nep-ino New Economics Papers
on Innovation
Issue of 2015‒12‒01
thirty-six papers chosen by
Uwe Cantner
University of Jena

  1. Breakthrough technologies - Robotics, innovation and intellectual property By Andrew Keisner; Julio Raffo; Sacha Wunsch-Vincent
  2. Breakthrough technologies – Semiconductor, innovation and intellectual property By Thomas Hoeren; Francesca Guadagno; Sacha Wunsch-Vincent
  3. Intellectual property rights and pharmaceuticals: The case of antibiotics By Bhaven N. Sampat
  4. Innovation, Technological Interdependence, and Economic Growth By Douglas Hanley
  5. Breakthrough innovations in aircraft and the intellectual property system, 1900-1975 By David C. Mowery
  6. The Role of the IT Revolution in Knowledge Diffusion, Innovation and Reallocation By Salome Baslandze
  7. Frontier Firms, Technology Diffusion and Public Policy: Micro Evidence from OECD Countries By Dan Andrews; Chiara Criscuolo; Peter N. Gal
  8. Economic growth and breakthrough innovations: A case study of nanotechnology By Lisa Larrimore Ouellette
  9. Too much or not enough heterogeneity in Innovation Policies among EU Member States? By Reinhilde Veugelers
  10. 3D printing and the intellectual property system By Stefan Bechtold
  11. Inverted-U relationship between innovation and survival: Evidence from firm-level UK data By Ugur, Mehmet; Trushin, Eshref; Solomon, Edna
  12. New industrial policy for more inclusive and sustainable growth By David Bailey; Lisa De Propris; Jürgen Janger
  13. Do Firms Respond to Stronger Patent Protection by Doing More R&D? By Joel Blit; Mauricio Zelaya
  14. Barriers to Innovation: Can Firm Age Help Lower Them? By Gabriele Pellegrino
  15. R&D and productivity in OECD firms and industries: A hierarchical meta-regression analysis By Ugur, Mehmet; Trushin, Eshref; Solomon, Edna; Guidi, Francesco
  16. Tax incentives and R&D: an evaluation of the 2002 UK reform using micro data By Irem Guceri
  17. Improving the Innovative Strategy of Interaction of Large Industrial Enterprises and Small Entrepreneurship in the Agro-industrial Sector By Dudin, Mikhail Nikolaevich; Lyasnikov, Nikolaj Vasil'evich; Dzhurabaeva, Gulnora Kahramanovna; Dzhurabaev, Kahraman Tursunovich; Reshetov, Konstantin Jur’evich
  18. Intermediate Users as a Source of Innovation in a Development Context: Empirical Evidence and Theory By Kinsuk Mani Sinha; Pamela Adams; Franco Malerba
  19. Heterogeneity and diffusion in the digital economy: Spain’s case By Javier Alonso; Alfonso Arellano
  20. Regional Growth and Convergence in the UK: the Role of MNE Subsidiaries and Domestic Firms By Bournakis, Ioannis; Papanastassiou, Marina; Pitelis, Christos
  21. Knowledge Here, Knowledge There: Multilatinas and their European Subsidiaries. By Ionara Costa; Howard Rush; Andrew Grantham
  22. Allocation of Company Research and Development Expenditures to Industries Using a Tobit Model By Christian Awuku-Budu; Leo Sveikauskas
  23. Innovative work practices, ICT use and employees' motivations By MARTIN Ludivine
  24. Farmers’ adoption of organic production. By Cuong Le Van; CNguyen To The
  25. Retail Networks and Real Estate: the case of Swiss luxury watches in China and Southeast By Tatsuro Iwaisako; Kazuyoshi Ohki
  26. Analyzing the Mobile-Banking Adoption Process among Low-Income Populations: A Sequential Logit Model By François-Seck Fall; Yaya Ky; Ousmane Birba
  27. China's textile industry: problems of preservation of sustainability and competitiveness in terms of the dynamics of the economic environment By Dudin, Mihail Nikolaevich; Lyasnikov, Nikolaj Vasilevich; Dzhurabaeva, Gulnora Kahramanovna; Kuznecov, Aleksandr Valerevich
  28. Entrepreneurship and the Reallocation of African Farmers By Naudé, Wim
  29. Is Advertising for Losers? An Empirical Study from a Value Creation– Value Capturing Perspective By Koen Tackx; Sandra Rothenberger; Paul Verdin
  30. The EU framework for social innovation - Between entrepreneurship and policy experimentation By Sebastiano Sabato; Bart Vanhercke; Gert Verschraegen
  31. Silicon Savanna? Local Competence Building and International Venture Capital in Low Income Countries. The Emergence of Foreign High-Tech Investments in Kenya By Daniel S.Hain; Roman Jurowetzki
  32. The case study of "Krushevo women"as a model of social entrepreneurship By Petreski, Blagica; Petreska, Despina
  33. The Dynamics of Skills: Technology and Business Cycles By Valeria Cirillo; Mario Pianta; Leopoldo Nascia
  34. Reap What You Sow: Agricultural Productivity, Structural Change and Urbanization By Danny McGowan; Chrysovalantis Vasilakis
  35. Roots of the Industrial Revolution By Kelly, Morgan; Mokyr, Joel; Grada, Cormac O
  36. A Discontinuity Model of Technological Change: Catastrophe Theory and Network Structure By Heinrich, Torsten

  1. By: Andrew Keisner (Attorney, Davis & Gilbert LLP, New York, New York, U.S.A); Julio Raffo (Economics and Statistics Division, World Intellectual Property Organization, Geneva, Switzerland.); Sacha Wunsch-Vincent (Economics and Statistics Division, World Intellectual Property Organization, Geneva, Switzerland.)
