nep-ino New Economics Papers
on Innovation
Issue of 2016‒10‒23
seventeen papers chosen by
Uwe Cantner
University of Jena

  1. Grantbacks, Territorial Restraints and the Type of Follow-On Innovation: The "But for..." Defence By Ambashi, Masahito; Régibeau, Pierre; Rockett, Katharine
  2. Intellectual Property Rights Induced Trade By Juan Felipe Bernal Uribe
  3. Firm Subsidies, Wages and Labor Mobility By Maliranta, Mika; Määttänen, Niku; Pajarinen, Mika
  4. Pre-commercial Procurement, Procurement of Innovative Solutions and Innovation Partnerships in the EU: Rationale and Strategy By Elisabetta Iossa, Federico Biagi and Paola Valbonesi
  5. Innovation and Manufacturing Offshoring with Fully Endogenous Productivity Growth By Colin Davis; Ken-ichi Hashimoto
  6. Nanothechnology and the emergence of a general purpose technology By Stuart Graham; Maurizio Iacopetta
  7. Do ‘green’ employment effects vary across industries? Implications for green growth By Christine Mee Lie
  8. Entrepreneurship as a Driver of Economic Growth: Evidence from Enterprise Development in Nigeria By FARAYIBI, Adesoji
  9. New and Improved? By Eric Schmidbauer
  10. Tort Reform and Innovation By Alberto Galasso; Hong Luo
  11. A Model of Sustainable Growth with Renewables( Wind, CS, Algae) in Africa Europe Relation By Paunić, Alida
  12. Taxation or subsidization policy for new technology adoption in oligopoly By Hattori, Masahiko; Tanaka, Yasuhito
  13. Toward a Matching Approach to Support CBM (Collaborative Business Model) Processes between Regional Entrepreneurs within the RIS3 Policy By Jérémie Faham; Maxime Daniel; Jérémy Legardeur
  14. Patterns and determinants of inventors' mobility across European urban areas By Clément Gorin
  15. Louis Pasteur's entrepreneurship : an economic history of science. By Gabriel Galvez-Behar
  16. Dancing with the Stars: Interactions and Human Capital Accumulation By Valerio Sterzi; Stefanie Stantcheva; Santiago Caicedo; Ernest Miguelez; Ufuk Akcigit
  17. A Ricardian-Demand Explanation for Changing Pharmaceutical R&D Productivity By Mark Pauly; Kyle Myers

  1. By: Ambashi, Masahito; Régibeau, Pierre; Rockett, Katharine
    Abstract: We analyse the effect of grantback clauses in licensing contracts. While competition authorities fear that grantback clauses might decrease the licensee’s ex post incentives to innovate, a standard defence is that grantback clauses are required for the patent-owner to agree to license its technology in the first place. We examine the validity of this “but for†defence and the equilibrium effect of grantback clauses on the innovation incentives of the licensee for both non-severable and severable innovations. Under the 2004 EU Technology Transfer Guidelines , and the guidelines for some other jurisdictions, grantback clauses that apply to “non - severable†(read “infringing†) innovations are considered to be less controversial than clauses that apply to “severable†innovations. We show, to the contrary, that grantback clauses do not increase the patent- holder’s incentives to license when non-severable innovations are at stake but they do when severable innovations are concerned – suggesting that the “but for†defence might be valid for severable innovations but not for non-severable ones. Moreover we show that, for severable innovations, grantback clauses can increase the range of parameters for which follow-on innovation by the licensee occurs.
    Date: 2016–10
  2. By: Juan Felipe Bernal Uribe
    Abstract: A positive relationship between a country’s strength of Intellectual Property Rights (IPRs) and the volume of imports of patent-sensitive goods has been empirically demonstrated. We provide a theoretical explanation of this link. Strengthening IPRs in a given economy generates a reallocation of R&D resources (in the form of skilled labor) out of the imitative activity and into the innovative activity and the production of consumption goods. Foreign patent owners perceive this reallocation of resources as a reduction in the imitation risk arising from the economy undertaking the change. This fall on the risk of imitation is translated as an increase in the expected value of that market. In average, a higher fraction of foreign innovators decide to incur in the ?xed cost of exporting after the change has taken place. This mechanism does not rely on technological assumptions about the innovative capabilities of any country, but rather on the interaction between endowments of R&D resources and national institutions related to IPRs. A calibrated model of this economy predicts an increase in skilled capital remunerations in the North. In the South, the remuneration of exporting innovators increases, while that of imitators and skilled workers in the Final sector decreases. The total number of skilled labor engaged in innovation in the world falls after the change, leading to a decrease in the rate of growth of the world.
