nep-ino New Economics Papers
on Innovation
Issue of 2016‒11‒13
28 papers chosen by
Uwe Cantner
University of Jena

  1. Lost in space? NASA and the changing publicprivate eco-system in space By Mariana Mazzucato; Douglas K Robinson
  2. Innovation, Competition and Technical Efficiency By Elina Berghäll
  3. Transplanting clean-tech paths from elsewhere: The emergence of the Chinese solar PV industry By Binz, Christian; Diaz Anadon, Laura
  4. Knowledge Disclosure, Patent Management, and the Four-Stroke Engine Business By Saiz, Patricio; Amengual, Rafael
  5. Has the German reunification strengthened Germany's national innovation system? Triple helix dynamics of Germany's innovation system By Yi, Sæung-gyu; Jun, Bogang
  6. On the relation between patent citations and patent value By Jurriën Bakker
  7. Innovation and Lock-in By Uwe Cantner; Simone Vannuccini
  8. Productivity gains from prioritising Research and Development (R&D) investment in agricultural policy: Case of South African cling peach breeding. By Tsvakirai, C.Z.; Leibenberg, F.; Kirsten, J.F.; Chaminuka, P.
  9. Taking the Leap: The Determinants of Entrepreneurs Hiring their First Employee By Robert W. Fairlie; Javier Miranda
  10. Celebrating 30 years of innovation system research: What you need to know about innovation systems By Klein, Malte; Sauer, Andreas
  11. The Global Diffusion of Ideas By Buera, Francisco J.; Oberfield, Ezra
  12. The EU 2020 innovation indicator: A step forward in measuring innovation outputs and outcomes? By Janger, Jürgen; Schubert, Torben; Andries, Petra; Rammer, Christian; Hoskens, Machteld
  13. Social networks, agricultural innovations, and farm productivity in Ethiopia By Mekonnen, Daniel Ayalew; Gerber, Nicolas; Matz, Julia Anna
  14. Animal Source Foods and Sustainable Global Food Security By Ramsden, Jessica
  15. Natural resource knowledge idiosyncrasy, innovation, industry dynamics, and sustainability By Allan Dahl Andersen; Olav Wicken
  16. Wie weit geht Crowdsourcing? Transnationale Open-Innovation-Strategien gegen den Braindrain der GUS-Staaten By Roth, Steffen; Ströhle, Lorenza
  17. Technology Acquisition, Catching Up and Competitiveness in Pakistan By Usman Qadir
  18. Landscape of standard essential patents : The case of East Asian countries By DANG, Jianwei; KANG, Byeongwoo; DING, Ke
  19. Openness and the Optimal Taxation of Foreign Know-How By Monge-Naranjo, Alexander
  20. Markets, Externalities, and the Dynamic Gains of Openness By Monge-Naranjo, Alexander
  21. High Growth Young Firms: Contribution to Job, Output and Productivity Growth By John Haltiwanger; Ron S Jarmin; Robert Kulick; Javier Miranda*
  22. Social Ties for Labor Market Access - Lessons from the Migration of East German Inventors By Bender, Stefan; Dorner, Matthias; Harhoff, Dietmar; Hinz, Tina; Hoisl, Karin
  23. The role of innovation transfer mechanisms in economic development: perspectives and legal approach By Amaya Muñoz, Wilson Enrique; Barón Ortegón, Brayan Alexander; Páramo Herrera, Isis Catalina
  24. Innovation and Growth with Frictions By Wright, Randall
  25. Synergies between different types of agricultural technologies: insights from the Kenyan small farm sector By Wainaina, Priscilla; Tongruksawattana, Songporne; Qaim, Matin
  26. The mining sectors in Chile and Norway, ca. 1870 - 1940: the development of a knowledge gap By Kristin Ranestad
  27. Did electricity drive Spain’s “most progressive decade”? By Llopis, Maria Teresa Sanchis
  28. Taste for science, academic boundary spanning and inventive performance of industrial scientists and engineers By Sam Arts; Reinhilde Veugelers

  1. By: Mariana Mazzucato (Science Policy Research Unit, University of Sussex, UK); Douglas K Robinson (Science Policy Research Unit, University of Sussex, UK)
    Abstract: U.S. public activities in space directed via NASA are undergoing change. While NASA has historically been able to drive market creation, through its procurement policy (which is much weaker in Europe), the past decade has seen a visible shift in US space policy, away from NASA-directed developments in low-Earth orbit (LEO) towards an ecosystem with a mix of private, not-for-profit, and public actors in LEO. This has fundamentally changed NASA‘s role from an orchestrating/directing role, to a more ‘facilitating’ one driven by commercialization needs. This shift in mission and approach has ramifications for the LEO ecosystem as well as NASA’s innovation policy, which has previously centred on clearly defined “mission-oriented” objectives, such as putting a man on the moon or creating the shuttle fleet. Such objectives required ‘active’ innovation policy whereby NASA both funded and ‘directed’ the innovation, within its walls and with its partners. The emerging multi-actor ecosystem approach has involved a more open-ended objective that does not have a unified nor clearly defined end-game. In this situation, NASA’s ability