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on Innovation |
| By: | Tetsugen Haruyama (Graduate School of Economics, Kobe University) |
| Abstract: | The paper develops a patent race model of firms which differ in R&D productivity. It is demon-strated that R&D subsidies generate the cleansing effect where relatively lower productivity firms drop out of the race and innovation accelerates due to expanded R&D investment by the remaining firms and new entrants with higher productivity than those that exit. |
| Keywords: | Patent race, R&D, industrial policy, cleansing effect |
| JEL: | L10 L20 L52 O32 |
| Date: | 2014–10 |
| URL: | http://d.repec.org/n?u=RePEc:koe:wpaper:1425&r=ino |
| By: | Dessi, Roberta; Yin, Nina |
| Abstract: | This paper explores a new role for venture capitalists, as knowledge intermediaries. A venture capital investor can communicate valuable knowledge to an entrepreneur, facilitating innovation. The venture capitalist can also communicate the entrepreneur's innovative knowledge to other portfolio companies. We study the costs and benefits of these two forms of knowledge transfer, and their implications for investment, innovation, and product market competition. The model also sheds light on the choice between venture capital and other forms of finance, and the determinants of the decision to seek patent protection for innovations. Our analysis provides a rationale for the use of contingencies (specifically, patent approval) in VC contracts documented by Kaplan and Stromberg (2003), and for recent evidence on patterns of syndication among venture capitalists. |
| Keywords: | venture capital, knowledge intermediaries, contracts, innovation, competition, patents. |
| JEL: | D82 D86 G24 L22 |
| Date: | 2015–02 |
| URL: | http://d.repec.org/n?u=RePEc:ide:wpaper:29009&r=ino |
| By: | Evrin, Alperen |
| Abstract: | In this paper, I examine the effects of implementing tighter Intellectual Property Rights in a model of International Trade. In my model, firms in different countries have the choice of committing their resources to introducing new products (product innovation) or to imitating and improving upon current products (process innovation). I analyze the impact of stronger patents on innovation decisions, overall welfare and the distribution of welfare among countries. I show that, depending on parameter values, firms in developed countries (North) may altogether specialize in product innovation or may attain incomplete specialization in the sense that some innovate and some imitate. Welfare analysis will depend on the degree of specialization. In the case of incomplete specialization, tighter IPRs increase the incentives for product innovation in the North but, at the same time, increase the imitation done in the South. This finding is contrary to the conventional argument that states the reverse for imitation rates. In the case of complete specialization, stronger patents do not affect the rate of product innovation but reduce the rate of imitation, and welfare is nonmonotonic in IPRs. Finally, I examine the case of Foreign Direct Investment (FDI) and predict that stronger patents will increase the FDI while lowering the wages worldwide. |
| Keywords: | Patent Policies, Foreign Direct Investment |
| JEL: | F43 O31 O34 O38 |
| Date: | 2013–12–12 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:62392&r=ino |
| By: | Strambach , Simone (Department of Geography, Philipps-University of Marburg) |
| Abstract: | The aim of the paper is to contribute both conceptually and empirically to a deeper understanding of the territorial shaping of knowledge combination and its development dynamics underpinning innovation. The importance of combining and integrating knowledge bases from different sources, geographical scales and heterogeneous actors is increasingly recognized in innovation studies. Yet, the question of what limits or enables knowledge combinations in innovation processes and what generates relatedness among unrelated knowledge bases in time and space is not fully answered. Conceptually the paper suggests a more specific focus on microfoundations and temporality by taking into account the economics of organization in more detail. This appears a particularly promising approach, as the causal relations and mechanisms across and between aggregated levels such as firms, sectors, regions, or nations are not well understood. Empirically the paper explores the micro-dynamics of knowledge combination and its territorial shaping from a transnational perspective. German-Chinese innovation projects in sustainable construction are investigated by using the methodology of innovation biography. This method allows following the time-space path of innovation. It enables capturing knowledge interactions and their unfolding in multi-scalar and cross-sectoral ways. The results underline a very dynamic geography of organization and barriers for knowledge integration at the micro-level rooted in organizational and institutional path dependencies. The investigation in the interplay between more permanent and temporary organizational forms and its geography holds a large potential for further research to provide new insights into the spatiality of combining knowledge bases in innovation processes. |
