nep-ino New Economics Papers
on Innovation
Issue of 2016‒04‒04
twenty-six papers chosen by
Uwe Cantner
University of Jena

  1. Sectoral Systems or Distance-to-the-Frontier Effects in Innovation? A Comparison of Three Medium-Technology Sectors in Germany, Italy and Spain By Fassio, Claudio
  2. Innovation and collaboration patterns between research establishments By Inoue, Hiroyasu; Nakajima, Kentaro; Saito, Yukiko Umeno
  3. University Innovation and the Professor's Privilege By Hans K. Hvide; Benjamin F. Jones
  4. Patent Settlements in the Pharmaceutical Industry: What Can We Learn From Economic Analysis? By Severin Frank; Wolfgang Kerber
  5. How Does Innovation Differ across Business Functions? Employee-level Analysis of a Multinational Company By Fulvio Castellacci; Magnus Gulbrandsen; Jarle Hildrum; E. Martinkenaite; Erlend Simensen; Vegard Tveito
  6. Open Innovation in clusters: The Portuguese case By Santos, Antonio Bob
  7. Time-period and industry heterogeneity of innovation activity in Japan By Yagi, Michiyuki; Managi, Shunsuke
  8. Creativity Under Fire: The Effects of Competition on Creative Production By Daniel P. Gross
  9. Food and gastronomy as elements of regional innovation strategies By Alessio CAVICCHI; Katerina CIAMPI STANCOVA
  10. Conditional Determinants of Mobile Phones Penetration and Mobile Banking in Sub-Saharan Africa By Asongu, Simplice
  11. The Impact of Entrepreneurship on Knowledge Economy in Africa By Asongu, Simplice; Tchamyou, Vanessa
  12. Taking the Leap: The Determinants of Entrepreneurs Hiring their First Employee By Fairlie, Robert; Miranda, Javier
  13. Monopoly VS Competition: Market Structure’s Impact on Product Innovation-with Endogenous Quality of New Product By Yang, Jinrui
  14. A study on the Finnish R&D tax credit of the years 2013–2014 By Kuusi, Tero; Pajarinen, Mika; Rouvinen, Petri; Valkonen, Tarmo
  15. Policy Brief: Exports and Innovation in Emerging Economies By Voeten, Jaap; Vannoorenberghe, Gonzague
  16. How can imitation counterbalance innovation? An ABM Bass model for competing products By Philippe Collard; Wilfried Segretier
  17. Agricultural knowledge and information system: Lessons learned in the postsocialist period in Romania and Bulgaria By Rusu, Marioara; Dirimanova, Violeta; Simionescu, Violeta Maria
  18. How Outward Looking is Smart Specialisation? Results from a survey on inter-regional collaboration in Smart Specialisation Strategies (RIS3) By Jens Sörvik; Inger Midtkandal; Chiara Marzocchi; Elvira Uyarra
  19. The causal effect of including standards-related documentation into patent prior art: evidence from a recent EPO policy change By Rudi Bekkers; Arianna Martinelli; Federico Tamagni
  20. Collective Efficacy of a Regional Network: Extending the Social Embeddedness Perspective of Entrepreneurship By Muhammad, Nabeel; Léo-Paul, Dana
  21. A Patent Race of Heterogeneous Firms and Its Application By Tetsugen Haruyama
  22. Population Aging and Inventive Activity By Andreas Irmen; Anastasia Litina
  23. Does the United States have a productivity slowdown or a measurement problem? By Byrne, David M.; Fernald, John G.; Reinsdorf, Marshall B.
