nep-ino New Economics Papers
on Innovation
Issue of 2017‒01‒08
thirty-six papers chosen by
Uwe Cantner
University of Jena

  1. Transition Towards a Green Economy in Europe: Innovation and Knowledge Integration in the Renewable Energy Sector By Conti, Chiara; Mancusi, Maria Luisa; Francesca, Sanna-Randaccio; Roberta, Sestini; Elena, Verdolini
  2. Startup Innovation during the Past Economic Crisis By Nabil Abou Lebdi; Katrin Hussinger
  3. Dynamics of technology upgrading of the Central and East European countries in a comparative perspective: analysis based on patent data By Björn Jindra; Iciar Dominguez Lacasa; Slavo Radosevic
  4. Characteristics of Finnish startups By Kotiranta, Annu; Pajarinen, Mika; Rouvinen, Petri
  5. Back to Basics: Basic Research Spillovers, Innovation Policy and Growth By Akcigit, Ufuk; Hanley, Douglas; Serrano-Velarde, Nicolas
  6. Financing energy innovation: The role of financing constraints for directed technical change from fossil-fuel to renewable innovation By Noailly, Joëlle; Smeets, Roger
  7. Agricultural research impact assessment: Issues, methods and challenges By Pierre-Benoit Joly; Laurence Colinet; Ariane Gaunand; Stéphane Lemarié; Mireille Matt
  8. Impact Assessment of Tax Incentives to Foster Industrial Innovation in Brazil: The Case of Law 11,196/05 By Daniel Gama e Colombo
  9. Clustering of R&D collaboration in Cournot oligopoly By Mauro Caminati
  10. Improving Decision Making for Public R&D Investment in Energy: Utilizing Expert Elicitation in Parametric Models By Chan, G.; Anadon, L-D.
  11. Collective ideation within the context of science and technology park and regional triple helix network By Ger Post; Lotte Geertsen
  12. The Effect of Innovation on Productivity: Evidence from Turkish Manufacturing Firms By Fazlıoğlu, Burcu; Dalgıç, Başak; Yereli, Ahmet Burçin
  13. Contracting for technology transfer: patent licensing and know-how in Brazil By Martinez, Catalina; Zuniga, Pluvia
  14. Investments, balance of payment equilibrium and a new industrial policy in Europe By Riccardo Cappellin
  15. Firm patenting activity, metropolitan innovative environment and their effects on business survival in a high-tech industry By Tsvetkova, Alexandra; Thill, Jean-Claude; Conroy, Tessa
  16. Comparison of smart specialization in coastal regions in Poland By Jacek Soltys; Dorota Kamrowska-Za?uska
  17. The impact of economic crisis on R&D convergence in Romania By Zizi Goschin; Steliana Sandu; Georgiana Gloria Goschin
  18. University spin-off firms in sustainable energy in five countries: What determines their reaching of the market? By Marina Van Geenhuizen; Razie Nejabat
  19. The Blockchain: A Gentle Four Page Introduction By Jan Hendrik Witte
  20. Inbound tourism as a driving force of the regional innovation system: An impact study on China By Jingjing Liu; Peter Nijkamp
  21. Innovation, income and regional development: An assessment of the importance of differences in regional potentials By Andreas P. Cornett; Nils Karl Sørensen
  22. Business Visits, Knowledge Diffusion and Productivity By Piva, Mariacristina; Tani, Massimiliano; Vivarelli, Marco
  23. Patent buyout in a model of endogenous growth By Radhakrishnan, Ravi
  24. Sectorial neighborhood in the Brazilian manufacturing industry By Milene Simone Tessarin; Paulo César Morceiro, André Luis Squarize Chagas
  25. Innovation Processes and Environmental Safety By BIMONTE, Giovanna; SENATORE, Luigi
  26. Why do we need theory and metrics of technology upgrading? By Slavo Radosevic; Esin Yoruk
  27. Capability factors in changing patterns of international knowledge relationships among university spin-off firms in Northwest Europe By Marina Van Geenhuizen