to shape activities in a direction in line with its mission will depend on its relationships with other members in the system. The rise of new actors in the space eco-system, and new relationships between them, presents interesting challenges for innovation policy informed by an Innovation System approach. In this paper, we critique the market failure approach of public intervention in markets and describe further work to be done in the innovation systems literature - more focus on the interactions between agents (and the type of agents) as complimentary to the dominant focus on funding programmes in innovation systems. In this paper, we present the evolving processes of NASA’s engagement in building a low-earth orbit economy to draw out case specific insights into a public agency shifting its mission to incorporate approaches to facilitate the market creation policy. The paper focuses on the way that NASA structures its new innovation policy, away from a classical supply side oriented R&D investment through NASA itself, towards a policy of orchestration and combination of instruments rather. We close the paper with a reflection on the ramifications of NASA’s approach to building a sustainable low-Earth orbit economic ecosystem.
    Keywords: Space economy, market creation, innovation ecosystem, mission-oriented innovation policy, NASA
  2. By: Elina Berghäll
    Abstract: Contradictory empirical and theoretical evidence on the relationship between innovation and competition has been reconciled in a model that yields an inverted U-shaped curve. I test whether the predictions of the model are supported by the data with an unbalanced panel of firms for 1990-2003 in a high productivity growth, high-tech industry, Finnish ICT manufacturing. In particular, I investigate how well alternative, yet rigorous measures of innovation and the technology gap, such as R&D intensity, R&D elasticity, technical change, technical efficiency and total factor productivity fare with respect to competition measured by the Lerner index. The results prove sensitive to the choice of variable. Overall, the model is not supported by the empirical evidence of the industry.
    Keywords: competition, innovation, technical efficiency, technology frontier, R&D intensity
    JEL: O25 L50 L60 D20 O30
    Date: 2016–10–12
  3. By: Binz, Christian (CIRCLE, Lund University); Diaz Anadon, Laura (Harvard University)
    Abstract: New clean-tech industries emerge in increasingly complex spatial patterns that challenge existing explanations on industrial path creation. In particular, the case of latecomer regions quickly building up industries in fields that are unrelated to their previous industrial capabilities is not well understood in the literature. This paper aims to address this gap with an analytical framework that draws on technological innovation system and catching-up literatures to specify the place-specific and extra-regional system resources that firms in latecomer regions draw on in the industry formation process. An in-depth case study of the Chinese solar photovoltaics (PV) sector reveals an industry formation process that differs from existing models. Rather than depending on linkages with multinational companies, extensive policy support, or gradual recombination of pre-existing domestic capabilities, early industry formation in the Chinese solar PV sector emerged from path transplantation in a highly internationalized entrepreneurial project. Pioneering actors mobilized knowledge, markets, investment and technology legitimacy developing outside China and re-combined them with the country’s generic capabilities in export-oriented mass manufacturing. This implies that in some industries, globalization may enable a new model of industrial path creation based on bridging domestic resource gaps by directly mobilizing system resources emerging in the international networks of a global innovation system.
    Keywords: cleantech; path creation; technological innovation system; solar photovoltaics; China; transnational entrepreneurship
    JEL: F64 O33 Q55
    Date: 2016–11–05
  4. By: Saiz, Patricio (Departamento de Análisis Económico: Teoría Económica e Historia Económica. Universidad Autónoma de Madrid); Amengual, Rafael (Universidad Politécnica de Madrid y Oficina Española de Patentes y Marcas)
    Abstract: The appropriateness of patent systems has been largely discussed and has led to substantial theoretical debates and empirical analyses. One of the most significant arguments in favor of patents is that they enable knowledge disclosure, which would compensate their social cost. Through an evolutionary approach to a key case study based on a radical innovation and business –the four-stroke engine invented by the German Nicolaus August Otto in 1876– we provide new and fresh insights on the disclosure issue, on patent management hidden strategies, and on patent institutions and controversies.