  24. The Schumpeter Legacy By Accolley, Delali
  25. Input Diffusion and the Evolution of Production Networks By Vasco M. Carvalho; Nico Voigtländer; ;
  26. Is European Entrepreneurship in Crisis? By Naudé, Wim

  1. By: Fassio, Claudio (LUISS School of European Political Economy)
    Abstract: This study analyzes empirically whether the Sectoral Systems of Innovation or the Distanceto-the-Frontier perspective more accurately describe the patterns of innovation in medium technology sectors in Germany, Italy and Spain. While the Sectoral Systems of Innovation predicts the existence of technology-related similarities in innovative patterns in the same sectors across countries, the Distance-to-the Frontier suggests the existence of important differences related with the level of technological development of each national sector. Using Community Innovation Survey data and applying an econometric strategy specifically devised for innovations survey I am able to test a set of hypotheses directly related with each of the two theories. The results of the econometric analysis show that relevant differences across countries exist with respect to the intensity of R&D activities and the economic impact of different types of innovations, confirming the Distance-to-the-Frontier hypothesis, while great cross-country similarity emerges among the sources of knowledge used to develop new innovations, in line with the Sectoral Systems of Innovation framework. The results highlight the importance to take into account both frameworks for a useful analysis of innovation within sectors.
    Keywords: Sectoral Systems of innovation; Distance-to-the-Frontier; R&D and productivity
    JEL: L60 O31
    Date: 2014–05–20
  2. By: Inoue, Hiroyasu; Nakajima, Kentaro; Saito, Yukiko Umeno
    Abstract: This study empirically investigates the determinants of the productivity of knowledge creation by collaboration. By using the Japanese patent database, we extracted establishment-level patent co-invention information, and found the following results. First, we find an inverse U-shaped pattern in the relationship between the similarity of knowledge stocks and the quality of patents. That is, moderate diversity in knowledge stocks between establishments rather than extreme similarity or extreme diversity is important for knowledge creation. Second, focusing on the differences in technology class, we find inverse U-shaped pattern only in the high-technology class. This implies that the common knowledge between establishments is important in the invention of high technology patents. Third, we find that the physical distance between collaborating establishments has a negative effect on the quality of patents.
    Keywords: Diversity, Knowledge creation
    JEL: O31 R11 D23
    Date: 2016–03
  3. By: Hans K. Hvide; Benjamin F. Jones
    Abstract: National policies take varied approaches to encouraging university-based innovation. This paper studies a natural experiment: the end of the “professor’s privilege” in Norway, where university researchers previously enjoyed full rights to their innovations. Upon the reform, Norway moved toward the typical U.S. model, where the university holds majority rights. Using comprehensive data on Norwegian workers, firms, and patents, we find a 50% decline in both entrepreneurship and patenting rates by university researchers after the reform. Quality measures for university start-ups and patents also decline. Applications to literatures on university technology transfer, innovation incentives, and taxes and entrepreneurship are considered.
    JEL: L26 O31
    Date: 2016–03
  4. By: Severin Frank (University of Marburg); Wolfgang Kerber (University of Marburg)
    Abstract: Patent settlements between originator and generic firms in the pharmaceutical industry have been challenged by antitrust and competition authorities in the U.S. and the EU. Particularly settlements with large "reverse payments" to generic firms raise the concern of collusive behaviour for protecting weak patents and delaying price competition through generic entry and therefore harming consumers. However, it is still heavily disputed under what conditions such patent settlements are anticompetitive and violate antitrust rules. This article scrutinizes critically what economic analysis has so far contributed to our knowledge about the effects of these patent settlements and the possible rules for their antitrust treatment. An important claim of this paper is that the problem of patent settlements can only be understood, if we analyze it not only from a narrow antitrust perspective but also take into account its deep interrelationship with the problems (and the economics) of the patent system. Therefore we identify three different channels of effects, how patent settlements can influence consumer welfare: (1) price effects, (2) innovation incentive effects, and (3) effects via the incentives to challenge weak patents. The paper critically analyzes the existing economic studies and identifies a number of research gaps, especially also in regard to trade offs between different effects. It also suggests that policy solutions for these patent settlements should also be sought in combination with patent law solutions.
