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on Innovation |
| By: | Bronwyn Hall |
| Abstract: | Information about the success of a new technology is usually held asymmetrically between the research and development (R&D)-performing firm and potential lenders and investors. This raises the cost of capital for financing R&D externally, resulting in financing constraints on R&D especially for firms with limited internal resources. Previous literature provided evidence for start-up firms on the role of patents as signals to investors, in particular to Venture Capitalists. This study adds to previous insights by studying the effects of firms’ patenting activity on the degree of financing constraints on R&D for a panel of established firms. The results show that patents do indeed attenuate financing constraints for small firms where information asymmetries may be particularly high and collateral value is low. Larger firms are not only less subject to financing constraints, but also do not seem to benefit from a patent quality signal. |
| Date: | 2014–07 |
| URL: | http://d.repec.org/n?u=RePEc:nsr:niesrd:430&r=all |
| By: | Aldieri, Luigi; Garofalo, Antonio; Vinci, Concetto Paolo |
| Abstract: | In this paper we analyze the relationship between R&D activity, spillovers and employment at the firm level. A reduced form labour demand equation is estimated. R&D expenditures can account for both product and process innovation. 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. We use data from all EU R&D investment scoreboards editions issued every year until 2011 by the JRC-IPTS (scoreboards). The main contribution to the existing literature is to investigate also the impact of outside R&D activity on own employment level. In particular, the paper investigates the role of R&D spillovers within the pillars of the Triad: United States, Japan and European economic area, but it goes beyond the previous studies by considering more opportune spillover components. Indeed, the potential stock of spillovers is dissociated into four components: the national stock, the international stock, the intra-industry stock and finally the inter-industry one. In this way, we will be able to appreciate to what extent geographical and cultural contiguity matters, by using an updated sample relative to large worldwide firms. The empirical results suggest a significant impact of R&D spillover effects on firms’ employment 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, Employment |
| JEL: | J20 O33 |
| Date: | 2015–10–16 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:67269&r=all |
| By: | Nan Li (International Monetary Fund); Jie Cai (University of New South Wales) |
| Abstract: | Technologies differ in their scopes of applications. The types of knowledge a country possesses have important implications on its growth. This paper develop a multi-sector model of innovation, trade and growth, in which knowledge in one sector is applicable to innovation in another sector in various degrees and a country's composition of knowledge is endogenously determined. We find that lower trade costs and better institutions (that increase production productivity) improve aggregate innovation efficiency through the within-country allocation of R&D towards sectors with higher knowledge applicability. We construct measures quantifying the sectoral knowledge applicability using cross-sector patent citations. Based on this index, we present cross-country evidence that broadly supports the model's implications. |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:red:sed015:1100&r=all |
| By: | D'Artis Kancs (European Commission – JRC - IPTS); Boriss Siliverstovs (KOF Swiss Economic Institute – ETH Zurich) |
| Abstract: | The present paper estimates and decomposes the employment effect of innovation by R&D intensity levels. Our microeconometric analysis is based on a large international panel data set from the EU Industrial R&D Investment Scoreboard. Employing flexible semi-parametric methods - the generalised propensity score - allows us to recover the full functional relationship between R&D investment and firm employment, and to address important econometric issues, which is not possible in the standard estimation approach used in the previous literature. Our results suggest that modest innovators do not create and may even destruct jobs by raising their R&D expenditures. Most of the jobs in the economy are created by innovation followers: increasing innovation by 1% may increase employment up to 0.7%. The job creation effect of innovation reaches its peak when R&D intensity is around 100% of the total capital expenditure, after which the positive employment effect declines and becomes statistically insignificant. Innovation leaders do not create jobs by further increasing their R&D expenditures, which are already very high. |
| Keywords: | Innovation, R&D investment, causal inference, semi-parametric, employment, job creation, GPS |
| JEL: | C14 C21 F23 J20 J23 O30 O32 O33 |
| Date: | 2015–07 |
| URL: | http://d.repec.org/n?u=RePEc:ipt:wpaper:201507&r=all |
