nep-ino New Economics Papers
on Innovation
Issue of 2015‒05‒22
twenty-two papers chosen by
Steffen Lippert
University of Auckland

  1. Another cluster premium: Innovation subsidies and R&D collaboration networks By Tom Broekel; Dirk Fornahl; Andrea Morrison
  2. Networking, context and firm-level innovation: Cooperation through the regional filter in Norway By Rune Dahl Fitjar; Andrés Rodríguez-Pose
  3. Private versus Social Incentives for Pharmaceutical Innovation By Paula González; Inés Macho-Stadler; David Pérez-Castrillo
  4. Persistence of Various Types of Innovation Analyzed and Explained By Tavassoli, Sam; Karlsson, Charlie
  5. Determinants of Internal Versus of External R&D Offshoring: Evidence from Spanish Firms By Mery Patricia Tamayo; Elena Huergo
  6. Export-led innovation: the role of export destinations By Fassio, Claudio
  7. Full Disclosure of Knowledge Between Rivals By Mário Alexandre Patrício Martins da Silva
  8. Push or pull? By David Rietzke
  9. What do firms know? What do they produce? A new look at the relationship between patenting profiles and patterns of product diversification By G. Dosi; M. Grazzi; D. Moschella
  10. Does EU Regulation Hinder or Stimulate Innovation? By Jacques Pelkmans; Andrea Renda
  11. Technology Transfer in ASEAN Countries: Some Evidence from Buyer-Provided Training Network Data By Dionisius A. NARJOKO
  12. The Gender Gap in Federal and Private Support for Entrepreneurship By Gicheva, Dora; Link, Albert
  13. Network (Mis)Alignment, Technology Policy and Innovation: The Tale of Two Brazilian Cities By Janaina Pamplona da Costa
  14. Intellectual Property Rights Protection and Trade By Auriol, Emmanuelle; Biancini, Sara; Paillacar, Rodrigo
  15. Innovativeness of service companies in FBiH By Andrijana Ostojic Mihic; Danijela Madžar; Ivan Madžar
  16. Innovation, trade and the size of exporting firms By Letizia Montinari; Massimo Riccaboni; Stefano Schiavo
  17. The Effect of State Taxes on the Geographical Location of Top Earners: Evidence from Star Scientists By Moretti, Enrico; Wilson, Daniel J
  18. Basic and Applied Research: A Welfare Analysis By Kunihiko Konishi
  19. R&D tax incentives in industry: empirical study among small and medium electronics manufacturing enterprises By Nina Bockova
  20. Growth Cycles in a Two-country Model of Innovation By Kunihiko Konishi
  21. Aiding innovation and entrepreneurship through migration policy: A view from Australia By Khanh Hoang
  22. Identifying Geographic Clusters: A Network Analytic Approach By Catini, Roberto; Karamshuk, Dmytro; Penner, Orion; Riccaboni, Massimo

  1. By: Tom Broekel; Dirk Fornahl; Andrea Morrison
    Abstract: This paper investigates the allocation of R&D subsidies with a focus on the granting success of firms located in clusters. On this basis it is evaluated whether firms in these clusters are differently embedded into networks of subsidized R&D collaboration than firms located elsewhere. The theoretical arguments are empirically tested using the example of the German biotechnology firms’ participation in the 6th EU-Framework Programmes and national R&D subsidization schemes in the early 2000s. We show that clusters grant firms another premium to their location, as they are more likely to receive funds from the EU-Framework Programmes and hold more favourable positions in national knowledge networks based on subsidies for joint R&D.