    Keywords: Patent settlements, probabilistic patents, weak patents, pharmaceutical industry, generic competition
    JEL: K40 L40 O34
    Date: 2016
  5. By: Fulvio Castellacci (TIK Centre, University of Oslo); Magnus Gulbrandsen (TIK Centre, University of Oslo); Jarle Hildrum (Telenor Research); E. Martinkenaite (Telenor Research); Erlend Simensen (TIK Centre, University of Oslo); Vegard Tveito (TIK Centre, University of Oslo)
    Abstract: This paper investigates how innovation differs across a company’s business functions. We argue that employees working in different functions of a corporation (e.g. marketing, R&D, top management) differ in terms of the types of innovation they are engaged in, the strategies they adopt to organize their innovative activities, and the factors that spur or hamper their innovation performance. Little is known about this issue, however, which we investigate by making use of a rich novel dataset at the employee-level for the multinational company Telenor. We combine a large survey among nearly 16,000 Telenor employees with an extensive qualitative data collection through interviews in different business units and functions. The empirical results point out the relevance of climate and culture, quality-oriented tasks and external interactions as the key factors supporting employees’ innovation activities. The effects of these factors on innovation are substantially different across business functions of the company.
    Date: 2016–03
  6. By: Santos, Antonio Bob
    Abstract: Given the lack of academic research linking open innovation with the clusters literature, this paper analyze the determinants of open innovation adoption in clusters, based on the Portuguese case. This paper is structured as follows: 1) introduction; 2) methodology; 3) theoretical analysis of clusters and open innovation; 4) cluster policy evolution in Portugal; 5) results of an online questionnaire launched to the Portuguese clusters members, identifying the main constraints for the development of open innovation activities; 6) conclusions and implications. The factors that hinder the use of open innovation by clusters members are related to internal problems (e.g., management skills) and external factors (e.g., funding access). This paper also allows the understanding of the importance of belonging to a cluster for the usage of open innovation activities, contributing to the discussion of the necessity of having a more open innovation policy approach in Portugal.
    Keywords: open innovation, clusters, cluster policy, innovation policy
    JEL: O25 O31 O32 O38
    Date: 2015
  7. By: Yagi, Michiyuki; Managi, Shunsuke
    Abstract: This study examines time-period and industry heterogeneity of innovation activity in Japan from 1964 to 2006 using patent data and non-consolidated firm data. This study focuses on the following three periods, based on changes of the Japanese patent system, in and non-manufacturing industries: I) before 1976; II) 1976–1987; and III) after 1988. Specifically, for each degree of patent protection in each industry, this study examines how innovation activities are affected by the following determinants found in the innovation literature: size, market competition, and search variety (depth and scope). Empirical results show that when using the entire sample from 1964 to 2006, the size effect on innovation is significantly positive. In addition, the effects of market competition and search variety on innovation are inverse-U. When considering time-period heterogeneity, the effects of size and search variety are similar to the entire period; however, the inverse-U effect of market competition is broken after 1988. On the other hand, when considering industry heterogeneity, the effects of size and search variety are similar to the entire sample, but differ between manufacturing and non-manufacturing industries. In addition, the effect of market competition is not statistically significant in either industry.
    Keywords: Patent; Inverse-U relationship; Competition; Search for variety
    JEL: L10 L40 O31
    Date: 2016
  8. By: Daniel P. Gross (Harvard Business School, Strategy Unit)
    Abstract: Though fundamental to innovation and essential to many industries and occupations, the creative act has received limited attention as an economic behavior and has historically proven difficult to study. This paper studies the incentive effects of competition on individuals' creative production. Using a sample of commercial logo design competitions, and a novel, content-based measure of originality, I find that competition has an inverted-U effect on creativity: some competition is necessary to induce agents to produce radically novel, untested ideas over incrementally tweaking their earlier work, but heavy competition drives them to stop investing altogether. The results are consistent with economic theory and reconcile conflicting evidence from an extensive literature on the effects of competition on innovation, with implications for R&D policy, competition policy, and organizations in creative or research industries.
    Keywords: Creativity; Incentives; Tournaments; Competition; Radical vs. incremental innovation
    JEL: D81 D82 D83 L4 M52 M55 O31 O32
    Date: 2016–03
  9. By: Alessio CAVICCHI (University of Macerata, Department of Education, Cultural Heritage and Tourism); Katerina CIAMPI STANCOVA (European Commission – JRC - IPTS)
    Abstract: The paper discusses recent innovation and diversification paths in agro-food, specifically the linkage between food, territory and branding, the emerging phenomenon of Food Cities and increasing interest in healthier and more sustainable food products. It also focuses on EU policies and instruments in support of R&I activities in agro-food and explores agro-food domain within the context of smart specialisation.