| By: | Patarapong INTARAKUMNERD (National Graduate Institute for Policy Studies (GRIPS)) |
| Abstract: | Over a span of 50 years, Thailand’s automotive industry changed from a small, import-substituting one to a large and vibrant exporting one. Intra-industry trade between Thailand and other countries in East Asia has risen markedly, especially in automotive parts. Its sectoral innovation system has evolved from a passive-learning and fragmented system to a more active-learning and coherent one. Foreign carmakers and first-tier suppliers as well as several local suppliers made considerable effort to enhance their technological capabilities. Universities and research institutes started to have sector-specific teaching and research programmes and closer collaboration with the industry. The sector-specific government promotion agency has been increasingly acting as an ‘intermediary’ organisation. The system gradually upgraded from being a ‘production’ system to a somewhat ‘innovation-oriented’ and ‘R&D-intensive’ one. It has also become more ‘product specific.’ |
| Keywords: | automotive industry, Thailand, technological and innovative capabilities, sectoral innovation system, production networks |
| Date: | 2015–10 |
| URL: | http://d.repec.org/n?u=RePEc:era:wpaper:dp-2015-73&r=all |
| By: | OKAMURO, Hiroyuki; NISHIMURA, Junichi |
| Abstract: | R&D consortia have been regarded as an effective means of promoting innovation, and several R&D consortia obtain public financial support, which may affect its governance structure and performance. This study investigates the governance mechanisms of publicly funded R&D consortia and their effects on innovation. Regarding R&D consortia, few studies have empirically addressed the effect of project monitoring by the government. Moreover, the role of project leadership in R&D consortia remains poorly explored. Focusing on a major support program for R&D consortia in Japan and using a sample of 315 firms that participated in publicly funded R&D consortia from 2004 to 2009, we empirically confirm that project leadership by a private firm, especially its coordination capability, significantly increases the probability of project success (early commercialization of innovation outcomes). We also find that project performance is positively affected by the strictness of project monitoring and evaluation by the government. Finally, we find no complementarity between project leadership and government monitoring with regard to the effects on project performance. |
| Keywords: | R&D consortia, public subsidy, leadership, monitoring, commercialization |
| JEL: | O31 O32 O38 |
| Date: | 2015–10 |
| URL: | http://d.repec.org/n?u=RePEc:hit:ccesdp:60&r=all |
| By: | Geoff Mason |
| Abstract: | There is now intense interest in developing a new industrial policy for the UK which, among other aims, will encourage more UK-based firms to shift towards higher value added activities in a range of industries. In this paper we argue that, if any such industrial policy is to be effective in improving UK economic performance, it needs to stimulate higher levels of innovation by firms. In particular, the policy must encourage a sizeable number of firms who do not currently engage in innovation to start doing so. This in turn implies an increased demand for innovation-related skills and knowledge by UK firms that is unlikely to be met by an industrial training system which is beset by historical weaknesses. Thus the emergence of new industrial policy needs to be complemented by new training policies designed to make skills development and utilisation more cost-effective and to stimulate higher levels of employer demand for innovation-related skills and training. These new policies will need to be balanced in three dimensions: between technical and generic skills, between higher and intermediate skills, and between initial and continuing education and training. |
| Date: | 2014–07 |
| URL: | http://d.repec.org/n?u=RePEc:nsr:niesrd:431&r=all |
| By: | Fassio, Claudio (Lund University); Kalantaryan, Sona (Migration Policy Centre); Venturini, Alessandra (University of Turin) |
| Abstract: | The objective of this paper is to analyse the role of migrants in innovation in Europe. We use Total Factor Productivity as a measure of innovation and focus on the three largest European countries – France, Germany and the United Kingdom – in the years 1994-2007. Unlike previous research, which mainly employs a regional approach, we analyse the link between migration and innovation at the sectoral level. This allows us to measure the direct contribution of migrants in the sector in which they are actually employed. Moreover, it allows a distinction between the real contribution of migrants to innovation from possible inter-sectoral complementarities, which might as well foster innovation. We control for the different components of human-capital, such as age, education and diversity of origin. To address the possible endogeneity of migration we draw on an instrumental variable strategy originally devised by Card (2001) and adapt it at the sector level. The results show that overall migrants are relevant in all sectors, but some important differences emerge across sectors: highly-educated migrants show a larger positive effect in the high-tech sectors, while middle- and low-educated ones are more relevant in manufacturing. The diversity of countries of origin contributes to innovation only in the services sectors, confirming that in empirical analyses at the regional or national level the diversity measure might capture the complementarity between sectors rather than the contribution of different national skills. |
