nep-ino New Economics Papers
on Innovation
Issue of 2016‒04‒09
thirty-two papers chosen by
Uwe Cantner
University of Jena

  1. Key Success Drivers in Public Research Grants: Funding the Seeds of Radical Innovation in Academia? By Albert Banal-Estañol; Inés Macho-Stadler; David Pérez-Castrillo
  2. Reconciling the Firm Size and Innovation Puzzle By Anne Marie Knott; Carl Vieregger
  3. Are patients and relatives the better innovators? The case of medical smartphone applications By Goeldner, Moritz; Herstatt, Cornelius
  4. The path of innovation: purchasing and supplier involvement into new product development By Davide Luzzini; Markus Amann; Federico Caniato; Michael Essig; Stefano Ronchi
  5. Environmental Policy and Technological Innovation in Shipbuilding By James Corbett; Nick Johnstone; Karin Strodel; Laurent Daniel
  6. Inventor diasporas and the internationalization of technology By Miguelez,Ernest
  7. Localization of Knowledge-creating Establishments By Inoue, Hiroyasu; Nakajima, Kentaro; Saito, Yukiko Umeno
  8. Environmental Regulation and Choice of Innovation in Oligopoly By Iwata, Hiroki
  9. How R&D Expenditures Influence Total Factor Productivity and Technical Efficiency? By Alexander Yu. Apokin; Irina Ipatova
  10. The Pre-Great Recession Slowdown in Productivity. By G. Cette; J. Fernald; B. Mojon
  11. The Geography of Inventiveness in the Primary Sector: Some Initial Results for New Zealand, 1880-1895 By Rebecca Williams; Les Oxley
  12. Endogenous Growth, Green Innovation and GDP Deceleration in a World with Polluting Production Inputs By Kerstin Burghaus; Peter Funk
  13. Towards modelling of innovation systems: An integrated TIS-MLP approach for wind turbines By Walz, Rainer; Köhler, Jonathan Hugh; Lerch, Christian
  14. Technology entry in the presence of patent thickets By Bronwyn H. Hall; Christian Helmers; Georg von Graevenitz
  15. The integration of place-based social innovations into the EU social agenda By Gert Verschraegen; Sebastiano Sabato
  16. Strategic Entrepreneurship and Knowledge Spillovers: Spatial and Aspatial Perspectives By Tavassoli, Sam; Bengtsson, Lars; Karlsson, Charlie
  17. Outsourced R&D and GDP Growth By Anne Marie Knott
  18. Clans, Guilds, and Markets: Apprenticeship Institutions and Growth in the Pre-Industrial Economy By David de la Croix; Matthias Doepke; Joel Mokyr
  19. What’s the price of consulting? Effects of public and private sector consulting on academic research. By Fudickar, Roman; Hottenrott, Hanna; Lawson, Cornelia
  20. Competition, Innovation, and the Number of Firms By Pedro Bento
  21. Regional Innovation Systems in China: A long-term perspective based on patent data at the prefectural level By Giorgio Prodi; Federico Frattini; Francesco Nicolli
  22. Life-Cycle Saving, Bequests, and the Role of Population in R&D-based Growth By Bharat Diwakar; Gilad Sorek
  23. Performance Feedback in Competitive Product Development By Daniel P. Gross
  24. Human-Capital Spillover, Population, and Economic Growth By Bharat Diwakar; Gilad Sorek
  25. Growth and welfare effects of intellectual property rights when consumers differ in income By Christian Kiedaisch
  26. The Diversity of Entrepreneurial Regimes in Europe By Dilli, Selin; Elert, Niklas
  27. The State of American Entrepreneurship: New Estimates of the Quantity and Quality of Entrepreneurship for 15 US States, 1988-2014 By Jorge Guzman; Scott Stern
  28. Business models, diffusion of innovation and imitation: The case of online press By LYUBAREVA, Inna; ROCHELANDET, Fabrice; ETIENNE, Jean-Michel
  29. The legacy of Friedrich List: The expansive reproduction system and the Korean history of industrialization By Jun, Bogang; Gerybadze, Alexander; Kim, Tai-Yoo
  30. A note on innovations from subjective ideas maps By Goorha, Prateek
  31. Are Jobs More Polarized in ICT Firms? By Böckerman, Petri; Laaksonen, Seppo; Vainiomäki, Jari
  32. The role of production factor quality and technology diffusion in 20th century productivity growth. By A. Bergeaud; G. Cette; R. Lecat

  1. By: Albert Banal-Estañol; Inés Macho-Stadler; David Pérez-Castrillo
    Abstract: We study what makes a research grant application successful in terms of ability, type of research, experience, and demographics of the applicants. But our main objective is to investigate whether public funding organizations support the teams that are most likely to undertake transformative or "radical" research. Making use of the literature on recombinant innovation, we characterize such "radical teams" as those formed by eclectic and non-usual collaborators, and those that are heterogeneous and scientifically diverse. Our results, using data from the UK's Engineering and Physical Sciences Research Council (EPSRC), show that the more able, more basic, and more senior researchers, working in a top university, are more likely to be successful. But, radical teams are less likely to be funded by funding bodies. Our analysis of the research output of the awarded projects suggests that, voluntarily or involuntarily, the evaluation process in these organizations is biased against radical teams.