    Abstract: Robotics technology and the increasing sophistication of artificial intelligence are breakthrough innovations with significant growth prospects and the potential to disrupt existing economic and social facets of everyday life. Few studies have analyzed the developments of robotics innovation. This paper closes this gap by analyzing how innovation in robotics is taking place, how it diffuses, and what role intellectual property (IP) plays. The paper finds that robotics clusters are mainly located in the US, Europe, but increasingly also in the Republic of Korea and China. The robotics innovation ecosystem builds on cooperative networks of actors, including individuals, research institutions, and firms. Governments play a significant role in supporting robotics innovation, in particular through funding, military demand, and national robotics strategies. Robotics competitions and prizes provide for an important incentive to innovation. Patents are used to exclude third parties, to secure freedom to operate, to license technologies and to avoid litigation. The countries with the highest number of filings are Japan, China, Republic of Korea and the US. The growing stock of patents owned by universities and PROs, in particular in China, is noteworthy too. Automotive and electronics companies are still the largest patent filers, but new actors in fields such as medical technologies and the Internet are emerging. Secrecy is often used as a tool to appropriate innovation. Copyright protection is relevant to robotics too, mainly in its role in protecting software, and more recently in protecting so-called Netlists. Finally, proprietary approaches co-exist with open-source robotics platforms which are developing rapidly in robotics clusters.
    Keywords: Robotics; artificial intelligence; innovation; patents; trade secrets; copyrights.
    JEL: F23 L86 O3 L6
    Date: 2015–11
  2. By: Thomas Hoeren (Institute for Information, Telecommunication and Media Law (ITM), University of Münster (Germany).); Francesca Guadagno (Economics and Statistics Division, World Intellectual Property Organization, Geneva, Switzerland.); Sacha Wunsch-Vincent (Economics and Statistics Division, World Intellectual Property Organization, Geneva, Switzerland.)
    Abstract: Semiconductor technology is at the origin of today’s digital economy. Its contribution to innovation, productivity and economic growth in the past four decades has been extensive. This paper analyzes how this breakthrough technology came about, how it diffused, and what role intellectual property (IP) played historically. The paper finds that the semiconductor innovation ecosystem evolved considerably over time, reflecting in particular the move from early - stage invention and first commercialization to mass production and diffusion. All phases relied heavily on contributions in fundamental science, linkages to public research and individual entrepreneurship. Government policy, in the form of demand-side and industrial policies were key. In terms of I P, patents were used intensively. However, they were often used as an effective means of sharing technology, rather than merely as a tool to block competitors. Antitrust policy helped spur key patent holders to set up liberal licensing policies. In contrast, and potentially as a cautionary tale for the future, the creation of new IP form s – the sui generis system to protect mask design - did not produce the desired outcome. Finally, copyright has gained in importance more recently.
    Keywords: semiconductors, innovation, patent, sui generis, copyright, intellectual property.
    JEL: O33 O34 O47 O38
    Date: 2015–11
  3. By: Bhaven N. Sampat (Columbia University and NBER)
    Abstract: The development and diffusion of antibiotics contributed to large improvements in human health and living standards. The antibiotic revolution also spawned the modern pharmaceutical industry. This paper reviews the development of the early antibiotics, and the roles of intellectual property rights (in particular, patents) in their development and diffusion. Though today the pharmaceutical sector is typically characterized as one industry where patents are absolutely essential for innovation incentives, patent incentives had a subtle role in the early years of the antibiotic revolution. Indeed, in successive stages of the antibiotic revolution there was increasing focus of pharmaceutical firms on patents and exclusivity. The new technologies shaped patent laws and practices as much as patents influenced innovation incentives: technology and institutions co-evolved. Beyond patents and intellectual property, wartime exigencies and several forms of university-industry collaboration also appear to have been important in supporting breakthrough antibiotic innovations.
    Keywords: Innovation;Research and Development; Technological Change; Intellectual Property Rights; Government, War, Law, International Relations, and Regulation; Health.
    JEL: O3 N4 I1
    Date: 2015–11
  4. By: Douglas Hanley (University of Pittsburgh)
    Abstract: There is substantial heterogeneity across industries in the level of interdependence between new and old technologies. I propose a measure of this interdependence--an index of sequentiality in innovation--which is the transfer rate of patents in a particular industry. I find that highly sequential industries have higher profitability, higher variance of firm growth, lower exit rates, and lower rates of patent expiry. To better understand these trends, I construct a model of firm dynamics where the productivity of firms evolves endogenously through innovations. New innovators either replace existing technologies or must purchase the rights to existing technologies from incumbents in order to produce, depending on the level of sequentiality in the industry. Estimating the model using data on US firms and recent data on US patent transfers, I can account for a large fraction of the cross-industry trends described above. Because innovation results in larger monopoly distortions in more sequential industries, there is an overinvestment of research inputs into these industries. This misallocation, which amounts to 2.5% in consumption equivalent terms, can be partially remedied using a patent policy featuring weaker protection in more sequential industries, yielding welfare gains of 1.7%.
    Date: 2015
  5. By: David C. Mowery (Haas School of Business, University of California Berkeley, USA)
    Abstract: Modern commercial aircraft are complex products that incorporate innovations in technologies ranging from advanced materials to software and electronics. Although commercial aircraft assuredly qualify as a transformative innovation, in fact today’s commercial aircraft are the result of a process of incremental innovation and improvement that dates back more than a century. A great many of these improvements and incremental innovations originated from government-supported R&D programs sponsored by the military services or government research laboratories. The adoption of commercial-aircraft innovations within many industrial economies, including the United States, also has been influenced by government regulation of air transportation. This paper provides a historical characterization of the innovation and record of technical progress in US commercial aircraft during the 1900-1975 period. It identifies the sources of support for innovation and technological adoption, and examines the origins and impacts of “breakthrough innovations” on the overall evolution of the global commercial aircraft industry. The paper also assesses the role of patents in these important innovations.