    Keywords: Innovation policy, R&D subsidy, collaboration networks, embeddedness, technology cluster
    JEL: R11 O33 R58 D85
    Date: 2015–05
  2. By: Rune Dahl Fitjar; Andrés Rodríguez-Pose
    Abstract: The paper assesses the role for innovation of one aspect which has been generally overlooked by evolutionary economic geography: context. It analyses how context shapes the impact of collaboration on firm-level innovation for 1604 firms located in the five largest city regions of Norway. Specifically, the analysis shows how the benefits to firms of collaborating within regional, national, and international innovation networks are affected by the knowledge endowments of the region within which the firm is located. Using a logit regression analysis, we find, first, that only national and international networking have a significant positive impact on the likelihood of innovation (the former only for process innovation), whereas the regional knowledge endowments have no direct effect. Second, regional cooperation is particularly effective in regions with high investments in R&D, whereas international cooperation is important in regions with an educated workforce – and regional and national collaboration may be ineffective in such cases. We conclude that, in the case of Norway, context is essential in determining the capacity of firms to set up networks and innovate. Regions with an educated workforce can use the resulting absorptive capacity to successfully assimilate knowledge being diffused through global pipelines from faraway places. However, this absorptive capacity is likely to be heavily filtered if regional firms mainly rely on internal connections within Norway.
    Keywords: Innovation; interaction; networking; context; human capital; R&D; firms; Norway
    Date: 2015–05
  3. By: Paula González (Department of Economics, Universidad Pablo de Olavide.); Inés Macho-Stadler (Department of Economics, Universitat Autònoma de Barcelona and Barcelona GSE.); David Pérez-Castrillo (Department of Economics, Universitat Autònoma de Barcelona and Barcelona GSE.)
    Abstract: There is a great deal of debate in society regarding the tendency of pharmaceutical companies to direct their R&D toward marketing products that are "follow-on" drugs of already existing drugs, rather than the development of breakthrough drugs. This paper provides a theoretical framework to study firm incentives for pharmaceutical innovation that disentangle the quest for breakthrough drugs from the firm effort to develop follow-on drugs. We construct a model with a population of patients treated with one of two --horizontally and vertically differentiated-- drugs. One of the drugs is the pioneer; the other is the result of an innovative process by a firm that seeks to achieve an improvement over the existing drug. Our results offer theoretical support for the conventional wisdom that pharmaceutical firms devote too many resources to conducting R&D activities that lead to incremental innovations.
    Keywords: pharmaceuticals, R&D activities, me-too drugs, breakthrough drugs, incremental innovation, radical innovation.
    JEL: I1 L1
    Date: 2015–05
  4. By: Tavassoli, Sam (CIRCLE, Lund University and Blekinge Institute of Technology, Karlskrona); Karlsson, Charlie (Blekinge Institute of Technology, Karlskrona; Centre of Excellence for Science and Innovation Studies (CESIS), KTH, Stockholm and Jönköping International Business School, Jönköping)
    Abstract: This paper analyzes the persistency in innovation behavior of firms. Using five waves of the Community Innovation Survey in Sweden, we have traced the innovative behavior of firms over a ten-year period, i.e. between 2002 and 2012. We distinguish between four types of innovations: process, product, marketing, and organizational innovations. First, using Transition Probability Matrix, we found evidence of (unconditional) state dependence in all types of innovation, with product innovators having the strongest persistent behavior. Second, using a dynamic probit model, we found evidence of “true” state dependency among all types of innovations, except marketing innovators. Once again, the strongest persistency was found for product innovators.
    Keywords: Persistence; innovation; product innovations; process innovations; market innovations; organizational innovations; state dependence; heterogeneity; firms; Community Innovation Survey
    JEL: D22 L20 O31 O32
    Date: 2015–05–14
  5. By: Mery Patricia Tamayo (Grupo de Economía y Empresa, Departamento de Economía, Universidad EAFIT, Universidad EAFIT and GRIPICOUCM, carrera 49 No 7 sur – 50, Medellín, Colombia.); Elena Huergo (Departamento de Fundamentos del Análisis Económico I (Análisis Económico), Facultad de CC. Económicas y Empresariales. Universidad Complutense de Madrid. Campus de Somosaguas, 28223 Pozuelo de Alarcón, Madrid (Spain); Grupo de Investigación en Productividad, Innovación y Competencia (GRIPICO) (Group for Research in Productivity, Innovation and Competition), Facultad de Ciencias Económicas y Empresariales (Faculty of Economics and Business), Universidad Complutense de Madrid (Complutense University of Madrid))
    Abstract: This paper analyzes the determinants of R&D offshoring of Spanish firms using infor-mation from the Panel of Technological Innovation. We find that being an exporter, continuous R&D engagement, applying for patents, being a subsidiary, and firm size are factors that positively affect the decision to offshore R&D. In addition, we obtain that the factors that influence this decision for firms that belong to a business group differ depending on whether the firm purchases R&D services within the group or through the market.