    Keywords: EU policies, regional policies, regional innovation, smart specialisation, agro-food, gastronomy, branding
    Date: 2016–03
  10. By: Asongu, Simplice
    Abstract: Using twenty-five policy variables, we investigate determinants of mobile phone/banking in 49 Sub-Saharan African countries with data for the year 2011. The determinants are classified into six policy categories, notably: macroeconomic, business/bank, market-related, knowledge economy, external flows and human development. The empirical evidence is based on contemporary and non-contemporary Quantile regressions. The following implications are relevant to the findings. First, mobile phone penetration is positively correlated with: (i) education, domestic savings, regulation quality and patent applications, especially at low initial levels of mobile penetration; (ii) bank density; (iii) urban population density and (iv) internet penetration. Second, the use of the mobile to pay bills is positively linked with: (i) trade and internet penetration, especially in contemporary specifications and (ii) remittances and patent applications, especially at low initial levels of the dependent variable. Third, using the mobile to send/receive money is positively correlated with: internet penetration and human development, especially in the contemporary specifications. Fourth, mobile banking is positively linked with: (i) trade in contemporary specifications; (ii) remittances and patent applications at low initial levels of the dependent variable and (iii) internet penetration and human development, with contemporary threshold evidence. The policy implications are articulated with incremental policy syndromes.
    Keywords: Mobile phones; Mobile banking; Development; Africa
    JEL: G20 L96 O11 O33 O55
    Date: 2015–06
  11. By: Asongu, Simplice; Tchamyou, Vanessa
    Abstract: Purpose - The paper assesses how entrepreneurship affects knowledge economy (KE) in Africa. Design/methodology/approach – Entrepreneurship is measured by indicators of starting, doing and ending business. The four dimensions of the World Bank’s index of KE are employed. Instrumental variable panel fixed effects are applied on a sampled of 53 African countries for the period 1996-2010. Findings –The following are some findings. First, creating an enabling environment for starting business can substantially boost most dimensions of KE. Second, doing business through mechanisms of trade globalisation has positive effects from sectors that are not ICT and High-tech oriented. Third, the time required to end business has negative effects on KE. Practical implications – Our findings confirm the narrative that the technology in African countries at the moment may be more imitative and adaptive for reverse-engineering in ICTs and high-tech products. Given the massive consumption of ICT and high-tech commodities in Africa, the continent has to start thinking of how to participate in the global value chain of producing what it consumes. Originality/value – This paper has a twofold motivation. First, given the ambitions of African countries of moving towards knowledge based economies, the line of inquiry is timely. Second, investigating the nexus may have substantial poverty mitigation and sustainable development implications. These entail inter alia: the development of technology with value-added services; enhancement of existing agricultural practices; promotion of conditions that are essential for competitiveness and adjustment of globalization challenges.
    Keywords: Entrepreneurship; Knowledge Economy; Development; Africa
    JEL: L59 O10 O20 O30 O55
    Date: 2015–02
  12. By: Fairlie, Robert; Miranda, Javier
    Abstract: Job creation is one of the most important aspects of entrepreneurship, but we know relatively little about the hiring patterns and decisions of startups. Longitudinal data from the Integrated Longitudinal Business Database (iLBD), Kauffman Firm Survey (KFS), and the Growing America through Entrepreneurship (GATE) experiment are used to provide some of the first evidence in the literature on the determinants of taking the leap from a non-employer to employer firm among startups. Several interesting patterns emerge regarding the dynamics of non-employer startups hiring their first employee. Hiring rates among the universe of non-employer startups are very low, but increase when the population of non-employers is focused on more growth-oriented businesses such as incorporated and EIN businesses. If non-employer startups hire, the bulk of hiring occurs in the first few years of existence. After this point in time relatively few non-employer startups hire an employee. Focusing on more growth- and employment-oriented startups in the KFS, we find that Asian-owned and Hispanic-owned startups have higher rates of hiring their first employee than white-owned startups. Female-owned startups are roughly 10 percentage points less likely to hire their first employee by the first, second and seventh years after startup. The education level of the owner, however, is not found to be associated with the probability of hiring an employee. Among business characteristics, we find evidence that business assets and intellectual property are associated with hiring the first employee. Using data from the largest random experiment providing entrepreneurship training in the United States ever conducted, we do not find evidence that entrepreneurship training increases the likelihood that non-employers hire their first employee.
