nep-ino New Economics Papers
on Innovation
Issue of 2016‒07‒30
39 papers chosen by
Uwe Cantner
University of Jena

  1. Innovation policy instruments at firm level, Review of India fs policy with respect to R&D tax incentives and Intellectual Property Rights By Mani Sunil
  2. Modes of ICT Innovation: Evidence from the Community Innovation Survey By Federico Biagi; Annarosa Pesole; Juraj Stancik
  3. Innovation and productivity in a S&T intensive sector: the case of Information industries in Spain By Nestor Duch-Brown; Andrea de Panizza; Ibrahim Kholilul Rohman
  4. Potential and partnerships in innovations in EU-funded research projects By Daniel Nepelski; Giuseppe Piroli
  5. Technological Progress and Ownership Structure By Heng GENG; Harald HAU; Sandy LAI
  6. Liquidity, Innovation, And Endogenous Growth By Semyon MALAMUD; Francesca ZUCCHI
  7. Counterfactual Impact Evaluation of Public Funding of Innovation, Investment and R&D By Daniele Bondonio; Federico Biagi; Juraj StanÄ ík
  8. The co-evolution of innovation networks: Collaboration between West and East Germany from 1972 to 2014 By Jun, Bogang; Yi, Seung-Kyu; Buchmann, Tobias; Mueller, Matthias
  9. Cooperative and noncooperative R&D in an asymmetric multi-product duopoly with spillovers By Juliane Fudickar; Ruzica Rakic
  10. Innovation, Pricing and Targeting in Networks By Panebianco, Fabrizio; Verdier, Thierry; Zenou, Yves
  11. Using the Salop Circle to Study Scale Effects in Schumpeterian Growth Models: Why Inter-sectoral Knowledge Diffusion Matters By Gray, Elie; Grimaud, André
  12. Innovation, competition and public procurement in the pre-commercial phase By Valeria De Bonis
  13. Technological Capabilities, Technological Dynamism and Innovation Offshoring By Schubert, Torben; Baier, Elisabeth; Rammer, Christian
  14. Mapping EU investments in ICT - description of an online tool and initial observations By Jens Sörvik; Alexander Kleibrink
  15. RIO Country Report 2015: Spain By Ana Fernández-Zubieta; Thomas Zacharewicz
  16. RIO Country Report 2015: United Kingdom By Paul Cunningham; Jessica Mitchell
  17. Costa Rica: Boosting productivity to sustain income convergence By Mauro Pisu
  18. RIO Country Report 2015:Slovak Republic By Balaz Vladimir; Zifciakova Jana
  19. From the Logan to the Kwid. \r\nAmbidexterity, reverse and fractal innovation, design-to-cost: recipes from Renault\'s Entry strategy By Yannick LUNG; Bernard JULLIEN; Christophe MIDLER
  20. Imported Intermediate Goods and Product Innovation : Evidence from India By Murat Seker; Daniel Rodriguez Delgado; Mehmet Fatih Ulu
  21. Strategic Entrepreneurship and Knowledge Spillovers: Spatial and Aspatial Perspectives By Tavassoli, Sam; Bengtsson, Lars; Karlsson, Charlie
  22. Optimal Syndication Decision of Corporate Venture Capital and Venture Capital Firms By Frick, Andreas; Maxin, Hannes
  23. Implementing RIS3 in the Region of Eastern Macedonia and Thrace: Towards a RIS3 tool box By Mark Boden; Patrice dos Santos; Karel Haegeman; Elisabetta Marinelli; Susana Valero
  24. INNOREG: A Comprehensive Dataset on Government Policies Affecting Innovation By Giorgia Casalone; Federico Biagi
  25. Strategic Technology Adoption and Hedging under Incomplete Markets By Markus LEIPPOLD; Jacob STROMBERG
  26. European Start-up Hotspots: An Analysis based on VC-backed Companies By Daniel Nepelski; Giuseppe Piroli; Giuditta De Prato
  27. Precaution in the Governance of Technology By Andy Stirling
  28. Boosting Productivity in Finland By Christophe André; Thomas Chalaux
  29. Innovación, Competitivad y Rentabilidad en los Sectores de la Economía Mexicana By Kurt Unger
  30. Scaling New Heights: Achievements and Future Challenges for Productivity Convergence in Lithuania By Ben Westmore
  31. Determinants of Wage Equalization in Chile from 1996 to 2006: Decomposition Approach By Yoshimichi Murakami; Tomokazu Nomura
  32. A Model of Business Innovation in the Context of Micro, Small and Medium Enterprises in Davao Del Sur By Castillo-Sam, Eva Marie; Tormis, Jeaneth; Murcia, John Vianne
  33. IPR protection, intelligence and economic growth: a cross-country empirical investigation By Odilova, Shoirahon; Xiaomin, Gu
  34. Innovation, Delegation, and Asset Price Swings By Yuki SATO
  35. Development of an Agricultural Biomaterial Industry in Ontario By Oo, Aung; Muntasir, Nafis; Poon, Kenneth; Weersink, Alfons; Thimmanagari, Mahendra
  36. Luck and Entrepreneurial Success By Diego LIECHTI; Claudio LODERER; Urs PEYER
  37. Towards a theory of regional diversification By Ron Boschma, Lars Coenen, Koen Frenken, Bernhard Truffer; Lars Coenen; Koen Frenken; Bernhard Truffer
  38. Historical shocks and persistence of economic activity: evidence from a unique natural experiment By Michael Fritsch; Alina Sorgner; Michael Wyrwich; Evguenii Zazdravnykh
  39. The Hand-Loom Weaver and the Power Loom: A Schumpeterian Perspective By Robert Allen

  1. By: Mani Sunil (National Graduate Institute for Policy Studies, Centre for Development Studies, and Centre for Development Studies, Trivandrum, Kerala, India)
    Abstract: Right through her independence, India has been trying to achieve economic growth with technological self-reliance. In order to achieve this goal, the country has been adopting a mix of industrial and innovation policies. During the period up to and including the early 1990s, the state attempted to give shape to this goal by intervening directly by generating a whole host of industrial technologies through state-owned undertakings and other public research institutes. During the period since the 1990s, coinciding with the economic liberalization policies the state has replaced this with incentivizing the innovation system of the country. This is because the state wants the private sector enterprises to be at the core of the innovation system. Key to incentivizing the private sector was two specific policies, namely the R&D tax policy and the policy on Intellectual Property Rights. The paper undertakes a critical review of the very recent changes to these two policy instruments.
