nep-ino New Economics Papers
on Innovation
Issue of 2016‒02‒23
thirty-one papers chosen by
Uwe Cantner
University of Jena

  1. The Bright Side of Patents By Farre-Mensa, Joan; Hegde, Deepak; Ljungqvist, Alexander P.
  2. Venture Capital and Knowledge Transfer By Dessí, Roberta; Yin, Nina
  3. Patent hold-up and royalty stacking: the case of multiple downstream firms By Karbowski, Adam; Prokop, Jacek
  4. Determinants of innovation in Croatian SMEs: Comparison of service and manufacturing firms By Bozic, Ljiljana; Mohnen, Pierre
  5. Essay on the State of Research and Innovation in France and the European Union By Antoine Kornprobst
  6. Research and Development as an Initiator of Fixed Capital Investment By Andrin Spescha; Martin Wörter
  7. The Impact of Researcher Diversity on Firms' Patent Application Activity (Japanese) By EDAMURA Kazuma; INUI Tomohiko
  8. International Technology Diffusion of Joint and Cross-border Patents By Chang, C-L.; McAleer, M.J.; Tang, J-T.
  9. Industrial Research and Innovation: Evidence for Policy By Mafini Dosso; Petros Gkotsis; Fernando Hervas; Pietro Moncada-Paterno-Castello
  10. R&D investments and spillovers under endogenous technological opportunity By Mário Alexandre Patrício Martins da Silva
  11. Does institutional diversity promote global innovation networks? By Grillitsch, Markus; Chaminade, Cristina
  12. On the timing of innovation and imitation By Billette de Villemeur, Etienne; Ruble, Richard; Versaevel, Bruno
  13. Public procurement for innovation: lessons from the procurement of a navigable storm surge barrier By Wesseling , Joeri H.; Edquist, Charles
  14. “Technological cooperation in Spanish firms” By Erika Raquel Badillo; Rosina Moreno
  16. An assessment of innovation profiles of telecom operators: a longitudinal comparison between BT and Orange from 2004 to 2013 By Vialle, Pierre; Beltran, Samuel; Whalley, Jason
  17. Exploring Cost-Benefit Analysis of Research, Development and Innovation Infrastructures: An Evaluation Framework By Massimo Florio; Chiara Pancotti; Emanuela Sirtori; Silvia Vignetti; Stefano Forte
  18. Impacts of geographical locations and sociocultural traits on the Vietnamese entrepreneurship By Quan-Hoang Vuong
  19. Comments on the Impact of Knowledge on Economic Growth across the Regions of the Russian Federation By Jens K. Perret
  20. Entrepreneurial culture and start-ups: Could a cultural shift in favour of entrepreneurship lead to more innovative start-ups? By Röhl, Klaus-Heiner
  21. Innovation Adoption by Forward-Looking Social Learners By Mira Frick; Yuhta Ishii
  22. A Case Study on Multinational Companies’ Global Innovation Networks and Global Production Networks: Toward a Theoretical Conceptualisation By Liu, Ju
  23. Broadband Infrastructure and Entrepreneurship: Evidence from German Municipalities By Falck, Oliver; Mazat, Andreas; Stockinger, Bastian
  24. Patent regulation in North-South and South-South Trade Agreements By Salam Alshareef
  25. Entrepreneurship Failure: Case of Low Productivity in Nigeria By Sapovadia, Vrajlal
  26. Stock Option Taxation and Venture Capital Activity: A Cross-Country Comparison By Henrekson, Magnus; Sanandaji, Tino
  27. Entrepreneurship vulnerability to business cycle. A new methodology for identification pro-cyclical and counter-cyclical patterns of entrepreneurial activity. By Lechman, Ewa; Dominiak, Piotr
  28. The Comparative Economics of Knowledge Economy in Africa: Policy Benchmarks, Syndromes and Implications By Simplice Asongu
  29. Replicator dynamics in value chains: explaining some puzzles of market selection. By Uwe Cantner; Ivan Savin; Simone Vannuccini
  30. Understanding the "regional policy mix": A classification and analysis of European regions' support policies By Kroll, Henning
  31. The Economic Significance of Business Angels - Towards Comparable Indicators By Avdeitchikova, Sofia; Landström, Hans

  1. By: Farre-Mensa, Joan; Hegde, Deepak; Ljungqvist, Alexander P.
    Abstract: Motivated by concerns that the patent system is hindering innovation, particularly for small inventors, this study investigates the bright side of patents. We examine whether patents help startups grow and succeed using detailed micro data on all patent applications filed by startups at the U.S. Patent and Trademark Office (USPTO) since 2001 and approved or rejected before 2014. We leverage the fact that patent applications are assigned quasi-randomly to USPTO examiners and instrument for the probability that an application is approved with individual examiners’ historical approval rates. We find that patent approvals help startups create jobs, grow their sales, innovate, and reward their investors. Exogenous delays in the patent examination process significantly reduce firm growth, job creation, and innovation, even when a firm’s patent application is eventually approved. Our results suggest that patents act as a catalyst that sets startups on a growth path by facilitating their access to capital. Proposals for patent reform should consider these benefits of patents alongside their potential costs.