    Date: 2016–05–24
  3. By: Maliranta, Mika; Määttänen, Niku; Pajarinen, Mika
    Abstract: The bulk of innovation subsidies in Finland are allocated to firms in industries where the employment share of “innovators,” i.e., workers who are specialized in R&D&I, is very high. The average subsidy per employee is typically the highest among young firms. At the firm level, an increase in innovation subsidies is typically associated with an inflow of innovators from high-productivity firms. These findings suggest that innovation subsidies contribute to economic renewal and the diffusion of knowledge between firms. Non-innovation subsidies, in contrast, appear to support established industry structures: a large share of them has been granted to relatively old firms within “traditional” manufacturing industries. Since non-innovation subsidies are systematically allocated to different types of firms than innovation subsidies, they may also crowd out resources from firms that receive innovation subsidies, thereby overriding some of the possible beneficial effects of innovation subsidies.
    Keywords: Firm subsidies, innovation, productivity, labor mobility
    JEL: O31 O33 O38 J62
    Date: 2016–10–13
  4. By: Elisabetta Iossa, Federico Biagi and Paola Valbonesi
    Abstract: We consider alternative European public procurement mechanisms for acquiring R&D services and innovative solutions, focusing on Pre-commercial Procurement, Public Procurement of Innovative Solutions and Innovation Partnerships. For each of these mechanisms, we identify conceptually strengths and weaknesses. We highlight the role played by (i) economies of scope and externalities between R&D and large-scale production; (ii) degree of specificity of the innovation; (iii) role of SMEs in the market and level of market competition; (iv) risk of market foreclosure and supplier lock-in. This article contributes to the literature on incentives in demand-side innovation policy by tapping into the contractual design features and by offering relevant implications for academics and policy makers.
    Keywords: Innovation, Demand-side policies, Incentives, Pre-commercial Procurement, Public Procurement of Innovative Solutions, Innovation Partnership.
    JEL: O31 O32 O38 H57
    Date: 2016
  5. By: Colin Davis (Institute for the Liberal Arts, Doshisha University); Ken-ichi Hashimoto (Graduate School of Economics, Kobe University)
    Abstract: This paper investigates the relationship between net offshoring patterns for innovation and manufacturing and fully endogenous productivity growth in a two-country model. The occupational choice of skill-differentiated workers into low-skilled employment in production and high-skilled employment in innova- tion determines labor market allocations, and perfect investment mobility allows firms to shift innovation and manufacturing independently between countries. These mechanisms generate a tension between access to technical knowledge and low-cost high-skilled labor in the location decision for innovation, which results in innovation and manufacturing tending to concentrate in the asset-wealthy (asset-poor) country when trade costs are high (low). The model exhibits a positive relationship between innovation costs and the concentration of industry and innovation, ensuring that a rise in knowledge diffusion between countries coincides with increases in net offshoring flows in innovation and manufacturing from the asset-wealthy country to the asset-poor country, and a faster rate of productivity growth, when the asset-wealthy country has larger shares of innovation and production.
    Keywords: innovation offshoring, manufacturing offshoring, endogenous productivity growth, process innovation, industry location, international trade
    JEL: F12 F43 R11
    Date: 2016–10
  6. By: Stuart Graham (Georgia Institute of technology); Maurizio Iacopetta (Observatoire français des conjonctures économiques)
    Abstract: This article examines how closely nanotechnology resembles a general purpose technology (GPT). Using patented nanotechnology inventions during 1975-2006, we test for characteristics of GPTs identified in the prior literature, and find evidence that nanotechnology shows both “pervasive” adoption and “spawning” of follow-on innovation. Offering a methodological contribution, we employ concentration indexes such as the Gini index and Lorenz curve to construct “knowledge dissemination curves” for different technologies, thereby providing evidence that nanotechnology shares relevant characteristics with other GPTs. Using an entirely new dataset, we use three different definitions of a “nanotechnology patent” and calculate patent generality indexes, finding that nanotechnology patents are significantly more likely to be referenced across technology space than are patents in information technology, another widely-adopted GPT. In another contribution, we suggest that innovative materials may demonstrate the characteristics of a GPT, and provide a historical parallel between the advancement of steel technology in the 19th Century with that of nanotechnology in the present day.