    Abstract: Este trabajo analiza los determinantes del offshoring de I+D de las empresas españolas utilizando información del Panel de Innovación Tecnológica. Los resultados indican que ser exportador, realizar I+D de forma continua, solicitar patentes, ser una filial y el tamaño de la empresas afectan positivamente a la decisión de realizar offshoring de I+D. Además, se obtiene que los factores que influyen en esta decisión para las empresas que pertenecen a grupos empresariales difieren dependiendo de si la empresa compra los servicios de I+D dentro del grupo o a través del mercado.
    Keywords: R&D offshoring, firms’ strategies, obstacles to innovation, independent firms, subsidiaries, estrategias empresariales, obstáculos a la innovación, empresas independientes, filiales.
    JEL: L24 O32
    Date: 2015–01
  6. By: Fassio, Claudio (CIRCLE, Lund University)
    Abstract: This paper investigates the effect of exporting activities on the innovation strategies of firms in France, Germany, Italy, Spain and UK. It puts forward the hypothesis that the positive effect usually found in the related literature is driven by two main mechanisms. The first is a technological learning effect that allows firms active in international markets to benefit from foreign knowledge spillovers in technologically advanced markets and decrease their research cost for the development of innovations. The second is a foreign demand effect according to which the increase of demand induced by the access to foreign markets increases also the profitability of introducing innovations. The paper uses firm-level information about the export destinations of exporters and creates two indices to proxy the two effects, using respectively foreign R&D intensity and foreign growth of imports of the countries of destination of exports, measured at the sectoral level. The empirical analysis, which takes into account possible endogeneity issues related with the firms’ strategic choice of the markets of destination, shows that the two effects induce the adoption of different innovation strategies: while the technological learning effect increases mainly the incentives to introduce brand new product innovations, the foreign demand effect fosters the adoption of efficiency strategies.
    Keywords: Export activity; Innovation strategies; Destination of exports; International Spillovers; International demand
    JEL: F10 O33 P51
    Date: 2015–05–14
  7. By: Mário Alexandre Patrício Martins da Silva (Faculdade de Economia do Porto)
    Abstract: We develop a symmetric duopoly model with strategic R&D spillovers where a specific type of innovation, recombinant innovation is introduced. Two major factors of effective knowledge spillovers, the technological learning parameters of the recombinant generation of new knowledge and the absorptive capacity of firms, are assumed to be exogenously determined. However, the third principal factor of the effectiveness of learning from rivals is endogenous: it is assumed that firms have control over the two individual spillover coefficients of the model. It is shown that identical firms operating in the same industry choose the highest level for the two spillover variables under plausible constellations of learning parameters. Furthermore, the realistic set of learning parameters is enlarged in the case where firms are able to commit to knowledge sharing strategies at the outset, thereby increasing the possibility of firms fully disclosing their knowledge in equilibrium.
    Keywords: Endogenous spillovers, knowledge sharing, absorptive capacity, recombinant innovation.
    JEL: O30
    Date: 2015–05
  8. By: David Rietzke
    Abstract: In the funding of R&D, push mechanisms, such as research grants, subsidize research input, while pull mechanisms, such as innovation prizes, reward research output. By rewarding research output, pull mechanisms create strong incentives for researchers to devote non observable inputs to R&D. Push mechanisms, in contrast, may reward a researcher independently of her output. In the presence of moral hazard, it might seem that push mechanisms generate weak incentives for non observable inputs from the researcher and, absent risk-sharing considerations, would be inferior to pull mechanisms; it is the aim of this paper to critically assess this hypothesis. I analyze a principal-agent model in which a funder encourages R&D activity through a push incentive (a grant) and/or a pull incentive (a prize); R&D input consists of both an observable and non observable component. In contrast to the stated hypothesis, it is shown that a grant may emerge as an optimal means of funding as a result of the interaction between adverse selection and moral hazard. The model also helps to explain the use of matching grants, it is shown that such grants serve as an effective sorting device in the presence of adverse selection.