    Date: 2016–07
  2. By: Federico Biagi (European Commission - JRC); Annarosa Pesole (European Commission - JRC); Juraj Stancik (European Commission - JRC)
    Abstract: This report was prepared in the context of the three-year research project on European Innovation Policies for the Digital Shift (EURIPIDIS). This project was jointly launched in 2013 by JRC-IPTS and DG CONNECT of the European Commission. It aims to improve understanding of innovation in the ICT sector and ICT-enabled innovation in the rest of the economy. In the context of the EURIPIDIS project, this report analyses innovative activities by ICT-producing firms and provides evidence on innovative activity in the ICT sector, compared to the overall economy. This analysis, based on a set of different indicators, aims to provide a deeper understanding of the modes of innovation adopted by ICT producing firms. To carry out the analysis, we created a panel dataset which matched the information collected by different Community Innovation Survey (CIS) waves from 2004 up to 2012 in twenty EU Member States. We then investigated the major innovation patterns that emerged, and compared the ICT sector to the whole economy. The main findings show that, in general, firms in the ICT sector tend to innovate more with respect to the economy as a whole: the shares of both innovators and technological innovators are consistently higher within the ICT sector than they are in the economy as a whole. Moreover, the ICT sector has a higher share of innovative firms which perform R&D and a higher share of Framework Programme-funded innovative firms. In order to capture the modes of innovation of ICT-producing firms, we used "complex" indicators that condense information from more than one measure and allow us to make multi-dimensional phenomena uni-dimensional. These complex indicators indicate that the share of international and domestic innovators is higher among ICT firms than it is in the economy as a whole. In other words, ICT firms tend to have a higher than average in-house R&D capability and are more likely to introduce new-to-the-market product or process innovations in both international and domestic markets. Looking at international or domestic "modifiers" (i.e. firms that mainly adopt and/or modify innovation made by others), we find no evidence that ICT-producing firms are more likely than the average firm to modify or adopt innovations developed elsewhere.
    Keywords: ICT sector, ICT-enabled innovation, ICT Innovation System, Community Innovation Survey
    Date: 2016–07
  3. By: Nestor Duch-Brown (European Commission – JRC); Andrea de Panizza (European Commission – JRC); Ibrahim Kholilul Rohman (European Commission – JRC)
    Abstract: This paper adds to the empirical literature on the relationships between R&D, innovation and productivity at the firm level. The focus is on Spanish enterprises in Information industries, which are acknowledged to be at the forefront for both innovative activity and R&D performance. The analysis is performed on ca. 1800 enterprises included in the PITEC database (the Spanish source of the EU Community Innovation Survey) for the period 2004-2013. Using a three-stage "CDM" model we consider: (i) factors affecting the decision to conduct R&D, including the role of perceived importance of innovation on firm's R&D performance, (ii) the impact of the predicted R&D effort on companies' effective undertaking of product, process, organisational and marketing innovations, as well as their simultaneous occurrence and (iii) whether and to what extent such innovations boost productivity. In the specific context of this R&D intensive array of industries, the decision of undertaking R&D appears to be strongly influenced by the importance attributed to enhancing existing products or creating new ones, as well as by the size of the company, the fact of being young and local, and the availability public funding. These elements also greatly impact on enterprises' R&D effort, thus providing some arguments in favour of R&D promotion policies, in particularly addressed to start-ups. Expected R&D performance, in turn, appears to be strongly related to the actual achievement of such innovations, including non-technical ones. By focusing on innovation patterns, it was possible to ascertain a strong complementarity between different families of innovation (as expected, given these industries' specificities), as well as to qualify existing evidence on the innovation-productivity conundrum. Indeed, we show that results depend on the way innovation types are modelled and combined. Controlling for complementarities, enterprises performing focused non-technical innovations and joint technical and non-technical ones (mixed-mode innovators) are likely to be more productive (in terms of sales per capita) than their peers, while stand-alone technical innovations give inconclusive results.
    Keywords: R&D, innovation, ICT sector, productivity, firm level data, panel
    JEL: O00 O31 O32 O47
    Date: 2016–07
  4. By: Daniel Nepelski; Giuseppe Piroli
    Abstract: We analyse the relationship between the composition of innovation partnerships and the potential of their innovations developed within EU-funded research projects under the Seventh Framework Programme for Research and Technological Development (FP7), the European Union's Research and Innovation funding programme for 2007-2013. Innovation potential is assessed using a formal framework capturing three different dimensions: innovation readiness, management and market potential. Both the analysed innovations and innovators were identified by external experts during periodic Framework Programme reviews. Thus, our population includes participants in the FP7 projects that are considered as key organisations in the project delivering innovations in FP7 projects. We show that the innovative potential of research output of homogenous partnerships, e.g. between two SMEs or two large companies, is likely to be higher, as compared to heterogeneous partnerships, e.g. an SME and a large company. The impact of universities on the potential of innovations is unclear. The total number of key organizations in delivering an innovation has a negative impact on its potential. Neither project funding nor duration affects the potential of innovation. Our results contribute to the discussion on the most appropriate design of R&D consortia of organizations in publically-funded projects.
    Keywords: R&D consortia; innovation policy; framework programme, small and medium-sized enterprises.
    JEL: L52 L53 O31 O32 O25
    Date: 2016–01–01
  5. By: Heng GENG (University of Hong Kong); Harald HAU (University of Geneva and Swiss Finance Institute); Sandy LAI (University of Hong Kong)
    Abstract: Innovation processes under patent protection generate holdup problems if complementary patents are owned by different firms. We show that in line with Hart and Moore (1990), shareholder ownership overlap across firms with patent complementarities helps mitigate such holdup problems and correlates significantly with higher patent investment and more patent success as measured by future citations. The positive innovation effect is strongest for concentrated overlapping ownership and for the cases when the overlapping shareholders are dedicated investors.
    Keywords: Patents, holdup Problems, Innovation, Institutional Ownership
    JEL: L22 G31 G32
  6. By: Semyon MALAMUD (Ecole Polytechnique Federale de Lausanne and Swiss Finance Institute); Francesca ZUCCHI (Ecole Polytechnique Federale de Lausanne and Swiss Finance Institute)
    Abstract: We study optimal liquidity management, innovation, and production decisions for a continuum of firms facing financing frictions and the threat of creative destruction. We show that liquidity constraints unambiguously lead firms to decrease their production rate but, surprisingly, may spur investment in innovation (R&D). Using the model, we characterize which firms substitute production for innovation when constrained and thus display a non-monotonic relation between cash reserves and R&D. We embed our single-firm dynamics in a Schumpeterian model of endogenous growth and demonstrate that financing frictions have an ambiguous effect on economic growth.
    Keywords: Innovation, Cash management, Financial constraints, Endogenous growth, Creative destruction
    JEL: D21 G31 G32 G35 L11
  7. By: Daniele Bondonio (Universita'del Piemonte Orientale); Federico Biagi (European Commission - JRC); Juraj StanÄ ík (European Commission - JRC)
    Abstract: This report uses data from Efige and from Bureau Van Dijk’s Amadeus and Orbis to estimate the effect of funding from the EU and national programmes on firms’ employment, sales, added value, productivity and innovativeness. It also looks at the impact of subsidies to investment and R&D (irrespective of the source of funding) on the same variables. In the first part of the report we use only the Efige dataset (covering the years 2007- 2009) and we look at (contemporaneous) correlation between public support (from national and EU sources) and product and process innovation. Our results indicate that national and EU funding are equally important in stimulating product innovation. However, EU funding has a higher correlation with process innovation. We also find a positive correlation between public support to private R&D and product innovation (but no significant correlation between the former and process innovation). On the other hand, public support to private investment (including ICT capital) is positively associated with process innovation but not with product innovation. In the second part of the report we perform a proper counterfactual analysis, where we merge the Efige dataset with the Bureau Van Dijk’s Amadeus (years 2001-2012) and Orbis (2006-2012) databases. This allows us to test whether firms funded between years 2007 and 2009 have a significantly different economic performance (measured in terms of employment, sales, and value added) in the years 2009-2012, while controlling for firms characteristics measured prior to 2007 (i.e. in the pre-treatment period). Our results indicate that receiving public support from national funds generates positive increments in employment, sales and added value, compared to the counterfactual status of the absence of public intervention. We do not find evidence that EU funds have additional impacts on employment, sales or value added (relative to firms receiving only national funding or no funding). This result is most likely due to the small sample size of firms receiving EU funds, which does not allow us to precisely estimate the impact of EU funding alone or in conjunction with national funding. It is also likely to depend upon the features of EU funding, which is geared towards research that produces results over a longer time horizon than the one observable in our data. We also find that generic support to firm-level investment projects has positive impacts on employment and added value. However, no statistically significant impacts are estimated for subsidies which support R&D expenditures exclusively (possibly due to the nature of R&D support policies, which often require more time to yield noticeable impacts on general firm-level performance).