| Keywords: | knowledge dynamics; transnational innovation; microfoundations; economics of organization; innovation biography |
| JEL: | D83 L14 L20 L84 O31 |
| Date: | 2015–02–26 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:lucirc:2015_010&r=ino |
| By: | Aldieri, Luigi; Vinci, Concetto Paolo |
| Abstract: | The aim of this paper is to explore the impact of intra- and inter-industry spillover components on productivity of large International firms. We use data from all EU R&D investment scoreboards editions issued every year until 2011 by the JRC-IPTS (scoreboards). The analysis is based upon a new dataset composed of 879 worldwide R&D-intensive manufacturing firms whose information has been collected for the period 2002-2010. Given the panel data structure of the sample, ad hoc econometric techniques that deal with both firm’s unobserved heterogeneity and weak exogeneity of the right hand-side variables are implemented. The main contribution to the literature is that of further investigating the industry spillovers at firm level within the Triad for a period of time that considers also the economic crisis. In order to measure the distribution of the firm’s research interests through the different technological areas, we use the patent distribution over technological sectors according to the International Patent Classification (IPC). The patent distribution relies on the whole number of patent applications filed to the European Patent Office until 2011. The empirical results suggest a significant impact of R&D spillover effects on firms’ productivity but the results are quite differentiated according to the spillover stock type and this may represent a relevant source of policy implications. |
| Keywords: | Panel Data Models; R&D Spillovers; Total Factor Productivity growth |
| JEL: | C23 O33 O47 |
| Date: | 2015–02–25 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:62429&r=ino |
| By: | Goodridge, PR |
| Date: | 2015–02–04 |
| URL: | http://d.repec.org/n?u=RePEc:imp:wpaper:19156&r=ino |
| By: | Hsu, Po-Hsuan; Huang, Sterling; Massa, Massimo; Zhang, Hong |
| Abstract: | According to conventional wisdom, family ownership, which signals a lack of social capital and trust in an economy, may impede innovation. This argument, however, fails to recognize that modern family firms can benefit from capitalist institutions that promote innovation. Using a comprehensive sample of U.S. family-owned public firms and patents for the period from 1998 to 2010, we show that family ownership plays multiple roles in promoting innovation and its influence can be attributed to reduced financial constraints, a greater commitment to long-term value, and improved corporate governance. Causality is confirmed through an instrumental variable analysis, a difference-in-difference analysis based on an exogenous regulatory shock and a matched sample analysis. |
| Keywords: | Family firms; innovation; intangible investment |
| JEL: | G32 O32 |
| Date: | 2015–03 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:10445&r=ino |
| By: | Bernstein, Shai (Stanford University); Giroud, Xavier (MIT); Townsend, Richard (Dartmouth College) |
| Abstract: | We examine whether venture capitalists contribute to the innovation and success of their portfolio companies, or merely select companies that are already poised to innovate and succeed. To do so, we exploit exogenous reductions in monitoring costs stemming from the introduction of new airline routes between venture capital firms and their existing portfolio companies. Within an existing relationship, we find that reductions in travel time are associated with an increase in the number of patents and number of citations per patent of the portfolio company, as well as an increase in the likelihood of an eventual IPO or acquisition. These results are robust when controlling for local shocks that could potentially drive the introduction of the new airline routes. We further document that the effect is concentrated in routes that connect lead VCs with portfolio companies, as opposed to other investors. Overall, these results are consistent with the monitoring channel and hence indicate that venture capitalists' physical presence at their portfolio companies is an important determinant of innovation and success. |
| JEL: | D81 G24 L26 M13 O31 O32 |
| Date: | 2014–02 |
| URL: | http://d.repec.org/n?u=RePEc:ecl:stabus:3007&r=ino |
