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on Innovation |
| By: | Vahagn Jerbeshian |
| Abstract: | I model knowledge (patent) licensing and evaluate intellectual property regulation in an endogenous growth framework where the engine of growth is in-house R&D performed by high-tech firms. I show that high-tech firms innovate more and economic growth is higher when there is knowledge licensing, and when intellectual property regulation facilitates excludability of knowledge, than when knowledge is not excludable and there are knowledge spillovers among high-tech firms. However, the number of high-tech firms is lower, and welfare is not necessarily higher, when there is knowledge licensing than when there are knowledge spillovers. |
| Keywords: | knowledge licensing; in-house R&D; intellectual property regulation; endogenous growth; welfare; |
| JEL: | O31 O34 L16 L50 O41 |
| Date: | 2016–06 |
| URL: | http://d.repec.org/n?u=RePEc:cer:papers:wp566&r=ino |
| By: | Damián Tojeiro-Rivero (AQR-IREA, University of Barcelona); Rosina Moreno (AQR-IREA, University of Barcelona); Erika Badillo (AQR-IREA, University of Barcelona) |
| Abstract: | Based on the Spanish Technological Innovation Panel, this paper explores the role of R&D offshoring on innovation performance from 2004 to 2013. Specifically, we focus our attention on the impact of different types of offshoring governance models on the profitability of developing breakthrough innovations. Using a novel methodology for panel data sets, we control for the heterogeneity of firms as well as for the sample selection and endogeneity. Our study provides evidence that firms developing breakthrough innovations tend to benefit more from the external acquisition of knowledge than those engaged in incremental innovations. We also find evidence that acquiring knowledge from firms outside the group is more profitable than doing so with firms within the group. Moreover, the external acquisition of knowledge tends to present a higher return on breakthrough innovation in the case of taking such knowledge from the business sector rather than from universities or research institutions. Finally, the recent financial crisis has led to an increase in the return of the foreign acquisition of knowledge on the generation of breakthrough innovations. |
| Keywords: | Endogeneity; Panel data; R&D offshoring; Spanish firms; Sample selection; Technological and organizational space JEL classification: - |
| Date: | 2016–11 |
| URL: | http://d.repec.org/n?u=RePEc:aqr:wpaper:201610&r=ino |
| By: | Llobet, Gerard; Padilla, Atilano Jorge |
| Abstract: | It has been commonly argued that the decision of a large number of inventors to license complementary patents necessary for the development of a product leads to excessively large royalties. This well-known Cournot-complements or royalty-stacking effect would hurt efficiency and downstream competition. In this paper we show that when we consider patent litigation and introduce heterogeneity in the portfolio of different firms these results change substantially due to what we denote the Inverse Cournot effect. We show that the lower the total royalty that a downstream producer pays, the lower the royalty that patent holders restricted by the threat of litigation of downstream producers will charge. This effect generates a moderation force in the royalty that unconstrained large patent holders will charge that may overturn some of the standard predictions in the literature. Interestingly, though, this effect can be less relevant when all patent portfolios are weak making royalty stacking more important. |
| Keywords: | Intellectual Property; Patent Licensing; Patent Pools; R&D Investment; Standard Setting Organizations |
| JEL: | L15 L24 O31 O34 |
| Date: | 2016–11 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:11624&r=ino |
| By: | Dachs, Bernhard; Hud, Martin; Koehler, Christian; Peters, Bettina |
| Abstract: | The shift of employment from lower to higher productive firms is an important driver for structural change and industry dynamics. We investigate this reallocation in terms of employment gains and losses from innovation. New employment created by product innovation may be offset by employment losses in related products, known as 'cannibalisation' or 'business stealing' effects in the literature, by employment losses from process and organisational innovation and by general productivity increases. The paper investigates this effect empirically with a large dataset from the European Community Innovation Survey (CIS). We find that employment gains and losses increase with technology intensity of the sector. High-technology manufacturing shows the strongest employment gains and losses from innovation, followed by knowledge-intensive services, low-technology manufacturing and less knowledge-intensive services. The net contribution of innovation to employment growth is mostly positive, an exception being manufacturing industries in recession periods. |
| Keywords: | innovation,employment,reallocation,technology intensity,compensation effect,displacement effect,cannibalisation effect |
| JEL: | O33 J23 C26 D2 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:16077&r=ino |
| By: | Thien Nguyen (The Ohio State University); Steve Raymond (UNC); Lukas Schmid (Duke University); Mariano Croce (University of North Carolina at Chapel H) |