| Keywords: | migration, innovation, highly skilled migrants, low skilled migrants |
| JEL: | F22 O31 O32 |
| Date: | 2015–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9422&r=all |
| By: | Elena A. Kochetkova (National Research University Higher School of Economics) |
| Abstract: | This paper examines Soviet engineer Leonid Zherebov, an inventor of continuous pulp cooker. After twenty-five years of experiments, Zherebov’s design failed, and Soviet factories began to produce pulp using imported Swedish digesters. This article examines the biography of Leonid Zherebov and continuous pulp cooking in order to better understand the nature of Russian technological innovation and its failures. It emphasizes the communication between different institutions involved as well as a range of technological, social, economic and political factors. The paper contends that technological failures were emerged from the failure of Soviet forestry as a technological system due to a lack of open discussion between its builders and the scarcity of resources required for innovation. |
| Keywords: | Zherebov, innovation, Soviet, continuous cooking, pulp industry |
| JEL: | N64 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:hig:wpaper:106hum2015&r=all |
| By: | Cristobal Campoamor, Adolfo |
| Abstract: | The catchup and convergence of developing economies with the Western world is a major experience in modern history. In this paper we explore the role played jointly by technological imitation and trade liberalization in a North-South endogenous growth model. We prove that a gradual trade liberalization between South and North will promote convergence at any level of initial trade costs if the Southern economies are fully industrialized, their R&D potential is relatively low and the elasticity of substitution among manufactures is high enough. |
| Keywords: | Product Cycles; Convergence; Trade Openness; Endogenous Growth |
| JEL: | O3 O41 |
| Date: | 2015–10–17 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:67289&r=all |
| By: | Joel Wagner |
| Abstract: | This paper takes a full-information model-based approach to evaluate the link between investment-specific technology and the inverse of the relative price of investment. The two-sector model presented includes monopolistic competition where firms can vary the markup charged on their product depending on the number of firms competing. With these changes to the standard two-sector model, both total factor productivity as well as a series of non-technological shocks can impact the high-frequency volatility of the relative price of investment. Utilizing a Bayesian estimation approach to match the model to the data, we find that investment-specific technology can explain at most half of the growth rate of the relative price of investment. Last of all, we compare the benchmark model results with endogenous movement in the relative price of investment to a model where all movement in the relative price of investment is derived exogenously. This is done by allowing technologies across sectors to move together over time. Comparison of these two methods finds that the exogenous approach is incapable of capturing changes in the relative price of investment as found in the data. This paper adds to the growing list of research, like that of Fisher (2009) and Basu et al. (2013), that suggests that the quality-adjusted relative price of investment may be a poor indicator of investment-specific technology. |
| Keywords: | Business fluctuations and cycles |
| JEL: | E32 L11 L16 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:bca:bocawp:15-30&r=all |
| By: | Simplice Asongu (Yaoundé/Cameroun) |
| Abstract: | Using twenty-five policy variables, we investigate determinants of mobile phone/banking in 49 Sub-Saharan African countries with data for the year 2011. The determinants are classified into six policy categories, notably: macroeconomic, business/bank, market-related, knowledge economy, external flows and human development. The empirical evidence is based on contemporary and non-contemporary Quantile regressions. The following implications are relevant to the findings. First, mobile phone penetration is positively correlated with: (i) education, domestic savings, regulation quality and patent applications, especially at low initial levels of mobile penetration; (ii) bank density; (iii) urban population density and (iv) internet penetration. Second, the use of the mobile to pay bills is positively linked with: (i) trade and internet penetration, especially in contemporary specifications and (ii) remittances and patent applications, especially at low initial levels of the dependent variable. Third, using the mobile to send/receive money is positively correlated with: internet penetration and human development, especially in the contemporary specifications. Fourth, mobile banking is positively linked with: (i) trade in contemporary specifications; (ii) remittances and patent applications at low initial levels of the dependent variable and (iii) internet penetration and human development, with contemporary threshold evidence. The policy implications are articulated with incremental policy syndromes. |