| By: | Feser, Daniel; Proeger, Till |
| Abstract: | Knowledge-intensive business services (KIBS) constitute a major source of innovative knowledge for small- and medium-sized enterprises. In regional innovation systems, KIBS play a crucial role in distributing innovations and improving the region´s overall innovative capacities. While the specific properties and effects on client firms and sectors have been comprehensively discussed, the internal perspective of client firms, i.e. the processes and problems in selecting, using, evaluating and recommending KIBS, has been neglected to date. Using a qualitative approach, we describe the internal mechanisms and problems of SMEs cooperating with various KIBS and discuss the implications for regional innovation systems from a policy-making perspective. We find that all stages of cooperation of SMEs and KIBS are characterized by strong information asymmetries, distrust and uncertainty about the effects of using external know-how, which yields the interpretation that SMEs perceive KIBS as credence goods. While informal networks are used to reduce information barriers, they regularly prove counterproductive by disseminating worst-case examples. Regional policy aiming at developing instruments for fostering innovative cooperation could thus strengthen formal networks that primarily create trust between KIBS and SMEs to systematically reduce mutual suspicions and information asymmetries. |
| Keywords: | credence goods,knowledge-intensive business services,regional innovation system,small- and medium enterprises |
| JEL: | D21 D40 H25 H40 L23 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:cegedp:232&r=ino |
| By: | Claudia Steinwender |
| Abstract: | A variety of empirical and theoretical trade papers have suggested and documented a positive impact of trade on the productivity of firms. However, there is less consensus about the underlying mechanism at work. While trade papers focus on access to export markets, other papers stress the importance of import competition. Since imports and exports (and even tariffs affecting either) are usually highly correlated, it is unclear which mechanism the existing empirical papers uncover. This paper conducts a "horse race" between export opportunities and import competition. Using Spanish firm level data, instrumenting for exports and imports with tariff changes and controlling for selection, I find robust evidence that access to export markets leads to productivity increases, but only for firms that were already highly productive before. The evidence on import competition is weaker. If anything, initially low-tech firms manage to increase their productivity in response to increased competition from abroad. The latter finding is at odds with most trade models, so I propose a model incorporating non-profit maximizing managers to reconcile theory with the evidence. Empirically, I find that all productivity upgrades are driven by increased R&D, patenting, and product innovation. Access to export markets also leads to the adaptation of foreign technologies. There is no evidence that either mechanism leads to increased full time employment, instead full time workers seem to be replaced by part-time or temporary workers. |
| Keywords: | Import competition, technical change, productivity, exporting |
| JEL: | F12 F13 F14 L25 |
| Date: | 2015–02 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp1334&r=ino |
| By: | María José Abud Sittler; Bronwyn Hall; Christian Helmers |
| Abstract: | We analyze the patent filing strategies of foreign pharmaceutical companies in Chile distinguishing between “primary” (active ingredient) and “secondary” patents (patents on modified compounds, formulations, dosages, particular medical uses etc.). There is prior evidence that secondary patents are used by pharmaceutical originator companies in the U.S. and Europe to extend patent protection on drugs in length and breadth. Using a novel dataset that comprises all drugs registered in Chile between 1991 and 2010 as well as the corresponding patents and trademarks, we find evidence that foreign originator companies pursue similar strategies in Chile. We find a primary to secondary patents ratio of 1:4 at the drug-level which is comparable to the available evidence for Europe; most secondary patents are filed over several years following the original primary patent and after the protected active ingredient has obtained market approval in Chile. This points toward effective patent term extensions through secondary patents. Secondary patents dominate “older” therapeutic classes like anti-ulcer and anti-depressants. In contrast, newer areas like anti-virals and anti-neoplastics (anti-cancer) have a much larger share of primary patents. |
| JEL: | K12 L5 L65 O34 |
| Date: | 2015–02 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:20995&r=ino |