    Keywords: radical innovation, funding organizations, research grants
    JEL: O32 I23
    Date: 2016–03
  2. By: Anne Marie Knott; Carl Vieregger
    Abstract: Since Schumpeter, there has been a long-standing debate regarding the optimal firm size for innovation. Empirical results have settled into a puzzle: R&D spending increasing with scale while R&D productivity decreases with scale. Thus large firms appear irrational. We propose the puzzle stems from the fact that product and patent counts undercount large firm innovation. To test that proposition we use recently available NSF BRDIS survey data of firms R&D practices as well as a broader measure of R&D productivity. Using the broader measure, we find that both R&D spending and R&D productivity increase with scale—thus resolving the puzzle. We further find that while large firms and small firms differ in the types of R&D they conduct, there is no type whose returns decrease in scale—there are merely types for which the small firm penalty is less severe.
    Date: 2016–03
  3. By: Goeldner, Moritz; Herstatt, Cornelius
    Abstract: Prior research has shown that users are a valuable resource for identifying new product or service innovations. However, few scholars have analyzed how different user types such as intermediate and end users are interacting along the value chain of an emerging new product and how they contribute to innovation. Further, user innovation success in the market is often unclear, since very few innovations diffuse directly to customers from the user innovators. We analyze different innovative contributions of intermediate and end users that have been sold and evaluated within the healthcare sector. Several studies in the healthcare sector have shown that healthcare professionals are an important source of innovation. Yet, to date, companies and scholars have paid little attention to the end users of medical devices: patients. We focus on the innovative behavior of patients and their relatives, their motivations, and their contributions to improving the quality of their own and ultimately of other patients' therapy. We analyze innovations of producers, healthcare professionals, patients, and relatives in the German, UK, and U.S. markets for medical smartphone apps (Apple App Store) and conduct 16 semi-structured interviews. Our findings show that users develop around 46% of all medical smartphone applications (apps). We analyzed 510,229 user ratings and found that apps designed by patients, relatives, and healthcare professionals are rated significantly better by App Store customers than apps created by professional software companies. Apps developed by patients' relatives achieve significantly more downloads and generate on average three times higher revenues per year. The initial medical smartphone app developments in the early days of the Apple App Store were mainly triggered by healthcare professionals. The interview data shows the extensive medical knowledge of patients and their relatives, particularly those with chronic diseases. The overall findings are in line with a current literature stream that indicates that patients are gaining more influence on their treatment, are better informed, and are taking more actions to increase their quality of life. Commercial healthcare companies should take advantage of this and should consider including patients and relatives into their product development.
    Keywords: user innovation,patient,relative,healthcare professional,m-health,medical,smartphone applications,app,apps
    Date: 2016
  4. By: Davide Luzzini (Audencia Recherche - Audencia); Markus Amann (Bundeswehr University Munich); Federico Caniato (Politecnico di Milano [Milan]); Michael Essig (Bundeswehr University Munich); Stefano Ronchi (Politecnico di Milano [Milan])
    Abstract: This paper aims to investigate the effects of supplier collaboration on the firm innovation performance as well as the enabling characteristics of the purchasing function. This is an original contribution as few papers empirically test the effect of supplier collaboration (meant as supplier involvement, development, and integration) on innovation performance and –simultaneously – the contribution of strategic sourcing activities and purchasing knowledge. Also, we explore the technological uncertainty of the purchase as an important contingent factor that might influence the firm’s innovation strategy and the emphasis on supplier collaboration or strategic sourcing. Towards this end, we develop a theoretical framework and test it through a survey conducted on a sample of 498 companies worldwide. Results show that innovation, as a category priority, does lead to emphasize supplier collaboration and strategic sourcing which, in turn, ensure better innovation performance. Empirical evidence also shows that, on the one hand, adequate purchasing (managers) knowledge enables greater supplier collaboration and strategic sourcing; on the other hand, technological uncertainty put greater emphasis on innovation strategy as well as on strategic sourcing.