| Keywords: | Mobile phones; Mobile banking; Development; Africa |
| JEL: | G20 L96 O11 O33 O55 |
| Date: | 2015–10 |
| URL: | http://d.repec.org/n?u=RePEc:agd:wpaper:15/043&r=all |
| By: | Botond Koszegi (Central European University); Peter Kondor (Central European University) |
| Abstract: | We analyze welfare implications of an optimal security offered by a bank to investors with inferior information. Investors are cursed, that is, neglect the information content of the offer. We show that, by financial innovation, rational profit-maximizing issuers induce investors to bet on unlikely market movements at unfavorable terms, creating both excess risk taking and undersaving. Giving more information to the issuer allows it to induce bigger bets, exacerbating both effects and therefore lowering welfare. Furthermore, under plausible circumstances, giving more, but still inferior, information to the investor also lowers welfare by giving investors false guidance on what to bet on. Market based policies as increased competition or more access to financial markets tend not to affect welfare, just redistribute profits from banks to investors. A policy dubbed "uninformed standardization" might improve welfare. |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:red:sed015:1098&r=all |
| By: | David Rosnick |
| Abstract: | This issue brief examines widely cited studies on the potential gains from the Trans-Atlantic Trade and Investment Partnership (TTIP) and finds that they would deliver no more than 40 cents per person per day in the U.S., and 0.2 euros per person per day in the EU. These projections are also optimistic, as they result in part from significantly underestimating the costs from patent protections for pharmaceuticals, copyright enforcement and other protections under the TTIP that could increase the price of a product by thousands, or tens of thousands, of percent. |
| Keywords: | TTIP, trade, TPP, terms of trade, growth, patents |
| JEL: | F F1 F4 |
| Date: | 2015–08 |
| URL: | http://d.repec.org/n?u=RePEc:epo:papers:2015-20&r=all |
| By: | Gerard Llobet (CEMFI, Centro de Estudios Monetarios y Financieros); Jorge Padilla (Compass Lexecon) |
| Abstract: | There is considerable controversy about the relative merits of the apportionment rule (which results in per-unit royalties) and the entire market value rule (which results in ad-valorem royalties) as ways to determine the scope of the royalty base in licensing negotiations and disputes. This paper analyzes the welfare implication of the two rules abstracting from implementation and practicability considerations. We show that ad-valorem royalties tend to lead to lower prices, particularly in the context of successive monopolies. They benefit upstream producers but not necessarily hurt downstream producers. When we endogenize the investment decisions, we show that a sufficient condition for ad-valorem royalties to improve social welfare is that enticing more upstream investment is optimal or when multiple innovators contribute complementary technologies. Our findings contribute to explain why most licensing contracts include royalties based on the value of sales. |
| Keywords: | Intellectual property, standard setting organizations, patent licensing, R&D investment. |
| JEL: | L15 L24 O31 O34 |
| Date: | 2014–12 |
| URL: | http://d.repec.org/n?u=RePEc:cmf:wpaper:wp2014_1409&r=all |
| By: | Staley, Mark |
| Abstract: | A model of firm dynamics is presented in which the growth rate of knowledge capital is linked to productivity, and productivity fluctuates randomly. The distribution of productivity forms a stable traveling wave, representing a growing economy. Granularity is maintained by way of spinoffs, resulting in a firm size distribution that rapidly approaches the Zipf distribution. An unexpected consequence of the model is that the growth rate is proportional to the log of the number of firms. The model also implies that specialization is positive for growth. |
| Keywords: | Growth, Ideas, Selection, Scale effect |
| JEL: | O40 O41 |
| Date: | 2015–10–12 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:67291&r=all |
| By: | Dale T. Mortensen (NA); Rasmus Lentz (University of Wisconsin-Madison) |