    Keywords: Innovation, airplane, intellectual property
    JEL: O3 O34 O38 N7
    Date: 2015–11
  6. By: Salome Baslandze (UPenn)
    Abstract: What is the impact of information and communications technologies (ICT) on aggregate productivity growth and industrial reallocation? In this paper, I analyze the impact of ICT through facilitating knowledge diffusion in the economy. There are two opposing effects. The increased flow of ideas between firms and industries improves learning opportunities and spurs innovation. However, knowledge diffusion through ICT also results in broader accessibility of knowledge by competitors, reducing expected returns from research efforts and hence harming innovation incentives. The nature of the tradeoff between these opposing forces depends on an industry's technological characteristics, which I call external knowledge dependence. Industries whose innovations rely more on external knowledge benefit greatly from knowledge externalities and expand, while more self-contained industries are more affected by intensified competition and shrink. This results in the reallocation of innovation and production activities toward more externally-focused, ``knowledge-hungry'' industries. I develop a general equilibrium endogenous growth model featuring this mechanism. In the model, firms belonging to technologically heterogeneous industries learn from external knowledge and innovate. These firms' abilities to access external information is governed by ICT. Using NBER patent and citations data together with BEA industry-level data on ICT, I empirically validate the mechanism of the paper. Quantitative analysis from the calibrated model illustrates that it is important to account for both technological heterogeneity and the knowledge-diffusion role of ICT to explain U.S. trends in productivity growth and sectoral reallocation in recent decades. Counterfactual experiments are conducted to quantitatively assess separate channels and illustrate various growth decompositions.
    Date: 2015
  7. By: Dan Andrews; Chiara Criscuolo; Peter N. Gal
    Abstract: This paper analyses the characteristics of firms that operate at the global productivity frontier and their relationship with other firms in the economy, focusing on the diffusion of global productivity gains and the policies that faciliate it. Firms at the global productivity frontier – defined as the most productive firms in each two-digit industry across 23 countries – are typically larger, more profitable, younger and more likely to patent and be part of a multinational group than other firms. Despite the slowdown in aggregate productivity, productivity growth at the global frontier remained robust over the 2000s. At the same time, the rising productivity gap between the global frontier and other firms raises key questions about why seemingly non-rival technologies do not diffuse to all firms. The analysis reveals a highly uneven process of technological diffusion, which is consistent with a model whereby global frontier technologies only diffuse to laggards once they are adapted to country-specific circumstances by the most productive firms within each country (i.e. national frontier firms). This motivates an analysis of the sources of differences in the productivity and size of national frontier firms vis-à-vis the global frontier and the catch-up of laggard firms to the national productivity frontier. Econometric analysis suggests that well-designed framework policies can aid productivity diffusion by sharpening firms’ incentives for technological adoption and by promoting a market environment that reallocates resources to the most productive firms. There is also a role for R&D tax incentives, business-university R&D collaboration and patent protection but trade-offs emerge which can inform the design of innovation-specific policies.<P>Entreprises en pointe, diffusion des technologies et politiques publiques : Microdonnées des pays de l'OCDE<BR>Ce document analyse les caractéristiques des entreprises qui se situent à la frontière mondiale en matière de productivité et leurs relations avec les autres entreprises de l’économie. Les entreprises à la frontière de la productivité mondiale – que l’on définit comme étant les entreprises les plus productives dans chaque industrie correspondant à un code à deux chiffres de la classification des activités économiques, dans 23 pays – sont en général de plus grande taille, plus rentables, plus jeunes, présentent une plus grande propension à breveter et font plus souvent partie d’un grand groupe multinational que les autres entreprises. Malgré le ralentissement de la croissance de la productivité globale, la croissance à la frontière mondiale est demeurée robuste pendant les années 2000, tandis que le creusement de l’écart de productivité entre les entreprises à la frontière et les autres soulève d’importantes questions quant aux raisons faisant que des technologies non rivales n’atteignent pas toutes les entreprises. À cet égard, l’analyse concorde avec un modèle selon lequel les technologies à la frontière mondiale ne rejoignent les entreprises retardataires que lorsqu’elles sont adaptées aux exigences propres à chaque pays des entreprises qui se situent à la frontière nationale. Ce processus très inégal de diffusion des technologies justifie une analyse des différences internationales en ce qui concerne les écarts de performances entre les entreprises à la frontière mondiale et celles qui se situent à la frontière nationale, et le rattrapage des entreprises retardataires par rapport à la frontière de productivité nationale. L’analyse économétrique donne à penser que des politiques-cadres judicieuses peuvent favoriser la diffusion de la productivité en affinant les motivations des entreprises à adopter des technologies nouvelles et en promouvant un environnement de marché qui réaffecte les ressources aux entreprises les plus productives. Les incitations fiscales à la R-D, la collaboration entreprises-universités en R-D et la protection par brevet ont un rôle à jouer, mais des arbitrages nouveaux peuvent inspirer des politiques spécifiques en faveur de l’innovation.
    Keywords: productivity, firm dynamics, reallocation, réaffectation, productivité
    JEL: M13 O30 O40 O43 O57
    Date: 2015–11–12
  8. By: Lisa Larrimore Ouellette (Stanford Law School, USA.)
    Abstract: This paper examines the role of intellectual property and other innovation incentives in the development of one field of breakthrough innovation: nanotechnology. Because nanotechnology is an enabling technology across a wide range of fields, the nanotechnology innovation ecosystem appears to be a microcosm of the global innovation ecosystem. Part I describes the nature of nanotechnology and its economic contribution, Part II explores the nanotechnology innovation ecosystem, and Part III focuses on the role of IP system s in the development of nanotechnology.