  28. Innovation and investments in a regional cross-sectoral growth model: A change is needed in European cohesion policies By Riccardo Cappellin
  29. Human Accomplishment and Growth in Britain since 1270: The Role of Great Scientists and Education By Jakob Brochner Madsen
  30. Optimal Licensing of Non-Drastic and (Super-)Drastic Innovations: The Case of the Inside Patent Holder By Cuihong Fan; Byoung Heon Jun; Elmar G. Wolfstetter
  31. Technologically captured? How material agency sustains interaction between regulators and industrial actors By John Finch; Susi Geiger; Emma Reid
  32. Knowledge bases, multi-scale interaction and transformation of the Vienna medical cluster By Tödtling, Franz; Sinozic, Tanja; Auer, Alexander
  33. Some Simple Economics of the Blockchain By Christian Catalini; Joshua S. Gans
  34. Promotion of Innovation and Job Growth in Small and Medium Sized Enterprises in Australia: Evidence and Policy Issues By Harry Bloch; Mita Bhattacharya
  35. How Destructive is Innovation? By Daniel Garcia-Macia; Chang-Tai Hsieh; Peter J. Klenow
  36. Ice Age Climate, Somatic Capital, and the Timing of the Neolithic Transition By Lothar Grall

  1. By: Conti, Chiara; Mancusi, Maria Luisa; Francesca, Sanna-Randaccio; Roberta, Sestini; Elena, Verdolini
    Abstract: A major concern regarding innovation in clean technologies in the EU is that the fragmentation of its innovation system may hinder knowledge flows and, consequently, spillovers across member countries. A low intensity of knowledge flows across EU states can negatively impact their technological base, suppressing opportunities for further innovations and hindering the movement towards the technological frontier. This paper evaluates the fragmentation of the EU innovation system in the field of renewable energy sources (RES) by examining the intensity and direction of knowledge spillovers over the years 1985-2010. We modify the original double exponential knowledge diffusion model to provide information on the degree of integration of EU countries’ innovation efforts and to assess how citation patterns changed over time. We show that EU RES inventors have increasingly built “on the shoulders of the other EU giants”, intensifying their citations to other member countries and decreasing those to domestic inventors. Furthermore, the EU strengthened its position as source of RES knowledge for the US. Finally, we show that this pattern is peculiar to RES, with other traditional (i.e. fossil-based) energy technologies behaving in a completely different way.
    Keywords: Knowledge Spillovers, Renewable Energy Technologies, Fossil Energy Technologies, EU Innovation, Research and Development/Tech Change/Emerging Technologies, Q55, Q58, Q42, O31, O33,
    Date: 2016–12–15
  2. By: Nabil Abou Lebdi (CREA, Université du Luxembourg); Katrin Hussinger (CREA, Université du Luxembourg)
    Abstract: By the notion of creative destruction, a crisis can stimulate entrepreneurship and innovation through reallocation of unproductive assets to new ventures that exploit emerging opportunities. However, a crisis can also hamper innovation by exacerbated credit market imperfections that affect new innovative ventures disproportionately. This study investigates the innovation behavior of German startups founded during the past economic crisis in 2009. Empirical results show that crisis startup foundations in high-tech sectors are less likely to introduce innovations to the market than ventures started in the pre-crisis period. Yet, the degree of novelty of these product or service innovations is significantly higher as compared to products and services introduced by start-ups founded in pre-crisis years. Moreover, we do not find evidence for necessity entrepreneurship in German low-tech industries.