    Keywords: entrepreneurship; innovation; patents; R&D; venture capital
    JEL: D23 G24 L26 O34
    Date: 2016–02
  2. By: Dessí, Roberta; Yin, Nina
    Abstract: This paper explores a new role for venture capitalists, as knowledge intermediaries. A venture capital investor can communicate valuable knowledge to an entrepreneur, facilitating innovation. The venture capitalist can also communicate the entrepreneur's innovative knowledge to other portfolio companies. We study the costs and benefits of these two forms of knowledge transfer, and their implications for investment, innovation, and product market competition. The model also sheds light on the choice between venture capital and other forms of finance, and the determinants of the decision to seek patent protection for innovations. Our analysis provides a rationale for the use of contingencies (specifically, patent approval) in VC contracts documented by Kaplan and Stromberg (2003), and for recent evidence on patterns of syndication among venture capitalists.
    Keywords: competition; contracts; innovation; knowledge intermediaries; patents; venture capital
    JEL: D82 D86 G24 L22
    Date: 2015–02
  3. By: Karbowski, Adam; Prokop, Jacek
    Abstract: The objective of this paper is twofold. First, we study the patent hold-up problem in game-theoretic framework. We show that in subgame perfect equilibrium of the patent hold-up game the innovating manufacturer exerts reduced effort to develop the new product and the patent holder obtains the entire value of product innovation. Second, we show that royalty stacking, which is believed to magnify the patent hold-up, may cause less severe problems than the ones predicted by Lemley and Shapiro [11] when competition on the downstream product market is introduced.
    Keywords: patent hold-up,royalty stacking,downstream competition
    JEL: O32 O34
    Date: 2015
  4. By: Bozic, Ljiljana (Institute of Economics, Zagreb); Mohnen, Pierre (UNU-MERIT, SBE, Maastricht University)
    Abstract: In this paper we focus on SMEs in Croatia operating in the manufacturing and services sectors and seek to compare them in terms of their involvement in innovation activities, the factors that determine their decision to innovate in general and in four types of innovations in particular: product/service, process, organisational and marketing innovations. The analysis relies on the Croatian Community Innovation Survey 2010 (CIS 2010) data. To find out whether innovations have a different pattern of drivers in manufacturing and in services, we estimate the probit and multivariate probit models separately on these two groups of firms. The findings reveal that despite some differences, service and manufacturing SMEs are not that different from one another when it comes to innovation activities. Service SMEs are somewhat less likely to introduce technological innovations, but manufacturing and service SMEs do not significantly differ from each other when it comes to non-technological innovations. One noteworthy difference between manufacturing and service SMEs is that the latter rely much more than the former on acquired knowledge.
    Keywords: Croatia, innovation, services, manufacturing, SME, multivariate probit
    JEL: O31 L80
    Date: 2016–02–16
  5. By: Antoine Kornprobst (Centre d'Economie de la Sorbonne and Labex ReFi)
    Abstract: Innovation in the economy is an important engine of growth and no economy, whatever its complexity and degree of advancement, whether it is based on industry, agriculture, high tech or the providing of services, can be truly healthy without innovating actors within it. The aim of this work, done by an applied mathematician working in finance, not by an economist or a lawyer, isn't to provide an exhaustive view of the all the mechanisms in France and in Europe that aim at fostering innovation in the economy and to offer solutions for removing all the roadblocks that still hinder innovation; indeed such a study would go far beyond the scope of this study. What I modestly attempted to achieve in this study was firstly to draw a panorama of what is working and what needs to perfected as far as innovation is concerned in France and Europe, then secondly to offer some solutions and personal thoughts to boost innovation
    Keywords: Law and Economics; Financial Markets; Financial institutions; Innovation; Start-up creation
    JEL: K1 K2 G1 G2 O31 O32 O38
    Date: 2016–01
  6. By: Andrin Spescha (KOF Swiss Economic Institute, ETH Zurich, Switzerland); Martin Wörter (KOF Swiss Economic Institute, ETH Zurich, Switzerland)
    Abstract: This paper investigates the causal relationship between firms’ research and development expenditures (R&D) and their investments into fixed capital. The literature provides two contrasting views in this respect. The first view holds that a firm’s research activity causes, via the creation of inventions, subsequent investment into fixed capital, as the firm needs additional capacities to produce the new goods or services that follow from the inventions. The second view holds that firms’ fixed capital investments cause intensified research activity, as novel capital goods from external suppliers offer the firms’ researchers a wide range of additional technical possibilities of how to build new prototypes. Using panel data of Swiss firms ranging from 1990 to 2014, the paper applies, contrasting the existing empirical literature only based on VARs, a 2SLS approach to uncover the direction of causality between R&D and fixed capital investment. In order to obtain exogenous instruments, the paper exploits shocks to i) technological opportunities and ii) sales from capital goods suppliers. Results show a one-way causal relationship; we find evidence for that firms’ R&D expenditures cause fixed capital investments, but we do not find evidence for the reverse effect. When additionally looking at innovation performance, R&D activities turn out to be complementary to fixed capital investment, in the sense that they markedly increase the expected return on investment. Thus, increasing research activity may not just be valuable for long-run economic growth but, via investment, may also give the economy a head start in times of a prolonged economic downturn.