    Keywords: Counterfactual impact evaluation; public funding; innovation; Framework programme
    Date: 2016–07
  8. By: Jun, Bogang; Yi, Seung-Kyu; Buchmann, Tobias; Mueller, Matthias
    Abstract: This paper describes the co-evolution of East and West German innovation networks after the German reunification in 1990 by analyzing publication data from 1972 to 2014. This study uses the following four benchmark models to interpret and classify German innovation networks: the random graph model, the small-world model, the Barabási-Albert model, and the evolutionary model. By comparing the network characteristics of empirical networks with the characteristics of these four benchmark models, we can increase our understanding of the particularities of German innovation networks, such as development over time as well as structural changes (i.e., new nodes or increasing/decreasing network density). We first confirm that a structural change in East-West networks occurred in the early 2000s in terms of the number of link between the two. Second, we show that regions with few collaborators dominated the properties of German innovation networks. Lastly, the change in network cliquishness, which reflects the tendency to build cohesive subgroups, and path length, which is a strong indicator of the speed of knowledge transfer in a network, compared with the four benchmark models show that East and West German regions tended to connect to new regions located in their surroundings, instead of entering distant regions. Our findings support the German federal government's continuous efforts to build networks between East and West German regions.
    Keywords: Innovation networks,Network dynamics,German reunification
    Date: 2016
  9. By: Juliane Fudickar (Freie Universitaet Berlin); Ruzica Rakic (Humboldt-Universitaet Berlin)
    Abstract: We consider R&D investment with spillovers in a market where a multi-product firm competes with a single-product firm. We analyze whether investment incentives are higher under R&D cooperation or competition and show that this depends not only on the technology spillover but also on the degree of product differentiation. R&D investments under cooperation are lower when the products are close substitutes even if the spillover is substantial.
    Keywords: R&D investments, Multi-product firms, R&D cooperation Regulation
    JEL: L13 O31 O32
    Date: 2016–07–01
  10. By: Panebianco, Fabrizio; Verdier, Thierry; Zenou, Yves
    Abstract: Consider a network of firms where a firm T is given the opportunity to innovate a product (first-generation innovation). If successful, this firm can temporarily sell this innovation to her direct neighbors because this will give her access to a larger market. However, if her direct neighbors innovate themselves on top of firm T's innovation (second-generation innovations), then firm T loses the right to sell her initial innovation to the remaining firms in the market. We analyze this game where each firm (T and her direct neighbors) has to decide at which price they want to sell their innovation. We show that the optimal price policy of each firm depends on the level of property rights protection, the position of firm T in the network, her degree and the size of the market. We then analyze the welfare implications of our model where the planner that maximizes total welfare has to decide which firm to target. We show that it depends on the level of property rights protection and on the network structure in a non-trivial way.
    Keywords: diffusion centrality; innovation.; Networks; targets
    JEL: D85 L1 Z13
    Date: 2016–07
  11. By: Gray, Elie; Grimaud, André
    Abstract: This paper analyzes the link between the fact that fully endogenous growth models exhibit (or not) the non-desirable scale effects property and assumptions regarding the intensity of knowledge diffusion. In that respect, we extend a standard Schumpeterian growth model by introducing explicitly knowledge diffusion over a Salop (1979) circle: a continuum of sectors simultaneously sending and receiving knowledge is located over the circle. The link between knowledge diffusion and scale effects stems from the fact that the more diffusion spreads with the size of the economy, the larger the pools of knowledge used by each sector’s R&D activity are, the higher the marginal productivity of labor in R&D is, and eventually the higher the growth rate is. The paper tackles the apparent following paradox. Knowledge diffusion seems to lead to scale effects; however, the former is empirically desirable while the latter is not. Our first basic result is that a sufficient condition to have a scale-invariant fully endogenous growth model is to assume no inter-sectoral knowledge diffusion. However, this assumption is not empirically reasonable. We overcome the aforementioned paradox by showing that the absence of diffusion is not a necessary condition to suppress scale effects. More precisely, we determine sets of reasonable assumptions on knowledge diffusion under which one can obtain fully endogenous growth models complying with most undeniable empirical facts - namely the absence of significant scale effects, the impact of public policies on the growth rate, and somehow realistic interactions among sectors R&D activities (including the occurrence of GPTs).
    Keywords: Schumpeterian growth theory / Scale effects / Inter-sectoral knowledge diffusion / Knowledge spillovers / Non rivalry
    JEL: O30 O31 O33 O40 O41
    Date: 2016–07
  12. By: Valeria De Bonis (Università Sapienza di Roma - Dipartimento di Studi Giuridici, Filosofici ed Economici)
    Abstract: Should the supply or the demand side bear the risk connected to innovation? The two polar cases identified in the literature are the supply push and the demand pull. The former is the typical one, with the supplier bearing the costs and obtaining the benefits from innovating. The latter is technology procurement, where the buyer takes the risk, by procuring the innovative good or service. With respect to this, pre-commercial procurement is a peculiar solution that can explain the debate found in the literature relative to its configuration either as a supply-side or a demand-side instrument. The separation from the commercial phase allows the procurer to take only (part of) the risks connected to R&D services. Also, competition among suppliers gives the opportunity of evaluating different solutions and to obtain, in the commercial phase, a lower price for the innovative good. The counterpart of all this is a large portion of risk being left to the supplier. As a consequence, suppliers need to obtain a larger share of the benefits of the innovation process. This economic reason, besides the legal restrictions on State aid, explains the need for a shared risks-shared benefits approach, centred on the agreements on the assignment of IPRs.
    Keywords: innovation; competition; public procurement for innovation; pre-commercial procurement.
    JEL: H57 K21 L16 M38 O34 O38
    Date: 2016–07
  13. By: Schubert, Torben (CIRCLE, Lund University); Baier, Elisabeth (Hochschule für Wirtschaft, Technik und Kultur (HWTK)); Rammer, Christian (Centre for European Economic Research (ZEW))
    Abstract: In this paper we analyze the conditions under which firms decide to offshore innovation. We consider the role of internal technological capabilities and technological dynamism in the firm environment, distinguishing speed and uncertainty of technological change. Using unique data from the German Innovation Survey we find that while high speed of technological change tends to drive innovation offshoring, high uncertainty about future technology developments results in more innovation offshoring only for firms with low internal technological capabilities. Firms with high technological capabilities instead are less likely to offshore innovation when uncertainty is high. We argue that these differences in offshoring behaviour reflect differing strategic objectives. We show that for firms with low technological capabilities asset augmentation is more important while for firms with high technological capabilities asset exploitation is more important. When faced by high technological uncertainty firms with low technological capabilities offshore innovation strategically in order to reduce uncertainty by augmenting their asset base. For firms with high technological capabilities asset augmentation is less important. When faced by high technological uncertainty, they prefer to innovate onshore in order to keep stronger control of their key assets.