    Keywords: grants, prizes, moral hazard, adverse selection, innovation, principal-agent problem
    JEL: D82 D86
    Date: 2015
  9. By: G. Dosi; M. Grazzi; D. Moschella
    Abstract: In this work we analyze the relationship between the patterns of firm diversification, if any, across product lines and across bodies of innovative knowledge, proxied by the patent classes where the firm is present. Putting it more emphatically we investigate the relationship between "what a firm does" and "what a firm knows". Using a newly developed dataset matching information on patents and products at the firm level, we provide evidence concerning firms' technological and product scope, their relationships, the size-scaling and coherence properties of diversification itself. Our analysis shows that typically firms are much more diversified in terms of products than in terms of technologies, with their main products more related to the exploitation of their innovative knowledge. The scaling properties show that the number of products and technologies increase log-linearly with firm size. And the directions of diversification themselves display coherence between neighboring activities also at relatively high degrees of diversification. These findings are well in tune with a capability-based theory of the firm.
    JEL: C81 D22 L20 L25 O31
    Date: 2015–04
  10. By: Jacques Pelkmans (Centre for European Policy Studies (CEPS), Brussels, Belgium); Andrea Renda (Centre for European Policy Studies (CEPS), Brussels, Belgium)
    Abstract: ‘Does EU regulation hinder or stimulate innovation’ is a frequently heard query in the EU, but there is little systematic analytical literature on the issue. Fragmented evidence or anecdotes dominate debates among EU regulatory decision-makers and in European business, insofar as there is a genuine debate at all. This text focuses on the multi-faceted, ambiguous and complex relationship between (EU) regulation and innovation in the economy, and discusses the innovation-enhancing potential of certain regulatory approaches as well as factors that tend to reduce incentives to innovate. We adopt an 'ecosystem' approach to both regulation and innovation and study the interactions between the two ecosystems. This general analysis and survey are complemented by seven case studies of EU regulation enabling and disabling innovation, two horizontal and five sectoral ones. The case studies are preceded by a broader contextual analysis of trends in EU regulation over the last three decades. These trends show the significant transformation of the nature as well as improvement of the quality of EU regulation, largely in the deepened internal market, which tend to have a favourable and lasting effect on the rate of innovation in the EU (other things being equal). Our findings include the following: Regulation can at times be a powerful stimulus to innovation. EU regulation matters at all stages of the innovation process. Different types of regulation can be identified in terms of innovation impact: general or horizontal, innovation specific and sector-specific regulation. More prescriptive regulation tends to hamper innovative activity, whereas the more flexible EU regulation is, the better innovation can be stimulated. Lower compliance and red-tape burdens have a positive effect on innovation. We recommend incorporating a specific test on innovation impacts in the ex-ante impact assessment of EU legislation as well as in ex-post evaluation. There is ample potential for fostering innovation by reviewing the EU regulatory acquis.