| Abstract: | In Lentz et al. (2008), we formulate and estimate a market equilibrium model of endogenous growth through product innovation. In this paper, we provide quantitative equilibrium solutions to the model based on our parameter estimates, and compare them with a social planner's solution. We find that the socially optimal growth rate is double that of the market equilibrium growth rate when firm differences in the ability to create productive products are highly persistent as a consequence of the 'business stealing externality present in the model. The welfare loss of the decentralized economy relative to that of the planner is equivalent to a 20% tax on the planner consumption path. The planner's solution differs from the decentralized economy in that it discourages innovation by low ability innovators as well as entry. We introduce two mechanisms that temper the strength of the negative externality: Transitory firm types and the possibility of buyouts. We show that both sharply reduce the inefficiency due to innovation by low ability innovators. But with caveats: If firm types are completely transitory, then the notion of firm heterogeneity is for practical purposes lost. Buyouts improve efficiency, but the efficiency gain depends significantly on the strength of the innovator's ability to extract rents from incumbents through the buyout. |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:red:sed015:1025&r=all |
| By: | OECD |
| Abstract: | Open science commonly refers to efforts to make the output of publicly funded research more widely accessible in digital format to the scientific community, the business sector, or society more generally. Open science is the encounter between the age-old tradition of openness in science and the tools of information and communications technologies (ICTs) that have reshaped the scientific enterprise and require a critical look from policy makers seeking to promote long-term research as well as innovation. |
| Date: | 2015–10–15 |
| URL: | http://d.repec.org/n?u=RePEc:oec:stiaac:25-en&r=all |
| By: | MIYAGIWA, Kaz; WAN, Yunyun |
| Abstract: | The merger paradox is revisited in the presence of cost-reducing R&D in Cournot oligopoly. Two cases are found, in which merger is profitable without satisfying the 80-percent threshold requirement of Salant et al (1983). |
| Keywords: | merger paradox, R&D, Cournot oligopoly |
| Date: | 2015–09–28 |
| URL: | http://d.repec.org/n?u=RePEc:hit:iirwps:15-21&r=all |
| By: | HONJO, Yuji; NAGAOKA, Sadao |
| Abstract: | This paper explores the initial public offering (IPO) and financing of biotechnology start-ups in Japan. Using a unique data set, we find that biotechnology start-ups initially backed by venture capital (VC) firms and those originating from universities are more likely to go public within a shorter period. Moreover, we examine whether two investment methods used by VC firms?staged financing and syndication?affect the market value of equity at the IPO. The results reveal that these methods do not create a higher value of biotechnology start-ups at the IPO. Furthermore, we provide evidence that the timing of IPOs does not depend on market conditions in the biotechnology industry, whereas the market value of equity tends to depend on market conditions. |
| Keywords: | Biotechnology, Initial public offering, Market value, Staged financing, Start-up, Syndication |
| JEL: | G32 M13 L65 |
| Date: | 2015–09 |
| URL: | http://d.repec.org/n?u=RePEc:hit:iirwps:15-20&r=all |
| By: | Smirnov, Vladimir; Wait, Andrew |
| Abstract: | Incentive reversal (IR) is when higher rewards induce some agents to reduce their effort (Winter, 2009). We show that IR can hold for all agents when: there is an improvement in production technology; and rewards are based on team output. Whilst IR requires at least one worker's marginal return to be decreasing in team productivity when agents invest simultaneously, this is not necessary with sequential investments. Rather, IR can occur with sequential investment when the marginal return of effort for all agents is increasing with improvements in technology. |
| Keywords: | Moral hazard in teams; Technology; Productivity; Incentive reversal |
| Date: | 2015–10 |
| URL: | http://d.repec.org/n?u=RePEc:syd:wpaper:2015-21&r=all |
| By: | Edward L. Glaeser; Giacomo A. M. Ponzetto; Yimei Zou |
| Abstract: | Should China build mega-cities or a network of linked middle-sized metropolises? Can Europe's mid-sized cities compete with global agglomeration by forging stronger inter-urban links? This paper examines these questions within a model of recombinant growth and endogenous local amenities. Three primary factors determine the trade-off between networks and big cities: local returns to scale in innovation, the elasticity of housing supply, and the importance of local amenities. Even if there are global increasing returns, the returns to local scale in innovation may be decreasing, and that makes networks more appealing than mega-cities. Inelastic housing supply makes it harder to supply more space in dense confines, which perhaps explains why networks are more popular in regulated Europe than in the American Sunbelt. Larger cities can dominate networks because of amenities, as long as the benefits of scale overwhelm the downsides of density. In our framework, the skilled are more likely to prefer mega-cities than the less skilled, and the long-run benefits of either mega-cities or networks may be quite different from the short-run benefits. |