    Keywords: Nanotechnology; General Purpose Technology; Patent Analysis
    JEL: O30 O33 O34
    Date: 2014–12
  7. By: Christine Mee Lie (TIK Centre, University of Oslo)
    Abstract: This article investigates the impact of green innovation on employment growth, employing firm-level survey data from South Korea. We focus especially on the industry-dimension, investigating whether displacement or compensation effects vary across industries and according to subtypes of green process innovations. Results demonstrate that both green and non-green product innovations are associated with significant employment increases: a 1% increase in sales growth from new products is associated with a less than 1% increase in employment. Finally results are found to vary across industries, especially when simultaneously accounting for subtypes of green process innovations.
    Date: 2016–10
  8. By: FARAYIBI, Adesoji
    Abstract: This study provides an econometric analysis of the role of entrepreneurship in economic growth in Nigeria. The study also assesses the areas where the country has developed enterprise and innovations. Findings from empirical analysis confirm the roles of entrepreneurs as good drivers of economic growth in the country. Specifically, results reveal that credit to SMEs is statistically significant in the determination of economic growth, implying that increase in entrepreneurial financing has significant effect on economic growth in Nigeria. Particularly, the increase in the operations and activities of SMEs in Nigeria remains indispensable to the pursuit of economic growth and development as a nation. However, the major hindrance inhibiting entrepreneurship as a growth driver in Nigeria include; poor infrastructural facilities, inadequate start-up process, financial management problems, lack of strategic planning and other socio-cultural problems. The study recommends building an in-country entrepreneurial capacity by incorporating requisite enterprise trainings and development progammes into the nation’s education system at all levels. Also, government, banking institutions and the organized private sector should increase financial support for entrepreneurial oriented initiatives.
    Keywords: Entrepreneurship, Enterprise Development, SMEs, MSMEs, SMEDAN, YouWin
    JEL: L1 M2 M21
    Date: 2015–08–10
  9. By: Eric Schmidbauer (University of Central Florida, Orlando, FL)
    Abstract: Are new versions of products necessarily better? We analyze product innovation by a rm that engages in research and development designed to improve an existing product, the outcome of which is uncertain. If the rm adopts the innovation its modi ed product appears to consumers as \new and improved," but consumers do not immediately know whether or how much the product is better. We nd that new products are on average improved and therefore command a pricing premium. This induces some types to exploit the innovation signal by selling new versions that are only trivially di erent from their older version or that require ineciently high upgrade costs. Nevertheless, the incentive to \show o " by introducing a new product may improve total welfare by inducing more innovation adoption and thereby mitigating the standard monopoly underinvestment problem. Firms bene t ex-ante from better consumer information about quality or from committing to not exploit their informational advantage.
    Keywords: asymmetric information, signaling, innovation
    JEL: D82 O31
    Date: 2016–03
  10. By: Alberto Galasso; Hong Luo
    Abstract: Current academic and policy debates focus on the impact of tort reforms on physicians' behavior and medical costs. This paper examines whether these reforms also affect incentives to develop new technologies. We find that, on average, laws that limit the liability exposure of healthcare providers are associated with a significant reduction in medical device patenting and that the effect is predominantly driven by innovators located in the states passing the reforms. Tort laws have the strongest impact in medical fields in which the probability of facing a malpractice claim is the largest, and they do not seem to affect the amount of new technologies of the highest and lowest quality. Our results underscore the importance of considering dynamic effects in the economic analysis of tort laws.
    JEL: I1 K4 O3
    Date: 2016–10
  11. By: Paunić, Alida
    Abstract: Paper states that investments in renewable energy - Africa north (Sahara) -contributes to growth, poverty reduction and social economical gain not just for Africa but for Europe too. It brings (wind) long term electricity input stability, price reduction, industry potential growth through cooperation with Africa(CS),input and long term solution (after oil) with algae to obtain biodiesel for car industry. With renewables in hand many innovation and day to day possibilities increase quality of life (wind supported with PV, magnets to increase efficiency), CS in respect of cooking, solar in transport (train, car), help in education. Opinion about long term sustainable growth is given as relation of known/unknown long term space matter constant 1 in which only variables are those in relation to person to person, person to positive (God) aspect.