    Keywords: Innovation, nanotechnology, intellectual property
    JEL: O3 O34 O38
    Date: 2015–11
  9. By: Reinhilde Veugelers
    Abstract: This contribution focuses on the heterogeneity in innovation capacity within Europe across its different Member States. Who are the leading and who are the lagging EU countries? Is there a trend towards convergence over time? And how has the crisis affected this trend of convergence? We then take a look at the research and innovation policies which the EU countries have in place and try to assess whether these policies match with the heterogeneous EU countries’ innovation capacity positions. We examine both the budgets allocated by EU Member States to R&I as well as the various kinds of R&I policy programmes being deployed. More particularly, we examine how heterogeneous the deployment of policy instruments is across EU member states and whether this matches with the heterogeneity in innovation capacity development among EU countries. Notwithstanding the large and increasing heterogeneity among EU countries in innovation capacity development, the evidence on innovation policies in EU countries shows a relative homogeneity of policy mixes in different countries. Current innovation policy mixes of instruments do not well reflect the countries’ levels of innovation capacity development.
    Keywords: Innovation, innovation policy, institutional reforms, multi-level governance
    JEL: O31 O38
    Date: 2015–08
  10. By: Stefan Bechtold (ETH Zurich)
    Abstract: Three-dimensional (3D) printing – or “additive manufacturing” – technologies differ from traditional molding and casting manufacturing processes in that they build 3D objects by successively creating layers of material on top of each other. Rooted in manufacturing research of the 1980s, 3D printing has evolved into a broad set of technologies that could fundamentally alter production processes in a wide set of technology areas. This report investigates, from the perspective of an intellectual property scholar, how 3D printing technology has developed over the last few decades, how intellectual property rights have shaped this breakthrough innovation and how 3D printing technologies could challenge the intellectual property rights system in the future. As in other areas of innovation policy, the role of the intellectual property system in fostering innovation in 3D printing technologies is a complex one. It played a beneficial role in some instances (sometimes intended and sometimes unintended), and it may have played a neutral or detrimental role in other instances. Studying the progress of 3D printing technologies thereby also informs us about the intricate relationship between intellectual property and innovation.
    Keywords: Innovation, 3D printing, intellectual property.
    JEL: K29 L60 O30 O32 O34 O38
    Date: 2015–11
  11. By: Ugur, Mehmet; Trushin, Eshref; Solomon, Edna
    Abstract: Theoretical and empirical work on innovation and firm survival has produced varied and often conflicting findings. In this paper, we draw on Schumpeterian models of competition and innovation and stochastic models of firm dynamics to demonstrate that the conflicting findings may be due to linear specifications of the innovation-survival relationship. We demonstrate that a quadratic specification is appropriate theoretically and fits the data well. Our findings from an unbalanced panel of 39,705 UK firms from 1997-2012 indicate that an inverted-U relationship holds for different types of R&D expenditures and sources of funding. We also report that R&D intensity is more likely to increase survival when firms are in more concentrated industries and in Pavitt technology classes consisting of specialized suppliers of technology and scale-intensive industries. Finally, we report that the effects of firm and industry characteristics as well as macroeconomic environment indicators are all consistent with prior findings. The results are robust to step-wise modeling, controlling for left truncation and use of lagged values to address potential simultaneity bias.
    Keywords: Innovation, post-entry performance, R&D, survival analysis
    JEL: C41 D22 L1 O21 O3
    Date: 2015–10–19
  12. By: David Bailey; Lisa De Propris; Jürgen Janger
    Abstract: The policy brief synthesises key policy findings from Area 3. The over-riding goal is to foster the transition to a new growth path for Europe, with a dynamic manufacturing and services base, greater social inclusiveness, less unemployment and higher sustainability based on excellence in clean technologies. Embarking on a growth path that leverages current technological chances, that is ecologically compatible and that delivers greater and more shared prosperity requires a vision that is able to set long term, clear and transparent targets and to draw pathways to reach them. Businesses require certainty to take risks and create the jobs that societies and communities need to flourish and prosper. Economic growth, social inclusion and ecological ambitions are not necessarily mutually exclusive, but neither are they mutually supportive. In the New Industrial Policy that this brief presents, we see a real opportunity for developing a policy agenda that is capable of transforming some of the trade-offs into potential synergies, problems into solutions and constraints into advantages. Our research has encompassed five key questions: (a) How can we redefine competitiveness so as to encompass social and ecological objectives and to motivate a new industrial policy needed for technology shifts and inclusive, sustainable growth? (b) How do we realign innovation and industrial performance towards social and ecological objectives? (c) What is the impact of green innovation on growth, employment and social cohesion? (d) How can entrepreneurial dynamics drive smart and sustainable growth? (e) How can intangible assets and the quality of academic research act as drivers of change? This Policy Brief outlines the essential elements of the New Industrial Policy for Europe (NIPE) for a more smart, inclusive and sustainable growth.
    Keywords: Economic growth path, economic strategy, holistic and interdisciplinary approach, industrial policy, policy options, political economy of policy reform, social development, sustainable growth
    JEL: O25 L52
    Date: 2015–08
  13. By: Joel Blit (Department of Economics, University of Waterloo); Mauricio Zelaya (Department of Economics, University of Waterloo)
    Abstract: We examine whether stronger intellectual property rights (IPR) promote firm R&D, using changes in the IPR of export-partner countries as an exogenous source of variation. Constructing an export-weighted index of trade partner IPR by country-industry-year, we find that R&D responds strongly to trade partner IPR, and this after including industry, year, country, and interacted fixed effects. We further find evidence of this relationship at the level of the establishment, using a unique Canadian dataset. Our results suggest a causal link between IPR and firm R&D investments.
    JEL: O34
    Date: 2015–08
  14. By: Gabriele Pellegrino (World Intellectual Property Organization, Economics and Statistics Division, 34, chemin des Colombettes CH-1211 Geneva 20, Switzerland; EPFL, College of Management of Technology, Lausanne; Barcelona Institute of Economics, University of Barcelona, Barcelona)
    Abstract: This paper examines how firm age can affect a firm’s perception of the obstacles (deterring vs. revealed) that hamper and delay innovation. Using a comprehensive panel of Spanish firms for the period 2004-2011, the empirical analysis conducted shows that distinct types of obstacle are perceived differently by firms of different ages. First, a clear-cut negative relationship is identified between firm age and a firm’s assessment of both the internal and external shortages of financial resources. Second, young firms seem to be less sensitive to the lack of qualified personnel when initiating an innovative project than when they are already engaged in such activities. By contrast, the attempts of mature firms to engage in innovation activity are significantly affected by the lack of qualified personnel. Finally, mature incumbents appear to attach greater importance to obstacles related to market structure and demand than is the case of firms with less experience.
