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on Innovation |
| By: | Congressional Budget Office |
| Abstract: | The federal government influences innovation through two broad channels: spending and tax policies, and the legal and regulatory systems. Policymakers could spur additional innovation by increasing funding for federal programs that support research and development, increasing funding on education, providing greater tax incentives for R&D, increasing loans or loan guarantees for firms that produce innovative technologies, or making changes to immigration policies, the patent system, and the regulatory regime. |
| JEL: | E22 H54 O00 |
| Date: | 2014–11–17 |
| URL: | http://d.repec.org/n?u=RePEc:cbo:report:49487&r=ino |
| By: | Tavassoli, Sam (Centre for Innovation, Research and Competence in the Learning Economy (CIRCLE), Blekinge Institute of Technology.); Karlsson, Charlie (Blekinge Institute of Technology, Jönköping International Business School & Centre of Excellence for Science and Innovation Studies (CESIS)) |
| Abstract: | This paper analyzes various innovation strategies of firms. Using five waves of the Community Innovation Survey in Sweden, we have traced the innovative behaviour of firms over a ten-year period, i.e. between 2002 and 2012. We distinguish between sixteen innovation strategies, which compose of Schumpeterian 4 types of innovations (process, product, marketing, and organizational) plus various combinations of these four types. First, we find that firms are not homogenous in choosing innovation strategies; instead, they have a wide range of preferences when it comes to innovation strategy. Second, using Transition Probability Matrix, we found that firms also persist to have such a diverse innovation strategy preferences. Finally, using Multinomial Logit model, we explained the determinant of each innovation strategies, while we gave special attention to the commonly used innovation strategies among firms. |
| Keywords: | innovation strategy; product innovations; process innovations; market innovations; organizational innovations; innovation strategies; heterogeneity; firms; persistence; Community Innovation Survey; Sweden |
| JEL: | D22 L20 O31 O32 |
| Date: | 2015–02–02 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:cesisp:0396&r=ino |
| By: | Carlo Cambini; Federico Caviggioli; Giuseppe Scellato |
| Abstract: | In this paper we study the effects of the changes in the level of product market regulation on the industry-level innovation intensity in the Electricity sector across 16 European countries during years 1990-2009. We matched data on R&D budgets and EPO patent applications from IEA and Eurostat Databases and indexes of market regulation conditions from OECD, in order to test the impact of deregulatory policies on the propensity to innovate in new energy technologies. Our findings indicate an increase in the aggregated Electricity R&D and in patenting activities following market deregulation. Our measure of market regulation intensity is based on the aggregation of three factors that capture respectively entry barriers, public ownership and vertical integration. Econometric results suggest that policies aimed at a reduction in vertical integration have a positive impact on both industry-level R&D and patenting. The reduction of public ownership of incumbent operators and entry barriers are mostly associated to a significant increase in R&D expenditures. In the paper we discuss the implication of this evidence in light of the current trend in investment in the electricity sector in Europe. |
| Keywords: | Innovation, Patents, Regulation, Electricity. |
| JEL: | L94 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:bcu:iefewp:iefewp78&r=ino |
| By: | Böing, Philipp |
| Abstract: | This study investigates the allocation and effect of technology subsidies on R&D activities and technology acquisitions of Chinese domestic firms. We exploit novel firm data which includes information on subsidies, R&D, patents, trade, and balance sheet indicators. Conditional difference-in-difference estimation confirms that the innovation policy of China s government follows a picking-the-winner strategy. Technology subsidies are allocated to minority state-owned and privately owned firms which have high-tech inventions, high profitability, and compete with foreign firms in domestic industries. However, we find almost no evidence which confirms that technology subsidies incentivize an increase in R&D intensity or technology acquisition. There is weak evidence for a positive effect of consecutive treatments. |
| JEL: | O38 O32 O30 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc14:100536&r=ino |
| By: | Boeing, Philipp; Mueller, Elisabeth; Sandner, Philipp |