    Keywords: offshoring; R&D; uncertainty; competition; technological change; speed
    JEL: F21 F23 L22 O32
    Date: 2016–07–25
  14. By: Jens Sörvik (European Commission – JRC); Alexander Kleibrink (European Commission – JRC)
    Abstract: Information and Communication Technologies (ICTs) are major drivers of social and economic change. They are also one of the key Thematic Objectives (TOs) in the European Structural and Investment Fund (ESIF). The aim of these funds is to strengthen economic, social and territorial cohesion within the European Union. ICTs not only constitute an important sector themselves, but are also an important enabler of other sectors. This is why, analysis of ESIF data on planned ICT investments show EUR 12.2 billion encoded in the dedicated TO, but when ICT categories in other TOs are included, this amount almost doubles, to EUR 21.4 billion. Finding out more about the ICT investment plans of EU Member States and regions is not always a straightforward process. The available data for ESIF are structured in TOs and Categories of Intervention (CoIs); however, ICT investment often funds activities beyond the dedicated TOs and CoIs. To obtain a better picture of planned ICT investments, the European Commission Directorate General for Communications Networks, Content & Technology (DG CONNECT) and the JRC Institute for Prospective Technological Studies (JRC-IPTS) have developed an online tool to display planned ICT investment data on a regional basis. This tool will help EC officials, national and regional policymakers working on ICT issues, and beneficiaries of ESIF, to understand what kind of ICT activities are being planned in Europe. The ICT monitoring tool can be searched using a number of predefined filters, or searches of TOs and CoIs can be customised. The tool also contains a database of keywords built up by a semantic search for keywords in Operational Programmes (OPs). This database allows the user to identify OPs that mention a number of ICT activities more frequently than others, and to identify if a specific topic is mentioned in a region at all. The data set included in the tool is based on an in-depth study of individual OPs, as well as on aggregated data sets. When studying the available data, we found that Thematic Objective 2 (TO2) does not account for all planned ESIF investments in ICT. Using a broader set of CoIs, planned spending on ICT almost doubled, from 3.8 % to around 6.6 % of the combined total of European Regional Development Funds (ERDF), the European Social Fund (ESF), Cohesion Funds (CF) and European Agricultural Fund for Rural Development (EAFRD). However, it is likely that even this method fails to capture all planned investments, as respondents to our study indicated that substantial investments in ICT will be allocated to other categories, which would increase ESIF investments in ICT to EUR 35.5 billion. However, this estimate is not currently included in the tool, as the methods of estimating investments are not judged to be adequate. This range of different amounts of investment reflects the dual nature of ICT as an important sector and activity in itself, as well as an enabling technology in other public and private activities. Taking the moderate estimates, the EU Member States that plan by far the largest investments in ICT in absolute terms are Poland, Italy and Spain; the regions with the largest planned investments are Campania (IT), Sicilia (IT), Andalucía (ES), Slaskie (PL) and Puglia (IT). For example, the region of Campania plans to invest more ESIF in ICT than the whole of Germany. The greatest investments will be in broadband and ICT infrastructures (EUR 6.9 billion), e-Inclusion and digital skills (EUR 3.9 billion), e-Government (EUR 3.4 billion), and smart cities and smart grids (EUR 3.1 billion). To get a more in-depth view of future plans, we carried out a keyword search of ESIF data. Among the most frequently mentioned keywords are ICT innovation, e-Inclusion, broadband and digital content. This is partly because these keywords are broad and all-encompassing, but the findings also reflect the ambition of many regions to invest in ICT-based innovation activities. Quite substantial ICT investments will go to ICT-based innovation and digital content, but this will be listed under CoIs related to support of small and medium-sized enterprises (SMEs) and research and innovation, rather than the core CoIs for planned ICT investments.
    Keywords: ICT, digital growth, monitoring, smart specialisation, structural funds, data for public policy
    Date: 2016–07
  15. By: Ana Fernández-Zubieta (CSIC); Thomas Zacharewicz (European Commission - JRC)
    Abstract: The 2015 series of RIO Country Reports analyse and assess the policy and the national research and innovation system developments in relation to national policy priorities and the EU policy agenda with special focus on ERA and Innovation Union. The executive summaries of these reports put forward the main challenges of the research and innovation systems.
    Keywords: R&I system, R&I policy, ERA, Innovation Union, Semester analysis, Spain
    Date: 2016–07
  16. By: Paul Cunningham (Manchester University); Jessica Mitchell (European Commission – JRC)
    Abstract: The 2015 series of RIO Country Reports analyse and assess the policy and the national research and innovation system developments in relation to national policy priorities and the EU policy agenda with special focus on ERA and Innovation Union. The executive summaries of these reports put forward the main challenges of the research and innovation systems.
    Keywords: R&I system, R&I policy, ERA, Innovation Union, Semester analysis, United Kingdom
    Date: 2016–07
  17. By: Mauro Pisu
    Abstract: In the latest 30 years, Costa Rica's real GDP per capita has more than doubled, driven by increasing labour utilisation. Labour productivity has instead stagnated at around 30% of the more advanced OECD countries. Productivity growth has been lacklustre despite the opening up of markets to international competition and large FDI inflows. Several obstacles continue to hamper the development of domestic firms and markets. They have fostered a dual speed economy characterised, on the one hand, by an innovative, productive and export oriented FDI sector – increasingly focussing on high value added sectors – and, on the other hand, a domestic sector – dominated by small firms and focused on traditional industries – that is neither innovative nor very productive. Boosting national productivity to sustain the convergence process towards OECD countries living standards will hinge on creating the right conditions for domestic firms to thrive and become more innovative and productive, while maintaining the long-standing commitment to open international markets and investment. To make this happens the government should: 1) encourage innovation and improving links between domestic and foreign firms by better enforcing and implementing intellectual property rights, shifting public R&D spending towards tertiary education institutions, and improving the coordination of public programmes promoting innovation of local firms and linkages with foreign affiliates; 2) strengthen competition in product markets and ease access to finance for SMEs by eliminating anti-trust exemptions, empowering the competition commission and giving it more independence, reducing barriers to entrepreneurship, ameliorating the corporate governance of state-owned enterprises and creating a level-playing fields between state-owned and private banks; 3) enhance the institutional and legal framework of the transport and other infrastructure sectors by reducing the number of agencies involved in policy development and project executions, and establishing an institutional framework to reduce policy uncertainty and attract more private investment. This Working Paper relates to the 2016 OECD Economic Assessment of Costa Rica ( Costa Rica: Stimuler la productivité pour soutenir la convergence des revenus Dans les dernières 30 années, le PIB réel par habitant du Costa Rica a plus que doublé, grâce à une utilisation croissante du travail. La productivité du travail a stagné autour de 30% des pays les plus avancés de l'OCDE. La croissance de la productivité a été terne, malgré l'ouverture des marchés à la concurrence internationale et de grandes entrées d'IDE. Plusieurs obstacles continuent d'entraver le développement des entreprises et des marchés intérieurs. Ils ont favorisé une économie à deux vitesses caractérisée, d'une part, par un secteur de l'IDE innovateur, productif et orienté vers l'exportation - se concentrant de plus en plus sur les secteurs à forte valeur ajoutée - et, d'autre part, un secteur domestique - dominé par les petites entreprises et concentré sur les industries traditionnelles - qui ne sont ni innovantes, ni très productives. Stimuler la productivité nationale pour soutenir le processus de convergence vers des pays de l'OCDE le niveau de vie dépendra de la création des conditions pour les entreprises nationales de se développer et de devenir plus innovantes et productives, tout en maintenant l'engagement de longue date pour ouvrir les marchés et les investissements internationaux. Pour que cela arrive, le gouvernement devrait: 1) encourager l'innovation et l'amélioration des liens entre les entreprises nationales et étrangères par une meilleure application et par la mise en oeuvre des droits de propriété intellectuelle, en déplaçant les dépenses de R&D vers les établissements d'enseignement supérieur, et par l'amélioration de la coordination des programmes publics de promotion de l'innovation des entreprises locales et des liens avec des sociétés étrangères affiliées; 2) renforcer la concurrence sur les marchés de produits et de faciliter l'accès au financement pour les PME en éliminant les exemptions anti-trust, habilitant la commission de la concurrence et en lui donnant plus d'indépendance, de réduire les obstacles à l'entrepreneuriat, améliorer la gouvernance des entreprises publiques et la création d'une concurrence equitable entre les banques publiques et privées; 3) renforcer le cadre institutionnel et juridique du transport et d'autres secteurs de l'infrastructure, en réduisant le nombre d'organismes impliqués dans les exécutions de développement des politiques et des projets, et l'établissement d'un cadre institutionnel pour réduire l'incertitude politique et d'attirer davantage d'investissements privés. Ce Document de travail se rapporte à l’Étude économique de l’OCDE de la Costa Rica 2016 ( ique-costa-rica.htm).