    Keywords: energy, renewables, Africa, growth
    JEL: O40 O44 Q20 Q4 Q40
    Date: 2016–10–13
  12. By: Hattori, Masahiko; Tanaka, Yasuhito
    Abstract: Adoption of new technology by firms is very important for economic growth of a country. However, it may be insufficient or excessive in less competitive industries from the point of view of social welfare. Then, subsidization or taxation by the government is necessary. We present an analysis about subsidy or tax policy for adoption of new technology in an oligopoly with a homogeneous good. The unit cost with the new technology is lower than that with the present technology, but each firm must expend a fixed set-up cost to adopt and use the new technology. We will show that if the number of firms is small, and the set-up cost is large, subsidization to promote adoption of new technology may be the optimum policy. However, if the number of firms is not so small, or the set-up cost is not so large, taxation to prevent adoption of new technology is likely to be the optimum policy.
    Keywords: subsidy or tax policy, new technology adoption, oligopoly
    JEL: D43 L13
    Date: 2016–10–13
  13. By: Jérémie Faham (ESTIA Recherche - Ecole Supérieure des Technologies Industrielles Avancées (ESTIA), IMS - Laboratoire de l'intégration, du matériau au système - Université Sciences et Technologies - Bordeaux 1 - Institut Polytechnique de Bordeaux - CNRS - Centre National de la Recherche Scientifique); Maxime Daniel (ESTIA Recherche - Ecole Supérieure des Technologies Industrielles Avancées (ESTIA), LaBRI - Laboratoire Bordelais de Recherche en Informatique - Université Bordeaux Segalen - Bordeaux 2 - Université Sciences et Technologies - Bordeaux 1 - École Nationale Supérieure d'Électronique, Informatique et Radiocommunications de Bordeaux (ENSEIRB) - CNRS - Centre National de la Recherche Scientifique); Jérémy Legardeur (ESTIA Recherche - Ecole Supérieure des Technologies Industrielles Avancées (ESTIA), IMS - Laboratoire de l'intégration, du matériau au système - Université Sciences et Technologies - Bordeaux 1 - Institut Polytechnique de Bordeaux - CNRS - Centre National de la Recherche Scientifique)
    Abstract: One of the objectives of the European Commission for 2014-2020 is to establish " Research and Innovation Strategies for the Smart Specialization " (RIS3). The originality of RIS3 is the " bottom-up " identification of regional priorities especially through the " Entrepreneurial Discovery " (ED) process. The Collaborative Business Models (CBM) approach has probably a role to play within this process as a suitable strategic tool to set up regional " value networks ". However, the preparatory stage of CBM and especially the identification and the matching processes among potential RE partners is often not addressed. This work is based on the need to support the discovering and the matching processes between " regional entrepreneurs " (companies, research , consulting, association, public authorities…) in order to improve the efficacy of CBM and RIS3. In this paper, we propose a review of the state of the art concerning the different dimensions linked to the matching processes.
    Keywords: Matching,RIS3,Entrepreneurial Discovery,Collaborative Business Models,Profile Comprehension,Entrepreneurs
    Date: 2016–04–10
  14. By: Clément Gorin (GATE Lyon Saint-Étienne - Groupe d'analyse et de théorie économique - ENS Lyon - École normale supérieure - Lyon - UL2 - Université Lumière - Lyon 2 - UCBL - Université Claude Bernard Lyon 1 - Université Jean Monnet - Saint-Etienne - PRES Université de Lyon - CNRS - Centre National de la Recherche Scientifique)
    Abstract: Highly skilled professionals are regarded as one of the main driver for the economic development of cities through their effect on innovative capabilities. Skilled individuals are mobile in space and tend to cluster within a limited number of urban areas, therefore a crucial question is what factors shape this flows and influence the divergent levels of economic development across urban areas. Building on these considerations, this paper takes advantage of a large-scale dataset to shed light on the patterns and determinants of inventors' mobility across European urban areas. First, a descriptive analysis is carried out to document the dynamics of inventors' mobility and their spatial dimension. Second, a gravity model is used to analyse how job opportunities and socio-professional networks influence the flows of inventors between urban areas. From a methodological perspective, this paper uses a spatial filtering variant of the Poisson gravity model, which accommodate the nature of the data, while controlling for multilateral resistance and spatial autocorrelation in mobility flows. The descriptive analysis suggest that inventors' mobility occurs primarily between relatively large and collocated urban areas, partly because of the high level of circular and intra-firm mobility. The econometric analysis shows that employment opportunities, social networks, as well as various forms of proximity are important determinants of inventors' mobility.
