Il conviendrait aussi d’améliorer le rendement des investissements massifs de la Corée dans l’innovation en instaurant un environnement plus favorable – en assouplissant la réglementation des marchés de produits, en favorisant la concurrence internationale et en conférant plus de flexibilité au marché du travail – afin d’encourager l’adoption de technologies nouvelles. Les entreprises à risque et les jeunes entreprises devraient jouer un rôle de premier plan dans la mise sur le marché de l’innovation. Pour que l’investissement en capital-risque soit vecteur de croissance, il est primordial de renforcer le rôle des investisseurs providentiels, de développer le marché des fusions-acquisitions et de favoriser l’entrepreneuriat. Une économie créatrice est aussi une économie qui dynamise le secteur des PME, lequel représente 87 % de l’emploi. Les politiques en faveur des PME doivent être rationnalisées et optimisées pour promouvoir les financements de marché et atténuer l’impact négatif des aides publiques, qui n’incitent pas les PME à se développer. Enfin, le développement des petites entreprises dépend aussi de la capacité à résoudre l'inadéquation de l'offre et de la demande sur le marché du travail et à tirer pleinement profit des opportunités offertes par Internet. Ce Document de travail se rapporte à l’Étude économique de l’OCDE de la Corée, 2014 (
    Keywords: product market regulation, R&D, entrepreneurship, start-ups, crowd-funding, innovation system, knowledge-based capital, mergers and acquisitions, business angels, creative economy, SMEs, chaebols, credit guarantees, venture capital investment, économie créative, système d'innovation, garanties de crédit, investissements en capital-risque, investisseurs providentiels, financement participatif, fusions et acquisitions, capitale de la connaissance, chaebols, PME, entrepreneuriat, R&D, jeunes entreprises, Corée, réglementation des marchés de produits
    JEL: L25 L26 M13 O31
    Date: 2014–07–24
  10. By: Michel Pendaries (Euromed Marseille - École de management - Association Euromed Management - Marseille); Hector Castaneda (Euromed Marseille - École de management - Association Euromed Management - Marseille)
    Abstract: L'innovation est devenue intensive et ouverte, car les efforts de R & D des entreprises technologiques à elles seules ne suffisent plus. Elles doivent ouvrir leurs réseaux et collaborer. De ce fait, la connaissance est distribuée et devient le résultat d'un travail collectif. Les connaissances, comme composante importante du capital humain et des actifs immatériels de l'entreprise, requièrent de nouvelles méthodes et de nouveaux dispositifs pour mesurer et piloter les performances et en particulier celles du processus de transfert de connaissances. Cette recherche conceptuelle, a pour objectif d'identifier : les variables clés d'une performance durable de la co-création de valeur dans le processus de transfert de connaissances du processus d'innovation technologique, et les leviers d'action sur ces variables. Elles sont les composantes d'un système de pilotage de la performance, commun à des acteurs partenaires de plus en plus nombreux et juridiquement indépendants. Ces variables sont identifiées à partir du croisement des dimensions technologiques, sociales et organisationnelles du processus de transfert de connaissances et des liens intra et inter-organisationnels : structurel, cognitif, affectif et économique. Des leviers d'action sur ces variables sont proposés selon la stratégie de contrôle associée : contrôle de processus, contrôle d'arbitrage et contrôle d'output.
    Keywords: Innovation technologique, Pilotage de la performance, Transfert de connaissances, Création de valeur, Valeur partenariale
    Date: 2013–05–31
  11. By: Massimiliano Mazzanti (Department of Economics and Management, University of Ferrara, Ferrara (Italy) and SEEDS, Ferrara (Italy).); Giovanni Marin (CERIS-CNR, Milano (Italy).); Susanna Mancinelli (Department of Economics and Management, University of Ferrara, Ferrara (Italy) and SEEDS, Ferrara (Italy)); Francesco Nicolli (CERIS-CNR, Milano (Italy).)
    Abstract: Eco innovations in the climate change realm require pressures and knowledge from outside the firm's and sector's boundaries. The role of policies is well known, as a tool that potentially tackles two externalities: innovation and environmental market failures. Sector integration is also increasingly relevant for understanding the economic, environmental and innovation performances of countries. We integrate these two perspectives to provide evidence on the policy effects behind the adoption of eco innovations in EU sectors. We take a sector perspective by exploiting EU CIS data over 2006-2008. By using past CO2 emission intensity (CO2 on value added) as a proxy of policy stringency, we find that emission intensive sectors are more likely to adopt CO2-related eco-innovations. The aforementioned results are valid for both the economy as a whole and for industrial sectors specifically. We additionally show that not only environmental policies are important to sustain EI adoptions. Other 'external' drivers play a role. Looking at the role of inter sector integration and knowledge sources, we observe that sectors with more emission intensive upstream 'partners' eco-innovate more to reduce their CO2 footprints. The positive and significant effect of upstream emission intensity (supplier's emission intensity) is actually stronger than the effect of 'direct' CO2 emission intensity (policy effect).