| Keywords: | Cities, Networks, Growth, Migration |
| JEL: | R10 R58 F15 O18 |
| Date: | 2015–09 |
| URL: | http://d.repec.org/n?u=RePEc:upf:upfgen:1489&r=all |
| By: | Cinzia Daraio (Department of Computer, Control and Management Engineering Antonio Ruberti (DIAG), University of Rome La Sapienza, Rome, Italy); Maurizio Lenzerini (Department of Computer, Control and Management Engineering Antonio Ruberti (DIAG), University of Rome La Sapienza, Rome, Italy); Claudio Leporelli (Department of Computer, Control and Management Engineering Antonio Ruberti (DIAG), University of Rome La Sapienza, Rome, Italy); Henk F. Moed (Department of Computer, Control and Management Engineering Antonio Ruberti (DIAG), University of Rome La Sapienza, Rome, Italy); Paolo Naggar (Studiare Ltd., Rome, Italy); Andrea Bonaccorsi (DISTEC, University of Pisa, Italy); Alessandro Bartolucci (Studiare Ltd., Rome, Italy) |
| Abstract: | The main objective of this paper is to propose an Ontology-based Data Management (OBDM) approach to coordinate, integrate and maintain the data needed for Science, Technology and Innovation (STI) policy development. The OBDM approach we propose is a form of integration of information in which the global schema of data is substituted by the conceptual model of the domain, formally specified through an ontology. Our approach, implemented in the Sapientia ontology (Sapientia: the Ontology of Multi- Dimensional Research Assessment) offers a transparent platform on which to base the evaluation process; permits to define and specify in an unambiguous way the indicators on which the evaluation is based on; allows us to track their evolution over time; makes it possible the analysis of the feedbacks of the indicators on the behavior of scholars and allows us to find out opportunistic behaviors; provides a monitoring system to track over time the changes in the established evaluation criteria and their consequences on the research system. We claim that an higher availability and a more transparent view on the scholarly outcomes may improve the understanding of basic science from the broad society and can improve the communication of the research outcome to the public opinion, which, in the present economic phase, has an increasingly money-for-value approach about the funding of science.A lot of work on these issues has still to be carried out. Nevertheless we believe that a new line of research based on an OBDM approach could successfully contribute to solve some of the key issues in the integration of heterogeneous data for STI policies. |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:aeg:report:2015-10&r=all |
| By: | Niccolò Innocenti (Dipartimento di Scienze per l'Economia e l'Impresa); Luciana Lazzeretti (Dipartimento di Scienze per l'Economia e l'Impresa) |
| Abstract: | The aim of the present research is to investigate, for the Italian case, the role and importance of Related variety to foster employment growth. The Related Variety approach received increasing attention in the literature, as it tried to identify the key drivers for economic development at regional and national level. This work supports the study of economic and local development from a related-variety approach’s perspective, focusing on the need to have some degree of cognitive proximity at local level to foster innovation and economic development covering the period 1991-2011 for the Italian case. The results underline that variety has a positive impact on employment growth, and related variety matters even more. |
| Keywords: | related variety, unrelated variety, employment growth. |
| JEL: | R11 O10 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:frz:wpmmos:wp2015_04.rdf&r=all |
| By: | WAN, Yunyun; MIYAGIWA, Kaz |
| Abstract: | We present a formal analysis that sheds new light on the Hatch-Waxman Act. Hatch-Waxman restores incentives to develop new drugs by extending the patent life for them, but also promotes generic entry by reducing entry costs and by providing 180-day marketing exclusivity to a first challenger to the patent. Although these two objectives appear incompatible, our model shows that marketing exclusivity, with a significant entry cost reduction, contributes to incentive restoration. It finds however that social welfare is lower with marketing exclusivity. Finally, our analysis suggests that marketing exclusivity not be granted in the case of drugs for rare diseases. |
| Keywords: | innovation, generic entry competition, patent, pharmaceuticals, Hatch-Waxman |
| JEL: | I18 K23 L13 |
| Date: | 2015–08–30 |
| URL: | http://d.repec.org/n?u=RePEc:hit:iirwps:15-18&r=all |