    Keywords: Investment, Research and Development, Invention, Technological Opportunities, Complementarity
    JEL: O33
    Date: 2016–02
  7. By: EDAMURA Kazuma; INUI Tomohiko
    Abstract: This paper empirically analyzes the impact of researcher diversity on firms' patent application activity. To account for diversity, we focus on their gender, doctorate degree, research field, and age. For firms' patent application activity, we use the number of patent applications and patent diversity as measured by an international patent classification. A poisson model regression for the count data of patents and ordinary least squares (OLS) regression for patent diversity using Japanese firm level-data show that firms with more female researchers and doctorate degree-holding researchers actively filed for patent applications. However, the relationship between the two groups and firms' patent activity is an inversed-U shape. In addition, the regressions show that firms that employ researchers without research field biases and with a flat age composition filed for patent applications more actively. The results suggest that a rich diversity of researchers in firms advances the research and development (R&D) activity.
    Date: 2016–02
  8. By: Chang, C-L.; McAleer, M.J.; Tang, J-T.
    Abstract: __Abstract__ With the advent of globalization, economic and financial interactions among countries have become widespread. Given technological advancements, the factors of production can no longer be considered to be just labor and capital. In the pursuit of economic growth, every country has sensibly invested in international cooperation, learning, innovation, technology diffusion and knowledge. In this paper, we use a panel data set of 40 countries from 1981 to 2008 and a negative binomial model, using a novel set of cross-border patents and joint patents as proxy variables for technology diffusion, in order to investigate such diffusion. The empirical results suggest that, if it is desired to shift from foreign to domestic technology, it is necessary to increase expenditure on R&D for business enterprises and higher education, exports and technology. If the focus is on increasing bilateral technology diffusion, it is necessary to increase expenditure on R&D for higher education and technology.
    Keywords: International Technology Diffusion, Exports, Imports, Joint Patent, Cross-border Patent, R&D, Negative Binomial Panel Data.
    JEL: F14 F21 O30 O57
    Date: 2015–05–15
  9. By: Mafini Dosso (European Commission – JRC - IPTS); Petros Gkotsis (European Commission – JRC - IPTS); Fernando Hervas (European Commission – JRC - IPTS); Pietro Moncada-Paterno-Castello (European Commission – JRC - IPTS)
    Abstract: This policy Brief addresses the results of the fifth European Conference on Corporate R&D and Innovation, CONCORDi 2015, on ‘Industrial Research and Innovation: evidence for policy’. Taking stock from the underlined background issues, the document presents the main evidence-based insights for policy drawing upon the contributions and debates. It also highlights the main implications for industrial and innovation policies making and for the science-policy interface. A series of open questions for policy and evidence makers conclude the brief.
    Keywords: corporate R&D, innovation, evidence for policy
    Date: 2015–11
  10. By: Mário Alexandre Patrício Martins da Silva (Faculdade de Economia do Porto)
    Abstract: In this paper, we focus on endogenous technological opportunity and its effects upon R&D outcomes in the independent and cooperative cases. In light of the importance of spillovers in economic analysis of R&D incentives, we examine the relationship between R&D appropriability and R&D investment in the presence of an endogenous technological opportunity. In order to do this, we develop a three-stage game in which firms first choose their R&D orientations, then how much to invest in R&D, and finally their Cournot outputs. Contrary to the usual assumption made in oligopoly models that technological opportunity is external to the industry where firms operate, we fully endogenize technological possibilities through the firms’ choices of their R&D approaches. We find that competing firms invest more in R&D as spillovers increase (and R&D appropriability diminishes) but still less than cooperating firms no matter the degree of exogenous spillovers. This is a reversal of well-known results established in the literature on R&D and spillovers.
    Keywords: Technological opportunity, R&D spillovers, R&D investment, absorptive capacity
    JEL: O30
    Date: 2016–02
  11. By: Grillitsch, Markus (CIRCLE, Lund University); Chaminade, Cristina (CIRCLE, Lund University)
    Abstract: Recent literature stresses the increasing importance of global innovation networks as a new mechanism to organize innovation across geographical space. This paper investigates if institutional diversity, defined at the level of the firm, influences firms’ engagement in GINs. Institutional diversity provides knowledge about the institutional context of other countries, increased capabilities to deal with institutional differences, larger social networks to build GINs and a broader search space. Further, the paper examines how the absorptive capacity of firms mediates the relationship between institutional diversity and global innovation networks. The empirical study is based on a linked employee-employer dataset with 8,573 innovative firms in Sweden. It provides strong evidence that the engagement in GINs is positively related to institutional diversity and that the relation is particularly strong for global innovation networks, depending, however, on the absorptive capacity of firms.
