nep-ino New Economics Papers
on Innovation
Issue of 2014‒11‒01
fourteen papers chosen by
Steffen Lippert
University of Auckland

  1. Inter-firm R&D cooperation in local innovation networks: The case of Italian technological districts By Otello Ardovino; Luca Pennacchio
  2. Transition to Clean Technology By Douglas Hanley; Daron Acemoglu; Ufuk Akcigit; William Kerr
  3. Innovative Activity in the Caribbean: Drivers, Benefits, and Obstacles By Preeya Mohan; Eric Strobl; Patrick Watson
  4. Network Determinants of a Collaborative Funding System: The Case of the German Innovation Policy By Florian Umlauf
  5. Assessing the FNS impacts of technological and institutional innovations and future innovation trends. FOODSECURE working paper no. 11 By Evita Pangaribowo; Nicolas Gerber; Pascal Tillie
  7. The dynamics of knowledge-intensive sectors' knowledge base: Evidence from Biotechnology and Telecommunications By Jackie Krafft; Francesco Quatraro; Pier-Paolo Saviotti
  8. Exports, R&D and Productivity: A test of the Bustos-model with enterprise data from France, Italy and Spain By Joachim Wagner
  9. How to improve Kline and Rosenberg's chain-linked model of innovation: building blocks and diagram-based languages By Jean-Pierre Micaëlli; Joelle Forest; Eric Coatanéa; Galina Medyna
  10. The Role of Communicators in Innovation Clusters By Bettina Blasini; Rani Jeanne Dang; Tim Minshall; Letizia Mortara
  11. The determinants of R&D persistence in SMEs By Juan A. Máñez; María E. Rochina-Barrachina; Amparo Sanchis-Llopis; Juan A. Sanchis-Llopis
  12. Do Credit Constrained Firms in Africa Innovate Less? A Study Based on Nine African Nations By Edward Lorenz
  13. How Do Open Standards Influence Inventive Activity? Evidence from the IETF By Wen Wen; Chris Forman; Sirkka Jarvenpaa

  1. By: Otello Ardovino; Luca Pennacchio
    Abstract: This paper explores the drivers of inter-firm R&D collaborations in a particular type of innovation network, the technological districts created in Italy under a specific public policy to promote innovation. The empirical analysis used an original database containing information on research projects activated by the districts and on the characteristics of participating firms. The main results show that districts with governance oriented towards market logic and districts that include several universities foster a stronger cooperation among firms than other districts. In addition, network effects such as structural embeddedness and interlocking directorate greatly influence the propensity to cooperate. Lastly, knowledge transfer and absorptive capacity of firms also play an important role in shaping collaboration strategies. Some considerations about the effectiveness of public policy also emerge from the analysis. In particular technological districts foster research collaborations among small firms and between small and large firms. The latter type of cooperation could be very important to enhance the innovation capabilities of small firms and their performance.
    Keywords: R&D cooperation, innovation networks, firm behaviour, dyadic regession.
    JEL: L14 O31 O32
    Date: 2014–10–09
  2. By: Douglas Hanley; Daron Acemoglu; Ufuk Akcigit; William Kerr
    Abstract: We develop a microeconomic model of endogenous growth where clean and dirty technologies compete in production and innovation-in the sense that research can be directed to either clean or dirty technologies. If dirty technologies are more advanced to start with, the potential transition to clean technology can be difficult both because clean research must climb several steps to catch up with dirty technology and because this gap discourages research effort directed towards clean technologies. Carbon taxes and research subsidies may nonetheless encourage production and innovation in clean technologies, though the transition will typically be slow. We characterize certain general properties of the transition path from dirty to clean technology. We then estimate the model using a combination of regression analysis on the relationship between R&D and patents, and simulated method of moments using microdata on employment, production, R&D, firm growth, entry and exit from the US energy sector. The model`s quantitative implications match a range of moments not targeted in the estimation quite well. We then characterize the optimal policy path implied by the model and our estimates. Optimal policy heavily relies on research subsidies as well as carbon taxes. We use the model to evaluate the welfare consequences of a range of alternative policy structures. For example, just relying on carbon taxes or delaying intervention both have significant welfare costs--though their implications for medium run temperature increases are quite different.
    Keywords: carbon cycle, directed technological change, environment, innovation, optimal policy
    JEL: O30 O31 O33 C65
    Date: 2014–01
  3. By: Preeya Mohan; Eric Strobl; Patrick Watson
    Abstract: We investigate the determinants of innovation and the benefits from it in making firms more productive in the Caribbean. To this end we use a rich firm level dataset covering 14 different countries and various non-parametric, semi- parametric and parametric statistical tools. Our results show that, while firms may be productive for many reasons, there are substantial productivity benefits resulting from investment in innovation. Moreover, these benefits do not appear to be particularly low compared to what prevails in other developing countries. However, there is some indication that factors that would normally encourage innovation investment, such as patent protection, public subsidies, or cooperation among innovators, may not bear fruit.