    Keywords: creative destruction, economic crisis, entrepreneurship, innovation, startups
    JEL: L26 M13 O31
    Date: 2016
  3. By: Björn Jindra (Copenhagen Business School); Iciar Dominguez Lacasa (University of Bremen); Slavo Radosevic (UCL School of Slavonic and East European Studies)
    Abstract: This working paper explores patterns of technology upgrading as a three-dimensional process which consists of (i) intensity of technology upgrading, (ii) structural change, and (iii) interaction with the global economy. The specificity of our report is that we depict patterns of technology upgrading by relying entirely on patent data. We derive patent indicators to capture the three dimensions. Patent indicators for intensity of technology upgrading trace technological capabilities at the technology frontier (transnational patents) and behind the technology frontier (domestic/resident direct applications to national offices). Structural change in technological knowledge is depicted by the share of transnational patent applications in high technology fields and knowledge-intensive activities and by calculating a technological diversification index. To capture interaction with global economy in the upgrading process indicators measure technological knowledge sourcing across countries and interactions between foreign and indigenous actors. Based on 7 patent indicators covering the three upgrading dimensions the comparative analysis focuses on EU27 and its subregions and on the BRICS countries. According to the results, in 2011 CEECs were quite homogenous in their upgrading paths. A typical CEE economy in 2011 is well behind EU12 in terms of frontier technology intensity, domestic technology intensity, share of high tech patents and technology sourcing abroad. Moreover, its organizational capabilities are often less advanced. The CEE profile is much less coherent in terms of technology diversification/specialization and share of joint inventions. However, differences among CEECs are not significant. Still there are some notable national features. Poland, Romania and Slovenia have above average domestic technological intensity which reflects partly their sizes (Romania and Poland) and specific model of innovation system reliant on domestic R&D intensive firms (Slovenia). Latvia and Lithuania are specific in terms of high share of HTKI patents. CEE technology upgrading as depicted by patents is within the BRIC pattern (with exception of China which in terms of technology upgrading has de facto delinked from BRICS). In the BRIC context, the CEE characterize very open innovation system with a high share of coinventions and foreign actors exploiting local inventions. This reveals weak organizational capabilities to commercialize its own inventions. According to the results CEE grew during 1990s/2008 based on production, not technological capability. Their future growth will increasingly depend on building technological capabilities at world frontier level. Our analysis shows that the basis for such growth exists only to a limited extent and that speed of upgrading towards world frontier activities is well beyond required for catching up. Equally, our analysis shows that solutions for improved technology upgrading will need to be found with their existing innovation model of small open economies integrated into the EU.
    Keywords: Technology upgrading; Central Europe; Eastern Europe
    Date: 2015–02
  4. By: Kotiranta, Annu; Pajarinen, Mika; Rouvinen, Petri
    Abstract: In this study, we analyze the characteristics and development of Finnish startups based on firm-level data available in public databases. By startups we refer to young, small, and independent firms holding basic elements for growth. Some 4 000–5 000 of such firms are being established annually, of which 6–7% grow to employ at least 10 workers in three years and have had simultaneously increased their employment by at least 20% per annum. About one third of all startups operate in knowledge intensive services and altogether around 70% in services; only few dozen of new startups are in high-tech manufacturing industries. Approximately 70% of startups survive for at least five years. During this period, their employment has on average doubled. The most intensive growth spurt emerges usually in the very first years after establishing the business. Only a few percent of startups get venture capital investments or public innovation subsidies.
    Keywords: Entrepreneurship, growth firm, start-up, enterprise policy
    JEL: D92 L26 L53 M13
    Date: 2016–12–22
  5. By: Akcigit, Ufuk; Hanley, Douglas; Serrano-Velarde, Nicolas
    Abstract: This paper introduces a general equilibrium model of endogenous technical change through basic and applied research. Basic research differs from applied research in the nature and the magnitude of the generated spillovers. We propose a novel way of empirically identifying these spillovers and embed them in a framework with private firms and a public research sector. After characterizing the equilibrium, we estimate our model using micro-level data on research expenditures by French firms. Our key finding is that standard innovation policies (e.g., uniform R&D tax credits) can accentuate the dynamic misallocation in the economy by oversubsidizing applied research. Policies geared towards public basic research and its transmission to the private sector are significantly welfare improving.
    Keywords: applied research; basic research; Endogenous Growth; government spending; innovation; productivity; Research and Development; spillover.
    JEL: J82 L25 L50 O31 O38 O40
    Date: 2016–12
  6. By: Noailly, Joëlle; Smeets, Roger
    Abstract: Addressing both the challenge of climate change and the world's growing energy needs will only be possible by achieving a breakthrough in clean technologies in order to deliver safe, clean and sustainable energy for future generations. Such a large-scale technological transition will require massive investments in research and development (R&D) of clean energy production. Within the sector of electricity generation, renewable (REN) energy technologies, such as solar, wind or geothermal energy, can provide a clean alternative to electricity produced from carbon-intensive fossil-fuels (FF). Nonetheless, private firms' investments in advancing innovation for renewable energy technologies face important challenges. [...]