| Abstract: | Elevated levels of US government debt in the aftermath of the great recession have raised concerns about their effects on long-term growth prospects. By empirically identifying measures of government indebtedness as risk factors priced in stock returns, we document and theoretically evaluate a novel risk channel at work shaping this link. In the cross-section, stocks earn positive premia for their exposure to movements in government debt, while these predict high stock returns going forward in the time series. A substantial return spread between the most and the least innovative firms is increasing in the debt-to-gdp ratio. We show that rises in the cost of capital for innovation-intensive firms associated with elevated government debt bring about declines in R&D activity and economic growth. We interpret these findings through the lens of a production-based asset pricing model with endogenous innovation and fiscal policy. The model emphasizes the role of political and fiscal uncertainty in shaping the empirical relationships. |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:red:sed016:1443&r=ino |
| By: | Dachs, Bernhard; Hud, Martin; Koehler, Christian; Peters, Bettina |
| Abstract: | A growing literature investigates how firms' innovation input reacts to changes in the business cycle. However, so far there is no evidence whether there is cyclicality in the effects of innovation on firm performance as well. In this paper, we investigate the employment effects of innovations over the business cycle. Our analysis employs a large data set of manufacturing firms from 26 European countries over the period from 1998 to 2010. Using the structural model of Harrison et al. (2014), our empirical analysis reveals four important findings: First, the net effect of product innovation on employment growth is pro-cyclical. It turns out to be positive in all business cycle phases except for the recession. Second, product innovators are more resilient to recessions than non-product innovators. Even during recessions they are able to substitute demand losses from old products by demand gains of new products to a substantial degree. As a result their net employment losses are significantly lower in recessions than those of non-product innovators. Third, we only find resilience for SMEs but not for large firms. Fourth, process and organizational innovations displace labor primarily during upturn and downturn periods. |
| Keywords: | innovation,employment,business cycle,resilience,Europe |
| JEL: | O33 J23 C26 D2 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:16076&r=ino |
| By: | Schwab, Thomas; Todtenhaupt, Maximilian |
| Abstract: | This paper analyzes externalities of patent box regimes in Europe. Tax reductions in foreign affiliates of a firm that also provide a profit shifting opportunity reduce the user cost of capital and thereby increase domestic investment. We test this mechanism for the case of research activity. By combining information on patents, firm ownership data and specific characteristics of patent box regimes, we show that patent box regimes without nexus requirements for tax-efficient reallocation of patent profits induce positive spillovers within multinational groups. The implementation of a patent box in a country one of the foreign affiliates of a firm resides, increases domestic research activity by about 74 percent or 2 percent per implied tax rate differential. Furthermore, our findings suggest that patent boxes generate negative spillovers on average patent quality. This has important implications for international tax policy and the evaluation of patent box regimes. |
| Keywords: | patent box,spillover,corporate taxation,innovation |
| JEL: | F23 H25 O31 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:16073&r=ino |
| By: | Oleg Sidorkin |
| Abstract: | I study the impact of management quality on innovation input and output of manufacturing firms in ten emerging countries using data from the Management, Organization and Innovation (MOI) Survey. I find effects of management quality on the decisions of firms to invest in R&D hold for both EU and non-EU emerging countries. An improvement in management quality from the 25th percentile to the median is associated with a 4.5 percentage point increase in the propensity to invest in R&D and a 5.7 percent increase in R&D spending per employee. Furthermore, there are positive but weak effects of management quality on product innovation. The empirical results for individual management practices show that the quality of monitoring management is intimately connected with innovation input and output. The quality of incentive management is related to higher input into innovation, but not to innovation output. The overall effects of operations and targeting management quality do not prove to be significant. All results hold after controlling for differences in management quality by industries. Additional analysis of management quality asymmetry shows that the results are driven mainly by firms with low quality management. |
| Keywords: | management quality; R&D; innovation; emerging countries; |
| JEL: | L2 M2 O3 P2 |
| Date: | 2015–12 |
| URL: | http://d.repec.org/n?u=RePEc:cer:papers:wp555&r=ino |
| By: | Müller, Bettina; Murmann, Martin |
| Abstract: | We investigate the extent to which complementarities between technical and business skills of founders and employees matter for the generation of market novelties by new ventures. Using data about German start-ups, we find that there are no complementarities between technical and business skills within the group of founders, but that there are significant complementarities between technically trained founders and employees who have business skills. This suggests that the innovation potential of start-ups by technically trained founders is best explored by hiring employees who are trained in business. However, a reverse relationship does not exist: There are no complementarities between founders with business skills and employees with technical skills. |