| Abstract: | In the past years Chinese firms increased their spending on R&D substantially and worked on achieving a higher quality level of R&D. We analyze whether different R&D activities show a positive influence on total factor productivity (TFP) for firms of different ownership types and across two time periods. Our panel dataset with annual information allows us to study listed firms over the two time periods 2001-2006 and 2007-2011. Privately owned enterprises (POEs) not only obtain higher returns from own R&D than majority and minority state-owned enterprises (SOEs), they are also able to increase their leading position. Overall strong increases in the size of patent stocks are related to a decreasingly positive or even vanishing influence on TFP. POEs not only produce R&D of the highest quality but are also the only ownership type profiting from higher quality. Up to now research collaborations allow almost no benefit with the only exception stemming from domestic collaborations with individuals. Our comprehensive analysis depicts strengths but also weaknesses of the corporate sector in China. We derive implications for the further development of economic policies. |
| Keywords: | productivity,R&D,China,ownership type,patents |
| JEL: | O32 O33 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:15006&r=ino |
| By: | Watzinger, Martin; Schnitzer, Monika |
| Abstract: | In this paper we measure knowledge spillovers arising from venture-capital nanced companies on the patenting activities of other companies and com- pare them to spillovers from established rms. We develop a novel measure to to identify the appropriate spillover pool based on backward citations which re ect channels for learning between rms. Using panel data of U.S. rms we show that venture capital investment in start-ups generates signi cant spillovers on the patent quantity and quality of other rms. Counterfactual estimates suggest that these spillovers are larger than those generated by corporate R&D. We address potential concerns about causality with an in- strumental variable strategy using changes in federal and state tax incentives as instrument for R&D and past fund raising as instrument for venture capital investment. |
| JEL: | O31 O32 G24 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc14:100318&r=ino |
| By: | Aflaki, Sam; Masini , Andrea |
| Abstract: | The paper aims to contribute to the longstanding technology-push vs. demand-pull debate and to the literature on renewable energy diffusion and renewable energy policy assessment. The authors argue that in addition to the traditional push-pull dichotomy, the drivers of technological change must be differentiated by whether they are exogenous or endogenous to the economic system. They maintain that a specific type of endogenous demand-pull mechanism (i.e. economic growth) is a major catalyst of environmental innovation. We apply this perspective to study the diffusion of renewable energy (RE) technologies in 15 European Union countries from 1990 to 2012. Applying different panel data estimators, the authors find that public R&D investments, policies supporting RE and per capita income all have a positive impact on RE diffusion, whereas the variability of policy support has a negative impact. However, they also find that economic growth is a stronger driver than either public R&D investments or policies supporting RE, and that models that do not take it explicitly into account tend to overestimate the importance of exogenous drivers. Most importantly, they note that the effect of economic growth on RE diffusion exhibits a nonlinear, U-shaped pattern that resonates with the well-known Environmental Kuznets Curve hypothesis. RE penetration remains negligible at low levels of growth whereas it increases sharply only after income per capita has reached a given threshold and the demand for environmental quality rises. Their findings have implications for policy making. They suggest that for RE diffusion to increase, government action should be directed not only at shielding renewables from competition with fossil fuel technologies but also at stimulating aggregated demand and economic growth. |
| Keywords: | Deployment policy; Technological innovation; Renewable Energy; Environmental Kuznets Curve; Nonstationary Panel |
| JEL: | C23 O31 O33 O38 O44 |
| Date: | 2014–12–01 |
| URL: | http://d.repec.org/n?u=RePEc:ebg:heccah:1070&r=ino |
| By: | Czarnitzki, Dirk; Doherr, Thorsten; Hussinger, Katrin; Schliessler, Paula; Toole, Andrew A. |
| Abstract: | We examine how the ownership of intellectual property rights influences patenting of university-discovered inventions. In 2002, Germany transferred patent rights from faculty members to their universities. To identify the effect on the volume of patenting, we exploit the researcher-level exogeneity of the 2002 policy change using a novel researcher-level panel database that includes a control group not affected by the law change. For professors who had existing industry connections, the policy decreased patenting, but for those without prior industry connections, it increased patenting. Overall, fewer university inventions were patented following the shift from inventor to institutional ownership. |
| Keywords: | intellectual property,patents,technology transfer,policy evaluation |
| JEL: | O38 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:15007&r=ino |
| By: | Laura Diaz Anadon (Belfer Center for Science and International Affairs, Harvard Kennedy School, Harvard University); Valentina Bosetti (Department of Economics, Bocconi University, Milan, Italy, Fondazione Eni Enrico Mattei, Milan, Italy and CMCC, Lecce, Italy); Gabe Chan (Belfer Center for Science and International Affairs, Harvard Kennedy School, Harvard University); Gregory Nemet (LaFollette School of Public Affairs, University of Madison-Wisconsin); Elena Verdolini (Fondazione Eni Enrico Mattei and CMCC) |