    Keywords: patent disclosure, ipr management, thermal machines, four-stroke engine, Otto
    JEL: N70 N83 O32 O33 O34
    Date: 2016–02
  5. By: Yi, Sæung-gyu; Jun, Bogang
    Abstract: This paper investigates whether the German reunification strengthened the country's national innovation system, using the Triple Helix model. In particular, it assesses the various dimensions of the innovation system by analyzing co-authorship networks from 1973 to 2014. Despite the series of policies promoting collaboration between the two regions and the rise in the number of regional collaborations and in the number of papers, the results show that the national innovation system of Germany has worsened since the reunification in 1990, and the role of government is critical in encouraging collaboration. Finally, this paper uses survey data on the type of Triple Helix configuration that actually occurred in East Germany as a robustness check.
    Keywords: Triple Helix model,German reunification,National innovation system
    Date: 2016
  6. By: Jurriën Bakker
    Abstract: This paper reports the results of an analysis of patent citation and patent renewal data, advancing a log-linear relation between patent citations and patent value. A complementary analysis of firms’ patent portfolios confirms that modelling the relation between citations and firm value benefits from the adoption of the log-linear form.
    Keywords: patent citations, patent value, patent renewal, Tobin’s Q
    Date: 2016–10
  7. By: Uwe Cantner (School of Economics and Business Administration, Friedrich-Schiller-University Jena); Simone Vannuccini (School of Economics and Business Administration, Friedrich-Schiller-University Jena)
    Abstract: This study focuses on a well-known but yet elusive concept: (technological) lock-in. We summarize what is known about the nature of lock-in and offer a critical view on history-dependent processes based on recent contributions to the literature. We discuss if lock-ins are really inescapable, especially when innovation is concerned. Also, we address the question if lock-in is a well-defined concept at all. To offer a fresh view on lock-in and to tackle the issues just raised, we employ the replicator dynamics model. By making a parallel between monopolization in the replicator dynamics and the occurrence of lock-ins, we show that the convergence of a system to a given outcome can be reversed, under certain conditions. We highlight the need for a more precise demarcation of the conceptual boundaries of lock-in and path dependence, both from the formal and the empirical side, and suggest that further structural features - for example users heterogeneity - may play a relevant role in affecting the outcome of dynamic allocation and competition processes.
    Keywords: Lock-in, path dependence, history dependent processes, innovation, competitive diffusion, Polya urn
    JEL: L15 O31 O33
    Date: 2016–11–03
  8. By: Tsvakirai, C.Z.; Leibenberg, F.; Kirsten, J.F.; Chaminuka, P.
    Abstract: Literature is awash with strategies of how the farm productivity of the smallholder agricultural sector can be transformed to equal that of the commercial sector. Policy options that have been suggested to transform smallholder agriculture have centred on increasing state financial investments in areas such as infrastructural development, mechanisation and market access. However, this paper provides a practical demonstration of how prioritising investment in research and development (R&D can achieve this goal. It particularly focuses on how consistent funding towards breeding can lead to the establishment of a strong industry that can remain productive in face of various changes in the market, production environment and institutional domains. Using the Cost-Benefit variation of the Economic Surplus Approach, the paper shows that the use of new locally bred peach varieties, as opposed to obsolete and imported varieties has yielded benefits estimated to range around R61.2 million (inflation adjusted to 2013 values). The results suggest two conclusions. First, R&D investment plays a pivotal role in enabling agricultural production to remain lucrative through various industry dynamics and will be important in the transformation of the smallholder agricultural sector. Second, increasing research investment can help countries achieve goals of economic growth in the domestic economy as the benefits of breeding investment were found to benefit local producers. Recommendations are made encouraging the prioritisation of R&D investment in all African agricultural industries as locally developed technologies are more likely to address Africa’s production problems rather than imported technologies.