    Date: 2014–09–25
  4. By: Florian Umlauf (University of Bremen)
    Abstract: The granting of publicly subsidized joint projects has become a popular policy instrument in Germany and other developed countries. However, little is known about how an emerging subsidization network affects the overall allocation process of further project grants. Employing a database that contains all funded R and D projects of the German federal government, this paper analyzes the extent to which the funding network tends to reproduce itself. The results of an empirical model show that participation within a collaborative project does not raise, per se, the chance of an enterprise obtaining another project grant. Rather, it is important to hold central positions within the network or have access to a diverse external knowledge base to receive anew project grant.
    Keywords: R&D subsidies, project allocation, network determinants, cooperation, R and D
    JEL: H32 L53 L60 O38
    Date: 2014–10–08
  5. By: Evita Pangaribowo; Nicolas Gerber; Pascal Tillie
    Abstract: Institutional and technological innovations on food and nutrition security (FNS). Impact assessments have been undertaken by various organizations. It is widely acknowledged that innovations in agriculture and other sectors have a remarkable impact on FNS. While the impact assessments of such innovations mostly focus on a specific type of innovation and FNS outcome, our meta-analysis expands the assessment to several types of innovations and their multiple impacts, including on agricultural production and distribution, environmental aspects and nutrition outcomes. The meta-analysis is complemented by a survey of stakeholders’ perceptions about the impacts of innovations for FNS. Drawing on the meta-analysis and the survey results, we discuss a framework for the development of FNS innovation scenarios.
    JEL: O31
  6. By: Nikolas J. Zolas
    Abstract: This paper analyzes how firms decide where to patent in a heterogeneous firm model of trade with endogenous rival entry. In the model, innovating firms compete with rival firms on price, where rivals force the innovating firm to reduce markups and lower the innovating firm's probability of obtaining monopolistic profits. Patenting allows the innovating firm to reduce the number of rival rms by increasing their fixed overhead costs, thereby providing higher expected profits and increased markups from reduced competition. Countries with higher states of technology, more competition and better patent protection have a greater proportion of entrants who patent. Industries tend to follow a U-shaped pattern of patenting where industries with high heterogeneity in production and low substitution, along with industries with low heterogeneity in production and high substitution patent more frequently. Using a generalized framework of the model, I estimate market-based measures of country-level patent protection, which when compared with other IP indices, suggests that not enough international patenting is taking place. Finally, I test the predictions of the model using a newly available technology-to-industry concordance on bilateral patent flows and show that firms are increasingly sensitive to foreign IP protection. Countries that choose to maximize their IP protection can increase the number of foreign patents by almost 10%.
    Keywords: Patents, international trade, heterogeneous rms, endogenous markups, intellectual property, imperfect competition
    JEL: F12 F29 O34 L11
    Date: 2014–09
  7. By: Jackie Krafft (GREDEG - Groupe de Recherche en Droit, Economie et Gestion - CNRS : UMR7321 - Université Nice Sophia Antipolis (UNS)); Francesco Quatraro (GREDEG - Groupe de Recherche en Droit, Economie et Gestion - CNRS : UMR7321 - Université Nice Sophia Antipolis (UNS)); Pier-Paolo Saviotti (GAEL - Grenoble Applied Economic laboratory - Aucune)
    Abstract: In this paper, we present a methodology to represent and measure knowledge which takes into account knowledge heterogeneity and its sectoral level theoretical and empirical implications in knowledge intensive environments. We draw on work on recombinant knowledge, extending the approach to include the way the dynamics of technological knowledge creation evolves according to a life cycle; testing the existence of concepts such as technological paradigms; mapping the characteristics of the search process in the phases of exploration and exploitation during this technology life cycle and detecting the differences in sectoral evolution that can be explained by the properties of the knowledge base. We use European Patent Office data (1981-2005) to propose some operational metrics for the knowledge base and its evolution in two knowledge intensive sectors: biotechnology and telecommunications. Our empirical results show that there are interesting and meaningful differences across sectors, which are linked to the different phases of the technology life cycles.