    Keywords: EU regulation, innovation in economy
    JEL: D02 D23 G38 K23 L51
  11. By: Dionisius A. NARJOKO (Economic Research Institute for ASEAN and East Asia, Indonesia)
    Abstract: Technology transfers are important channels for firms in developing countries to get access to new technology and initiate innovation. This paper examines the geographical pattern of technology transfers in the form of buyer-provided training in domestic and international production networks. Our unique buyer-supplier network data in four countries in Southeast Asia allow us to directly observe the buyer-supplier relationship as well as the existence of inter-firm provision of training for product/process innovation in order to investigate the geographical structure of knowledge acquisition, dissemination, and aggregation among local and non-local firms. The empirical analysis finds the following: (i) the probability of having training provided by the main buyer presents a U-shaped quadratic pattern with respect to the geographical distance between the respondent firms and the main buyers. The geographical proximity to the main buyer seems to be particularly important for local firms. (ii) The training provision is likely for both local and non-local firms when the main buyer is a multinational located in the same country. (iii) The probability of having training from the main buyer is high when the main buyer conducts R&D. (iv) Both local and non-local firms that have training provided by their main buyers are likely to provide training to their main suppliers. (v) In the case of non-local firms, product innovation with production partners is more likely when they have upstream/downstream training. However, such links seem to be weaker in the case of local firms
    Keywords: buyer-provided training; FDI spillovers; backward linkages; Southeast Asia
    JEL: M5 O31 O32 R12
    Date: 2015–05
  12. By: Gicheva, Dora (University of North Carolina at Greensboro, Department of Economics); Link, Albert (University of North Carolina at Greensboro, Department of Economics)
    Abstract: The role of gender in entrepreneurship has been thoroughly investigated. However, less is known about gender differences in access to private investment when attempting to develop a new technology. In this paper we use data collected by the National Research Council of the National Academies to estimate differences between the probability that a female-owned firm and a male-owned firm, both conducting research funded by the Small Business Innovation Research (SBIR) program, will receive private investment funding to help to commercialize the funded technology. We find that female-owned firms are disadvantaged in their access to private investment, especially in the West and Northeast regions of the United States.
    Keywords: private investments; entrepreneurship; gender; technology; innovation
    JEL: L26 O31 O38
    Date: 2015–05–11
  13. By: Janaina Pamplona da Costa (State University of Campinas, Department of Science and Technology Policy)
    Abstract: This article addresses network alignment through an investigation of network governance (coordination) and structure, and examines how regional level network governance and structure influence the effectiveness of technology policy to improve local firms’ innovativeness in a developing country context. It examines whether network governance and structure have a consistent influence on firms’ innovative performance in developing country regions with different levels of socio-economic development. The empirical evidence is based on case studies of the Campinas and Recife regional software networks in Brazil and the innovative performance of the participating local firms. We find that adoption of a general technology policy prescription and formation of networks to improve firm-level innovation and regional catch-up should involve careful consideration of the intended effects: membership of a network may not be a necessary condition for improved innovation at firm level.
    Keywords: network alignment; network governance; Brazilian software industry; innovation networks; technology policy effectiveness; regional development
    Date: 2015–05
  14. By: Auriol, Emmanuelle; Biancini, Sara; Paillacar, Rodrigo
    Abstract: The paper studies developing countries' incentives to protect intellectual property rights (IPR). IPR enforcement is U-shaped in a country's market size relative to the aggregated market size of its trade partners: small/poor countries protect IPR to get access to advanced economies' markets, while large emerging countries tend to free-ride on rich countries' technology to serve their internal demand. Asymmetric protection of IPR, strict in the North and lax in the South, leads in many cases to a higher level of innovation than universal enforcement. An empirical analysis conducted with panel data covering 112 countries and 45 years supports the theoretical predictions.
    Keywords: developing countries; imitation; innovation; intellectual property rights; oligopoly; trade policy
    JEL: F12 F13 F15 L13 O31 O34
    Date: 2015–05
  15. By: Andrijana Ostojic Mihic (Doctoral study of the Faculty of Economics of the University of Mostar and Faculty of Economics of the University of Split, Mostar, BiH); Danijela Madžar (Faculty of Science and Education, University of Mostar, Mostar, BiH); Ivan Madžar (Faculty of Science and Education, University of Mostar, Mostar, BiH)
    Abstract: Purpose – The purpose of this paper is to explain importance of innovation in service companies. Service companies comprise a significant part of the overall economic activity and give a crucial contribution to the economic growth and employment. Despite their economic importance, their innovativeness has not been taken into account for a long time nor has it been considered that innovation in services exists. Design – It can be said that it is insufficiently researched in relation to the innovation in production companies. Increasing environmental pressure causes the need for innovative behaviour of companies. Methodology – The aim of this paper is to examine the innovativeness of the service companies which operate in Bosnia and Herzegovina by applying Croatian Innovativeness Quotient methodology for the assessment of the condition and activities which are undertaken with the purpose of building the innovative capacities, and the assessment of perception of innovativeness on the company level. Approach – It could be said that only the change is constant and that increasing demand for speed, flexibility, product and services quality require the companies to be innovative and proactive. Findings – Although innovation in production companies is easily recognizable since there is a material product, it cannot be said that innovation in service companies is any less important. Originality – The originality of this model is that if a company is unable to innovate, it risks a standstill state in relation to its competitors, who may take over the leadership by changing their offer.