    Keywords: Business, Social and Behavioral Sciences, entrepreneurship, job creation, Kauffman Firm Survey, iLBD, startups, entrepreneurship training, small business, GATE experiment
    Date: 2016–03–24
  13. By: Yang, Jinrui
    Abstract: This paper focuses on innovation for new product with exogenously determined horizontal difference from initial product which is provided either by a monopolist or by competitive firms. The innovator, no matter initially under monopoly or competition, will be unique producer of new product and need decide quality of new product which is correlated with investment for innovation. The paper through a model shows that for horizontally similar new product, competition is superior to monopoly to innovate. However, for typical horizontally differentiated product, a monopolist would choose higher quality and invest more than a competitive innovator does if innovation is complex, but brings about lower endogenous quality than the innovator initially under competition does if innovation is easy. Monopoly can support sales of new product with higher price of initial product, but also hamper product innovation to avoid erosion of initial profit. If it is presumed that complexity of innovation is always huge at the beginning, monopoly is more likely to generate innovation for horizontally different product while competition for similar product, respectively compared to each other.
    Keywords: product innovation; horizontal difference; monopoly; competition; complexity of innovation
    JEL: D8 L1 O3 O31
    Date: 2016–03–17
  14. By: Kuusi, Tero; Pajarinen, Mika; Rouvinen, Petri; Valkonen, Tarmo
    Abstract: In this report, we analyze the Finnish R&D tax incentive scheme of the years 2013 and 2014. Under the scheme, firms were eligible for double corporate tax deduction incentive on labor expenses incurred for undertaking R&D activities. Our report consists of a literature review, an empirical analysis of the Finnish register data, and an internet survey. We find that the scheme failed to reach its anticipated impact. The deduction was claimed far less than expected, the actual tax loss being only 8 % of the expected tax loss. Furthermore, our analysis suggests that the R&D tax incentive failed to reach clear, blind spots in the current Finnish, mainly direct-subsidy-based innovation system. Although the scheme’s design does not allow an unambiguous analysis of its impact on the R&D expenditure, our tentative results suggests that its impact remained rather small. The previous, international literature shows that the R&D tax incentives have an increasing effect on the R&D expenditures, but the impact tends not to exceed the amount of the tax subsidy. Based on our results it is unlikely that even a better-designed R&D tax deduction scheme would bring great value-added to the current, Finnish innovation system.
    Keywords: R&D, tax credits
    JEL: O38 H25
    Date: 2016–03–11
  15. By: Voeten, Jaap (Tilburg University, School of Economics and Management); Vannoorenberghe, Gonzague (Tilburg University, School of Economics and Management)
    Date: 2016
  16. By: Philippe Collard (I3S - Laboratoire d'Informatique, Signaux, et Systèmes de Sophia Antipolis - UNS - Université Nice Sophia Antipolis - CNRS - Centre National de la Recherche Scientifique); Wilfried Segretier (IDC - LAMIA - Laboratoire de Mathématiques Informatique et Applications - UAG - Université des Antilles et de la Guyane)
    Abstract: The general context of this paper is the Bass model which presented a theory of the adoption of new products. We propose an agent based modelling to allow to model the respective grow of competing products. We assume that there is competition for the same market among two trademarks: each one has its own rate of spontaneous innovation and its own rate of imitation. This paper deals with the relative weight of these competing behaviors on the global dynamics; in particular, we ask the question of the equivalence between mass media influence and word-of-mouth effect.