    Keywords: Crop Production/Industries, Productivity Analysis, Research and Development/Tech Change/Emerging Technologies,
    Date: 2016–09
  9. By: Robert W. Fairlie; Javier Miranda
    Abstract: Job creation is one of the most important aspects of entrepreneurship, but we know relatively little about the hiring patterns and decisions of startups. Longitudinal data from the Integrated Longitudinal Business Database (iLBD), Kauffman Firm Survey (KFS), and the Growing America through Entrepreneurship (GATE) experiment are used to provide some of the first evidence in the literature on the determinants of taking the leap from a non-employer to employer firm among startups. Several interesting patterns emerge regarding the dynamics of non-employer startups hiring their first employee. Hiring rates among the universe of non-employer startups are very low, but increase when the population of non-employers is focused on more growth-oriented businesses such as incorporated and EIN businesses. If non-employer startups hire, the bulk of hiring occurs in the first few years of existence. After this point in time relatively few non-employer startups hire an employee. Focusing on more growth- and employment-oriented startups in the KFS, we find that Asian-owned and Hispanic-owned startups have higher rates of hiring their first employee than white-owned startups. Female-owned startups are roughly 10 percentage points less likely to hire their first employee by the first, second and seventh years after startup. The education level of the owner, however, is not found to be associated with the probability of hiring an employee. Among business characteristics, we find evidence that business assets and intellectual property are associated with hiring the first employee. Using data from the largest random experiment providing entrepreneurship training in the United States ever conducted, we do not find evidence that entrepreneurship training increases the likelihood that non-employers hire their first employee.
    Date: 2016–01
  10. By: Klein, Malte; Sauer, Andreas
    Abstract: On the occasion of the 30th anniversary of Innovation System research, this paper presents an extensive literature review on this large field of innovation research. Building on an analytical basis of the commonalities "system" and "innovation", the authors analyze the four main Innovation System approaches: National Innovation Systems (NIS), Regional Innovation Systems (RIS), Sectoral Innovation Systems (SIS) and Technological Innovation Systems (TIS). The analysis is structured systematically along ten comprehensive criteria. Starting with the founder(s) of each theory and the research program within each Innovation System approach was developed (1), the basic thoughts of each Innovation System approach are explained (2). For five case studies most cited (3), spatial boundaries are examined (4) and units of analyses are derived (5). By comparing the underlying theoretical concept and empirical results, the authors show patterns in the evolution of Innovation System research overall. By studying the basic components (6) and a functional analysis (7), each Innovation System approach is broken down into structural pieces and functional processes. If available, the authors present one or several taxonomies (8) for each Innovation System approach and summarize similar approaches (9), in order to classify and integrate the approaches into the ongoing innovation research. The identification of further research (10) shows which steps will need to be taken in the next years in order to evolve Innovation System research further and deeper. After the conclusion, the extensive table of comparison is presented which can serve as a guideline for academics and practitioners from basic and applied science, industry or policy that need to understand which Innovation System approach may be best for their specific analytical purposes.
    Keywords: Innovation System,National Innovation System,Regional Innovation System,Sectoral Innovation System,Technological Innovation System
    Date: 2016
  11. By: Buera, Francisco J. (Federal Reserve Bank of Chicago); Oberfield, Ezra (Federal Reserve Bank of Chicago)
    Abstract: We provide a tractable theory of innovation and technology diffusion to explore the role of international trade in the process of development. We model innovation and diffusion as a process involving the combination of new ideas with insights from other industries or countries. We provide conditions under which each country's equilibrium frontier of knowledge converges to a Frechet distribution, and derive a system of differential equations describing the evolution of the scale parameters of these distributions, i.e., countries' stocks of knowledge. In particular, the growth of a country's stock of knowledge depends only on its trade shares and the stocks of knowledge of its trading partners. We use the framework to quantify the contribution of bilateral trade costs to cross-sectional TFP differences, long-run changes in TFP, and individual post-war growth miracles.
    Keywords: Frechet distribution; global outlook; technology diffusion; trade
    JEL: F1 F43 O33 O47
    Date: 2015–12–31
  12. By: Janger, Jürgen; Schubert, Torben; Andries, Petra; Rammer, Christian; Hoskens, Machteld
    Abstract: In October 2013, the European Commission presented a new indicator intended to capture innovation outputs and outcomes and thereby "support policy-makers in establishing new or reinforced actions to remove bottlenecks that prevent innovators from translating ideas into products and services that can be successful on the market". This article aims to evaluate the usefulness of the new indicator against the background of the difficulties in measuring innovation outputs and outcomes. We develop a unique conceptual framework for measuring innovation outcomes that distinguishes structural change and structural upgrading as two key dimensions in both manufacturing and services. We conclude that the new indicator is biased towards a somewhat narrowly defined "high-tech" understanding of innovation outcomes. We illustrate our framework proposing a broader set of outcome indicators capturing also structural upgrading. We find that the results for the modified indicator differ substantially for a number of countries, with potentially wide-ranging consequences for innovation and industrial policies.