| Abstract: | Characterizing the future performance of energy technologies can improve the development of energy policies that have net benefits under a broad set of future conditions. In particular, decisions about public investments in research, development, and demonstration (RD&D) that promote technological change can benefit from (1) an explicit consideration of the uncertainty inherent in the innovation process and (2) a systematic evaluation of the tradeoffs in investment allocations across different technologies. To shed light on these questions, over the past five years several groups in the United States and Europe have conducted expert elicitations and modeled the resulting societal benefits. In this paper, we discuss the lessons learned from the design and implementation of these initiatives in four respects. First, we discuss lessons from the development of ten energy-technology expert elicitation protocols, highlighting the challenge of matching elicitation design with a particular modeling tool. Second, we report insights from the use of expert elicitations to optimize RD&D investment portfolios. These include a discussion of the rate of decreasing marginal returns to research, the optimal level of overall investments, and the sensitivity of results to policy scenarios and selected metrics for evaluation. Third, we discuss the effect of combining online elicitation tools with in-person group discussions on the usefulness of the results. Fourth, we summarize the results of a meta-analysis of elicited data across research groups to identify the association between expert characteristics and elicitation results. |
| Keywords: | Expert Elicitations, Energy Technology Innovation, Public R&D, Meta-analysis, Optimization |
| JEL: | O32 Q40 |
| Date: | 2014–10 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2014.91&r=ino |
| By: | Richard T. Thakor; Andrew W. Lo |
| Abstract: | R&D-intensive firms such as biotechnology and pharmaceutical companies follow very different corporate financial policies from firms in less R&D-intensive industries. To account for these differences, we propose an equilibrium model for such firms in which their capital structure, amount of R&D investment, and information disclosure policy are all endogenously determined in response to the degree of competition in the industry. The key results are that, as competition increases, such firms will: (1) increase R&D investment and reduce investment in assets-in-place that support existing products; (2) carry more cash and maintain less net debt; and (3) experience declining betas but greater total stock return volatility due to higher idiosyncratic risk. While the focus is on the biopharmaceutical industry, the results are broadly applicable to other R&D-intensive industries as well. We confirm the model's empirical implications using historical data from the biopharmaceutical industry, and our tests also deal with the endogeneity issue introduced by the fact that a firm's R&D investments and the product-market competition it faces influence each other. |
| JEL: | D82 D83 G31 G32 L11 L15 L25 L65 |
| Date: | 2015–01 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:20903&r=ino |
| By: | Antonio Navas (Department of Economics, University of Sheffield) |
| Abstract: | This paper explores how trade openness affects both product and process innovation in a factor proportions model of trade and firm heterogeneity. Trade openness expands the profit opportunities of the most productive firms and expels the less efficient firms out of the market, making process innovation more attractive for the most productive firms in both industries. Incentives, however, are larger in the industry in which the country has the comparative advantage. Trade also increases the profits of prospective entrants leading to an increase in product innovation in the comparative advantage industry. In addition, I obtain a non-monotonic relationship between trade costs and a country's trade pattern: When the level of trade costs are high, a reduction in trade costs leads to an increase in process innovation in both industries, being stronger in the comparative advantage one; when the trade costs are low the effect is stronger in the comparative disadvantage one. This final result could rationalize recent empirical findings suggesting that in the last half century the Ricardian comparative advantage has become weaker over time. |
| Keywords: | Innovation, Firm Heterogeneity, Comparative Advantage. |
| JEL: | F12 F43 |
| Date: | 2015–01 |
| URL: | http://d.repec.org/n?u=RePEc:shf:wpaper:2015005&r=ino |
| By: | Paolo Sgrignoli (Department of Economics (University of Verona)); Elena Agliari (University of Parma); Raffaella Burioni (University of Parma); Augusto Schianchi (University of Parma) |