    Keywords: Agent based modelling, Bass model, Marketing, Competing products
    Date: 2014–05–28
  17. By: Rusu, Marioara; Dirimanova, Violeta; Simionescu, Violeta Maria
    Abstract: The new challenges facing Eastern European rural and agricultural sector impose, among other things, a review of the links between knowledge production and its use to promote innovation. Given that, agriculture is the main source of livelihood for a large part of the rural population in Romania and Bulgaria and its development requires multiple interventions that include, inter alia, ensuring effective transfer of agricultural modern knowledge, technologies, methods and practices to the direct beneficiaries - farmers. Both in Romania and Bulgaria, agricultural knowledge generation (research), transfer (extension) and use (farmers as end users) passed during the post-socialist period through important changes. The main objective of this paper is to analyze the Agricultural Knowledge and Information System (AKIS), in the two countries, in terms of pursued objectives, structure and performed functions. Based on this analysis the authors synthesize the main lessons learned during the post-socialist period in the two countries, and outline the future direction of development of agricultural knowledge, production, transfer and use them in agreement with European requirements.
    Keywords: AKIS, agricultural extension, agricultural research and education, Romania, Bulgaria
    JEL: D83 O12 O57 Q1
    Date: 2015–11–20
  18. By: Jens Sörvik (European Commission – JRC - IPTS); Inger Midtkandal (Royal Norwegian Embassy, New Delhi (India), commercial section Innovation Norway); Chiara Marzocchi (Manchester Institute of Innovation Research, Manchester Business School, Manchester (UK)); Elvira Uyarra (Manchester Institute of Innovation Research, Manchester Business School, Manchester (UK))
    Abstract: Smart specialisation (S3) emphasises the identification of niches, cross-sectorial innovation and solving societal challenges. With this comes a need for an outward-looking dimension, to find a region’s potential advantages in international markets, and to identify partners to help deliver new solutions and solve common challenges. This is the case not only for industry and academia, but also for regional policy-makers who need to engage in inter-regional collaboration processes. The purpose of the survey presented in this report was to increase our understanding of the factors underlying successful inter-regional cooperation within S3. It builds on an analytical framework to better understand the multiple dimensions of inter-regional collaboration, developed in a previous working paper (Uyarra et al., 2014). The objectives of this study were to increase our knowledge of inter-regional collaboration in research and innovation (R&I), with the aim of supporting regions and Member States in their collaborative efforts in S3, but also to inform the S3 Platform (S3P) and other European Commission (EC) services on how to best support inter-regional collaboration in R&I policy. The answers from the survey respondents indicate that the EU’s new cohesion policy has led some regions and Member States to change their behaviour in collaboration in R&I policy. More than half of the respondents reported having prior collaboration experiences, of which 67 % reported increased collaboration in the previous 2 years and 30 % reported a stable level of collaborative effort. The factors driving collaboration and the perceived benefits of collaboration include information sharing, meeting a new orientation of regional policy and supporting linkages between R&I and industry. Collaboration largely involves low-intensity activities that bring direct and immediate benefits. Collaboration is most prominent in the first steps of the RIS3 process, analysis, design and decision-making. The criteria underlying the choice of partners are in line with the RIS3 concept; they are based on industry composition (similar or complementary), research capabilities that are complementary or similar, as well as similar societal challenges. In contrast, the survey findings regarding the geographical location of partnering regions, as regions most often collaborate with other regions in their own country. The main barriers to collaboration seem to be inter-related and include lack of resources, insufficient political commitment, insufficient engagement of regional stakeholders and lack of clarity of objectives. One interpretation is that it is challenging to communicate clearly to stakeholders and politicians the outcomes of an intervention, with the result that stakeholders are unwilling commit or mobilise resources. The rationale for innovation policy interventions quite often is to support activities that provide indirect and dynamic benefits that are not easily measured, divisible or attributable to individual actors or activities. In contrast, the least problematic barriers are socio-cultural issues, legal or administrative barriers and lack of trust. It is recommended that regions and Member States better prepare the evidence base for their projects and improve the materials they use to communicate to stakeholders the potential benefits of collaboration and how to achieve them. Regions should also engage more with private sector actors and civil society. The paper indicates the importance of the EC communicating a more complex picture of the dynamics of inter-regional collaboration. An oversimplification of the message might lead to underinvestment and less intensive collaboration than that which is needed to address the larger challenges with potential for longer-term benefits for Europe. The recommendations for S3P include that it should focus on learning activities and support the initiation of collaborative processes. However, it appears that the regions and Member States want S3P support to implement thematic collaboration, but then to be left to themselves to carry it out. Likewise, respondents considered it important that S3P should provide guidance, act as a knowledge hub and offer expert assistance. This indicates that S3P should continue to develop knowledge around inter-regional collaboration and assist regions and Member States in establishing and developing this.