    Keywords: global innovation networks; institutions; institutional diversity; absorptive capacity; open innovation
    JEL: D02 F20 O30
    Date: 2016–02–15
  12. By: Billette de Villemeur, Etienne; Ruble, Richard; Versaevel, Bruno
    Abstract: When fixed costs of innovation and imitation differ, strategic competition between duopolists involves either preemption or attrition, the latter being likelier with high uncertainty. We show that industry value is maximized when firms neither stall nor hasten entry, whereas social welfare has local optima in both the attrition and preemption ranges. The social optimum implies a positive imitation cost, and with static business-stealing and sufficient discounting it involves preemption. Finally we endogenize entry barriers and discuss contracting, showing that firms are more likely to rely on secrecy and patents at low imitation costs and that simple licensing schemes are welfare improving.
    Keywords: Dynamic oligopoly; Knowledge spillover; Real options
    JEL: G31 L13 O33
    Date: 2015–12–18
  13. By: Wesseling , Joeri H. (CIRCLE, Lund University); Edquist, Charles (CIRCLE, Lund University)
    Abstract: Public Procurement for Innovation (PPI) is a powerful, underutilized demand-side innovation policy instrument that can be used to stimulate innovation, meet sectoral policy goals and mitigate grand challenges. Further research is required to analyze how PPI contributes to these goals and how it operates in practice; more case studies are needed to achieve this. We analyze a case of direct developmental PPI, the procurement of a navigable storm surge barrier in the Netherlands. Data from policy documents, reports and interviews were used in an event history analysis which serves to capture dynamic patterns of innovation activities. We interpret our findings in relation to the tentative lessons on PPI available in the literature. We also draw policy conclusions with respect to dealing with multiple policy goals and user needs; specifying functional requirements; levels of expertise within governments; balancing competition and cooperation; and taking risks.
    Keywords: innovation policy; demand-side policy; large infrastructural project; tender; water construction sector
    JEL: H54 H57 O30 O31 O32 O33 O38
    Date: 2016–02–05
  14. By: Erika Raquel Badillo (AQR Research Group. University of Barcelona.); Rosina Moreno (AQR Research Group.Faculty of Economics, University of Barcelona)
    Abstract: This paper aims to study to what extent participating in technological cooperation agreements can be a useful mechanism for improving the innovative capacity of Spanish firms, specially in the context of the economic recession. We analyse if there are differences in the returns obtained from cooperation alliances according to the firm’s size as well as different geographical scopes of such alliances. In addition, we want to study to what extent innovation cooperation may have a different effect on incremental innovations than on radical/breakthrough innovation s. We use the Spanish Technological Innovation Panel from 2004 to 2012 to provide evidence on the above issues.
    Keywords: Innovation cooperation; Technological partners; Performance; Spanish firms. JEL classification: L25; O31; O33; R1
    Date: 2016–01
  15. By: Biondolillo, Aldo; Brandi, Juan Pedro
    Abstract: Over the last years there has been a debate about the “structural change” in emerging economies and their impact on the understanding of development. New types of structuralisms are discussed using the concept of value chain in certain production sectors that have undergone significant changes. The objective of this paper is to contribute to the debate about the structural change of the Argentine grape-wine growing sector using the dual analysis of “Strengths and Governance”. First of all, we wish to point out that viticultural production is carried out in imperfect markets where prices are the result of an asymmetric negotiation between the purchasing power of a demand that is concentrated in a few firms and an atomized supply that is in the hands of thousands of producers. We analyze the strengths resulting from the interaction between the internal factors characteristic of the production unit and the external forces that operate within a given business organization. We describe the manner in which the supplier is related to the resources and the markets. We combine the above analysis with the governance approach, which refers to the manner in which the relationship among the several actors engaged in grape-wine growing is governed. We also analyze the relationships between firms and institutional mechanisms through which coordination actions are implemented outside the market. Emphasis is laid on the importance of explicitly incorporating institutionality into the analysis of the grape-wine growing sector chain so as to make sure that enforcement agencies comply with decisions reached by “consensus”. One first conclusion of the study refers to the complementariness of both approaches and, in both cases, there is a continuous segment that spans from “decentralized coordination to a more centralized one”. By learning how value chains are governed, it is possible to know how they affect suppliers’ “upgrade” (increasing the added value of the chain through innovation). The upgrade is illustrated with a case study in which the knowledge acquired by the innovative firm is spread within the grape-wine growing sector, giving rise to a positive externality that may be internalized by means of suitable public policy instruments.