    Keywords: Inventors’ mobility, urban areas, job opportunities, socio-professional network, Poisson gravity model, spatial filtering
    Date: 2016
  15. By: Gabriel Galvez-Behar (IRHiS - Institut de Recherches Historiques du Septentrion - Université de Lille, Sciences Humaines et Sociales - CNRS - Centre National de la Recherche Scientifique)
    Abstract: For many studies, the current “commodification” of science ends with a period which started in the middle of the twentieth century. The scientific entrepreneur may renew old practices and reminds old figures like Louis Pasteur's one. Such an echo of the past justifies an historical approach. Thus this paper calls for a renewed economic history of science thanks to the study of Pasteur's scientific enterprise. Based on new approaches to entrepreneurship, he focuses here on the analysis of three very specific resources - money, patents and capital – in order to have a better understanding of Pasteur's entrepreneurial logic. This study uses sources, which were largely neglected or even unknown. At last, it highlights the accumulation process of Pasteur's enterprise, which allowed him to take more risk in his scientific activities.
    Abstract: De nombreux travaux considèrent que l’implication croissante de la science dans des formes de valorisation économique met fin à une parenthèse ouverte au milieu du XXe siècle. La figure actuelle du chercheur entrepreneur – ou de l’entrepreneur scientifique – renouerait avec des pratiques plus anciennes dont Louis Pasteur serait d’ailleurs l’un des symboles. Un tel constat appelle une histoire économique renouvelée des mondes savants à laquelle cet article entend contribuer à travers l’étude de l’entreprise scientifique de Louis Pasteur. S’inspirant d’approches nouvelles de l’entrepreneuriat, il se concentre ici sur l’analyse de trois ressources bien particulières – l’argent, les brevets d’invention et le capital – qui permettent de mieux saisir la logique entrepreneuriale de Louis Pasteur. Cette étude, qui repose sur l’exploitation de sources jusqu’alors largement négligées voire inexploitées, fait alors ressortir la logique d’accumulation de l’entreprise pasteurienne qui lui permet d’assumer des risques toujours croissants.
    Keywords: Economic History,History of science,Patents, Brevets,Pasteur (Louis), Histoire des sciences, Histoire économique
    Date: 2016–02
  16. By: Valerio Sterzi (Université de Bordeaux); Stefanie Stantcheva (Harvard University); Santiago Caicedo (University of Chicago); Ernest Miguelez (Université de Bordeaux); Ufuk Akcigit (University of Chicago)
    Abstract: Does interacting with others contribute to human capital accumulation? We try to answer this question by using a novel panel dataset on European inventors matched to their employers. Our panel data comes from the European Patent Offices since the 1980s and contains information on inventors, their employers, and their patents. More interactions are very strongly correlated with higher subsequent productivities of inventors, as measured by their number and quality of patents. Using variation in labor market regulations and flexibility across sectors, countries and time as instruments, we document a causal link between interactions and productivity or human capital accumulation of inventors.
    Date: 2016
  17. By: Mark Pauly; Kyle Myers
    Abstract: This paper examines trends in the aggregate productivity of the pharmaceutical sector over the past three decades. We incorporate Ricardo’s insight about demand-driven productivity in settings of variable scarce resources, and estimate the industry’s responsiveness to changes in demand over this timeframe using therapeutic class-specific data. In contrast to many analyses, our empirical estimates indicate that the industry has “met demand” with remarkable consistency since the late-1980s. The growth in total R&D spending, and therefore R&D costs per new drug, appear to have been profitable and productive investments. While we identify a significant increase in the industry’s fixed costs - the intercept of the production function - we find no decline in the marginal productivity of industry investments that might suggest significant supply-side frictions. While we cannot diagnose in detail why average, but not marginal, productivity declined, the data suggests that firms have finally begun to compete down returns from the supranormal levels of decades past.
    JEL: D20 I11 L10 L65 O31
    Date: 2016–10

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