    Keywords: Innovation Output,Innovation Outcome,Innovation Measurement,Structural Change,Structural Upgrading,EU 2020 Strategy,Innovation Policy
    JEL: O25 O31 O38 O52
    Date: 2016
  13. By: Mekonnen, Daniel Ayalew; Gerber, Nicolas; Matz, Julia Anna
    Abstract: This paper examines the existence of social learning in agriculture in Ethiopia. We use a ‘random matching within sample’ technique to collect data on social networks and elicit details of the relationships and information exchange between network members, complementing the analysis with information on self-reported networks. We find that, while kinship or membership in certain groups, informal forms of insurance, or having frequent meetings with network members are all associated with a higher probability of forming an information link, none of these are correlated with observed innovative behavior such as the adoption of row-planting. This may suggest that behavior is more likely to be affected by the nature of information that passes through the network, rather than the number of information links. In support of this, we find that information links that exclusively involve discussions on farming or business matters are indeed associated with a higher likelihood of adopting row-planting. We use econometric strategies to isolate social learning from that of correlated and contextual effects. After controlling for factors that might otherwise generate spurious correlation, we find a strong evidence of network externalities in the adoption of row-planting techniques and also in farm productivity. Our results imply that extension services and other programs that promote agricultural innovations and seek yield improvement may benefit from social networks but they may be more effective if they identify the ‘right’ networks, that is, the ones that exclusively involve information exchange regarding agriculture. This further implies that investment in group formation, rather than simply using existing networks, may be a beneficial strategy.
    Keywords: Social networks, innovations, row planting, agriculture, Ethiopia, Crop Production/Industries, Research and Development/Tech Change/Emerging Technologies, Q1, D02, O33, D83, D62,
    Date: 2016–09
  14. By: Ramsden, Jessica
    Abstract: The development and adoption of new innovation in livestock production (including products, practices and genetics) can help farmers produce more food, more sustainably. Conservation organisations, among others, are calling for the need to freeze the environmental footprint of agriculture, particularly animal agriculture. In so doing, food can also be kept more affordable. This is an achievable goal. For example, with existing innovations, such as improved animal welfare, nutrition and genetics, we can raise the average annual increase in global milk yield from 13.5 litres/yr/cow to 24 litres. Realising this potential involves a combination of commercial opportunity, corporate responsibility and responsiveness to post-farm gate consumer dynamics. It also requires predictable science-based policy to support innovation across diverse production systems, and to facilitate global food trade.
    Keywords: Food Consumption/Nutrition/Food Safety, Food Security and Poverty, Livestock Production/Industries,
    Date: 2015–08
  15. By: Allan Dahl Andersen (TIK Centre, University of Oslo); Olav Wicken (TIK Centre, University of Oslo)
    Abstract: Natural resource based industries (NRBIs) have received only limited attention in Innovation Studies. In this paper we explore how qualitative diversity of ecological and geological conditions influence innovation—a phenomenon we denote natural resource knowledge idiosyncrasy (NKI)—as one particular aspect of change in NRBIs. We find that the dominant thinking in Innovation Studies about innovation and industry change—which is largely informed by studies of high-tech manufacturing industries—does not allow us to achieve a full understanding of change in NRBIs. To advance our thinking about NRBIs we propose a definition of NKI, a conceptualization of how NKI influence innovation and industry change, and explore implications of the latter for strategies for resource based development and sustainability in natural resources. Lastly, we argue that a new model of innovation is required for grasping and guiding innovation and transformation in NRBIs.
    Date: 2016–11
  16. By: Roth, Steffen; Ströhle, Lorenza
    Abstract: Vor dem Hintergrund der Abwanderung hochqualifizierter Arbeitskräfte aus den GUS-Staaten zeigt die vorliegende Arbeit anhand der Arbeitsweise zweier Schweizer Open- Innovation-Dienstleister, wie Open-Innovation- und Crowdsourcing-Strategien nachhaltige Vorteile aus der exzellenten Bildungsinfrastruktur der GUS-Staaten schöpfen können.