    Keywords: Knowledge base, knowledge intensive sectors, variety, coherence, cognitive distance, technological classes, patents
    Date: 2014–06–12
  8. By: Joachim Wagner (Leuphana University Lueneburg, Germany)
    Abstract: This paper uses comparable firm level data from France, Italy and Spain to test a hypothesis derived by Bustos (AER 2011) in a model that explains the decision of heterogeneous firms to export and to engage in R&D. Using a non-parametric test for first order stochastic dominance it is shown that, in line with this hypothesis, the productivity distribution of firms with exports and R&D dominates that of exporters without R&D, which in turn dominates that of firms that neither export nor engage in R&D. These results are in line with findings for Argentina reported by Bustos, and with findings for Germany and Denmark. The model, therefore, seems to be useful to guide empirical work on the relation between exports, R&D and productivity.
    Keywords: Exports, R&D, productivity, EFIGE data, France, Italy, Spain
    JEL: F14
    Date: 2014–10
  9. By: Jean-Pierre Micaëlli (EVS - Environnement Ville Société - CNRS : UMR5600 - Université Jean Moulin - Lyon III - Université Lumière - Lyon II - Université Jean Monnet - Saint-Etienne - École Nationale des Travaux Publics de l'État [ENTPE] - Institut National des Sciences Appliquées [INSA] : - LYON - École Normale Supérieure (ENS) - Lyon - École Nationale Supérieure des Mines - Saint-Étienne); Joelle Forest (EVS - Environnement Ville Société - CNRS : UMR5600 - Université Jean Moulin - Lyon III - Université Lumière - Lyon II - Université Jean Monnet - Saint-Etienne - École Nationale des Travaux Publics de l'État [ENTPE] - Institut National des Sciences Appliquées [INSA] : - LYON - École Normale Supérieure (ENS) - Lyon - École Nationale Supérieure des Mines - Saint-Étienne); Eric Coatanéa (Helsinki University of Technology - Helsinki University of Technology); Galina Medyna (Helsinki University of Technology - Helsinki University of Technology)
    Abstract: The "hierarchical and linear model of innovation" (HLMI) is often used to describe how innovations are produced. HLMI presents several shortcomings and one possible way of overcoming them is to consider innovations from a system perspective. In order to achieve this, this article uses Kline and Rosenberg's chain-linked model (CLM, 1985) as a starting point and builds up on it, proposing an improvement rendering CLM more coherent with its systemic bases. The proposed improvement suggests conceiving innovation systems as associations of building blocks and using contemporary engineering diagram-based languages to display them. Nevertheless, this improvement does not challenge the dynamic features of innovation systems
    Keywords: chain-linked model diagram-based language innovation chain linked model, diagram-based language, innovation, linear model of innovation, system thinking
    Date: 2014–09–15
  10. By: Bettina Blasini (Engineering Department - University of Cambridge); Rani Jeanne Dang (GREDEG - Groupe de Recherche en Droit, Economie et Gestion - CNRS : UMR7321 - Université Nice Sophia Antipolis (UNS), IIE - Institute for Innovation and Entrepreneurship, Université de Gothenburg, Suède - Université de Gothenburg, Suède); Tim Minshall (Engineering Department - University of Cambridge); Letizia Mortara (Engineering Department - University of Cambridge)
    Abstract: Innovation clusters continue to be an important focus of economic development policies in many nations. Leading innovation clusters demonstrate that regional concentration strengthens the innovative capability and can lead to successful competitiveness on a global level, as demonstrated by regions such as Silicon Valley (US), Cambridge (UK) and Sophia Antipolis (France). However the successful creation of clusters still presents a challenge to policy makers as efforts to do so regularly fail. The development of innovation clusters has therefore received much academic and policymaker attention. While past research has examined a variety of factors as drivers for clustering effects, the role of communication within the cluster - and, specifically, the role of key individual communicators - in underpinning successful cluster development has received almost no academic attention. In this chapter, we will draw upon the relevant literature to develop a conceptual framework that will underpin research on this important topic by investigating the role of communicators in innovation clusters. Building on communication theories, the framework suggests that there are four influence-levels that shape and impact the role of communications in innovation clusters: the Individual Level, the Organizational Level, the Cluster Level and the Context. The interdisciplinary view on clustering effects contributes valuable insight to both communication studies and cluster theories. The framework developed within this chapter provides a structure to aid future research on the role of communicators within innovation clusters.