| Abstract: | We consider a network of interacting agents and we model the process of choice on the adoption of a given innovative product by means of statistical mechanics tools. The modelization allows us to focus on the effects of direct interactions among agents in establishing the success or failure of the product itself. Mimicking real systems, the whole population is divided into two sub-communities called, respectively, Innovators and Followers, where the former are assumed to display more influence power. We study in detail and via numerical simulations on a random graph two different scenarios: no-feedback interaction, where innovators are cohesive and not sensitively affected by the remaining population, and feedback interaction, where the influence of followers on innovators is non negligible. The outcomes are markedly different: in the former case, which corresponds to the creation of a niche in the market, Innovators are able to drive and polarize the whole market. In the latter case the behavior of the market cannot be definitely predicted and become unstable. In both cases we highlight the emergence of collective phenomena and we show how the final outcome, in terms of the number of buyers, is affected by the concentration of innovators and by the interaction strengths among agents. |
| Keywords: | Innovation diffusion, Agent-based, Collective phenomena, Innovators, Random network |
| JEL: | D85 O31 O32 |
| Date: | 2014–09 |
| URL: | http://d.repec.org/n?u=RePEc:ver:wpaper:16/2014&r=ino |
| By: | Hallingby, Hanne Kristine |
| Abstract: | The traditional mobile industry expresses worries for the future due to converging technologies and new actors. Standards are the foundation for convergence, and have been central in all current subsectors of the mobile industry. However, subsectors have developed different technological knowledge, routines and path dependencies in their standardisation processes and can be understood as different technology trajectories within the same technology paradigm. The research question in this comparative case study is: What are characteristics, differences and similarities of important standardisation processes in the mobile telecommunication ecosystem? The systematic comparison suggests that the technology trajectories 3GPP and ETSI neither are able to spur necessary innovation in the wider ecosystem, nor to ensure satisfying profit. IETF and 3WC spur innovation through an extensive accessibility to standards, but appropriability conditions are challenging. It is private platforms such as Google and Apple that seem handle both aspects: to enable innovation and adoption by making technology elements public through extension markets, and simultaneously ensure profit by keeping technology private. This research contributes by clarifying how the tension between private and public goods is played out in major technology trajectories in the mobile telecommunication sector; especially helpful is the distinction between standard openness and extension markets as different means for making technology public. The four concepts developed for assessing the status of standardization processes can be used for structuring discussions on the issue, and for future analyses of technology innovations in the telecommunication sector. |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:itsb14:106858&r=ino |
| By: | Mikko Packalen; Jay Bhattacharya |
| Abstract: | Faster technological progress has long been considered a key potential benefit of agglomeration. Physical proximity to others may help inventors adopt new ideas in their work by increasing awareness about which new ideas exist and by enhancing understanding of the properties and usefulness of new ideas through a vigorous debate on the ideas' merits (Marshall, 1920). We test a key empirical prediction of this theory: that inventions in large cities build on newer ideas than inventions in smaller cities. We analyze the idea inputs of nearly every US patent granted during 1836–2010. We find that a larger city size provided a considerable advantage in inventive activities during most of the 20th century but that in recent decades this advantage has eroded. |
| JEL: | O18 O31 O32 O33 R12 |
| Date: | 2015–01 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:20921&r=ino |
| By: | Kovac, Eugen |
| Abstract: | This paper analyzes innovation races in a moral hazard setting. I develop a model where two competing entrepreneurs, financed by a single venture capitalist, work independently on the same project. The venture capitalist cannot observe the allocation of funds she provides, which creates a moral hazard problem. I identify properties of the optimal financing contract and compare them to two benchmarks: single entrepreneur and first best. In particular, if the entrepreneurs differ in their skills, the relevant question is whether it is profitable to employ the less skilled entrepreneur in addition to the more skilled one. I show that if the entrepreneurs do not differ in their skills too much, financing both of them indeed helps to alleviate the moral hazard problem. Moreover, it might be profitable to finance the less skilled entrepreneur, in addition more skilled one, even in cases where the former would not be employed in the first best. |
| JEL: | D92 G24 O31 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc14:100302&r=ino |