| By: | Francesco Devicienti (Department of Economics and Statistics (Dipartimento di Scienze Economico-Sociali e Matematico-Statistiche), University of Torino, Italy); Elena Grinza (Department of Economics and Statistics (Dipartimento di Scienze Economico-Sociali e Matematico-Statistiche), University of Torino, Italy); Davide Vannoni (Department of Economics and Statistics (Dipartimento di Scienze Economico-Sociali e Matematico-Statistiche), University of Torino, Italy) |
| Abstract: | In this paper, we explore the impact of part-time work on firm productivity. Using a large panel data set of Italian corporations’ balance sheets for the period 2000-2010, we first estimate the total factor productivity (TFP) of each firm for each year. We use different approaches aimed at solving input simultaneity, including a version of Ackerberg et al.’s (2006) control function approach, which accounts for firm fixed effects. We then match the TFP estimates with rich information on the firms’ use of part-time work obtained from survey data and estimate the impact of part-time work on TFP at the firm level. We find that an increase of 1 standard deviation in the part-time share reduces TFP by 2.03%. The results suggest that this harmful effect stems from horizontal rather than vertical part-time arrangements. We also find that firms declaring that they use part-time work to accommodate workers’ requests suffer the most. Moreover, we show that the so-called ‘flexible’ and ‘elastic’ clauses are successful in reducing the negative impact associated with part-time work. |
| Keywords: | Part-time work, Horizontal and vertical part-time contracts, Flexible and elastic clauses, Firm total factor productivity (TFP), Semiparametric estimation methods. |
| JEL: | L23 L25 J23 |
| Date: | 2015–10 |
| URL: | http://d.repec.org/n?u=RePEc:tur:wpapnw:032&r=all |
| By: | Pierre Monnin (Council on Economic Policies) |
| Abstract: | This paper explores the empirical link between income inequality and inflation in ten OECD countries over the period 1971 to 2010. In addition to inflation, we include six control variables in our analysis: economic development level, business cycles, unemployment, unionization, openness to international trade and skill-biased technological change. We estimate the empirical link between all seven variables and income inequality with a balanced panel. We find a U-shaped link between long-run inflation and income inequality. Low inflation rates are associated with higher income inequality. As inflation goes up, inequality decreases, reaches a minimum with an inflation rate of about 13%, and then starts rising again. The precise mechanisms that lead more inflation to correlate with a decrease in income inequality until a certain threshold are unclear yet, and warrant further research. |
| Date: | 2014–05 |
| URL: | http://d.repec.org/n?u=RePEc:ceq:wpaper:1401&r=all |
| By: | Xavier Raurich (Departament de Teoria Econòmica and CREB Universitat de Barcelona - Departament de Teoria Econòmica and CREB Universitat de Barcelona); Thomas Seegmuller (AMSE - Aix-Marseille School of Economics - EHESS - École des hautes études en sciences sociales - Centre national de la recherche scientifique (CNRS) - Ecole Centrale Marseille (ECM) - AMU - Aix-Marseille Université) |
| Abstract: | The aim of this paper is to study the interplay between long term productive investments and more short term and liquid speculative ones. A three-period lived overlapping generations model allows us to make this distinction. Agents have two investment decisions. When young, they can invest in productive capital that provides a return during the following two periods. When young or in the middle age, they can also invest in a bubble. Assuming, in accordance with the empirical evidence, that the bubbleless economy is dynamically efficient, the existence of a stationary bubble raises productive investment and production. Indeed, young agents sell short the bubble to increase productive investments, whereas traders at middle age transfer wealth to the old age. We outline that a technological change inducing either a larger return of capital in the short term or a similar increase in the return of capital in both periods raises productive capital, production and the bubble size. This framework also allows us to discuss several economic applications: the effects of both regulation on limited borrowing and fiscal policy on the occurrence of bubbles, the introduction of a probability of market crash and the effect of bubbles on income inequality. |
| Keywords: | bubble,efficiency,vintage capital,short sellers,overlapping generations |
| Date: | 2015–10 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-01214689&r=all |
| By: | Stuetzer, Michael; Obschonka, Martin; Audretsch, David B.; Wyrwich, Michael; Rentfrow, Peter J.; Coombes, Mike; Shaw-Taylor, Leigh; Satchell, Max |
