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on Innovation |
| By: | 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); Thierry Madies (CREM - Centre de Recherche en Economie et Management - CNRS : UMR6211 - Université de Rennes 1 - Université de Caen Basse-Normandie, Université de Fribourg - University of Fribourg) |
| Abstract: | The contemporary tensions between patents and competition no longer reside in the traditional trade-off between the exclusionary right given to an inventor to encourage innovation, and the welfare loss induced by the market power associated to this right. They rather result from three important distortions of the patent system that create conflicts between patents and competition on the product market, the technology market, and the innovation market. The first distortion is related to the existence of dubious or weak patents: too many patents are granted to applications of bad quality according to the patentability criteria. This increases the uncertainty attached to patents, reduces the credibility of the system and calls into question the justification of the patent as a protective mechanism. Second, the configuration of a patent, originally designed in the context of an isolated innovation, is not quite adapted to the context of sequential innovations. While sequential patents requires fine limitations between successive generations of innovations, the strengthening of intellectual property rights, including the extension of the patentable subject matters, opened the door to opportunistic behavior and adversely affected the technological exchanges. Third, the emergence of complex technologies, in which the use of a large number of fragmented patents is necessary to produce a new product, implies the necessity to coordinate the behavior of numerous patent holders. Some entrants in these complex technologies are struck by the imperfect coordinated behavior of these patent holders as illustrated in different settings such as the pooling of complementary patents and the licensing of essential patents by the Standard Setting Organisation members. Very often, patents serve to create ambushes or to capture unjustified rents through excessive license fees, which in turn create barriers to entry for new competitors in the innovation market. Two important consequences of these distortions are derived. First, the resolution of the conflicts cannot rely exclusively on the application of the antitrust law. Second, the distortions lead to a very expensive judicial implementation of the patent system. |
| Keywords: | uncertain patents, product market, technology market, innovation market, litigation, licensing cost,fragmentation, patent pools, competition policy |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:halshs-00848247&r=ino |
| By: | Juana Sanchez |
| Abstract: | This paper uses new business micro data from the Business Research and Development and Innovation Survey (BRDIS) for the years 2008-2011 to relate the discrete innovation choices made by U.S. companies to features of the company that have long been considered to be important correlates of innovation. We use multinomial logit to model those choices. Bloch and Lopez-Bassols (2009) used the Community Innovation Surveys (CIS) to classify companies according dual, technological or output-based innovation constructs. We found that for each of those constructs of innovation combinations considered, manufacturing and engaging in intellectual property transfer increase the odds of choosing innovation strategies that involve more than one type of categories (for example, both goods and services, or both tech and non-tech) and radical innovations, controlling form size, productivity, time and type of R&D. Company size and company productivity as well as time do not lean the choices in any particular direction. These associations are robust across the three multinomial choice models that we have considered. In contrast with other studies, we have been able to use companies that do and companies that do not innovate, and this has allowed to rule out to some extent selectivity bias. |
| Keywords: | Innovation, R&D, productivity, intellectual property, generalized logistic regression, choice models |
| Date: | 2014–10 |
| URL: | http://d.repec.org/n?u=RePEc:cen:wpaper:14-42&r=ino |
| By: | Paul O'Sullivan (Economics, National University of Ireland, Maynooth); |
| Abstract: | This paper analyses the desirability of RJV formation when firms may choose their R&D investment before or after any demand uncertainty is resolved. If a R&D leader accommodates a follower, multiple Nash equilibria are possible under both R&D competition and RJV formation. If a R&D leader prevents activity by the follower, this is only expected to be profitable at very low spillover and unit R&D cost levels. Whether R&D leadership when competing in R&D is expected to be more profitable than waiting and forming a RJV will depend on unit R&D costs and spillovers. Maximising expected welfare may require an active role for government. |
| JEL: | D21 D81 L13 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:may:mayecw:n252-14.pdf&r=ino |
| By: | Christian Rutzer (University of Basel) |