    Keywords: Inter-regional collaboration, Smart Specialisation, innovation policy, regional development, dimensions of collaboration, transnational collaboration.
    Date: 2016–03
  19. By: Rudi Bekkers; Arianna Martinelli; Federico Tamagni
    Abstract: The aim of this paper is to investigate the causal effect of a recent attempt undertaken by the EPO to improve the quality of the patent granting process. To do so we examine a policy change that aimed at including the information revealed during the standardisation-setting process into the official definition of prior art. All the empirical analysis consistently support that the policy was successful. Indeed, we find a negative and strongly significant reduction in the granting rate, suggesting that the process of patent granting has become more careful and selective after the policy implementation.
    Keywords: Quality of patent granting, technological standards, policy evaluation
    Date: 2016–03–27
  20. By: Muhammad, Nabeel; Léo-Paul, Dana
    Abstract: Through participatory observation and in-depth interviews with members of the Memon community, in Pakistan, this paper probes into how the collective efforts of a regional network can facilitate entrepreneurship, social enterprises and regional development. The setting is a developing country that is lacking a large-scale entrepreneurial culture. Despite caste differences, Memons throughout the Karachi region meet and share experiences with other Memon members of their network – including Memons from unlike castes. Within this regional network Memons help one another. They give preferential treatment to other Memons of their regional network and sometimes also to co-ethnics from other regional networks. Entrepreneurship is encouraged by a collective effort without suppressing individual goals; this extends the social embeddedness perspective of entrepreneurship allowing for a collective efficacy along a regional network, facilitating entrepreneurship among individuals.
    Keywords: collective efficacy, community, cultural capital, entrepreneurship, Memon, Pakistan, participatory observation, regional development, regional network
    JEL: I25 L26 L31 N0 Q01 R11
    Date: 2015–10
  21. By: Tetsugen Haruyama (Graduate School of Economics, Kobe University)
    Date: 2016–03
  22. By: Andreas Irmen (CREA, Université du Luxembourg); Anastasia Litina (CREA, Université du Luxembourg)
    Abstract: This research empirically establishes and theoretically motivates the hypothesis that population aging has a hump-shaped effect on inventive activity. We estimate this hump-shaped relationship in a panel of 33 OECD countries over the period 1960-2012. The increasing part of the hump captures the awareness that population aging requires inventive activity to guarantee current and future standards of living. The decreasing part reflects the tendency of aging societies to lose dynamism and the willingness to take risks. Policy-wise our analysis suggests that raising the awareness of individuals about the consequences of population aging may facilitate the adoption of strategies and policies encouraging inventive activity and economic growth.