    Keywords: Innovation, Supplier collaboration, Strategic sourcing, Purchasing knowledge, Technological uncertainty
    Date: 2015
  5. By: James Corbett; Nick Johnstone; Karin Strodel; Laurent Daniel
    Abstract: This paper examines the relationship between environmental policy and “green” innovation in shipbuilding. The primary motivating question of this work is whether there is evidence of: i) technology push from innovation that enables environmental policy initiatives; and/or, ii) policy pull that induces innovation leading to “green” ships. This paper focuses on four environmental categories of technological innovation in the shipbuilding industry, encompassing oil spill recovery, emissions control, climate change mitigation and ballast water treatment. The analysis draws upon documents filed at the International Maritime Organization (IMO) to proxy for policy measures, and uses patent data of the Worldwide Statistical Patent Database, maintained by the European Patent Office (EPO), to account for innovation. Our results show a similar trend between patent activity and IMO document submissions over the years 1998 to 2012 for the two environmental categories, climate change mitigation and emissions control. The key contribution of this work are to provide more insights into environmental policy in shipbuilding and its role in innovation activity, as well as to develop a rich dataset focused on IMO policies aimed at encouraging improved environmental performance by ships.
    Date: 2016–03–25
  6. By: Miguelez,Ernest
    Abstract: This paper documents the influence of diaspora networks of highly-skilled individuals -- that is, inventors -- on international technological collaborations. Using gravity models, it studies the determinants of the internationalization of inventive activity between a group of industrialized countries and a sample of developing and emerging economies. The paper examines the influence exerted by skilled diasporas in fostering cross-country co-inventorship as well as R&D offshoring. The study finds a strong and robust relationship between inventor diasporas and different forms of international co-patenting. However, the effect decreases with the level of formality of the interactions. Interestingly, some of the most successful diasporas recently documented -- namely, Chinese and Indian ones -- do not govern the results.
    Keywords: E-Business,ICT Policy and Strategies,Technology Industry,Real&Intellectual Property Law,Population Policies
    Date: 2016–04–04
  7. By: Inoue, Hiroyasu; Nakajima, Kentaro; Saito, Yukiko Umeno
    Abstract: This study investigates the localization of establishment-level knowledge creation using data from a Japanese patent database. Using distance-based methods, we obtain the following results. First, Japanese patent-creating establishments are significantly localized at the 5% level, with a localization range of approximately 80 km. Second, localization is observed for all patent technology classes, and the extent of localization has a positive relationship with the level of technology measured by R&D investment. Finally, the extent of localization is stronger for establishments that are more productive in terms of both the number of patents and the number of citations received, i.e., quantitatively and qualitatively. These results indicate that geographical proximity is important for knowledge spillover, particularly for knowledge-demanding establishments.
    Keywords: Knowledge spillover, Agglomeration, Micro-geographic data
    JEL: R11
    Date: 2016–03
  8. By: Iwata, Hiroki
    Abstract: This study investigates the effect of an environmental regulation on the innovation choice of firms in an oligopoly. Most existing studies on environmental regulations and innovations examine the optimal behavior of firms when one innovation project is feasible. In our model, firms are allowed to choose from multiple types of innovation projects. Our main contributions are that we derive the conditions under which environmentally friendly and cost reducing innovations are selected in Bertrand competition and we show how environmental regulation affects innovation choice.
    Keywords: environmental regulation; innovation; the Porter hypothesis
    JEL: D21 Q55 Q58
    Date: 2016–03–25
  9. By: Alexander Yu. Apokin (National Research University Higher School of Economics); Irina Ipatova (National Research University Higher School of Economics)
    Abstract: In this paper we estimate the impact of R&D expenditures on the total factor productivity (TFP) and technical efficiency of two panels of countries in the period 1990-2011. We obtain TFP decomposition estimates using one- and two-step Stochastic Frontier Analysis (SFA) and a modified (O’Donnell, 2008) Data Envelopment Analysis (DEA) framework. Our estimates of TFP growth rates correlate highly with those of OECD, The Conference Board and PWT. The efficiency-based rankings of the countries are similar to those from the results of other studies. The estimates of R&D’s impact on TFP and technical efficiency were obtained controlling for various factors, including the structure of the economy, institutional and infrastructural development and R&D expenditures over a total of five hundred possible model specifications. We found that the increase in total R&D expenditures by 1% of GDP in five years raises the average TFP growth rate by 5.0 to 7.7 percentage points, depending on the sample. Also, raising total R&D expenditures by $1,000 per researcher raises TFP growth five years later by 0.013 to 0.025 percentage points, depending on the sample. Also we have identified a significant impact of lagged R&D expenditures (up to ten years) on the dynamics of the global technology frontier component in the presence of a number of control variables.
    Keywords: DEA, SFA, total factor productivity, technical efficiency, R&D expenditures
    JEL: O11 O33
    Date: 2016
  10. By: G. Cette; J. Fernald; B. Mojon
    Abstract: In the years since the Great Recession, many observers have highlighted the slow pace of productivity growth around the world. For the United States and Europe, we highlight that this slow pace began prior to the Great Recession. The timing thus suggests that it is important to consider factors other than just the deep crisis itself or policy changes since the crisis. For the United States, at the frontier of knowledge, there was a burst of innovation and reallocation related to the production and use of information technology in the second half of the 1990s and the early 2000s. That burst ran its course prior to the Great Recession. Continental European economies were falling back relative to that frontier at varying rates since the mid-1990s. We provide VAR and panel-data evidence that changes in real interest rates have nfluenced productivity dynamics in this period. In particular, the sharp decline in real interest rates that took place in Italy and Spain seem to have triggered unfavorable resource reallocations that were large enough to reduce the level of total factor productivity, consistent with recent theories and firm-level evidence.