| Keywords: | Entrepreneurship,Innovation,Human Capital,Skills,Complementarity |
| JEL: | J24 L23 L26 M13 M51 Q31 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:16074&r=ino |
| By: | Yaping Shan (School of Economics, University of Adelaide) |
| Abstract: | We study the agency problem between a firm and its research employees under several scenarios characterized by different R&D unit setups. In a multiagent dynamic contracting setting, we describe the precise pattern of the optimal contract. We illustrate that the optimal incentive regime is a function of how agents' efforts interact with one another; relative performance evaluation is used when their efforts are substitutes whereas joint performance evaluation is used when their efforts are complements. The optimal contract pattern provides a theoretical justification for the compensation policies used by firms that rely on R&D. |
| Keywords: | Dynamic Contract, Repeated Moral Hazard, Multiagent Incentive, R&D, Employee Compensation |
| JEL: | D23 D82 D86 J33 L22 O32 |
| Date: | 2016–11 |
| URL: | http://d.repec.org/n?u=RePEc:adl:wpaper:2016-14&r=ino |
| By: | Karol Jan Borowiecki (Department of Economics, Trinity College Dublin); Trilce Navarrete (Department of Business and Economics, University of Southern Denmark) |
| Abstract: | Heritage institutions house cultural and research content, which is the key source to stimulate soft innovation. Despite the potential, heritage collections are mostly inaccessible via digital mediums. We analyze the macro, meso and micro conditions of heritage organizations across Europe to identify the key determinants that foster soft innovation as reflected by the share of collection digitization and online publication. We find that organizations respond positively to an environment of high consumer digital literacy and sustainable resource allocation that enables slack, skilled staff and long-term strategic planning. Innovation is thus, in fact, enhanced by digital literacy from both producers as well as consumers. |
| Keywords: | innovation; digitization; heritage collections; cultural institution |
| JEL: | O31 Z1 |
| Date: | 2016–11 |
| URL: | http://d.repec.org/n?u=RePEc:tcd:tcduee:tep1616&r=ino |
| By: | Vendler Toft-Kehler, Rasmus (Copenhagen Business School); Wennberg, Karl (The Ratio Institute and Linköping University); Kim, Philip (Babson College) |
| Abstract: | Existing research has offered conflicting narratives of how entrepreneurial experience influences whether founders will continue working on or disengage from their ventures. We theorize and test how entrepreneurs with varying levels of experience disengage from early-stage companies. Findings reveal a U-shaped relationship, such that novices and highly experienced entrepreneurs are more likely to quit their ventures, while moderately experienced entrepreneurs are more likely to persist in their pursuits. We offer both theoretical and empirical explanations for how the propensity to disengage from new ventures evolves with entrepreneurial experience. |
| Keywords: | Serial entrepreneurship; Disengagement; Experience curves; Entrepreneurial behavior |
| JEL: | L26 M13 |
| Date: | 2016–11–21 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:ratioi:0277&r=ino |
| By: | Lorenz Kueng; Nicholas Li; Mu-Jeung Yang |
| Abstract: | How do firms in high-income countries adjust to emerging market competition? We estimate how a representative panel of Canadian firms adjusts innovation activities, business strategies, and exit in response to large increases in Chinese imports between 1999 and 2005. On average, process innovation declines more strongly than product innovation. In addition, initially more differentiated firms that survive the increase in competition have better performance ex-post, but are ex-ante more likely to exit. Differentiation therefore does not ensure insulation against competitive shocks but instead increases risk. |
| JEL: | F14 L2 O3 |
| Date: | 2016–11 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:22840&r=ino |
| By: | Pietro-Moncada- Paternò-Castello (European Commission – JRC) |
| Abstract: | In order to achieve the 3% target in R&D intensity and boost its competitiveness and job creation, the EU needs to adapt its industrial structure and increase the weight of high R&D intensive sectors. A focus on creating the conditions for firm creation and growth in "new-emerging innovative sectors" (NEIS) is recommended. |
| Keywords: | EU private R&D intensity gap, industrial dynamics, firms demographics, comparative analysis, EU R&D policy |
| Date: | 2016–11 |
| URL: | http://d.repec.org/n?u=RePEc:ipt:iptwpa:jrc103361&r=ino |
| By: | Iris Wanzenböck |
| Abstract: | This paper proposes a new measure for assessing the network proximity between aggregated units, based on disaggregated information on the network distance of actors. Specific focus is on R&D network structures between regions. We introduce a weighted version of the proximity measure, related to the idea that direct and indirect linkages carry different types of knowledge. Here, first-order proximity arising from direct cross-regional linkages is to be distinguished from higher-order network proximity resulting from indirect linkages in the R&D network. We use an macroeconomic application where we analyse the productivity effects of R&D network spillovers across regions to illustrate the usefulness of a proximity measure specifically developed for aggregated units. |
| Keywords: | network proximity, aggregated networks, first-order proximity, higher-order proximity, R&D networks, knowledge spillovers |
| Date: | 2016–11 |
| URL: | http://d.repec.org/n?u=RePEc:uis:wpaper:1603&r=ino |