    Keywords: Open Innovation,Brain Drain,GUS,Crowdsourcing
    JEL: A14 Z13
    Date: 2016
  17. By: Usman Qadir (Pakistan Institute of Development Economics, Islamabad)
    Abstract: The growth trajectories of developed and developing countries are diverging rather than converging as expected from theory. Five policy areas have been identified that are crucial for ensuring development efforts succeed, of which a vital area is in innovation promotion and imitation and accelerated or sustained catching up policies. It is generally agreed that positive progress is required on all the five policy fronts highlighted above, for there to be sustained growth over long time horizons. Against this backdrop, a key concern for developing countries that merits further research in the context of learning by doing and innovation promotion is: what has been the country’s performance with regard to technology acquisition for purposes of enhancing productivity? Has the country been effective in its efforts to acquire the appropriate technology needed to boost productivity levels? Has the country made effective use of the technology acquired? What market failure(s), if any, are constraining the country’s ability to acquire the technology and make appropriate use of it? This research addresses these questions in the light of the experience of Pakistan’s economy, focusing on the development of the domestic automotive industry. The research frames these issues in the context of rent-seeking, political settlements and firm-level efficiency and proposes a framework of analysis that allows for an assessment of technology acquisition efforts at the firm level.
    Keywords: Economic Development, Technology Acquisition, Productivity, Pakistan, Political Settlements, Rent-seeking
    JEL: O11 O30 O47 D72 O53
    Date: 2016
  18. By: DANG, Jianwei; KANG, Byeongwoo; DING, Ke
    Abstract: Technical standards in the mobile communications industry have been developed from national to regional and from regional to global. In the current era, global standards in the industry have enabled the formation of a single global market. However, because standard essential patents (SEPs) are territorial given the nature of the patent system, they can function as an opportunity or a threat depending on whether or not they are protected in countries of interest. This paper investigates how W-CDMA and LTE SEPs owned by East Asian countries are globally distributed. From the analysis, the current study discovers East Asian SEP owners’ strategies, future opportunities, and threats in their international businesses.
    Keywords: East Asia, Essential Patent, Standard
    JEL: L19 O30 O53
    Date: 2016–10
  19. By: Monge-Naranjo, Alexander (Federal Reserve Bank of St. Louis)
    Abstract: Developing countries frequently offer tax incentives and even subsidize the entry and operation of foreign firms. I examine the optimality of such policies in an economy where growth is driven by entrepreneurial know-how, a skill that is continuously updated on the basis of the productive ideas implemented in the country. Openness allows foreign ideas to disseminate inside a country and can foster the country's domestic accumulation of know- how. With externalities, however, laissez-faire openness is suboptimal and can be growth-and even welfare-reducing. I examine the gains from openness under an optimal taxation program the self-funding taxes on domestic and foreign firms that maximize the welfare of the recipient country, subject to the equilibrium behavior of national and foreign firms. Under optimal taxation, openness is always welfare enhancing and leads lagging countries to catch up with the world frontier. Yet, a country may want to subsidize the entry of foreign firms only if it can also subsidize the domestic accumulation of know-how. I also consider the optimal tax program under a number of restrictions that developing countries typically face. For instance, a country must not subsidize entry of foreign firms if doing so requires taxing the concurrent cohort of domestic firms. Similarly, an international agreement that requires equal taxation of domestic and foreign firms can be welfare reducing for a country close to the knowledge frontier.
    Keywords: Pigou taxes; Ramsey program; Multinational firms; Gains from openness Fiscal Constraints.
    JEL: H21 H25 O19 O31 O33 O34 O38
    Date: 2016–10–01
  20. By: Monge-Naranjo, Alexander (Federal Reserve Bank of St. Louis)
    Abstract: Inflows of foreign knowledge can be the key for developing countries to catch up with the world technology frontier. In this paper, I construct a simple tractable model to analyze (a) the incentives of foreign firms to bring their know-how to a developing country and (b) the incentives of domestic firms to invest in their own know-how. The model embeds the two mechanisms typically considered separately in the literature for the diffusion of knowledge: Externalities and Markets. The relative preponderance of these mechanisms significantly changes the dynamic implications of openness. Notably, openness allows developing countries to fully catch up only when market transactions fully dominate the diffusion of ideas. While externalities can also push domestic firms to upgrade their productivity, the equilibrium exposure to ideas in the country is always below the frontier and asymptotically the country would remain importing foreign know-how. However, in general, the dynamic gains of openness are substantial.