    Keywords: Barriers to innovation, firm age, probit panel data model
    JEL: C23 O31 O32 O33
    Date: 2015–11
  15. By: Ugur, Mehmet; Trushin, Eshref; Solomon, Edna; Guidi, Francesco
    Abstract: Effects of R&D investment on frim/industry productivity have been investigated widely thanks to pioneering contributions by Zvi Griliches and others in late 1970s and early 1980s. We aim to establish where the balance of the evidence lies and what factors may explain the variation in the research findings. Using 1,258 estimates from 65 primary studies and hierarchical meta-regression models, we report that the average elasticity and rate-of-return estimates are both positive, but smaller than those reported in prior narrative reviews and meta-analysis studies. We discuss the likely sources of upward bias in prior reviews, investigate the sources of heterogeneity in the evidence base, and discuss the implications for future research. Overall, this study contributes to existing knowledge by placing the elasticity and rate-of-return estimates under a critical spot light and providing empirically-verifiable explanations for the variation in the evidence base.
    Keywords: R&D, knowledge capital, productivity, meta-analysis
    JEL: C8 D24 O30 O32
    Date: 2015–08–11
  16. By: Irem Guceri (Oxford University Centre for Business Taxation)
    Abstract: The United Kingdom introduced an R&D tax incentive scheme rst for SMEs in 2000 and then for large rms in 2002, gradually increasing the generosity of both schemes after 2008. This study exploits the differences between companies with similar characteristics that were just above the size threshold for eligibility to the SME scheme and those that were just below, before and after the 2002 reform. This allows for a difference-in-differences approach to measure the (additional) impact of the tax incentives on firms around this size threshold. Treatment group firms are found to have increased their R&D spending by around 18 percent on average in response to the large company tax incentive, implying a user cost elasticity of -1.35. We do not find significant differences in this effect between sectors.
    Keywords: R&D, tax credits, difference-in-differences
    JEL: H25 O31
    Date: 2015
  17. By: Dudin, Mikhail Nikolaevich (Russian Academy of Entrepreneurship); Lyasnikov, Nikolaj Vasil'evich (Russian Academy of Entrepreneurship); Dzhurabaeva, Gulnora Kahramanovna (Novosibirsk State Technical University); Dzhurabaev, Kahraman Tursunovich (Novosibirsk State Technical University); Reshetov, Konstantin Jur’evich (National Institute of Business)
    Abstract: This article aims to reveal main theoretical and methodological issues related to the specificity of the strategic innovation-oriented interaction of large and small business structures of the agrarian sector. As part of the presentation of this paper, the authors have obtained the following main conclusions Secure and sustainable development of national economies and the international community as a whole is not possible without a constant evolution of the agro-industrial sector, which plays a key role in the formation of an adequate level of food security; effectiveness of development of the agrarian sector can be enhanced through the use of innovative solutions, both in terms of agricultural production, and in terms of interaction of large industrial enterprises and small entrepreneurship with each other; interaction of large industrial enterprises and small entrepreneurship of the agrarian sector is strategically-oriented solutions, aimed at meeting the interests and needs of the cooperating subjects, as well as maximizing economic and other benefits in proportion to a contribution of each partner; improving the innovative strategy of interaction of large industrial enterprises and small entrepreneurship in the agrarian sphere should include two directions: ongoing collaboration (meeting functioning needs) and strategic partnerships (meeting development needs).
    Keywords: Cooperation, teamwork, strategy, small entrepreneurship, large industrial enterprises, agrarian sphere
    Date: 2015–02–09
  18. By: Kinsuk Mani Sinha; Pamela Adams; Franco Malerba
    Abstract: This study proposes that individual intermediate users in resource-poor environments represent a source of innovation. The paper first surveys the empirical evidence of user innovation in various developing countries and then examines some cases of user innovation in India. On the basis of the cases examined, the paper proposes an appreciative theory and then a formal model of the innovation process by users in a development context. This process is driven by the unmet, low-cost and functional needs of users, users’ contextual know-how and experience, and users’ knowledge of, and ability to learn from, the local context.
    Keywords: users, innovation, economic development, local knowledge, process model.
    Date: 2015
  19. By: Javier Alonso; Alfonso Arellano
    Abstract: The traditional Bass model (Bass, 1969) for the adoption and diffusion of new products has customarily been used to gauge the speed at which new products were adopted in a market by estimating innovation (p) and imitation (q) parameters.
    Keywords: Developed Economies , Digital economy , Research , Spain , Working Paper
    JEL: O30 L81 L86
    Date: 2015–11
  20. By: Bournakis, Ioannis; Papanastassiou, Marina; Pitelis, Christos
    Abstract: This paper explores the relative effects of Multinational Enterprises’ (MNEs) subsidiaries to domestic firms (DOMS) on regional productivity growth in the UK. We combine regional and firm level data to explore the relative importance of three key characteristics of Multinational Enterprises’ subsidiaries: R&D, intangible assets and exports. Our main results indicate that MNE subsidiaries are on average more R&D intensive and have a higher level of investment in intangibles which impact significantly on regional productivity growth. The results are shown not to be symmetric when we take into account the country of origin of MNE subsidiaries, the role of R&D, intangibles and exports depending on the country of origin of the parental MNE. Two key implications can be derived from our findings: (a) DOMS can sometimes be more advantageous for local development; (b) the contribution of MNEs subsidiaries to the regional economy depends on its degree of embeddedness in the local economy. These two findings can provide a large scope for regional policy making.