    Keywords: Productivity, ICT, Europe, convergence, capital flows, mis-allocation.
    JEL: E23 E32 O47 O52
    Date: 2016
  11. By: Rebecca Williams (Reserve Bank of New Zealand); Les Oxley (University of Waikato)
    Abstract: At the turn of the twentieth century, New Zealand was one of the wealthiest nations in the world on a per capita basis. We examine the role of innovation in explaining New Zealand’s economic performance. Using a new dataset on patent applications for the period 1880-1895, we consider whether the geographical concentration of innovative activity influenced economic activity. We find relationships between agricultural and pastoral output indices and inventiveness and between different regions and related industries. The results, however, are relatively weak. We conclude that tests of agglomeration effects in New Zealand during this period deserve further attention.
    Keywords: inventiveness; agglomeration; patents; knowledge spill-overs; New Zealand
    JEL: O3 N7 N1
    Date: 2016–03–31
  12. By: Kerstin Burghaus; Peter Funk
    Abstract: We study economic growth and pollution control in a model with endogenous rate and direction of technical change. Economic growth results from growth in the quantity and productivity of polluting intermediates. Pollution can be controlled by reducing the pollution intensity of a given quantity through costly research (green innovation) and by reducing the share of polluting intermediate quantity in GDP. Without clean substitutes, saving on polluting inputs implies that the rate of GDP growth remains below productivity growth (deceleration). While neither green innovation nor deceleration is chosen under laissez-faire, both contribute to long-run optimal pollution control for reasonable parameter values.
    Keywords: Endogenous Growth, Direction of Technical Change, Pollution, Green Innovation, Rebound Effect
    JEL: O30 O41 O44 Q55
    Date: 2016–02–01
  13. By: Walz, Rainer; Köhler, Jonathan Hugh; Lerch, Christian
    Abstract: Meeting sustainability challenges requires not only innovations but also transitions towards sustainability paths. Studies which use technological innovation systems and multi-level-perspective approaches show that the development of innovation systems is a complex process, with many direct and indirect interdependencies of the different variables. The paper looks into the feasibility to support such analysis with system dynamics models. It is analysed how a combined TIS-MLP approach could form the conceptual basis for analysing the dynamics which drives the development of the system to be modelled. The feasibility of such a concept is further investigated by implementing it for China and Germany using wind energy as a case study. In order to develop a perspective how to build the model in technical terms, the dynamics of the innovation systems is translated in software based causal loop diagrams. In addition to methodological insights about the feasibility of modelling, the paper also yields insights into differences and similarities in the drivers of system dynamics in both countries. Furthermore, general conclusions for the potential of regime shift in countries catching up and the relation to leapfrogging are drawn. Thus, the paper augments more general conceptual advances with an evidence based case study and extends theoretical analysis towards empirical modelling.
    Keywords: sustainability transitions,system dynamics,wind energy,technological innovation systems,multi level perspective,system dynamics
    Date: 2016
  14. By: Bronwyn H. Hall (Institute for Fiscal Studies); Christian Helmers (Institute for Fiscal Studies and Santa Clara University); Georg von Graevenitz (Institute for Fiscal Studies and Queen Mary University of London)
    Abstract: We analyze the effect of patent thickets on entry into technology areas by firms in the UK. We present a model that describes incentives to enter technology areas characterized by varying technological opportunity, complexity of technology, and the potential for hold-up in patent thickets. We show empirically that our measure of patent thickets is associated with a reduction of first time patenting in a given technology area controlling for the level of technological complexity and opportunity. Technological areas characterized by more technological complexity and opportunity, in contrast, see more entry. Our evidence indicates that patent thickets raise entry costs, which leads to less entry into technologies regardless of a firm’s size.