    Keywords: productivity, innovation, research and development, transport infrastructure, competition, recherche et développement, infrastructures de transport, innovation, compétition, productivité
    JEL: F20 G20 G28 H10 H40 H54 L40 L91 L98 O O30 O33 O38
    Date: 2016–07–27
  18. By: Balaz Vladimir (Slovak Academy of Sciences, (Bratislava, Slovak Republic)); Zifciakova Jana (European Commission - JRC)
    Abstract: The 2015 series of RIO Country Reports analyse and assess the policy and the national research and innovation system developments in relation to national policy priorities and the EU policy agenda with special focus on ERA and Innovation Union. The executive summaries of these reports put forward the main challenges of the research and innovation systems.
    Keywords: R&I system, R&I policy, ERA, innovation union, Semester analysis, Belgium
    JEL: I20 O30 Z18
    Date: 2016–07
  19. By: Yannick LUNG; Bernard JULLIEN; Christophe MIDLER
    Abstract: A detailed comparative analysis of two \"low cost\" car projects at Renault (Logan and Kwid) illustrates how the Entry strategy has fundamentally transformed the French carmaker. An increasingly explicit reverse innovation approach has emerged, along with systematic adoption of design-to-cost methods, which are at the heart of fractal innovation. The first part of the paper analyses the conditions under which this strategy has been progressively adopted and the second part explains its implementation throughout the management of these two projects.
    JEL: D22 F23 L62 N60 O14 O32
    Date: 2016
  20. By: Murat Seker; Daniel Rodriguez Delgado; Mehmet Fatih Ulu
    Abstract: In this study, we build a structural model of multi-product firms that illustrates how access to new foreign intermediate goods contributes to product innovation. We establish a stochastic dynamic model of firm evolution allowing firms to be heterogeneous in their efficiency levels. Through introducing importing decision to this dynamic framework, we show that the effects of importing intermediate goods are twofold: i) it increases the revenues per each product created and ii) through the knowledge spillovers obtained from importing, firms become more likely to introduce new varieties. Calibration of the model to Indian data shows that the model can successfully explain the dynamics of product evolution and other moments related to importing and product distribution. Finally the comparison of autarky with trade equilibrium shows how liberalizing trade increases innovation performances and product growth.
    Keywords: Firm dynamics, Heterogeneous firms, Innovation, Endogenous product scope, Importing intermediate goods, Trade liberalization, Indian manufacturing sector
    JEL: F12 F13 L11 O31
    Date: 2015
  21. By: Tavassoli, Sam (CIRCLE, Lund University); Bengtsson, Lars (LTH, Lund University); Karlsson, Charlie (CESIS, KTH)
    Abstract: The literature in the Strategic Entrepreneurship (SE) is increasingly embracing the concept and implications of knowledge spillovers. In this paper, we add to the theoretical repertoire 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 three 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) has received the major attention in previous research in increasing the amount of ‘inputs’ dimension of SE, while the aspatial knowledge (either inter-regional or intra-firm) has been relatively neglected not only for ‘inputs’, but also for ‘resource orchestration’ dimension. At the end, the paper provides suggestions for future research.
    Keywords: Strategic entrepreneurship; knowledge spillovers; spatial; aspatial
    JEL: D21 D80 L10 L26
    Date: 2016–07–06
  22. By: Frick, Andreas; Maxin, Hannes
    Abstract: Venture capital and corporate venture capital firms are driven by high financial returns through the sale of ownership stakes. Additionally, corporate venture capital firms maximize the profits of their parent companies by generating innovation advantage. Despite this, both intermediaries can join syndicates to obtain more information about their potential investments. We examine a model to show the differences between the syndication decisions of these two investor types. We find that corporate venture capital firms finance more projects without a syndicate in comparison with venture capital firms. To reinforce our theoretical results, we conduct a survey about the German private equity market. The empirical evidence support our main theoretical findings.
    Keywords: Corporate venture capital; Venture capital; Syndication; Screening
    JEL: G24 M13
    Date: 2016–07
  23. By: Mark Boden (European Commission – JRC); Patrice dos Santos (European Commission – JRC); Karel Haegeman (European Commission – JRC); Elisabetta Marinelli (European Commission – JRC); Susana Valero (European Commission – JRC)
    Abstract: This policy brief provides a summary of the approach and outcomes of a European Parliament Preparatory Action centred on the refinement and implementation of the Research and Innovation Smart Specialisation Strategy (RIS3) in the region of Eastern Macedonia and Thrace (REMTh). Implemented, mainly during 2015, by the European Commission (the Joint Research Centre in collaboration with the Directorate General for Regional and Urban Policy) and the Managing Authority of the region, this action also had the explicit aim to draw lessons for other low growth and less developed regions in Europe. An essential aspect of the preparatory action was the opportunity it offered for stakeholders, the EC and the regional authority to share experiences and build a common understanding of RIS3 and the challenges to its implementation. This centred on a series of stakeholder events, critical for the mutual learning process and trust building among stakeholders. Stakeholders have thus worked together to identify and exploit research and innovation based opportunities for the region as well as tackling the challenges to RIS3 implementation. The various tools developed and applied in the REMTh preparatory action can, taken together, be seen to constitute a toolbox of approaches for RIS3 implementation. This toolbox and the hands-on approach taken for the implementation of this Preparatory Action, as well as the flexibility to further adapt methodologies to local needs and context, can generate a wide set of tools and lessons on the implementation of regional smart specialisation strategies. These can be of benefit both to less developed regions that have struggled to restructure their economy in spite of considerable investments, and to all regions facing difficulties in implementing RIS3 as a new and largely unknown governance approach.