    Keywords: Innovation clusters, communications framework, journalist; communicators
    Date: 2013–12–05
  11. By: Juan A. Máñez (Universitat de València and ERI-CES, Departamento de Economía Aplicada II, Avda. dels Tarongers s/n, 46022 Valencia, Spain); María E. Rochina-Barrachina (Universitat de València and ERI-CES, Departamento de Economía Aplicada II, Avda. dels Tarongers s/n, 46022 Valencia, Spain); Amparo Sanchis-Llopis (Universitat de València and ERI-CES, Departamento de Economía Aplicada II, Avda. dels Tarongers s/n, 46022 Valencia, Spain); Juan A. Sanchis-Llopis (Universitat de València and ERI-CES, Departamento de Economía Aplicada II, Avda. dels Tarongers s/n, 46022 Valencia, Spain)
    Abstract: This paper analyses the sources of persistence in conducting R&D activities by SMEs. The data used is a panel of Spanish manufacturing firms drawn from the Survey of Business Strategies (ESEE), for the period 1990-2011. We estimate discrete time proportional hazard models accounting for firm observed and unobserved heterogeneity. Our results are consistent with a process of learning associated with the accumulation of R&D capital and with a self-sustained effect of engagement in R&D activities. In addition, we obtain that persistence in R&D in SMEs is also related to the success-breeds-success, sunk costs and demand-pull hypotheses. Finally, our findings also uncover some interesting differences in the underlying drivers of R&D persistence of SMEs as compared to their larger counterparts.
    Keywords: SMEs, R&D activities, persistence, learning, success-breeds-success, sunk costs, demand-pull, discrete time survival models
    JEL: C41 L60 O31
    Date: 2014–10
  12. By: Edward Lorenz (University of Nice Sophia Antipolis, France; GREDEG CNRS)
    Abstract: This paper draws on the results of World Bank Enterprise surveys to investigate the relation between financials constraints and innovation performance for a sample of firms in 9 African nations: Ethiopia, Zimbabwe, Rwanda, the Central African Republic, Uganda, Zambia, Tanzania, Ghana and the Democratic Republic of Congo. In common with much of the recent literature focusing on these issues, the analysis makes use of direct measures of innovation and of financial constraints. The econometric analysis takes into account the potential endogeneity of financing constraints to the firm’s decision to innovate. The results show that financing constraints have a negative impact on the probability of successful innovation and that this negative impact tends to be greater both for small-sized firms compared to large firms and for young firms compared to old firm. The results have important policy implications and strongly suggest that government subsidies and financial support programs for micro and small-sized firms could make a positive contribution to increasing the innovation performance of African nations.
    Keywords: Contextual Credit constraints, Innovation, Small and Medium-sized Enterprises, Sub-Saharan Africa
    JEL: G32
    Date: 2014–10
  13. By: Wen Wen (McCombs School of Business, The University of Texas at Austin, 2110 Speedway Stop B6500, Austin, TX 78712); Chris Forman (Scheller College of Business, Georgia Institute of Technology, 800 West Peachtree Street NW, Atlanta, GA 30308); Sirkka Jarvenpaa (McCombs School of Business, The University of Texas at Austin, 2110 Speedway Stop B6500, Austin, TX 78712)
    Abstract: We examine how standardization in the information and communication technologies affects the inventive activities of firms that do not contribute standards but potentially produce to the standards. In the context of the Internet Engineering Task Force, we find that as a technological area releases 100 more open standards contributed by commercial firms, non-contributing firms have 18%-20% less inventive output in the same technological area. This negative effect of standardization in a technological area is stronger when the standards-contributing firms hold a large fraction of complementary intellectual property rights (IPR) in the area, but is somewhat lessened when the ownership of complementary IPR is highly concentrated among these contributing firms. These effects are also stronger (more negative) on the inventive activity of small firms. In contrast, we find that increases in the number of standards developed solely by academics and others associated with noncommercial entities are positively associated with inventive activity.
    Keywords: standardization; inventive activity; innovation; intellectual property rights
    JEL: L15 L86 O34
    Date: 2014–10
  14. By: Florence Honore
    Abstract: Start-ups founded by team members with prior shared experience in incumbent firms tend to perform better than other start-ups. While the prior shared experience brings relevant knowledge and coherent routines, the knowledge is also by definition redundant and can corner the new firms in local search and limit innovation. I propose that start-ups may mitigate the negative aspects of shared prior experience by including in the founding team individuals with extensive experience in multiple prior jobs or industries – i.e., job hoppers. I find that job hoppers positively moderate the effect of shared experience on performance. I also find that job hoppers who bring knowledge from outside the start-up industry are beneficial to teams with prior shared experience within the start-up industry and that job hoppers who bring knowledge from the start-up industry are beneficial to teams with prior shared experience outside the start-up industry. Consequently, the job-hoppers may embody both the positive disruptive effect and the introduction of relevant complementary knowledge. With these results, the paper uncovers a novel mechanism that underlies the knowledge complementarities in founding teams.
    Date: 2014–10

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