    Keywords: IPR, patents, entry, technological opportunity, technological complexity, hold-up
    JEL: O34 O31 L20 K11
    Date: 2016–02
  15. By: Gert Verschraegen; Sebastiano Sabato
    Abstract: This report examines how place-based socially innovative policies and actions can be better integrated into the broader European Union (EU) social agenda. On the basis of previous work and a roundtable taking place in the context of the Improve project, it a) identifies some main challenges for upscaling and consolidating place-based social innovation throughout the European multi-level governance system; b) analyses whether social innovation dovetails with the broader European policy goals of territorial cohesion and public participation, and c) proposes some cautious policy recommendations with regard to how EU resources can be used to better support socially innovative practices. Three main conclusions can be drawn from our analysis. Firstly, the EU supports social innovation both directly (by providing different kinds of resources for local socially innovative projects, not limited to financial resources) and indirectly, by supporting European umbrella organisations operating in the field of poverty and social inclusion. Yet, the degree of innovativeness of EU supported projects differs. Secondly, although EU support for place-based social innovation is significant, it is not consistent throughout the whole life cycle of social innovation. EU support is particularly effective in the early stages of socially innovative projects (conception and start-up). Institutionalisation of those projects depends on domestic circumstances (including welfare regimes’ peculiarities) and, what is more surprising given the emphasis at the EU level, EU resources are no used for up-scaling local socially innovative practices. Thirdly, an important challenge is to adapt the increasingly top-down approach in the support of socially innovative projects, with scarce attention being paid to the involvement and empowerment of socially excluded groups.
    Keywords: Social innovation, Europe 2020, poverty and social exclusion, participatory governance, usages of Europe
    JEL: I3 L3 Z18
  16. By: Tavassoli, Sam (CIRCLE, Lund University); Bengtsson, Lars (Faculty of Engineering, Department of Industrial Management and Logistics, Lund University); Karlsson, Charlie (Centre of Excellence for Science and Innovation Studies (CESIS), KTH, Stockholm; Jönköping International Business School & Blekinge Institute of Technology, Karlskrona, Sweden)
    Abstract: The literature in the Strategic Entrepreneurship (SE) is increasingly embracing the concept and implication of knowledge spillovers. In this paper, we add to the theoretical literature on SE and knowledge spillovers by investigating the types of knowledge spillovers and what they imply for various dimensions of SE. On the one hand, we distinguish between spatial and aspatial knowledge spillovers. On the other hand, we distinguish between various dimensions of SE, i.e. inputs, resource orchestration, and output. Finally, we conceptually link the various types of knowledge spillovers and dimensions of SE and discuss the implications. Doing so, we argue that spatial knowledge spillovers (inter-firm) play the major role in increasing the amount of ‘inputs’ dimension of SE, while the aspatial knowledge (either inter-regional or intra-firm) play the major role not only for ‘inputs’, but also for ‘rresource orchestration’ dimension. At the end, the paper provides suggestions for future research and managerial implications.
    Keywords: Strategic entrepreneurship; knowledge spillovers; spatial; aspatial
    JEL: L26 O31 R23
    Date: 2016–03–17
  17. By: Anne Marie Knott
    Abstract: Endogenous growth theory holds that growth should increase with R&D. However coarse comparison between R&D and US GDP growth over the past forty years indicates that inflation scientific labor increased 2.5 times, while GDP growth was at best stagnant. The leading explanation for the disconnect between theory and the empirical record is that R&D has gotten harder. I develop and test an alternative view that firms have become worse at it. I find no evidence R&D has gotten harder. Instead I find firms’ R&D productivity declined 65%, and that the main culprit in the decline is outsourced R&D, which is unproductive for the funding firm. This offers hope firms’ R&D productivity and economic growth may be fairly easily restored by bringing outsourced R&D back in-house.
    Date: 2016–03
  18. By: David de la Croix; Matthias Doepke; Joel Mokyr
    Abstract: In the centuries leading up to the Industrial Revolution, Western Europe gradually pulled ahead of other world regions in terms of technological creativity, population growth, and income per capita. We argue that superior institutions for the creation and dissemination of productive knowledge help explain the European advantage. We build a model of technological progress in a pre-industrial economy that emphasizes the person-to-person transmission of tacit knowledge. The young learn as apprentices from the old. Institutions such as the family, the clan, the guild, and the market organize who learns from whom. We argue that medieval European institutions such as guilds, and specific features such as journeymanship, can explain the rise of Europe relative to regions that relied on the transmission of knowledge within extended families or clans.
    JEL: E02 J24 N10 N30 O33 O43
    Date: 2016–03
  19. By: Fudickar, Roman; Hottenrott, Hanna; Lawson, Cornelia (University of Turin)
    Abstract: Academic consulting is recognised as an important and effective means of knowledge transfer with the public and private sectors. These interactions with external sectors offer opportunities for research application but also raise concerns over their potentially negative consequences for academic research and its dissemination. For a sample of social, natural and engineering science academics in Germany, we find consulting to be widespread, undertaken by academics at all seniority levels and in all disciplines, with academics in the social sciences more likely to provide advice to the public sector and those in engineering to the private sector. Controlling for the selection into consulting, we then investigate its effect on research performance. While previous research suggested that consulting activities might come at the cost of reduced research output, our analysis does not confirm this concern. The results, however, suggest that stronger engagement in consulting increases the probability to cease publishing research altogether. This may point to a flight of consulting-active academics from active research. Moreover, public sector consulting comes with lower average citations which may suggest a move towards context-specific publications that attract fewer citations. We draw lessons for research institutions and policy about the promotion of academic consulting.