    Keywords: REMTh, Eastern Macedonia and Thrace, RIS3, smart specialisation, toolbox
    Date: 2016–07
  24. By: Giorgia Casalone (Universita'del Piemonte Orientale); Federico Biagi (European Commission - JRC)
    Abstract: The purpose of this report is to describe the methodology used to develop a comprehensive dataset, denominated INNOREG, which provides information on several potential drivers and barriers to firms’ innovation activity. All the examined drivers and barriers depend, in a more or less direct way, upon the decisions taken by national policy makers. By merging INNOREG with data on ICT use, innovation, productivity and employment it will be possible to investigate the effect of several policies (mainly concerning labour market and taxation) and of the efficiency of bureaucracy on measures of economic performance such as production, employment, innovation etc.. The data are of three main types: 1. reforms of labour market regulation, computed using the EU Commission LABREF database, and which gives us information on the direction and intensity of reforms affecting the labour markets of 27 EU countries from 2000 to 2012 (LABREF_DRF.DTA); 2. generosity of the tax treatment for R&D, as measured by the B-Index over the period 1990-2013 (not all years are available) for a set of EU countries (B_INDEX.DTA); 3. indices of business regulation, as measured by various indicators taken by the Wordbank DoingBusiness project, reported annually from 2004 to 2014 for all EU countries (DOINGBUSINESS.DTA). For each of the above three topics, we developed a specific dataset (name in parenthesis). The three resulting datasets were then merged to form the comprehensive INNOREG dataset (INNOREG.dta). In this report we also provide summary statistics on the three types of data mentioned above.
    Keywords: Labour market reform, B-Index; business regulation; innovation
    Date: 2016–07
  25. By: Markus LEIPPOLD (University of Zurich and Swiss Finance Institute); Jacob STROMBERG (University of Zurich and Swiss Finance Institute)
    Abstract: We investigate the implications of technological innovation and non-diversifiable risk on entrepreneurial entry and optimal portfolio choice. In a real options model where two risk-averse individuals strategically decide on technology adoption, we show that the impact of non-diversifiable risk on the option timing decision is ambiguous and depends on the frequency of technological change. Compared to the complete market case, non-diversifiable risk may accelerate or delay the optimal investment decision. Moreover, strategic considerations regarding technology adoption play a central role for the entrepreneur's optimal portfolio choice in the presence of non-diversifiable risk.
    Keywords: Real Options, Incomplete Markets, Technology Adoption, Optimal Portfolio Choice, Hedging
    JEL: G11 G31 E02
  26. By: Daniel Nepelski (European Commission – JRC); Giuseppe Piroli (European Commission – DG Employment, Social Affairs & Inclusion); Giuditta De Prato (European Commission – JRC)
    Abstract: Through the perspective of VC-backed companies, this report describes the main locations of start-up activity in Europe, i.e. start-up hotspots. It aims at providing evidence on start-up activity in Europe and at describing the European VC activity over the last two decades. The study reports the following: • Europe receives 15% of global VC investments. After the hype, VC activity in Europe decreased and has never come close to the levels from 2000. VC funds have also moved away from seed to later stage of funding. • 28% of all European VC-backed companies are based in one of the 20 cities. Paris, London and Berlin lead the ranking of cities with the highest number of VC-backed companies in Europe. • The location of a start-up is likely to be one of the major factors influencing the amount of money it receives from VC funds and the number of funding rounds it goes through. • Majority of European VC-backed companies are up to 8 years old and have up to 100 employees. • The majority of VC-backed firms in Europe belong to the Business, Consumer and Retail industries.
    Keywords: venture capital, start-ups, entrepreneurship
    JEL: O3 L26 G24 R51
    Date: 2016–07
  27. By: Andy Stirling (Professor of Science & Technology Policy, University of Sussex, UK)
    Abstract: Equally at national and the highest international levels, few issues in technology governance are more vexed than those around the precautionary principle. Often using colourful rhetoric – and frequently paying scant attention to the substantive form taken by precaution in any given setting, even ostensibly academic analyses accuse precautionary approaches of being ‘dangerous’, ‘arbitrary’, ‘capricious’ and ‘irrational’ – somehow serving indiscriminately to ‘stifle discovery’, ‘suppress innovation’ and foster an 'anti-technology’ climate. The widely advocated alternative is ‘science based’ risk assessment – under which single aggregated probabilities are assigned to supposedly definitively-characterised possibilities and asserted to offer sufficient representations of the many intractable dimensions of uncertainty, ambiguity and ignorance. The high economic and political stakes combine with their expediency to entrenched institutional and technological interests, to intensify these arguments. Amidst all the noise, it is easy to miss the more balanced, reasonable realities of precaution. By reference to a large literature on all sides of these debates, this paper shows how these pressures are not only misleading, but themselves seriously unscientific – leading to potentially grave vulnerabilities. Experience over more than a century in technology governance, shows that the dominant issues are not about calculation of probabilities, but about the effects of power in innovation and regulatory systems, the need for balanced consideration of alternative options, scrutinising claimed benefits as much as alleged risks and always being vigilant for the ever-present possibility of surprise. In this light, it is not rational to assert that incertitudes of many difficult kinds must always take the convenient forms susceptible to risk assessment. To invoke the name of science as a whole, in seeking to force such practices, is gravely undermining of science itself. And these pressures also seriously misrepresent the nature of innovation processes, in which the branching evolutionary dynamic means that concerns over particular trajectories simply help to favour alternative innovation pathways. Precaution is about steering innovation, not blocking it. It is not necessarily about ‘banning’ anything, but simply taking the time and effort to gather deeper and more relevant information and consider wider options. Under conditions of incertitude to which risk assessment is – even under its own definition – quite simply inapplicable, precaution offers a means to build more robust understandings of the implications of divergent views of the world and more diverse possibilities for action. Of course, like risk assessment, precaution is sometimes implemented in mistaken or exaggerated ways. But the reason such a sensible, measured approach is the object of such intense general criticism, has more to do with the pervasive imprints of power in and around conventional regulatory processes, than it does with any intrinsic features of recaution itself. Whilst partisan lobbying is legitimate in a democracy as a way to advance narrow sectoral interests, it is unfortunate when such rhetorics seek spuriously to don the clothing of disinterested science and reason in the public interest. Taking the best of all approaches, this paper ends by outlining a general framework under which more rigorous and comprehensive precautionary forms of appraisal, can be reconciled with riskbased approaches under conditions where these remain applicable. A number of practical implications arise for innovation and regulatory policy alike, spanning many different sectors of emerging technologies. In the end, precaution is identified to be about escaping from technocratic capture under which sectoral interests use narrow risk assessment to force particular views of the world. What precaution offers to enable instead is more democratic choice under ever-present uncertainties, over the best directions to be taken by innovation in any given field.