    Keywords: trade, wine, Argentina, competition, Crop Production/Industries, International Development, International Relations/Trade, Production Economics,
    Date: 2015–10
  16. By: Vialle, Pierre; Beltran, Samuel; Whalley, Jason
    Abstract: A large body of research has focused on measuring innovation and the innovativeness of firms. One option frequently chosen is to analyse quantitative indicators published, often at the expense of an intimate understanding of the specific industry or firm context. Another option is to rely on in-depth case analysis relying on methods such as extensive interviews, which can be difficult to implement for various reasons. Little research specifically focuses on network operators, and in particular over a long period In this paper we explore a methodology based on publicly available information for assessing and characterising the innovation profile of telecom operators over time. It combines quantitative and qualitative analysis and relies on an understanding of telecom operators’ business. This methodology aims at allowing comparison between operators, and also to enable linking the observed innovation patterns. For example the innovation patterns observed can be related to external events such as changes in market, competition, regulation or technology. They can also be related to internal events such as change in top management or financial events. So far we have included three components in this approach: (1) an analysis of quantitative indicators, (2) an analysis of service releases, and (3) an analysis of statements of Chairmen and CEOs. The main source is annual reports of companies. In this paper, we present an exploratory analysis of two operators, BT and FT/Orange from 2004 to 2013.
    Keywords: Innovativeness,innovation,telecommunications,BT,France Télécom / Orange
    Date: 2015
  17. By: Massimo Florio (DEAS, Universita' di Milano); Chiara Pancotti (CSIL Centre for Industrial Studies); Emanuela Sirtori (CSIL Centre for Industrial Studies); Silvia Vignetti (CSIL Centre for Industrial Studies); Stefano Forte
    Abstract: Governments, funding agencies and policy makers have high expectations on research, development and innovation (RDI) infrastructures in the context of science and innovation policies aimed at sustaining economic growth in the long term. The stakes associated with their selection and evaluation are therefore high. Cost-benefit analysis of RDI infrastructures is a new field. The intangible nature of some benefits and the uncertainty associated to the achievement of research results have often discouraged the use of a proper CBA for RDI infrastructures. Recently, some attempts to develop a CBA theoretical framework for RDI infrastructures have been made in the context of the use of Structural Funds by the Czech government and JASPERS. Moreover, the new Guide for the CBA of investment projects in the context of Cohesion Policy, recently adopted by the European Commission (2014) provides guidelines to appraise RDI projects, but also admits that – due to lack of experience and best practices – further steps are needed to improve the evaluation framework. This paper presents the results and the lessons learned on how to apply ex-ante CBA for major RDI infrastructures by a team of economists and scientists at the University of Milan and CSIL during a three-year research project supported by a EIBURS grant of the European Investment Bank Institute. Albeit the comprehensive conceptual framework presented in the paper builds on principles firmly rooted in CBA tradition, their application to the RDI sector is still in its infancy. So far, the model has been applied on two cases in physics involving particle accelerators (the Large Hadron Collider (LHC) at CERN and the National Centre for Oncological Treatment (CNAO) in Italy)). In a nutshell, the model presented break down benefits into two broad classes: i) use benefits, held by different categories of infrastructure’s users such as scientists, firms, students and general public visitors, and ii) non-use benefits, denoting the social value for the discovery potential of the RDI infrastructure regardless of its actual or future use. We argue that the social value of discovery can be estimated with contingent valuation techniques. Another significant feature of our approach is the stochastic nature of the CBA model, intended to deal with the uncertainty and risk of optimism bias in the estimates
    Keywords: Research infrastructures, Cost-benefit analysis, Public good, Knowledge
    JEL: D61 D81 I23 O32
    Date: 2016–02–01
  18. By: Quan-Hoang Vuong
    Abstract: This paper presents new results that are obtained from investigations into a 2015 Vietnamese entrepreneurs survey data, containing 3071 observations. Evidence found from the estimations using multinomial logits supports relationships between several sociocultural factors and entrepreneurshiprelated performance or traits has been found. Specifically, those relationships include: a) Active participation in entrepreneurs' social networks and reported value of creativity; b) CSR-willingness and reported entrepreneurs' perseverance; c) Transforming of sociocultural values and entrepreneurs' decisiveness; and, d) Lessons learned from others' failures and perceived chance of success. Using geographical locations as control variate, evaluations of the baseline-category logits models indicate their varying effects on the outcomes when combined with the sociocultural factors that are found statistically significant. Empirical probabilities that help to learn in details about behavioral patterns are provided; and toward the end, the paper offers a discussion on some striking insights and useful explanations on this entrepreneurship data set.
    Keywords: Entrepreneurship; creativity; perseverance; cultural changes; transitional economies
    JEL: L26 M13 O33
    Date: 2016–02–04
  19. By: Jens K. Perret (Europäisches Institut für Internationale Wirtschaftsbeziehungen (EIIW))
    Abstract: Using a basic growth accounting approach it is deduced how far the regional knowledge infrastructure plays any significant role across the regions of the Russian Federation. Aside from aspects of the size of the regional innovation system, like the number of researchers and students, it is discussed in how far the inflow and outflow of knowledge plays a role in determining the economic growth. The study shows thereby that while the Russian growth dynamics are indeed driven by the exploitation of natural resources, foremost of oil and gas, a significant part of Russian growth is due to its innovation system. This shows that innovation oriented growth politics as promoted by former president Dmitry Medvedev do have a solid foundation to be built on.