    Date: 2016
  7. By: Pierre-Benoit Joly; Laurence Colinet; Ariane Gaunand; Stéphane Lemarié; Mireille Matt
    Abstract: The Research Impact Assessment (RIA) is expected to increase the efficiency with which public funds are used, and to improve more broadly the functioning of the research and innovation system and its contribution to address a wide range of socio-economic and environmental issues. Both standard economic approaches, which aim to estimate the economic benefits of research investments, and case-study approaches, which aim to analyse the processes of impact generation, have been applied to agricultural research in practice. Standard economic approaches generally focus on public research as information on private efforts in agricultural research is limited, and on economic impacts such as productivity growth. Case studies provide richer information, through a narrative, and highlight the complex relationships among the various variables, events and actors, but it is difficult to standardise results and scale them up. The challenge for RIA is to take into account broader impacts that go beyond science and economic impacts, and to improve knowledge on impact-generating mechanisms. This has become more difficult as agricultural research and innovation systems are increasingly open and complex, and changing quickly. Observation of practices applied to agricultural research in five selected organisations confirms the difference found in RIA between academic research and in practice. In both, the assessment systems pursue the same objectives: 1) Learning: enhance the know-how to produce an environment conducive to socio-economic impact; 2) Capacity building: spread the culture of socio-economic impact to its researchers; and 3) Reporting to stakeholders: from accountability purposes to advocacy targeted to various audiences. The accountability objective, including estimating returns on the financial investment, poses complex challenges and is in tension with the learning and capacity building objectives. The future of RIA will depend on the capacity to improve estimation methods and gather quality information (which also takes into account non-economic impacts) and the sharing of good practices.
    Keywords: agricultural research, research impact evaluation
    JEL: O31 O38 Q16
    Date: 2016–12–23
  8. By: Daniel Gama e Colombo
    Abstract: This paper evaluates the effects of tax incentives for technological innovation in Brazil established by the Law 11,196/05 ("Lei do Bem"), to test whether they have increased resources for business innovation projects and had any significant impact on their results. The average treatment effect on the treated (ATT) is estimated using microdata on the firm level from the Brazilian Industrial Innovation Survey (PINTEC) conducted by IBGE, and applying a propensity score matching (PSM) technique, used in recent similar analyzes. Results suggest the policy positively affects R&D expenditures, number of research staff and the base of firms investing in innovation. Average impact on spending, nevertheless, falls short of the volume of tax break per firm. Moreover, benefited firms have more chances to innovate and experience higher growth in terms of overall number of employees. Such results are in accordance with findings of most of the empirical literature on innovation tax incentives. The study provides empirical support in favor of tax incentives as part of a government strategy to boost entrepreneurial innovation in the country.
    Keywords: Tax incentives; technological innovation; impact assessment; “Lei do Bem”.
    JEL: O38 O54 H25
    Date: 2016–12–01
  9. By: Mauro Caminati
    Abstract: This paper complements the Cournot collaboration game outlined in Goyal and Joshi (2003, sect. 4), with the hypothesis that pairwise R&D alliance is constrained by knowledge distance. Potential asymmetry of distance between two knowledge sets is formalized through a quasi-metric in knowldge space. If the knowledge constraints to collaboration are weak enough, the paper replicates the result by Goyal and Joshi (2003, sect. 4), that a ?firm is either isolated, or is connected to every other ?firm in the industry. If absoprtion of ideas from one?s potential partner requires sufficiently high knowledge proximity, the stable R&D networks in Cournot oligopoly are shown to display the clustering property, that is characteristic of real-world industry networks, and of social networks more generally.