    Keywords: risk assessment, uncertainty, precaution, technology governance, direction of innovation
    Date: 2016–07
  28. By: Christophe André; Thomas Chalaux
    Abstract: Boosting productivity growth is necessary to raise living standards and well-being for all. Aggregate productivity has fallen, mainly driven by manufacturing, although service industries have also tended to underperform. Reviving productivity requires improving framework conditions further so labour and capital can more easily move to the most dynamic sectors and firms, making the tax system more growth-friendly, and supporting innovation, basic research and young firms’ financing. This working paper relates to the 2016 OECD Economic Survey of Finland ( Stimuler la productivité en Finlande Il faut stimuler la croissance de la productivité pour améliorer le niveau de vie et de bien-être de tous. La productivité globale a reculé, principalement sous l’influence du secteur manufacturier, même si les services ont eu tendance à faire de moins bon résultats. Pour gagner en productivité, il faut améliorer encore les conditions générales de telle façon que le travail et le capital puissent être redéployés plus facilement vers les secteurs et les entreprises les plus dynamiques, rendre le système fiscal plus propice à la croissance et soutenir le financement de l’innovation, de la recherche fondamentale et des jeunes entreprises. Ce Document de travail se rapporte à l’Étude économique de l’OCDE de la Finlande 2016 ( ique-finlande.htm).
    Keywords: taxation, economic growth, innovation, research and development, labour productivity, productivité du travail, recherche et développement, taxation, innovation, croissance économique
    JEL: D24 H21 J24 K20 O30 O38 O47
    Date: 2016–07–27
  29. By: Kurt Unger (Division of Economics, CIDE)
    Abstract: After a brief review of contemporary Mexican policy on science and technology we locate innovation experiences of firms in the context of innovation systems and market failures. Given the purpose of competitiveness as related to local innovation policy, the focus must be to solve the market failures inhibiting the firms' willingness to assume innovation risks and uncertainty. Most of all the failure of higher rates of profitability for non-tradeables, which are discriminating against tradeables in higher competition and more uncertain outcomes. For the most part there is also a lack of continuity in the participation of firms in the programs of subsides for innovation projects. In conclusion we argue for highly differentiated policy according to sectors and states.
    Keywords: innovation, competitiveness, profitability, continuity, sectors, states, firms.
    JEL: O32
    Date: 2015–11
  30. By: Ben Westmore
    Abstract: GDP per capita in Lithuania rose from one third to two thirds of the OECD average level between 1995 and 2014, despite internal and external crises. Productivity catch-up was critical to this process, although the level of labour productivity also remains around one-third below the OECD average. Further productivity gains will partly rely on improvements in resource allocation. In particular, the Lithuanian government should promote better governance of state-owned enterprises, more effective bankruptcy procedures and new forms of business financing. However, convergence will also require policy settings that encourage advances in within-firm productivity growth. Improvements to the quality of education at all levels and increasing the role of workplace training will be important. So too will be further measures that support the innovation capacity of the business sector, including innovation policies that promote the absorptive capacity of firms and do not favour incumbents at the expense of young businesses. This Working Paper relates to the 2016 OECD Economic Survey of Lithuania ( Atteindre des nouveaux sommets : réalisations et défis futurs pour une convergence de la productivité en Lituanie Le produit intérieur brut (PIB) par habitant s'est hissé d'un tiers à deux tiers de la moyenne de l'OCDE entre 1995 et 2014, malgré des crises internes et externes. Le rattrapage du retard qu'avait accumulé la Lituanie en termes de productivité a joué un rôle essentiel dans ce processus, même si le niveau de la productivité du travail demeure inférieur d'un tiers environ à la moyenne de l'OCDE. La poursuite de cette convergence dépendra en partie d'une amélioration de la répartition des ressources. Le gouvernement devrait notamment favoriser une amélioration de la gouvernance des entreprises publiques, la mise en place de procédures de faillite efficaces et l'émergence de nouvelles formes de financement des entreprises. Cette convergence passera aussi par des politiques publiques propices à l'amélioration de la croissance de la productivité au sein des entreprises. Il sera également important d'améliorer la qualité de l'enseignement à tous les niveaux et de renforcer le rôle de la formation en entreprise. Néanmoins, il conviendra aussi de prendre de nouvelles mesures pour renforcer la capacité d'innovation du secteur des entreprises, notamment en mettant en oeuvre des politiques d'innovation qui permettent d'améliorer encore la capacité d'absorption des entreprises et ne favorisent pas les acteurs en place au détriment des jeunes entreprises. Ce Document de travail se rapporte à l’Étude économique de l’OCDE 2016 de la Lituanie ( ique-lituanie.htm)
    Keywords: product market regulation, education, innovation, productivity convergence, resource allocation, knowledge transfer, transferts de connaissances, convergence de la productivité, allocation des ressources, innovation, éducation, réglementation des marchés de produits
    JEL: F43 O10 O24 O33 O38 O47 O52
    Date: 2016–07–26
  31. By: Yoshimichi Murakami (Research Institute for Economics & Business Administration (RIEB), Kobe University, Japan); Tomokazu Nomura (Faculty of Economics, Aichi Gakuin University, Japan)
    Abstract: In this paper, we analyze the determinants of wage equalization in Chile during the commodity boom from 1996 to 2006. Most Latin American countries, including Chile, reported both high economic growth and lowered wage inequality during the commodity boom. Thus, a detailed analysis regarding the determinants of the wage equalization is necessary. We analyze the dominant factors that contributed to the changes in workers' wages at different points of the wage distribution. For this purpose, we take advantage of a methodology recently developed by Firpo, Fortin, and Lemieux (2009), and apply the standard Blinder–Oaxaca decomposition approach to the quantile regression technique. Our study finds three main channels for the wage equalization witnessed from 1996 to 2006: (1) the decreasing share of workers with primary education as well as the increase in their relative wages across the whole wage distribution, (2) the decreasing returns to higher education, especially the university level, at the top of the wage distribution, and (3) the increasing industry wage premiums of primary commodity sectors such as agriculture and forestry at the bottom of the wage distribution. Therefore, the wage equalization in Chile during the said period can be explained by the Stolper–Samuelson effect and the increasing relative supply of higher educated workers, both of which dominate the possible upward pressure on the wages of higher-educated workers, derived from skill-biased technological changes (SBTCs). The findings are quite different from those of previous studies that analyzed the case of Chile during the period prior to the commodity boom and found that the increase in the wage inequality can be explained by SBTCs. Therefore, using the above-mentioned methodology, our study provides new evidence regarding the distributional impacts of globalization in an emerging country.
    Keywords: Chile, Commodity boom, Decomposition approach, Skill-biased technological changes, Stolper–Samuelson effect
    Date: 2016–07
  32. By: Castillo-Sam, Eva Marie; Tormis, Jeaneth; Murcia, John Vianne
    Abstract: This study determined the factors that affect business innovation of micro, small and medium enterprises (MSMEs) in Davao del Sur. Data were gathered from owners and proprietors of 88 microenterprises, 61 small enterprises and 52 medium enterprises registered and are operational within the municipalities and component city of the Province of Davao del Sur. Results revealed that the respective mean scores of the management factors have the interpretations: articulation of vision, mission and goals was found to be good, organizational structure was found to be good, while human resource management was found to be very good. In addition, the mean scores for marketing mix have the following interpretations: Product was found to be very good, while price, place and promotion were found to be good. MSMEs were found to be financially-capable. More so, politico-legal, economic, socio-cultural and technological factors were found to be influential in the activities and decision-making of the owners and proprietors. They also posed high regard in adopting business innovation. Stepwise regression analysis was used to derive a model for business innovation of micro, small and medium enterprises in Davao del Sur. The final model revealed that a combination of organizational structure, human resource management, politico-legal forces and socio-cultural forces significantly determine the business innovation of micro, small and medium enterprises, holding other variables constant.