    Keywords: environmental innovations, sector integration, induced effects, innovation adoption, NAMEA, Input output, EU, carbon abatement.
    JEL: O13 Q55
    Date: 2014–08
  12. By: Nabokin, Tatjana
    Abstract: This paper investigates the role of patent protection in the global investment decisions of multinational firms. Using comprehensive firm-level panel data of German multinationals, we investigate how changes in a host country’s patent protection influence the extensive and intensive margin of foreign direct investment (FDI) decisions. We isolate the effect of patent protection by estimating a difference-in-difference type approach and controlling for an extensive set of fixed effects. At the extensive margin, we find that strengthening patent protection increases the probability of locating a foreign affiliate, whereby the effect is stronger for firms that highly depend on patent protection. The effect depends further on a host country’s initial legal and economic development. Given that a parent has established a foreign affiliate, no systematic effects of patent protection are found for the decision on how much to invest in the affiliate at the intensive margin. With regard to the ownership structure, we find that multinationals take into account the risk of intellectual property infringements and increase the ownership share held in the foreign affiliate after strengthening patent protection.
    Keywords: Intellectual property rights; patent protection; foreign direct investment; multinationals
    JEL: O34 F23
    Date: 2014–08
  13. By: Hasan Bakhshi (Nesta); John Edwards (Aston University Business School); Stephen Roper (Warwick University Business School); Judy Scully (Aston University Business School); Duncan Shaw (Warwick University Business School); Lorraine Morley (Warwick University Business School); Nicola Rathbone (Aston University Business School)
    Abstract: Experimental methods of policy evaluation are well-established in social policy and development economics but are rare in industrial and innovation policy. In this paper we consider the arguments for applying experimental methods to industrial policy measures, and propose an experimental policy evaluation approach (which we call RCT+). This combines the randomised assignment of firms to treatment and control groups with a longitudinal data collection strategy incorporating quantitative and qualitative data (so-called mixed methods). The RCT+ approach is designed to provide a causative rather than purely summative evaluation, i.e. to assess both ‘whether’ and ‘how’ programme outcomes are achieved. We test the RCT+ approach in an evaluation of Creative Credits – a UK business-to-business innovation voucher initiative intended to promote new innovation partnerships between SMEs and creative service providers. The results suggest the potential value of experimental approaches to industrial policy evaluation, and the benefits of mixed methods and longitudinal data collection in industrial policy evaluations.
    Keywords: evaluation, experimental, industrial policy, innovation, creative, qualitative research
    JEL: Z18 D04 D83
    Date: 2013–06–01
  14. By: Joshua S. Gans
    Abstract: This paper examines an environment where original content can be remixed by follow-on creators. The modelling innovation is to assume that original content creators and remixers can negotiate over the ‘amount’ of original content that is used by the follow-on creator in the shadow of various rights regimes. The following results are demonstrated. First, traditional copyright protection where the original content creators can block any use of their content provides more incentives for content creators and also more remixing than no copyright protection. This is because that regime incentivises original content creators to consider the value of remixing and permit it in negotiations. Second, fair use can improve on traditional copyright protection in some instances by mitigating potential hold-up of follow-on creators by original content providers. Finally, remix rights can significantly avoid the need for any negotiations over use by granting those rights to follow-on innovators in return for a set compensation regime. However, while these rights are sometimes optimal when the returns to remixing are relatively low, standard copyright protection can afford more opportunities to engage in remixing when remixing returns are relatively high.
    JEL: O34
    Date: 2014–08
  15. By: Nicolas CARAYOL; Lorenzo CASSI; Pascale ROUX
    Abstract: Most of the empirical and theoretical literature aimed at understanding the behavioral patterns that lead to the formation of social networks argue that such networks are clustered because agents like social closure, since it facilitates cooperation enforcement, for instance, or increases match quality. We argue that, in certain circumstances, network clustering may arise for other reasons, even though agents may actually not like redundancy in connections. We propose a theoretical model of the formation of new research collaboration that we estimate on the longitudinal evolution of the French co-invention network. We show that if this type of social network is closed it is because it correlates with exogenous metrics affecting the costs of direct link formation, not because agents prefer to close triangles per se. This result is obtained thanks to the richness of our dataset, allowing us to control for dyadic fixed-effects and various costs of network formation (geographical distance, technological specialization, and institution boundaries and attributes) omitted in previous studies.
    Keywords: Strategic network formation; Inter-individual collaborations; Closure; Clustering; Patents.
    JEL: D85 C23 O31 Z13
    Date: 2014

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