    Keywords: Economic Growth, Russian Federation, Knowledge, Innovations
    JEL: O31 P25
    Date: 2015–04
  20. By: Röhl, Klaus-Heiner
    Abstract: Europe is lagging behind the United States and Israel in the number of successful start-ups. Highly innovative start-ups that grow to become global companies the size of Google or Amazon within just a few years are not being founded here. Many of Europe’s countries and regions are experiencing persistent low growth with high unemployment, which is something a boom in new companies implementing new creative ideas could help alleviate. Even in Germany, which has a much better macroeconomic performance, the number of companies being founded has been falling for several years. There are strong indicators that Europe’s aforementioned weakness when it comes to the starting of new companies may also have a cultural dimension. Regions which are seeing particularly strong numbers of innovative start-ups being founded appear to have a strong entrepreneurial spirit. This policy paper will therefore examine what defines the entrepreneurial culture of successful start-up regions and to what extent different entrepreneurial cultures contribute to the differences in entrepreneurial activity between large areas of continental Europe and other highly developed economies, especially the United States, the United Kingdom, and Israel. This paper will examine both the societal and institutional framework that exists in an entrepreneurial culture and the personality structure of successful entrepreneurs. Following an international comparison of enterprise birth rates, this paper will review the different start-up systems in Europe, the United States, and Israel, which are also expected to have a connection to differences in the availability of venture capital. Finally, this paper considers the role of the education system in transferring business knowledge and entrepreneurship. This is followed by a conclusion in which recommendations are given regarding how to develop an entrepreneurial culture and a willingness to take risks.
    Abstract: Europa hinkt im Vergleich zu den Vereinigten Staaten oder Israel bei der Zahl erfolgreicher Startups hinterher. Innovationsstarke Gründungen, die innerhalb weniger Jahre zu globalen Konzernen wie Google oder Amazon heranwachsen, finden nicht hier statt. In vielen Staaten und Regionen Europas gibt es eine hartnäckige Wachstumsschwäche mit hoher Arbeitslosigkeit, zu deren Überwindung auch ein Gründungsboom zur Umsetzung neuer kreativer Ideen beitragen könnte. Selbst in Deutschland, das eine gute makroökonomische Performance vorweist, sinken die Gründungszahlen seit mehreren Jahren. Vieles weist darauf hin, dass die konstatierte Gründungsschwäche Europas auch eine kulturelle Dimension besitzen könnte. Besonders gründungsstarke Regionen, die auf innovative Start-ups konzentriert sind, haben offenbar einen starken 'Entrepreneurial Spirit'. In diesem Policy Paper wird deshalb der Frage nachgegangen, was die 'Entrepreneurial Culture' erfolgreicher Gründungsregionen ausmacht und inwieweit eine unterschiedliche Gründungskultur zu den Differenzen im Gründungsgeschehen zwischen weiten Teilen Europas und anderen hoch entwickelten Volkswirtschaften, speziell den Vereinigten Staaten, Großbritannien und Israel, beiträgt. Neben den gesellschaftlichen und institutionellen Rahmenbedingungen einer Gründerkultur wird auch auf die Persönlichkeitsstruktur erfolgreicher Entrepreneure beleuchtet. Nach einem internationalen Vergleich der Gründungsquoten wird auf die unterschiedlichen Startup-Systeme in Europa, Amerika und Israel eingegangen, die auch auf Unterschiede in der Verfügbarkeit von Wagniskapital zurückzuführen sein dürften. Abschließend wird die Rolle des Bildungssystems in der Vermittlung von wirtschaftlichen Kenntnissen sowie Entrepreneurship beleuchtet, bevor im Fazit Empfehlungen zum Ausbau von Gründerkultur und Risikobereitschaft gegeben werden.
    JEL: L25 L26 M13 M14
    Date: 2016
  21. By: Mira Frick (Dept. of Economics, Harvard University); Yuhta Ishii (Cowles Foundation, Yale University & Centro de Investigacion Economica, ITAM)
    Abstract: Motivated by the rise of social media, we build a model studying the effect of an economy’s potential for social learning on the adoption of innovations of uncertain quality. Provided consumers are forward-looking (i.e., recognize the value of waiting for information), equilibrium dynamics depend non-trivially on qualitative and quantitative features of the informational environment. We identify informational environments that are subject to a saturation effect, whereby increased opportunities for social learning can slow down adoption and learning and do not increase consumer welfare. We also suggest a novel, purely informational explanation for different commonly observed adoption curves (S-shaped vs. concave).
    Keywords: Innovation adoption, Social learning, Poisson bandits, Informational free-Riding
    JEL: D81 D83
    Date: 2015–02
  22. By: Liu, Ju (CIRCLE, Lund University)
    Abstract: The recent wave of globalisation has been characterised not only by an increased number of cross-border production networks of multinational companies (MNCs) but also by an increasing number of their cross-border innovation networks. However, the differences, commonalities, and interaction between a MNC’s global innovation network (GIN) and global production network (GPN) have not been theoretically and empirically clarified. Using case study and social network analysis, this paper simultaneously captures the network characteristics of the case MNCs’ GINs and GPNs. It finds that the case MNCs’ GINs and GPNs 1) interact; 2) are different in terms of network composition and network centralisation; 3) are similar in terms of pattern of ties; nevertheless, 4) the interaction, the differences and the commonality clearly present firm or industrial differences. The paper argues that theoretically considering GIN and GPN as two different but interwoven layers of a MNC’s global value creation network may provide better conceptual clarity for reality interpretation and theoretical development. It suggests knowledge base perspective in future research for better understanding the dynamics of MNCs’ GINs and GPNs.