    Keywords: business innovation, MSMEs, management factor, marketing mix, financial capability, best-fit model
    JEL: M00 M1 M3
    Date: 2016–01
  33. By: Odilova, Shoirahon; Xiaomin, Gu
    Abstract: Extant literature on the link between patent protection and economic growth have yielded inconclusive results. In this study, we aim to engage in this debate by conjecturing that intelligence moderates the effect of patent protection on economic growth. Using annual data of 88 nations from 1970 to 2013 we find that patent protection has positive effect on growth only after accounting for the interaction between IQ and IPR. Indeed, we find that the interaction term is negative and statistically significant suggesting that countries with higher level of intelligence (above 90 points) can offset the negative effect of weak IPR protection. The results remain robust for a battery of robustness tests.
    Keywords: IQ; intelligence; patent protection; economic growth
    JEL: F0
    Date: 2016
  34. By: Yuki SATO (University of Lausanne and Swiss Finance Institute)
    Abstract: We propose a dynamic asset-market equilibrium model in which (1) an "innovative" asset with as-yet-unknown average payoff is traded, and (2) investors delegate investment to experts. Experts secretly renege on investors' orders and take on leveraged positions in the asset to manipulate investors' beliefs, thereby attracting more orders and fees. Despite agents' full rationality, the combination of experts' moral hazard and investors' learning generates bubble-like price dynamics: gradual upswing, overshoot, and reversal. Consistent with empirical observations, hedge funds "ride" price swings, adjusting holdings counter-cyclically to other financial intermediaries. Capping fees may lower fund leverage, dampen price swings, and improve welfare.
    Keywords: asset price swings, delegated investment, innovation, learning, moral hazard, signal jamming
    JEL: D80 G10 G23
  35. By: Oo, Aung; Muntasir, Nafis; Poon, Kenneth; Weersink, Alfons; Thimmanagari, Mahendra
    Abstract: The agricultural-based biomaterial industry in Ontario is investigated with an overarching goal of formulating strategies to accelerate the industry’s establishment and development. The availability of current and potential biomass feedstock for use in the biomaterial sector is assessed. The current market status of selected biomaterials is analyzed, and the promising biomaterials for immediate commercial establishment in Ontario are identified. Policy instruments to promote the biomaterial industry are examined and compared with those in other jurisdictions. The influential factors in commercializing biomaterials and barriers are reviewed, and an evaluation matrix to screen the biomaterials/firms is developed. The strategic approach to accelerate the industry development is proposed with the prioritized market sectors and biomaterials.
    Keywords: biomaterial, biocomposites, fibreboards, innovation, Agricultural and Food Policy,
    Date: 2016–04
  36. By: Diego LIECHTI (University of Bern); Claudio LODERER (University of Bern and Swiss Finance Institute); Urs PEYER (INSEAD)
    Abstract: How much of entrepreneurial performance is sheer luck compared to talent, experience, education, and hard work? We define luck as unexpected performance and look for an answer in a large survey of entrepreneurs. Accordingly, luck ranks last in importance among various success factors and accounts for less than one third of performance variation. This ranking is unaffected by past performance and many personality traits, including self-attribution and illusion of control. Luck matters, however, in activities such as finding the appropriate business idea or choosing the right moment to enter a market. More important, luck perceptions shape decisions. For example, individuals who believe luck is important are reluctant to become entrepreneurs. Consistent with the definition, what entrepreneurs believe is luck correlates with the unexplained variation in a standard econometric model of performance. Estimates of that model also show that hard work does affect performance. So do talent, education, and, especially, experience.
    Keywords: luck, start-ups, entrepreneur, factors of success, performance
    JEL: G3 G02 M13
  37. By: Ron Boschma, Lars Coenen, Koen Frenken, Bernhard Truffer; Lars Coenen; Koen Frenken; Bernhard Truffer
    Abstract: This paper aims to develop a theoretical framework on regional diversification. Combining insights from the evolutionary economic geography literature and the transition literature, we argue that a theory of regional diversification should build on the current understanding of conditions for related diversification but additionally start to tackle processes of unrelated diversification by accounting for (1) the role of agency (institutional entrepreneurship) and the dynamic interplay between agency and context; (2) enabling and constraining factors at various spatial scales. We propose a typology of four regional diversification processes by cross-tabulating related versus unrelated diversification with niche creation versus regime adoption.
    Keywords: evolutionary economic geography, transition studies, regional diversification, unrelated diversification, institutional entrepreneurship, institutional change
    JEL: B52 O18 R11
    Date: 2016–07
  38. By: Michael Fritsch (Friedrich Schiller University Jena); Alina Sorgner (Friedrich Schiller University Jena); Michael Wyrwich (Friedrich Schiller University Jena); Evguenii Zazdravnykh (National Research University Higher School of Economics)
    Abstract: This paper investigates the persistence of entrepreneurship in the region of Kaliningrad between 1925 and 2010. During this time period the area experienced a number of extremely disruptive shocks including; devastation caused by World War II, a nearly complete replacement of the native German population by Soviets, and 45 years under an anti-entrepreneurial socialist economic regime followed by a shock-type transition to a market economy. Nevertheless, we find a surprisingly high level of persistence of industry-specific self-employment rates in the districts of the Kaliningrad region. Our analysis suggests that persistence of entrepreneurship is higher in regions with a history of successful entrepreneurship. That is, in regions where a specific industry was particularly efficient and entrepreneurial activity was especially pronounced.
    Keywords: Entrepreneurship, regional culture, persistence
    JEL: L26 N94 P25 P5
    Date: 2016
  39. By: Robert Allen (New York University ABU Dhabi, UAE)
    Abstract: Schumpeter’s ‘perennial gale of creative destruction’ blew strongly through Britain during the Industrial Revolution, as the factory mode of production displaced the cottage mode in many industries. A famous example is the shift from hand loom weaving to the use of power looms in mills. As the use of power looms expanded, the price of cloth fell, and the ‘golden age of the hand loom weaver’ gave way to poverty and unemployment. This paper argues that the fates of the hand and machine processes were even more closely interwoven. With the expansion of factory spinning in the 1780s, the demand for hand loom weavers soared in order to process the newly available cheap yarn. The rise in demand raised the earnings of hand loom weavers, thereby, creating the ‘golden age’. The high earnings also increased the profitability of developing the power loom by raising the value of the labour that it saved. This meant that less efficient–hence, cheaper to develop--power looms could be brought into commercial use than would have been the case had the golden age not occurred. The counterfactual possibilities are explored with a model of the costs of weaving by hand and by power. The cottage mode of production was an efficient system of producing cloth, but it self-destructed as its expansion after 1780 raised the demand for sector-specific skills, thus providing the incentive for inventors to develop a power technology to replace it. The power loom, in turn, devalued the old skills, so poverty accompanied progress.
    Keywords: technological change, invention, technological unemployment, creative destruction
    JEL: N63 N34 O31

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