    Keywords: Know-how; Diffusion; Internalization; Compensating differentials
    JEL: F23 F43 O19 O33 O34 O41
    Date: 2016–10–01
  21. By: John Haltiwanger; Ron S Jarmin; Robert Kulick; Javier Miranda*
    Abstract: Recent research shows that the job creating prowess of small firms in the U.S. is better attributed to startups and young firms that are small. But most startups and young firms either fail or don’t create jobs. A small proportion of young firms grow rapidly and they account for the long lasting contribution of startups to job growth. High growth firms are not well understood in terms of either theory or evidence. Although the evidence of their role in job creation is mounting, little is known about their life cycle dynamics, or their contribution to other key outcomes such as real output growth and productivity. In this paper, we enhance the Longitudinal Business Database with gross output (real revenue) measures. We find that the patterns for high output growth firms largely mimic those for high employment growth firms. High growth output firms are disproportionately young and make disproportionate contributions to output and productivity growth. The share of activity accounted for by high growth output and employment firms varies substantially across industries – in the post 2000 period the share of activity accounted for by high growth firms is significantly higher in the High Tech and Energy related industries. A firm in a small business intensive industry is less likely to be a high output growth firm but small business intensive industries don’t have significantly smaller shares of either employment or output activity accounted for by high growth firms.
    Date: 2016–01
  22. By: Bender, Stefan; Dorner, Matthias; Harhoff, Dietmar; Hinz, Tina; Hoisl, Karin
    Abstract: We study the impact of social ties on the migration of inventors from East to West Germany, using the fall of the Iron Curtain and German reunification as a natural experiment. We identify East German inventors via their patenting track records prior to 1990 and their social security records in the German labor market after reunification. Modeling inventor migration to West German regions after 1990, we find that Western regions with stronger historically determined social ties across the former East-West border attracted more inventors after the fall of the Iron Curtain than regions without such ties. However, mobility decisions made by inventors with outstanding patenting track records (star inventors) were not impacted by social ties. We conclude that social ties support labor market access for migrant inventors and determine regional choices while dependence on these ties is substantially reduced for star performers.
    Keywords: East Germany; inventors; migration; networks; social ties; transition
    JEL: J60 O30 P20 R23
    Date: 2016–11
  23. By: Amaya Muñoz, Wilson Enrique; Barón Ortegón, Brayan Alexander; Páramo Herrera, Isis Catalina
    Abstract: English Abstract: Currently, innovation depends largely on the efficiency of the legislation concerning means to transform knowledge into innovation, and the mechanisms of international innovation transfer. The way and speed of knowledge transmission and know-how are crucial for the economic development of a nation. The following paper explores, first, the status of the legal framework for innovation transfer articulated with an economic analysis; then, the main features of the regulations on intangible property for the Colombian case are identified; finally, conclusions are drawn in terms of economic and legislative policies. Spanish Abstract: La innovación depende en gran medida de la eficiencia de la legislación concerniente a los medios para transformar el conocimiento en innovación, y los mecanismos de transferencia internacional de innovación. La forma y la velocidad de transmisión de conocimiento y el know-how resultan cruciales para el desarrollo económico de una nación. El siguiente trabajo explora, en primer lugar, el estado del marco legal para la transferencia de innovación y lo articula con un análisis económico; después, se identifican las principales características de la normatividad sobre propiedad intangible para el caso colombiano; finalmente, se extraen conclusiones de política económica y legislativa.
    Keywords: technology transfer, innovation transfer, free trade agreements, copyright, legal and institutional framework, economic development, transferencia de tecnología, transferencia de innovación, acuerdos de libre comercio, derechos de autor, marco institucional y legal, desarrollo económico
    JEL: K0 K2 O1
    Date: 2016–11–02
  24. By: Wright, Randall (Federal Reserve Bank of Minneapolis)
    Abstract: The generation and implementation of new ideas are major factors in economic performance and growth. If some people are better at research and others at development, there emerges a role for an “idea market,” where technology transfers reallocate knowledge to those best able to develop and apply it. Financial institutions can facilitate this reallocation by providing credit for these transfers. {{p}} However, the idea market is rife with frictions. These include so-called search-and-bargaining problems. Another obstacle is credit friction: If a debtor reneges, it is not always easy to repossess information or otherwise prevent its use. {{p}} These obstacles lead to several monetary policy implications. First, policymakers should strive for low inflation, since that encourages investment in liquidity, which is crucial for exchanging ideas when credit is imperfect. Second, policymakers should encourage financial intermediation, since that facilitates efficient reallocation of liquidity. Fiscal policy has a role, too, but in terms of lessons for central bank policy, sound money and sound banking are engines of economic growth.