    Keywords: Total Factor Productivity (TFP), Regions, Multinationals, Subsidiaries, Domestic Firms, R&D, Intangibles, Exports
    JEL: F23 O47 R3
    Date: 2015–11–26
  21. By: Ionara Costa; Howard Rush; Andrew Grantham
    Abstract: This study focuses on ‘multilatinas’, a group of emerging multinationals headquartered in Latin American countries, and analyses the flows of knowledge between multilatinas’ European subsidiaries and their headquarters. The research tracts both the occurrence of conventional flows of knowledge from headquarters to their European subsidiaries, as well those flows going in the reverse direction. The paper’s main findings can be summarised as follows. First, multilatinas presence in Europe is the result of the combination of market and strategic-asset seeking drivers; with Europe being both an important market for multilatinas, as well as a key location for their R&D activities. Second, multilatinas’ European subsidiaries exchange knowledge with their headquarters in Latin America, implying the concurrency of both conventional and reverse knowledge flows. Third, multilatinas are not only tapping into European knowledge base (strategic-asset seeking), they are also bringing knowledge into their European operations, suggesting the occurrence of spillovers into the host environments. Forth, intra-firm trade is a key mechanism for knowledge transfers, particularly from Europe to Latin America.
    Keywords: emerging multinationals; multilatinas; multinational subsidiaries; knowledge flows; knowledge management
    Date: 2015
  22. By: Christian Awuku-Budu; Leo Sveikauskas
    Abstract: This paper uses Census microdata and a regression-based approach to assign multi-division firms’ pre-2008 Research and Development (R&D) expenditures to more than one industry. Since multi-division firms conduct R&D in more than one industry, assigning R&D to corresponding industries provides a more accurate representation of where R&D actually takes place and provides a consistent time-series with the National Science Foundation R&D by line of business information. Firm R&D is allocated to industries on the basis of observed industry payroll, as befits the historic importance of payroll in Census assignments of firms to industry. The results demonstrate that the method of assigning R&D to industries on the basis of payroll works well in earlier years, but becomes less effective over time as firms outsource their manufacturing function.
    Keywords: business R&D, industry classification, Tobit model, establishment payroll
    Date: 2015–11
  23. By: MARTIN Ludivine
    Abstract: I investigate the impact of innovative work practices and of Information and Communication Technologies (ICT) on employees' motivations. While the existing literature assumes that their positive effects on performance are due to employees' motivation but only assess related concepts, this paper directly analyses employees' motivations. The data come from a cross-sectional survey conducted in 2013. The paper provides new and interesting results on how firms can build a motivational environment shaped by work practices and ICT. I resort to an original empirical framework that permits one to take into account the potential reverse causation between, on the one hand, the voluntary participation in innovative work practices and the use of ICT and motivations on the other. Within this framework, I modify what previous analyses reveal about quality circle and training participation. The results confirm the positive role of work practices such as teamwork, quality norms, formal appraisals, management recognition and family-friendly policies on employee's positive attitudes. Moreover, I introduce a large range of ICT compared to existing research and find that the ICT that most contributed to the development of a motivational environment are those that facilitate access to information and knowledge such as workflow, Internet and e-mail.
    Keywords: Innovative work practices; information and communication technologies; Employees' motivations
    JEL: J81 L23 M12 M54
    Date: 2015–11
  24. By: Cuong Le Van; CNguyen To The
    Abstract: The paper presents a theoretical model in order to figure out the farmer’s decisions of organic production adoption in agriculture. The decisions concern the allocation of lands for conventional and organic farming. This paper suggests that an entirely theoretical exercise can illuminate parts of this complex issue which the empirical work cannot reach. Our results might give some advice to policy makers when contemplating regulations in the agricultural sector. We show the importance of (i) the available quantity of land devoted to agricultural plants, (ii) the productivity of the organic products, (iii) the incentive mechanism and, finally (iv) the constraints on output of organic products. We consider this result as a good example of a new technology. In addition, the result of this article not completely confined in the agricultural production sector. It is possible to open up applications in other fields related to technology transfer.
    Keywords: New technology, Adoption, Organic products, Conventional products, Productivity.
    JEL: O33 C33 Q22
    Date: 2015
  25. By: Tatsuro Iwaisako (Graduate School of Economics, Osaka University); Kazuyoshi Ohki (Graduate School of Economics, Osaka University)
    Abstract: We develop a Schumpeterian growth model that differs from the quality-ladder model in the following two ways. First, the size of the quality increment is determined by a random draw from a given distribution, and consequently leader firms are different in terms of their quality lead over their followers, and thus have different profit flows. Second, we assume that the R&D technology of leader firms exhibits diminishing returns, and consequently some leader firms engage in R&D activities. The results show that leaders with larger quality leads over their followers make smaller R&D investments and tend to be replaced more rapidly; this result is consistent with the behaviors of some previous leader firms such as Sony and Eastman-Kodak. Moreover, we show that subsidizing followersf R&D can promote leadersf aggregate R&D. Subsidies for followersf R&D promote their R&D and impede individual leader firmsf R&D. However, promotion of followersf R&D decreases the number of leaders with larger quality leads and smaller R&D investments and increases that of leaders with smaller quality leads and larger R&D investments. If this positive effect from a changed distribution outweighs the negative effects on individual firmsf R&D, promotion of followersf R&D increases leadersf aggregate R&D.