    Date: 2016–03
  20. By: Pedro Bento (Texas A&M University, Department of Economics)
    Abstract: I look at manufacturing firms across countries and over time, and find that barriers to competition actually increase the number of firms. This finding contradicts a central feature of all current models of endogenous markups and free entry, that higher barriers should reduce competition and firm entry, thereby increasing markups. To rationalize this finding, I extend a standard model in two ways. First, I allow for multi-product firms. Second, I model barriers as increasing the cost of entering a product market, rather than the cost of forming a firm. Higher barriers to competition reduce the number of products per firm and per market, but increase markups and the total number of firms. Calibrating the model to U.S. data, I estimate cross-country differences in consumption as large as 65 percent from observed differences in barriers to competition. In addition, increasing barriers generates either a negative or inverted-U relationship between firm-level innovation and markups. While higher markups encourage product-level innovation through the usual Schumpeterian mechanism, firm-level innovation (at least eventually) drops as firms reduce their number of products. I provide new evidence supporting these two novel implications of the model - that product-level innovation increases with barriers to competition, while the number of products per firm decreases.
    Keywords: product market regulation, entry costs, firm size, productivity, innovation, markups, competition, multi-product firms, innovation, inverted-U
    JEL: L1 L5 O1 O3 O4
    Date: 2016–03–23
  21. By: Giorgio Prodi (Department of Economics and Management, University of Ferrara, Italy.); Federico Frattini (Department of Economics and Management, University of Ferrara, Italy.); Francesco Nicolli (IRCrES-CNR, Milano, Italy.)
    Abstract: This paper focuses on the connections between long-term development and Regional Innovation Systems (RIS) in China. It aims to investigate how the evolution of RIS fits with China’s overall process of economic upgrading. The analysis relies on Chinese patent applications filed to the EPO during the period 1981 to 2009, which authors have regionalised at a prefectural level. Conceptu-ally, the investigation concerns the relative prevalence of indexes derived from inventors’ and ap-plicants’ localisation to describe local innovation activities in terms of emergence, development and reinforcement. The hypothesis ranks higher those prefectures where indigenous applicants prevail, that is, the initiative, organisation and exploitation of innovation activities are foremost local (or endogenous). Results return the possibility of grouping Chinese prefectures into six clusters. On this basis, RIS features appear to diffuse, even while regional concentration of innovation activities is still increasing. This pattern is deemed to fit the process of industrial development in China very well. As it was in the past, RIS benefit from the opportunities that a long-term development strategy provides, but face its limits as well.
    Keywords: China; development; endogeneity; patent; reform; Regional Innovation System
    Date: 2016–04
  22. By: Bharat Diwakar; Gilad Sorek
    Abstract: This study shows how the two alternative saving motives, life-cycle consumption smoothing and parental bequests, determine the relation between population growth and R&D-based economic growth, i.e. the sign of the "weak scale-effect". We take a textbook R&D-based growth model of infinitely living agents with no weak-scale effect, and analyze it in an Overlapping Generations framework - with and without bequest saving-motive. We show how the different saving motives determine the relation between population growth and per-capita income growth, which proves to be ambiguous in general, and may also be non-monotonic. Hence, we conclude that the counterfactual weak-scale effect that is present in the second and third generations of R&D-based growth models of infinitely-living agents depends on their specific demographic structure, and thus is not inherent to R&D-based growth theory itself.
    Keywords: R&D-based Growth, Weak Scale Effect, Overlapping Generations
    JEL: O31 O40
    Date: 2016–03
  23. By: Daniel P. Gross (Harvard Business School, Strategy Unit)
    Abstract: Performance feedback is ubiquitous in competitive settings where new products are developed. This paper introduces a fundamental tension between incentives and improvement in performance evaluation. Using a sample of four thousand commercial logo design tournaments, I show that feedback reduces participation but improves the quality of subsequent submissions, with an ambiguous effect on high-quality output. To evaluate this tradeoff, I develop a procedure to estimate agents' effort costs and simulate counterfactuals under alternative feedback policies. The results suggest that feedback on net increases the number of high-quality ideas produced and may thus be desirable for a principal seeking innovation.
    Keywords: Feedback; Evaluation; Learning; Tournaments; Innovation
    JEL: C51 D82 D83 M55 O31 O32
    Date: 2016–03
  24. By: Bharat Diwakar; Gilad Sorek
    Abstract: We study two-sector R&D model with endogenous human capital accumulation. Allowing for fractional human capital spillover from parents to their o¤spring, which are subject to congestion in fertility rate, we establish non-monotonic relations between population growth and economic growth. These non-monotonic relations, which are polynomial in general, are determined by the base level of human capital spillover and the magnitude of the congestion e¤ect: a U shape relation can arise under low congestion factor, whereas a hump shape may present for high congestion factor.