| Abstract: | There is mounting evidence demonstrating that entrepreneurship is spatially clustered and that these spatial differences are quite persistent over long periods of time. However, especially the sources of that persistence are not yet well-understood, and it is largely unclear whether persistent differences in entrepreneurship are reflected in differences in entrepreneurship culture across space as it is often argued in the literature. We approach the cluster phenomenon by theorizing that a historically high regional presence of large-scale firms negatively affects entrepreneurship, due to low levels of human capital and entrepreneurial skills, fewer opportunities for entry and entrepreneurship inhibiting formal and informal institutions. These effects can become self-perpetuating over time, ultimately resulting in persistent low levels of entrepreneurship activity and entrepreneurship culture. Using data from Great Britain, we analyze this long-term imprinting effect by using the distance to coalfields as an exogenous instrument for the regional presence of large-scale industries. IV regressions show that British regions with high employment shares of large-scale industries in the 19th century, due to spatial proximity to coalfields, have lower entrepreneurship rates and weaker entrepreneurship culture today. We control for an array of competing hypotheses like agglomeration forces, the regional knowledge stock, climate, and soil quality. Our main results are robust with respect to inclusion of these control variables and various other modifications which demonstrates the credibility of our empirical identification strategy. A mediation analysis reveals that a substantial part of the impact of large-scale industries on entrepreneurship is through human capital. |
| Keywords: | Entrepreneurship; entrepreneurship culture; Industrial Revolution; industry structure; personality |
| JEL: | L26 L64 N13 N53 N94 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:67424&r=all |
| By: | Shutao Cao; Mohanad Salameh; Mai Seki; Pierre St-Amant |
| Abstract: | Recently released data show downward trends for both the firm entry rate and the rate of new entrepreneurship since the early 1980s in Canada. This paper documents these trends and discusses potential explanations. A shift-share analysis suggests that changes to Canada’s industrial and demographic structures cannot explain the long-term downward trends, although population aging accounts for part of the decline in new entrepreneurship since around 2000. The paper also discusses other factors potentially contributing to the downward trends: increased industrial concentration, changing labour market conditions, an increased college wage premium and higher student debt. In-depth analysis of these factors is left for future research. |
| Keywords: | Firm dynamics; Market structure and pricing; Productivity |
| JEL: | L11 M13 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:bca:bocadp:15-11&r=all |
| By: | Alex Bryson; John Forth |
| Abstract: | The 2008 Great Recession was notable in the UK for three things: the enormity of the output shock; the muted unemployment response; and the very slow rate of recovery. We review the literature which finds most of the decline in productivity is within sector and within firm before presenting new micro-analysis of workplace-level behaviour between 2004 and 2011 to gain insights into the processes that may have contributed to this aggregate picture. We find clear evidence of labour intensification but employers appeared incapable of turning this effort into improved workplace level productivity. Widespread pay freezes and cuts were often initiated in direct response to the recession. Workplace closure rates were little different to those experienced prior to the recession, but there is some evidence of a "cleansing" effect with poorer performing workplaces being more likely to close. There is some evidence of labour "hoarding", especially hoarding of high skilled labour: this has had no discernible impact on the rate of innovation. There is no impact of recession on either the number of HRM practices workplaces invested in, nor their returns on those investments. There is no evidence that workplaces have benefitted from Britain's "flexible" labour market as indicated by using recruitment channels used by welfare recipients or the use of numerically flexible workers. On the contrary, workplaces with increasing unionisation appeared to benefit in terms of improved workplace performance. |
| Date: | 2015–05 |
| URL: | http://d.repec.org/n?u=RePEc:nsr:niesrd:448&r=all |
| By: | Gawlik, Remigiusz |
| Abstract: | Socio-economic development can be understood in a number of ways. Jaffee (1998, p. 3) defines this term by saying that it “refers to the ability to produce an adequate and growing supply of goods and services productively and efficiently, to accumulate capital, and to distribute the fruits of production in a relatively equitable manner”. This definition seems to be the most accurate because it combines both leading and sometimes competing approaches to socio-economic development: economic (production, accumulation, efficiency) and sociological (social transition and change and relatively equal distribution of welfare). |
| Keywords: | socioeconomic development, social entrepreneurship |
| JEL: | A13 L26 O10 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:67328&r=all |