    Keywords: Schumpeterian growth; Heterogeneous leaders; R&D subsidies
    JEL: L16 O31 O38
    Date: 2015–11
  26. By: François-Seck Fall (LEREPS - Laboratoire d'Etude et de Recherche sur l'Economie, les Politiques et les Systèmes Sociaux - UT1 - Université Toulouse 1 Capitole - UTM - Université Toulouse 2 Le Mirail - Institut d'Études Politiques [IEP] - Toulouse - École Nationale de Formation Agronomique - ENFA); Yaya Ky (CRES - Consortium pour la Recherche Economique et Sociale - University of Dakar); Ousmane Birba (CRES - Consortium pour la Recherche Economique et Sociale - University of Dakar)
    Abstract: The purpose of this study is to uncover the socioeconomic factors that explain the adoption of mobile banking (mbanking), based on data collected from households in the suburbs of Dakar (Senegal). Starting from the hypothesis that adopting an innovation goes through three stages, at each stage we identify the factors that explain adoption. In the first stage, that of "knowledge", the individual must know about the product and its uses. In the second stage, that of "possession", the person must test the product. If the product is accessible and its advantages are observable, he/she can finally adopt it in the last stage of the process. Therefore, the steps "knowledge" and "possession" are required passages in the adoption process. In this article, we use a sequential logit model to highlight the determinants at each level of this process. The results show that age was the only determining factor in the first stage of adoption, that is, "knowledge" of m-banking. In the second phase, other factors appeared in addition; cognitive factors came into play, such as literacy, education level, as well as financial factors such as membership in a ROSCA (rotating credit and savings scheme) that influenced the ‘possession' of m-banking. At the final stage of the adoption process, the variables education level, wages and owning a business were the factors involved in the adoption of m-banking.
    Keywords: Senegal,innovation adoption,Mobile banking, Low-income populations, Sequential Logit Model
    Date: 2015
  27. By: Dudin, Mihail Nikolaevich (Russian academy of Entrepreneurship); Lyasnikov, Nikolaj Vasilevich (Russian academy of Entrepreneurship); Dzhurabaeva, Gulnora Kahramanovna (Novosibirsk State Technical University); Kuznecov, Aleksandr Valerevich (Moskovskij institut jekonomiki, politiki i prava)
    Abstract: Modern global geo-economic development is characterized by a turn of the European and the whole of the Western concept of the Asia-Pacific and East Asian concept, resulting in the further evolution of the World System will determine the economics of the new industrial and post-industrial countries. The purpose of this article is to study the role of the economies of the East Asian countries in the global economic development. And in particular the purpose of this article is to analyze the situation of the textile industry of China in the world market and the prospects for its definition of sustainable and competitive development. During the presentation of this work it was found that textile production in China is currently under the influence of delayed negative effects of the global financial and economic crisis 2008 - 2010 years, which can then lead to the deployment of systemic risks in the Chinese economy, since the textile industry plays leading role in the economic development of China. In the analytical procedures were received substantive justification for increasing the competitiveness of the textile industry in China through the use of organizational and technological innovation, as well as through review of government support measures under consideration of the economic sphere. Enhancing the competitiveness and sustainable growth and development of the textile industry in China to create a new reserve of strength of the Chinese economy and secure in the long term for the textile industry unconditional leadership.
    Keywords: China's economy, the textile industry, sustainable development, industrial competitiveness
    Date: 2015–06
  28. By: Naudé, Wim (Maastricht University)
    Abstract: African agriculture's importance for sustainable development is well appreciated. Indeed, recent years have seen a thorough reappraisal of the sector. What are less well understood, however, are the drivers that reallocate scarce human and physical resources across occupations and space, and without which agriculture and industrial development, and hence structural transformation, will stagnate. One such endogenous driver is entrepreneurship. In this paper I start with the reappraisal of African agriculture and focus on the literature on entrepreneurship in Africa's structural transformation. I present a conceptual model to describe how entrepreneurship reallocates farmers out of agriculture into non-agricultural activities and locations. Recent empirical evidence that is broadly consistent with this model is discussed. Implications and challenges for entrepreneurship development policies and further research are outlined.
    Keywords: agriculture, entrepreneurship, Africa, development, industrialization, structural change, urbanisation
    JEL: Q12 J43 L26 M13 O13
    Date: 2015–11
  29. By: Koen Tackx; Sandra Rothenberger; Paul Verdin
    Abstract: Does advertising lead to higher profits? This question has occupied both academic researchers and company executives for many decades. Arguments have gone in both directions, and evidence is mixed at best. Re-examining the question from a value creation and value capturing perspective as introduced in the strategic management and marketing literature, this article attempts to re-interpret and reconcile the different views and empirically validate the resulting hypotheses. Using a database of the top 500 brands of established companies during the period 2008–2012, we find that advertising spending has no significant impact on profitability, in contrast with brand value and innovation(the latter also positively affects brand value creation). In addition, advertising spending actually weakens the positive effect of innovation on profitability. These findings provide support for the view that advertising in and of itself does not improve profitability. Rather, its effect is positive only when it acts to support customer value creation, based on brand value and/or innovation activities.