    Keywords: service companies, changes, innovations
    JEL: L83
  16. By: Letizia Montinari; Massimo Riccaboni; Stefano Schiavo
    Abstract: This paper contributes to the literature explaining firm-level heterogenenity in the extensive margin of trade, defined as the number of products exported by each firm. We develop a dynamic model where firms must invest in RD to maintain and increase their portfolio of goods: the process of product innovation by incumbent firms is such that the probability to capture new products is a function of the number of varieties already exported. Varieties can also be produced from scratch by new entrepreneurs. The entry/exit dynamics of varieties, together with population growth that characterize the economy, gives rise to a distribution for the number of products exported by each firm with a heavy right tail, which is consistent with the data. This markedly heterogeneous behavior in export markets occur even if we do not assume any heterogeneity in productivity to start with. On the other hand, we assume that differences in export sales across products originate from the demand- side of the model, in the form of a product-specific preference attribute. Finally, a simple extension of the model allows us to derive some interesting insights on the behavior of multi-products firms: sales of different products across destinations are not uncorrelated, but show a rather strict hierarchy.
    Keywords: international trade, extensive margin, innovation, preferential attachment, multi-product firms
    Date: 2015
  17. By: Moretti, Enrico; Wilson, Daniel J
    Abstract: Using data on the universe of U.S. patents filed between 1976 and 2010, we quantify how sensitive is migration by star scientist to changes in personal and business tax differentials across states. We uncover large, stable, and precisely estimated effects of personal and corporate taxes on star scientists’ migration patterns. The long run elasticity of mobility relative to taxes is 1.6 for personal income taxes, 2.3 for state corporate income tax and -2.6 for the investment tax credit. The effect on mobility is small in the short run, and tends to grow over time. We find no evidence of pre-trends: Changes in mobility follow changes in taxes and do not to precede them. Consistent with their high income, star scientists migratory flows are sensitive to changes in the 99th percentile marginal tax rate, but are insensitive to changes in taxes for the median income. As expected, the effect of corporate income taxes is concentrated among private sector inventors: no effect is found on academic and government researchers. Moreover, corporate taxes only matter in states where the wage bill enters the state’s formula for apportioning multi-state income. No effect is found in states that apportion income based only on sales (in which case labor’s location has little or no effect on the tax bill). We also find no evidence that changes in state taxes are correlated with changes in the fortunes of local firms in the innovation sector in the years leading up to the tax change. Overall, we conclude that state taxes have significant effect of the geographical location of star scientists and possibly other highly skilled workers. While there are many other factors that drive when innovative individual and innovative companies decide to locate, there are enough firms and workers on the margin that relative taxes matter.
    Keywords: economic geography; innovation; taxes
    JEL: H2 J01
    Date: 2015–05
  18. By: Kunihiko Konishi (Graduate School of Economics, Osaka University)
    Abstract: This study constructs a variety expansion growth model that integrates basic research to analytically examine its effects on household welfare. In our approach, the research sector consists of applied and basic research components. The former creates blueprints and expands the variety of goods available for consumption, whereas the latter adds to the stock of public knowledge. The two sectors interplay through knowledge spillovers. The analysis reveals two key results. First, the steady-state welfare-maximizing level of basic research is below the steady-state growth-maximizing level. Second, a reduction in the level of basic research raises household welfare if the level of basic research is initially at the steady-state welfare-maximizing level.