    Keywords: global innovation network; global production network; multinational companies; Social network analysis
    JEL: M16 O32
    Date: 2015–12–02
  23. By: Falck, Oliver; Mazat, Andreas; Stockinger, Bastian
    Abstract: Policy makers in many places regularly call for broadband infrastructure deployment to foster regional development. While some empirical studies deal with the productivity impact of broadband Internet availability, few hard facts are known about its relation to establishment start-up. This paper contributes to closing the gap, providing causal evidence on the impact of broadband Internet availability on establishment start-up. We apply an instrumental variables approach, exploiting technological peculiarities of the preexisting voice telephony network that impeded high-speed Internet availability to circumvent endogeneity bias. We find that Internet effects on establishment start-up might take some time to realize and are likely heterogeneous across sectors, establishment size and knowledge intensity.
    Date: 2015
  24. By: Salam Alshareef (CREG - Centre de recherche en économie de Grenoble - Grenoble 2 UPMF - Université Pierre Mendès France)
    Abstract: The article provides a comparative examination of patent provisions in both North-South and South-South Preferential Trade Agreements (PTAs). It assesses whether the flexibilities of World Trade Organization Agreement on trade-related aspect Intellectual Property Rights (TRIPS), are getting eliminated, preserved or affirmed in the studied PTAs. The article studies the PTAs of both the United States and European Union with developing countries as examples of North-South agreements, and the PTAs of both China and India with developing countries as examples of South-South agreements. The PTAs of US show systematic efforts to eliminate TRIPS flexibilities. EU chapters on IP engage partner countries to accede or comply with WIPO treaties in its earlier versions, and converge toward US approach in its latest versions. By contrast, China PTAs affirm commitment under TRIPS and emphasis some of its flexibilities. Patent related issues are absent from India’s PTAs.
    Keywords: patent , TRIPS flexibilities , Preferential Trade Agreements , TRIPS plus
    Date: 2015–10–15
  25. By: Sapovadia, Vrajlal
    Abstract: We study the role of entrepreneurs in low productivity in manufacturing firms of Nigeria. Federal Executive Council while adopting the National Policy of Productivity in 2012 emphasized that transformation of Nigeria to become strong economy will never be realized until the nation adopts the culture of productivity, innovation, improvements and proper management of resources. The policy is to guide the public and private sectors in enhancing productivity to stimulate national development. Thus policy framework appreciated role of private sector management in enhancing productivity, the dire need for national development. Enhanced national productivity is at the heart of any economic development and progress.
    Keywords: Nigeria, Productivity, Industrial, Entrepreneurship
    JEL: A1 M20
    Date: 2015–11–01
  26. By: Henrekson, Magnus (Research Institute of Industrial Economics (IFN)); Sanandaji, Tino (Institute for Economic and Business History Research (EHFF), Stockholm School of Economics)
    Abstract: One response to uncertainty and transactions costs in VC-finance is to compensate founders (and other key personnel) with stock options under complex contracts. Entrepreneurs are granted stock options contingent on firm performance, vesting and other criteria. While most countries tax stock options as labor earnings, the United States allow them to be taxed at a low capital gains tax rate. The interaction of favorable tax treatment and inherent advantages has led to near universal use of stock options in American venture capital deals, while this remains less common in Europe. The effective tax treatment of stock options depends on tax practices and is not readily observed using statutory tax rates. We asked the local offices of the tax consultancy firm PwC to calculate the effective tax rate for a standardized entrepreneurial case in 22 countries, finding that countries with favorable tax treatment have more VC activity. One advantage of this tax policy is that it narrowly targets entrepreneurial startups without requiring broad tax cuts.