    Keywords: Population Aging, Inventive Activity, Panel Estimation
    JEL: J11 O31 O50 O57
    Date: 2016
  23. By: Byrne, David M. (Federal Reserve Board); Fernald, John G. (Federal Reserve Bank of San Francisco); Reinsdorf, Marshall B. (International Monetary Fund)
    Abstract: After 2004, measured growth in labor productivity and total-factor productivity (TFP) slowed. We find little evidence that the slowdown arises from growing mismeasurement of the gains from innovation in IT-related goods and services. First, mismeasurement of IT hardware is significant prior to the slowdown. Because the domestic production of these products has fallen, the quantitative effect on productivity was larger in the 1995-2004 period than since, despite mismeasurement worsening for some types of IT—so our adjustments make the slowdown in labor productivity worse. The effect on TFP is more muted. Second, many of the tremendous consumer benefits from smartphones, Google searches, and Facebook are, conceptually, non-market: Consumers are more productive in using their nonmarket time to produce services they value. These benefits do not mean that market-sector production functions are shifting out more rapidly than measured, even if consumer welfare is rising. Moreover, gains in non-market production appear too small to compensate for the loss in overall wellbeing from slower market-sector productivity growth. Third, other measurement issues we can quantify (such as increasing globalization and fracking) are also quantitatively small relative to the slowdown. Finally, we suggest high-priority areas for future research.
    Date: 2016–03–01
  24. By: Accolley, Delali
    Abstract: This is a biography of Joseph Alois Schumpeter, the father of both the concept of creative destruction and the elite theory of democracy. The influence of his works has gone beyond the Economics field. He has influenced both economists through his explanations of business cycles and innovations and Political Scientists through his theories of democracy. Recently, in the wake of the 2008 financial crisis, Schumpeter's thesis on the self-destruction of capitalism has been revisited by economists.
    Keywords: Schumpeter, creative destruction, innovation
    JEL: B3
    Date: 2011–03–20
  25. By: Vasco M. Carvalho; Nico Voigtländer; ;
    Abstract: The adoption and diffusion of inputs in the production network is at the heart of technological progress. What determines which inputs are initially considered and eventually adopted by innovators? We examine the evolution of input linkages from a network perspective, starting from a stylized model of network formation. Producers direct their search for new inputs along vertical linkages, screening the network neighborhood of existing suppliers to identify potentially useful inputs. A subset of these is then adopted, following a tradeoff between the benefits from input variety and the costs of customizing new inputs. Guided by this framework, we document a novel stylized fact at both the sector and the firm level: producers are more likely to adopt inputs that are already used – directly or indirectly – by their current suppliers. In particular, using disaggregated input-output data, we show that initial network proximity of a sector in 1967 significantly increases the likelihood of adoption throughout the subsequent four decades. A one-standard deviation decrease in network distance is associated with an increase in the adoption probability by one third to one half. Similarly, U.S. firms are significantly more likely to develop new input linkages among their suppliers’ network neighborhood. Our results imply that the existing production network plays a crucial role in the diffusion of inputs and the evolution of technology.
    Keywords: Input adoption, directed network search, dynamics of production networks
    JEL: O33 C67 D57 L23
    Date: 2015–03–10
  26. By: Naudé, Wim (Maastricht University)
    Abstract: The European Commission has adopted an Entrepreneurship 2020 Action Plan as its answer to challenges brought by the gravest economic crisis in the last 50 years. Governments of European countries all habour high expectations that entrepreneurship will contribute towards ending the continent's economic malaise. In this article I argue that these expectations may be disappointed because (i) entrepreneurship promotion is a last-resort policy, (ii) entrepreneurs are being overestimated, and (iii) entrepreneurs are too often allowed to capture policy. These reasons are indicative that that in addition to its euro and refugee crises, Europe is suffering from an entrepreneurship crisis. Entrepreneurs are increasingly older and are faring less well in terms of earnings compared to wage earners. Small businesses are not creating sufficient jobs, they are not raising labour productivity, and immigrant-entrepreneurs are not productively assimilated. Big businesses are largely a legacy of the past, and resorting more and more to lobbying. When they innovate it is often to replace labour. Hence, given that Europe faces rising unemployment, growing numbers of unassimilated migrants, and more pensioners - and all in the face of stagnating productivity growth - the conclusion is that entrepreneurs have failed to reduce the dependency burden on those who do work. This puts immense strain on European public finances that are already fragile after the financial crisis. Demographic changes and institutional shortcomings are thus at the core of the entrepreneurship crisis in Europe.
    Keywords: entrepreneurship, Europe, development
    JEL: L53 M13 O52
    Date: 2016–03

This nep-ino issue is ©2016 by Uwe Cantner. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.