    Keywords: advertising effectiveness; brand value; effectiveness of research and development; profitability drivers; innovation; value creation; value capturing
    JEL: M10 M20 M30
    Date: 2015–08–28
  30. By: Sebastiano Sabato; Bart Vanhercke; Gert Verschraegen
    Abstract: The aim of this paper is to identify and provide a preliminary assessment of the resources that the EU has made available to promote social innovation over the period 2006-2014, with special focus on poverty and social exclusion policies. Such a focus is relevant insofar as the establishment of a quantitative target concerning poverty and social exclusion has been one of the major novelties introduced by the Europe 2020 Strategy: social innovation has been presented as a key area for facilitating its achievement. In order to identify European Union (EU) resources relevant for social innovation, we have adopted a diachronic approach taking into account two sub-periods: 2006-2010 (the period of the revised Lisbon Strategy) and 2010-2014 (the first stage of the new Europe 2020 Strategy). This has allowed us to shed light on both the varying importance of the issue over time and the evolution of the relevant instruments and processes implemented by the EU. Our analysis also provides insights into the complex and multi-layered European policy architecture for underpinning social innovation.(for more see paper)
    Keywords: Social innovation, Europe 2020, poverty and social exclusion, social experimentation, European structural Funds
    JEL: I3
    Date: 2015–11
  31. By: Daniel S.Hain; Roman Jurowetzki
    Abstract: With the beginning of the current decade, Africa’s emergence appears to be a new consensus. In contrast to investments earlier this centure, which had mostly aid-characteristics, we nowadays see some flourishing investment hubs emerging – such as Nairobi in Kenya and Lagos in Nigeria – attracting the attention of global growth-oriented tech-investors.This development is pioneered by a number of silicon valley venture capitalists. That such investments finally arrived in sub-Saharan Africa is a positive signal, as it suggests that there exist young companies with innovative products, services, or business models which are potentially fit for international or even global markets. In this paper we investigate the pattern of current technology investments in Kenya – one of sub-Saharan Africa’s buzzing ICT centers. In many cases these financial investments are accompanied by intensive technical and business support. Besides, some of these investors are actively building up networks, and thus, connecting supported companies. This scenario is new for companies and institutions in sub-Saharan Africa and likely to contribute to local capacity building and potentially even catching-up. We explore this new phenomenon of international high-tech investments, focusing on the case of Kenya. Classifying investors and start-ups, and mapping the interaction structure between them, we aim at identifying investment patterns that can contribute to compe- tence building and sustainable development in less developed economies in the global South. To gather the data required, we are among the first to exploit the rich information and graph-based structure of the CrunchBase dataset to explore technology investments in an economically less developed context.
    Keywords: Venture Capital, frugal innovation, local knowledge, local capacity building, tech start-ups, East Africa, Kenya
    Date: 2015
  32. By: Petreski, Blagica; Petreska, Despina
    Abstract: Many families in Krushevo (small city in Macedonia) are struggling with unemployment and poverty, seeking a way to address these bitter social problems. The main objective of the intervention is economic empowerment of women. The social entrepreneurship model has been applied among 25 unemployed women from Krushevo who produce traditional, homemade products divided in several categories: homemade pasta, berries products and natural teas. The model involves horizontal clustering through interconnections among individual producers and the community, as well vertical clustering through networking with the local caterers. Hence, applied approach composes of: capacity building, mentoring, piloting and promotion. The income of the women increased on average more than six times, the number of new buyers increased by 80%. At the same time, skills for packaging and sale significantly improved. Vertical clustering diversifies existing and enable new channels on sale, and horizontal clustering improved their products with joint brand, slogan and logo.
    Keywords: social entrepreneurship, economic empowerment, women, mini-clustering, traditional products
    JEL: E2 J16 J24 P36
    Date: 2015–11–26
  33. By: Valeria Cirillo; Mario Pianta; Leopoldo Nascia
    Keywords: Skills; Innovation; Technology; Business Cycles
    Date: 2015–11–25
  34. By: Danny McGowan (University of Nottingham); Chrysovalantis Vasilakis (Bangor University and IRES)
    Abstract: This paper explores the effects of agricultural productivity shocks on structural change. We exploit the invention of hybrid corn seed as an exogenous source of variation in US agricultural productivity. The technology significantly increased land productivity in counties suited to producing corn. Using a difference-in-difference estimation strategy we show that the treatment group experienced structural change as economic activity became more concentrated in agriculture. Owing to the factor bias of the technology, agricultural labor demand increased leading labor to reallocate from manufacturing to agriculture. We also find the rate of urbanization significantly decreases in treated counties, consistent with structural change causing a decrease in living standards. The findings support recent economic theory that argues factor-biased productivity shocks in agriculture can differentially affect structural change and economic development.
    Keywords: agriculture, productivity, structural change, urbanization
    JEL: D22 D24 L16 Q11
    Date: 2015–11–19
  35. By: Kelly, Morgan (University College Dublin); Mokyr, Joel (Northwestern University); Grada, Cormac O (University College Dublin)
    Abstract: We analyze factors explaining the very di.erent patterns of industrialization across the 42 counties of England between 1760 and 1830. Against the widespread view that high wages and cheap coal drove industrialization, we find that industrialization was restricted to low wage areas, while energy availability (coal or water) had little impact. Instead we find that industrialization can largely be explained by two related factors related to the human capability of the labour force. Instead of being composed of landless labourers, successful industrializers had large numbers of small farms, which are associated with better nutrition and height. Secondly, industrializing counties had a high density of population relative to agricultural land, indicating extensive rural industrial activity: counties that were already reliant on small scale industry, with the technical and entrepreneurial skills this generated, experienced the strongest industrial growth. Looking at 1830s France we find that the strongest predictor of industrialization again is quality of workers shown by height of the population, although market access and availability of water power were also important there.
    Keywords: JEL Classification:
    Date: 2015
  36. By: Heinrich, Torsten
    Abstract: Discontinuities as a crucial aspect of economic systems have been discussed both verbally - particularly in institutionalist theory - and formally, chiefly using catastrophe theory. Catastrophe theory has, however, been criticized heavily for lacking micro-foundations and has mainly fallen out of use in economics and social sciences. The present paper proposes a simple catastrophe theory model of technological change with network externalities and reevaluates the value of such a model by adding an agent-based micro layer. To this end an agent-based variant of the model is proposed and investigated specifically with regard to the network structure among the agents. While the macro level of the model produces a classical cusp catastrophe - a result that is preserved in the agent-based form - it is found that the behavior of the model changes locally depending on the network structure, especially if networks with features that resemble social networks (low diameter, high clustering, power law distributed node degree) are considered. While the present work investigates merely an aspect out of a large possibility space, it encourages further research using agent-based catastrophe theory models especially of economic aspects to which catastrophe theory has previously successfully been applied; aspects such as technological and institutional change, economic crises, or industry structure.
    Keywords: network structures; agent-based modeling; catastrophe theory; information and communication technology; preferential attachment networks; technological change
    JEL: C63 D85 L14 L86
    Date: 2015–02–26

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