    Keywords: Basic research, Innovation, Endogenous growth, Welfare analysis
    JEL: H41 O31 O41
    Date: 2015–05
  19. By: Nina Bockova (Brno University of Technology)
    Abstract: The paper deals with the topic of direct and indirect support for research and development and its use in small and medium-sized enterprises operating in the electronic industry. The Czech Republic is the geographic segment to be explored. A chapter on theoretical issues is followed by a description of the current situation in the Czech Republic and abroad and access to legal support for research and development in the business sector. Primary data collected from a survey are analysed in the analytical part. Some small and medium-sized enterprises of chosen group of manufacturing industry focus on research and development performed by they own means and they searched the possibility of financing the research from various sources. The initiative of these enterprises increase considerably their competitiveness in the global market and they realize the necessity of the innovation policy in the strategic management of the business, but still they do not make full use of all available supports in research and development from public sources and instruments of fiscal policy, which allows the legislation of the Czech Republic.
    Keywords: small & medium-size enterprises, R&D tax deductible, own research and development, Czech Republic
    JEL: E61 H29 D92
    Date: 2015–05
  20. By: Kunihiko Konishi (Graduate School of Economics, Osaka University)
    Abstract: This study examines growth cycles in a simple discrete-time two-country model of in- novation. In this setting, we find that there are two key driving forces that give rise to cycles. They are perfect international capital mobility and perfect international knowledge spillovers. In addition, this study shows that the opening of trade can create cycles in both countries, whereas pretrade equilibrium in each country initially jumps to the steady state. That is, our results are characteristic of an open-economy framework.
    Keywords: Two-country model, Cycles, Innovation
    JEL: E32 F44 O41
    Date: 2015–05
  21. By: Khanh Hoang (ANU College of Law, Australian National University)
    Abstract: In recent years, there has been significant interest internationally in the role that migration law and policies may play in aiding innovation, entrepreneurship and economic growth. Several countries, including Australia, Canada, the US and Singapore have established various investment and entrepreneur visas aimed at attracting foreign investment and human capital in return for permanent residency or citizenship. This paper analyses the effectiveness of Australia’s migration policies in strengthening its innovation system and provides suggestions for reform. It identifies shortages in venture capital and access to overseas entrepreneurial talent as two urgent areas for reform of the innovation system. Australia’s visa offerings under its Business Innovation and Investment Program - such as Significant Investment Visa (SIV) program and the Venture Capital Entrepreneur Visa - have so far failed to address these shortages. The paper draws on experiences from other jurisdictions to suggest avenues for reform of Business Innovation and Investment Program. These reforms could include: widening the ‘complying investment’ criterion for significant investor visa; mandatory investment in venture capital funds, with matching from the Government; and reducing onerous threshold criteria for entry into Australia as an entrepreneur. These proposals for reform, and Australia’s experiences, may provide lessons for other countries seeking to establish similar investment visa programs.
    Keywords: migration, innovation, investment, entrepreneurship
    JEL: K00
  22. By: Catini, Roberto; Karamshuk, Dmytro; Penner, Orion; Riccaboni, Massimo
    Abstract: In recent years there has been a growing interest in the role of networks and clusters in the global economy. Despite being a popular research topic in economics, sociology and urban studies, geographical clustering of human activity has often studied been by means of predetermined geographical units such as administrative divisions and metropolitan areas. This approach is intrinsically time invariant and it does not allow one to differentiate between different activities. Our goal in this paper is to present a new methodology for identifying clusters, that can be applied to different empirical settings. We use a graph approach based on k-shell decomposition to analyze world biomedical research clusters based on PubMed scientific publications. We identify research institutions and locate their activities in geographical clusters. Leading areas of scientific production and their top performing research institutions are consistently identified at different geographic scales.
    Keywords: innovation clusters; network analysis; bio-pharmaceutical industry
    JEL: C6 O31 R12
    Date: 2015–05–14

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