    Date: 2016–11–01
  25. By: Wainaina, Priscilla; Tongruksawattana, Songporne; Qaim, Matin
    Abstract: Global demand for food and farm commodities continues to grow, while land and other natural resources are becoming increasingly scarce. Sustainable intensification is often seen as a new paradigm for increasing agricultural productivity in a socially and environmentally responsible way. Sustainable intensification requires a broad portfolio of technologies, including improved seeds, fertilizers, and various natural resource management (NRM) practices. However, possible synergies between different types of technologies are not yet sufficiently understood. Here, we address this knowledge gap. Using representative data from small farms in Kenya and a propensity score matching approach, we analyze income effects of various technologies and technology combinations. When adopted alone, some innovations produce positive effects, while others do not. Effects of certain technology combinations are larger. The largest income gains occur when improved seeds are adopted together with organic manure and zero tillage practices. This points at important synergies between input-intensive and NRM technologies. Yet, the number of farmers that have adopted such promising technology combinations is relatively small, implying that synergies are not yet fully exploited. More impact studies that explicitly account for possible synergies can add to the knowledge that is needed for designing and promoting technology combinations suitable for particular contexts.
    Keywords: Agricultural technology, Sustainable intensification, Economic impact, Maize farming, Sub-Saharan Africa, Crop Production/Industries, Research and Development/Tech Change/Emerging Technologies,
    Date: 2016–09
  26. By: Kristin Ranestad (Department of Archaeology, Conservation and History, University of Oslo, Centre for Business History, Copenhagen Business School)
    Abstract: Chile and Norway are two ‘natural resource intensive economies’, which have had different development trajectories, yet are closely similar in industrial structure and geophysical conditions. The questions of how and why Chile and Norway have developed so differently are explored through an analysis of how knowledge accumulation occurred and how it was transformed by learning into technological innovation in mining, a sector which has long traditions in Norway and has by far been the largest export sector in Chile for centuries. Similar types of ‘knowledge organisations’ with the direct aim of developing knowledge for mining were developed in both countries. Formal mining education, scientifically trained professionals, organisations for technology transfer and geological mapping and ore surveys are compared in search of differences which may explain the underlying reasons for variations in economic growth.
    Keywords: natural intensive economies, Chile, Norway, mining, innovation, mining education, technical education, knowledge organisations
    JEL: N30 N50 L72
    Date: 2016–11
  27. By: Llopis, Maria Teresa Sanchis (University of Valencia and Figuerola Institute of History and Social Sciences)
    Abstract: Following the growth accounting approach introduced by Oliner & Sichel (2000, 2002) to evaluate the impact of information and communications technologies on the U.S. economy in the 1990s, this paper analyses the impact of electricity on Spanish economic growth in the period 1958-1970. Spain was a follower country that exhibited the benefits of electricity nearly half a century after it had its biggest impact in the U.S. The results confirm that electricity played a significant role in Spain via the three channels identified in the literature for quantifying the contribution of a general purpose technology (GPT): capital deepening, the total factor productivity effect and the spillover effect. The overall impact is greater than that estimated for other follower countries in the 1920s. The main boost to growth came from improvements in productivity in developments in electric plants electricity and the production of electrical capital goods, not from electricity use. We also find a weaker positive effect of spillovers in electricity-using industries. The laggard effect of electrification in Spain, in spite of its early start, confirms that a GPT needs time to establish new institutional arrangements and complementary investments in order to display positive linkages deriving from the new technology.
    Keywords: Technological change, Aggregate Productivity, Spain (country studies) JEL Classification: O33, O47, O52
    Date: 2016
  28. By: Sam Arts; Reinhilde Veugelers
    Abstract: Matching survey data on Ph.D. scientists and engineers currently working in an R&D job in industry with their publications and patents, we study the relationship between their motives and their inventive performance. We find that individuals with a strong taste for science, i.e. motivated by intellectual challenge, independence, and contribution to society, create more novel and valuable patents. We find partial mediation of the effect of taste for science on value-weighted inventive output through academic boundary spanning, proxied by scientific publications co-authored with academic scientists. For novelty of inventive output, we find no mediation through academic boundary spanning. We confirm the negative relation between academic co-publications and annual base salary in industry. This helps to explain why individuals with a strong taste for salary collaborate less with academic scientists, negatively affecting their value-weighted inventive output.
    Keywords: taste for science, boundary spanning, industry-science links
    Date: 2016–11

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