    Keywords: Innovation-Based Growth; Population Growth; Human-Capital Spillover
    JEL: O31 O40
    Date: 2016–03
  25. By: Christian Kiedaisch
    Abstract: This paper analyzes how changing the expected length of intellectual property right (IPR) protection affects growth and the welfare of rich and poor consumers. The analysis is based on a product-variety model with non-homothetic preferences and endogenous markups in which, in accordance with empirical evidence, rich households consume a larger variety of goods than poorer ones. Unlike in models with homothetic preferences, the effect of intellectual property (IP) protection on growth depends on the distribution of income: when the length of IP protection is (uniformly) increased, growth increases when there is inequality among households consuming IP protected goods, but stays constant when there is no such inequality. When wealth is unequally distributed, reducing the length of IP protection for new but not for previously issued IPRs can increase growth. In the case where increasing the length of IP protection increases growth, poor households prefer a shorter length of protection than richer ones, although they consume fewer IP protected goods.
    Keywords: Intellectual property rights, income distribution, endogenous growth, nonhomothetic preferences
    JEL: O34 O31 L16 D30 O15
    Date: 2016–03
  26. By: Dilli, Selin (Economic and Social History); Elert, Niklas (Research Institute of Industrial Economics (IFN))
    Abstract: Although institutional reforms are necessary to increase rates of entrepreneurship in European countries, we argue that one-size-fits-all reform strategies are unlikely to be successful. Reform strategies must be informed by a better knowledge of the varieties of European capitalism and the institutional complementarities that drive these differences. We investigate these issues by gathering a number of potentially relevant entrepreneurial regime measurements as well as indicators of formal and informal institutions based on data available from the 2000s onward. We employ principal component analysis, factor analysis and cluster analysis to examine how 21 European countries and the United States cluster in the entrepreneurial and institutional dimensions. Our results reveal six country clusters, or entrepreneurial regimes, with a distinct bundle of entrepreneurial characteristics and institutional attributes. The main implication is that different reform strategies are appropriate to promote entrepreneurship and economic growth in European countries in different clusters.
    Keywords: Entrepreneurship; Innovation; Institutions; Regulation
    JEL: L50 M13 O31 P14
    Date: 2016–03–21
  27. By: Jorge Guzman; Scott Stern
    Abstract: While official measures of business dynamism have seen a long-term decline, early-stage venture financing of new companies has reached levels not observed since the late 1990s, resulting in a sharp debate about the state of American entrepreneurship. Building on Guzman and Stern (2015a; 2015b), this paper offers new evidence to inform this debate by estimating measures of entrepreneurial quality based on predictive analytics and comprehensive business registries. Our estimates suggest that the probability of a significant growth outcome (either an IPO or high-value acquisition) is highly skewed and predicted by observables at or near the time of business registration: 69% of realized growth events are in the top 5% of our estimated growth distribution. This high level of skewness motivates the development of three new economic statistics that simultaneously account for both the quantity as well as the quality of entrepreneurship: the Entrepreneurial Quality Index (EQI, measuring the average quality level among a group of start-ups within a given cohort), the Regional Entrepreneurship Cohort Potential Index (RECPI, measuring the growth potential of firms founded within a given region and time period) and the Regional Entrepreneurship Acceleration Index (REAI, measuring the performance of a region over time in realizing the potential of firms founded there). We use these statistics to establish several new findings about the history and state of US entrepreneurship using data for 15 states (covering 51% of the overall US economy) from 1988 through 2014. First, in contrast the secular decline in the aggregate quantity of entrepreneurship observed in series such as the Business Dynamic Statistics (BDS), the growth potential of start-up companies (RECPI relative to GDP) has followed a cyclical pattern that seems sensitive to the capital market environment and overall economic conditions. Second, while the peak value of RECPI is recorded in 2000, the level during the first decade during this century was actually higher than the late 1980s and first half of the 1990s, and also has experienced a sharp upward swing beginning in 2010. Even after controlling for changes in the overall size of the economy, the second highest level of entrepreneurial growth potential is registered in 2014. Third, the likelihood of start-up firms for a given quality level to realize their potential (REAI) declined sharply in the late 1990s, and did not recover through 2008. These findings suggest that divergent assessments of the state of American entrepreneurship can potentially be reconciled by explicitly adopting a quantitative approach to the measurement of entrepreneurial quality.