| Abstract: | This paper extends the firm heterogeneity model of Melitz (2003) by introducing a new concept of endogenous investments in process R&D. The novelty is that if a firm invests more in R&D its expected innovation return hazard rate stochastically dominates the return of less R&D investments. Due to this property, entrants invest more in R&D in response to trade liberalization. As a result, the aggregate productivity is affected by a reallocation of resources to more productive firms and a simultaneous increase in firms' investments in innovations, which is consistent with empirical findings. At the same time the firms' increased R&D investments lead to a sector distribution with a higher right-tail compared to the distribution prior to trade liberalization. Hence, the model gives an explanation for the empirically found differences in the distribution tails among sectors with different trade openness levels. Another advantage of this paper's framework compared to other trade models with innovations is its foundation in and extension of Melitz (2003). It enables most of the heterogeneous firms trade models to be extended by endogenous firm-level R&D in an empirically relevant and analytically tractable way. |
| Keywords: | Aggregate Level, Firm Size Distribution, Heterogeneous Firms, R&D Investments, Trade Liberalization |
| JEL: | F12 F13 O31 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:bsl:wpaper:2014/02&r=ino |
| By: | Andries, Petra; Hünermund, Paul |
| Abstract: | Building on real options literature, this study shows that the use of a staged approach for the management of innovation projects affects the innovation output of firms differently depending on firm characteristics and ambitions. In particular, while staged project management increases the effect of inno- vation expenditures on new product sales for firms envisaging incremental or continuous innovations, this moderating effect is absent for firms aspiring radical innovations. In addition, while staged project management has a pos- itive moderating effect in firms with resource slack, this is not the case when firms are resource-constrained. We further investigate the underlying mecha- nisms to this latter finding by demonstrating that in resource-abundant firms staged project organization is associated with delaying projects until more information becomes available. Thereby these firms reap the waiting value inherent to real options reasoning. By contrast, resource-constrained firms using staged project management are shown to abandon a larger share of their innovation projects and to concentrate resources on fewer projects. It appears, however, that, due to budgetary pressure, they make the decision to abandon at a too early stage where uncertainty is insufficiently resolved. This can explain why there is no effect of staged project management on the sales of resource-constrained firms from new products. The paper contributes to theory development on when and why the staging of innovation projects affects the innovation output of firms and to the literature on real options reasoning in general. |
| Keywords: | staging of innovation projects,real options theory,new product development process,ressource allocation,innovation portfolios |
| JEL: | O32 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:14091&r=ino |
| By: | Crespi G.A.; Tacsir E.; Vargas F. (UNU-MERIT) |
| Abstract: | This paper analyses and compares the determinants of innovation in the service industry and its impact on labour productivity at the firm level in three countries of Latin America Chile, Colombia, and Uruguay. The main findings show that, similar to what is observed in the manufacturing industry, service firms that invest the most in innovation activities are more likely to introduce changes or improvements in their production process and/or product mix, and those firms that innovate have higher labour productivity than non-innovative firms. Size was found to be a less relevant determinant of innovation in services than in manufacturing, suggesting that the need for infrastructure and associated sunk costs are lower in services. Conversely, cooperation was found to be far more important for innovation in services than in manufacturing, in line with the more interactive nature of innovation in services. Yet, large differences in statistical significance and size of the coefficients of explanatory variables among the countries studied suggest that the framework conditions where a firm operates have an important role in innovation decisions. |
| Keywords: | Microeconomic Analyses of Economic Development; Industrialization; Manufacturing and Service Industries; Choice of Technology; Innovation and Invention: Processes and Incentives; Technological Change: Choices and Consequences; Diffusion Processes; Economic Growth and Aggregate Productivity: General; Economywide Country Studies: Latin America; Caribbean; |
| JEL: | O12 O14 O31 O33 O40 O54 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:unm:unumer:2014069&r=ino |
| By: | Graef, Inge; Wahyuningtyas, Sih Yuliana; Valcke, Peggy |
| Abstract: | Because of the reliance on market analysis, current competition law may not be sufficiently fit for taking account of disruptive innovation which leads to the introduction of new products or services overthrowing existing markets. In the US, innovation has been given a more prominent place in competition analysis by way of recognizing the existence of 'innovation markets' and 'innovation competition' in, respectively, the 1995 Antitrust Guidelines for the Licensing of Intellectual Property and the 2010 US Merger Guidelines. Although a similar notion of 'competition in innovation' has been introduced in the EU in policy documents in the area of Article 101 TFEU, in merger review and abuse of dominance cases such a concept has not been applied yet. By giving insight into the way in which the different pillars of EU competition law deal with disruptive innovation, this paper aims to contribute to the debate on how competition policy could be more conducive towards innovation in dynamic industries. |
| Keywords: | Disruptive innovation,dynamic competition,restrictive agreements,merger review,abuse of dominance |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:itse14:101378&r=ino |
| By: | Iain M. Cockburn; Jean O. Lanjouw; Mark Schankerman |