    Keywords: Business taxation; Corporate governance; Entrepreneurship; Innovation; Institutions; Tax policy; Venture capital
    JEL: H25 H30 K34 L26
    Date: 2016–01–11
  27. By: Lechman, Ewa; Dominiak, Piotr
    Abstract: In literature, there is ongoing discussion whether entrepreneurial activity, approximated by, for instance, changes in self-employment, tends to behave pro-cyclically, counter-cyclically or rather is a-cyclical. Thus far, both theoretical and empirical evidence, where various multiple methodological approaches are used, does not provide clear answer to the latter; while widely offered explanations are scattered and lack robustness. Regarding the latter, some evidence may be traced in works of Kollinger and Thurik (2012), which using data for 22 OECD countries over the period 1972-2007, use Granger-causality tests to verify if entrepreneur activities are leading or lagging indicator over the business cycles; and their findings they show that entrepreneurship is leading indicator of the business cycle. Rampini (2004), using canonical real business cycle model, finds that entrepreneurship behaves pro-cyclical, which is associated with changes in risk aversion during respective phases of business cycle. Carmona et al. (2010), using quarterly data for self-employment and GDP in Spain and the United States, over the period 1987-2004, adopt the cross-correlations and VAR models to demonstrate that the hypothesis on pro-cyclicality of self-employment cannot be confirmed. At the same time, they present rather mixed results for various groups of self-employed. Klapper et al. (2014), using data for 109 countries over the period 2002-2012, find that entrepreneurial behavior demonstrates strong pro-cyclical patterns. More recent evidence may be also found in works of, inter alia, Parker (2002), Parker et al. (2012a,b), Milan et al. (2012), Baptista and Preto (2011). This paper is designed to contribute to the present state of the art, by presenting a novel methodological approach to identification of the relationship between the intensity of entrepreneurial activity and business cycle. Put differently, we aim unveil if entrepreneurship (approximated by changes in self-employment) behaves pro-cyclically, counter-cyclically or a-cyclically. To exemplify our new conceptual approach, we use quarterly data on deflated gross domestic product and self-employment. The empirical evidence presents the case of Italy. The period of analysis is restricted to the years 1995-2014. All statistics are extracted from OECD datasets on Annual Labor Force and Gross Domestic Product.
    Keywords: entrepreneurship, self-employment, vulnerability, small and medium sized enterprises, business cycle, economic growth
    JEL: A1 B41 D22 E3
    Date: 2016
  28. By: Simplice Asongu (Yaoundé/Cameroun)
    Abstract: The paper complements the scarce literature on knowledge economy (KE) in Africa by comparing KE dynamics within Africa in order to assess best and worst performers based on fundamental characteristics of the continent’s development. The five dimensions of the World Bank’s knowledge economy index (KEI) are employed, notably: education, information and communication technology, innovation and, economic incentives and institutional regime. The empirical evidence is based on a five-step novel approach with data from 53 African countries for the period 1996-2010. Limitations of the beta catch-up approach are complemented with the sigma convergence strategy. Based on the determined fundamental characteristics, computed dynamic benchmarks, policy syndromes and syndrome free scenarios we establish that: Landlocked, Low-income, Conflict-affected, sub-Saharan African, Non-oil-exporting and French civil law countries are generally more predisposed to lower levels of KE whereas; English common-law, Notlandlocked, Conflict-free, North African and middle-income countries are characteristics that predispose certain nations to higher KE. Broad and specific policy implications are discussed in detail.
    Keywords: Knowledge economy; Benchmarks; Policy syndromes; Catch-up; Africa
    JEL: O10 O30 O38 O55 O57
    Date: 2015–06
  29. By: Uwe Cantner; Ivan Savin; Simone Vannuccini
    Abstract: The pure model of replicator dynamics though providing important insights in the evolution of markets has not found much of empirical support. This paper extends the model to the case of firms vertically integrated in value chains. We show that i) by taking value chains into account, the replicator dynamics may revert its effect. In these regressive developments of market selection, firms with low fitness expand because of being integrated with highly fit partners, and the other way around; ii) allowing partner’s switching within a value chain illustrates that periods of instability in the early stage of industry life-cycle may be the result of an ’optimization’ of partners within a value chain providing a novel and simple explanation to the evidence discussed by Mazzucato (1998); iii) there are distinct differences in the contribution to market selection between the layers of a value chain, causing strategic advantages to firms in partnering.
    Keywords: innovation, replicator dynamics, returns to scale, value chain.
    JEL: C63 D24 L14 O32
    Date: 2016
  30. By: Kroll, Henning
    Abstract: In recent years, no small number of studies have emphasised the importance of "getting the policy mix right". What that term, "policy mix" relates to, however, remained less than clear, not least as a result of the absence of an appropriate database on regional policies. With the Regional Innovation Monitor repository, such a database has now become available. Using this novel source of data, this paper identifies specific types of "policy mixes" common among European regions as well as external and internal factors that determine regional policy makers' choices of policy mixes. Finally, it demonstrates that regions' choice of a particular policy mixes may have influenced their economic resilience during the recent years of crisis.
    Date: 2016
  31. By: Avdeitchikova, Sofia (The Ratio institute); Landström, Hans (Lund University)
    Abstract: Due to their importance for fostering high-growth entrepreneurship, business angels have over the last decades attracted considerable interest among policy-makers around the world. However, most of the policy initiatives to support business angel investing have been made without any strong empirical basis to guide them. Thus, the research results so far have done little to inform policy-makers regarding – what is the state of business angel market and what (if any) policy action is required? In this paper, we take one step in the direction of “making sense” of the existing evidence. We make a differentiation between the scope of the business angel investing and the significance of business angel investing and relate the recent empirical estimates of the business angel activity to the supply of venture finance on the one hand and the demand for venture finance on the other. In this respect, we move beyond talking about the scope of the business angel market and discuss the importance or potential impact of this source of finance for new and growing ventures.
    Keywords: business angels; entrepreneurship policy; indicators; supply-side; demand-side.
    JEL: G18 M13 M20 O16
    Date: 2014–12–31

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