    JEL: C53 L26 O51
    Date: 2016–03
  28. By: LYUBAREVA, Inna; ROCHELANDET, Fabrice; ETIENNE, Jean-Michel
    Abstract: A body of literature shows the destabilizing role of ICT and change from analogue to digital in the cultural industries in general, and in press industry in particular. This literature demonstrates that constant experimentation and innovation in the area of organizational arrangements and business models (BM) has become a key competitive advantage. As a result, traditional BMs, which were dominant and stable in different cultural industries (such as media, film, music, publishing etc), have given rise to a multiplicity of arrangements in business management and the emergence of disruptive and innovative business models, which often successfully coexist in the same market segment. According to this view point, strategic and structural change is necessarily driven by competition or the need for efficiency. However alternative theories predicts that in depending on the industry structural characteristic, only early adopters of innovation may be driven by a desire to improve performance, whereas as an innovation spreads and organizational field becomes more established, there may be a push towards homogenization. The case of the French press is quite symptomatic of that standpoint. From the empirical analysis of 100 press websites observed over the period from 2004 to 2014, the paper substantiates the convergence process towards three dominant clusters of online BMs: “A minima Digital”, “Freebie Plus” and “Exploring Leaders”. Using a Random Effects Probit econometric model the paper puts forward that this isomorphic process is mainly due to the fact that mimetic behavior over-weights search for performance in French press.
    Keywords: Online Press, Business Models, Innovation of Service, Imitation, Isomorphism
    JEL: L82 M2 O33
    Date: 2016–01
  29. By: Jun, Bogang; Gerybadze, Alexander; Kim, Tai-Yoo
    Abstract: This study revisits the theory of Friedrich List from a more comprehensive and modernized perspective and applies it to the Korean history of industrialization. Although List is well known as the scholar who insisted on the protection of infant industry, his argument on protectionism is a part of the broader picture depicted in his book The National System of Political Economy (1841). This study follows his theoretical legacy in various fields of study. Although we can find his theoretical influence in several fields of research such as the national innovation system, concept of national competitiveness, and theory of developmental state, these studies fail to embrace all the arguments of List. Additionally, theses models focus more heavily on the explanation of historical and regional development phenomena without providing general principles of economic development behind the phenomena. This study therefore aims to suggest the expansive reproduction system as a generalized and modernized version of List's theory and to show its example by using the Korean history of industrialization. Consequently, we argue that the economic development of Korea has been achieved by putting the theory of List into practice.
    Keywords: Friedrich List,Economic Development,Korean Economic History,Economic Policy
    Date: 2016
  30. By: Goorha, Prateek
    Abstract: In this note the author proposes an approach to examine how innovations might arise from a knowledge commons with agents that interact on the basis of their subjective assessment of the relationships between ideas. Two types of knowledge commons emerge from this dynamic - a pure knowledge commons, with a pursuit of knowledge for its own sake and a satisficing knowledge commons, where members seek a predetermined value for their ideas.
    Keywords: idea maps,knowledge commons,innovation,subjectivity
    JEL: D85 O34
    Date: 2016
  31. By: Böckerman, Petri (Labour Institute for Economic Research); Laaksonen, Seppo (University of Helsinki); Vainiomäki, Jari (University of Tampere)
    Abstract: We perform decompositions and regression analyses that test the routinization hypothesis and implied job polarization at the firm level. Prior studies have focused on the aggregate, industry or local levels. Our results for the abstract and routine occupation groups are consistent with the routinization hypothesis at the firm level. The observed changes are linked to ICT adoption. Thus, disappearing middle-level (routine) work can be traced to firm-level technological change.
    Keywords: skill-biased technological change, job polarization, routinization
    JEL: J23 J24 J31 O33
    Date: 2016–03
  32. By: A. Bergeaud; G. Cette; R. Lecat
    Abstract: 20th century growth has been an exceptional period in the history of mankind, relying mostly on increase in total factor productivity (TFP). Using a 1890-2013 17-OECD country database, this paper improves the measurement of TFP by taking into account production factor quality, i.e. the education level of the working-age population for labor and the age of equipment for the capital stock. However, our main contribution is to assess the role of technology diffusion to TFP growth through two emblematic general purpose technologies, electricity and information and communication technologies (ICT). Using both growth decomposition methodology and instrumental variables estimates, this paper finds that, among factor quality, education levels have posted the largest contribution to growth, while the age of capital has a significant, although limited, contribution. Quality-adjusted production factors explain less than half of labor productivity growth in the largest countries but Japan, where capital deepening posted a very large contribution. As a consequence, the “one big wave” of productivity growth (Gordon, 1999), as well as the ICT productivity wave for the countries which experienced it, remains only partially explained by quality-adjusted factors, although education and technology diffusion contribute to explain the US earlier wave in the 1930s-1940s. Finally, technology diffusion, as captured through our two general purpose technologies, leaves between 0.6 and 1 point of yearly growth, as well as a large share of the two 20th century technology waves, unexplained. These results support both a significant lag in the diffusion of general purpose technologies and a wider view on growth factors, encompassing changes in the production process, management techniques or financing practices.
    Keywords: Productivity, Total factor productivity, Education, Technological Change, Technology diffusion, Global History.
    JEL: N10 O47 E20
    Date: 2016

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