| Abstract: | This paper studies how patent rights and price regulation affect how fast new drugs are launched in different countries, using newly constructed data on launches of 642 new drugs in 76 countries for the period 1983-2002, and information on the duration and content of patent and price control regimes. Price regulation strongly delays launch, while longer and more extensive patent protection accelerates it. Health policy institutions, and economic and demographic factors that make markets more profitable, also speed up diffusion. The effects are robust to using instruments to control for endogeneity of policy regimes. The results point to an important role for patents and other policy choices in driving the diffusion of new innovations. |
| JEL: | I15 I18 K19 L65 O31 O33 O34 O38 |
| Date: | 2014–09 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:20492&r=ino |
| By: | Köhler, Christian |
| Abstract: | This paper explores the effect of bargaining in vertical relationships on the profitability of suppliers' R&D investments. Studies on the relationship between R&D and firm profitability mostly concentrate on the impact of horizontal market structure and neglect vertical interac-tions. Building on theoretical and empirical evidence about the effects of bargaining in vertical relationships, the crucial determinants of a supplier's bargaining power are identified as the market position and the degree of concentration in the buyer portfolio. With respect to R&D profitability the latter is expected to diminish returns from R&D, while the former is expected to increase it. The hypotheses are tested using a sample of 472 German manufactur-ing firms. The empirical findings support all hypotheses and highlight the importance of tak-ing a supplier's bargaining power into account when estimating R&D profitability. The esti-mated effects are considerable: for an average R&D performing supplier an increase of R&D intensity in 2010 by a percentage point would reduce profits by about 14 % in 2012 given the supplier depends completely on the largest three buyers and does hold an average market share. Contrastingly, a monopolist R&D performing supplier with average buyer concentra-tion would experience a profit increase by 10 % in 2012. |
| Keywords: | Bargaining,Firm performance,Vertical relationships |
| JEL: | D22 L22 O32 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:14087&r=ino |
| By: | Jonathan Bainée (UEA - Unité d'Économie Appliquée - ENSTA ParisTech, CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris I - Panthéon-Sorbonne) |
| Abstract: | Entrepreneurship and, thus, small- and middlesized firms (SMEs) have had a growing interest for the past two decades, from the academic world as well as from public authorities. This interest is part of many economic changes. In particular, technological change and the increasing incidence of innovation in most developed countries have reduced the importance of the size of the companies in the industry and favored the development of entrepreneurial activities. In addition, globalization would have dragged the comparative advantages of North American and European countries toward knowledge-based activities, while the "knowledge-based economy" would be relatively more conducive to entrepreneurship and to SMEs. The issues in terms of ability to manage the creation, transition, and business development are primordial, both in their qualitative and quantitative dimension. It is in this context, conducive to new needs of knowledge, that emerge entrepreneurship teachings designed to inspire and enable individuals to start and to grow entrepreneurial ventures. They can be addressed in two steps. First, a historical approach will show how teachings in entrepreneurship have evolved in their implementation based on a double dynamic of empowerment and "complication" of training programs in entrepreneurship, which seems structured around the controversy over the ability to learn to undertake business or initiate the risk culture. Second, practical teaching methods of entrepreneurship will be analyzed, making sure to highlight the multifaceted reality of innovative approaches and actions through an international benchmark conducted by the PIMREP (ParisTech Innovation Management Research and Education Program) network (PIMREP 2010, 2011) |
| Keywords: | Entrepreneuriat ; management de l'innovation ; enseignements ; Eco-système |
| Date: | 2013–04–15 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-00980385&r=ino |
| By: | Ueda, Masashi |
| Keywords: | Smart phone,conjoint analysis,SNS,switching cost,diffusion of innovation and system migration |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:itse14:101422&r=ino |
| By: | Mitusch, Kay; Liedtke, Gernot; Guihery, Laurent; Bälz, David |
| Abstract: | We analyse the potential for shifting freight transports to the railways in Western and Central Europe. This potential arises for large and concentrated freight flows over long distances of about 300 km or more. However, we show that there are only few such freight flows in Europe, and that they are concentrated or connected to the central European population centers, sometimes called the "Blue Banana". As a consequence, the European railway freight corridors according to EU Regulation 913/2010 should be divided into two distinct groups: first tier and second tier corridors. Substantial innovations should be introduced on the first tier corridors first, in order to increase efficiency and reduce noise. This refers to core innovations for rolling stock like the introduction of automatic couplings, electronic or electro-pneumatic brakes, and modern bogies. |
| Keywords: | freight transport,railways,corridors,rolling stock,innovation policy |
| JEL: | R48 L92 Q55 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:kitwps:61&r=ino |