    Keywords: Cournot collaboration game, directed knowledge distance, R&D networks, degree assortativity, clustering
    JEL: D85 L13 O30
    Date: 2016–10
  10. By: Chan, G.; Anadon, L-D.
    Abstract: Effective decision making to allocate public funds for energy technology research, development, and demonstration (R&D) requires considering alternative investment opportunities that can have large but highly uncertain returns and a multitude of positive or negative interactions. This paper proposes and implements a method to support R&D decisions that propagates uncertainty through an economic model to estimate the benefits of an R&D portfolio, accounting for innovation spillovers and technology substitution and complementarity. The proposed method improves on the existing literature by: (a) using estimates of the impact of R&D investments from one of the most comprehensive sets of expert elicitations on this topic to date; (b) using a detailed energy-economic model to estimate evaluation metrics relevant to an energy R&D portfolio: e.g., system benefits, technology diffusion, and uncertainty around outcomes; and (c) using a novel sampling and optimization strategy to calculate optimal R&D portfolios. This design is used to estimate an optimal energy R&D portfolio that maximizes the net economic benefits under an R&D budget constraint. Results parameterized based on expert elicitations conducted in 2009-2011 in the United States provide indicative results that show: (1) an expert-recommended portfolio in 2030, relative to the BAU portfolio, can reduce carbon dioxide emissions by 46 million tonnes, increase economic surplus by $29 billion, and increase renewable energy generation by 39 TWh; (2) uncertainty around the estimates of R&D benefits is large and overall uncertainty increases with greater investment levels; (3) a 10-fold expansion from 2012 levels in the annual R&D budget for utility-scale energy storage, bioenergy, advanced vehicles, fossil energy, nuclear energy, and solar photovoltaic technologies can be justified by returns to economic surplus; (4) the greatest returns to public R&D investment are in energy storage and solar photovoltaics; and (5) the current allocation of energy R&D funds is very different from optimal portfolios. Taken together, these results demonstrate the utility of applying new methods to improve the cost-effectiveness and environmental performance in a deliberative approach to energy R&D portfolio decision making.
    Keywords: decision-making under uncertainty, research policy, public R&D, energy R&D, energy technology
    JEL: O32 O38 G11 Q48 D81
    Date: 2016–12–19
  11. By: Ger Post; Lotte Geertsen
    Abstract: Organizations want to have access to each other?s resources and so they establish different forms of collaboration strategies (Podolny & Page, 1998). Knowledge sharing and also collaboration are dependent on an organizations? social network and the proximity within this network. A central element in the theory of clustering is the idea that physical clustering of businesses within specialized sectors is a source for regional economic growth (Porter, 1998). The spatial proximity of companies and institutions within related industries create a specific setting in which learning, knowledge sharing and mutual competition are encouraged (Raaijmakers, 2012). Additionally, active participation within the innovation eco system of a Science & Technology park provides actors access to knowledge, facilities and complementary contacts and network structures (Post, 2009). Collective ideation helps an organization to improve the positioning within the technological field and economic market (Alexy et al., 2013), especially within an innovation ecosystem because actors are dependent on each other's behavior (Pisano & Teece, 2007) to be successful in innovation. This research focuses on the question how to design the collective ideation process in particular to foster interactions within the context of a science & technology parks? this research is based 16 semi-structured interviews, conducted at all development stages (idea, startup, grow and mature) of Dutch science & technology parks with stakeholders from different perspectives, based on the triple-helix structure (government, industry, research). The study describes how multiple stakeholders benefit from collective ideation, what mechanisms and tools used in practice and also descibes prerequisites and limitations of collective ideation, This research contributes to consisting literature in three different ways. First, this research builds on theory on how to produce ideas as it offers an structural overview of the process and of the underexplored process-based facilitators (benefits, boundaries, strategies, mechanisms, deliverables) in the process of collective ideation (Harvey, 2014). This research can add a new collaboration method which can be a standard tool in the competitive toolbox of the organization (Alexy et al., 2013). Second, this research provides a new template of collective ideation and a new design of the creative process at the group (Harvey, 2014) and how this can be embedded in strategy (Alexy et al., 2013). Next to that, as relationships strongly depend on knowledge brokering within a network, this research extends understanding in the stickiness of knowledge (Zahra & Nambisan, 2011). It adds new insights on how these networks can be governed successfully (Alexy et al., 2013). Third, the concept of collective ideation is empirically tested at Science and Technology parks which provides a new framework that will help platforms to become more successful (Gawer & Cusumano, 2014). In other words, this research contributes on how to organize innovative activity and open innovation (Alexy et al., 2013; Chesbrough, 2003; Dahlander & Gann, 2010; Laursen & Salter, 2006).
    Keywords: Ideation; proximity; collaboration; cluster; science and technologiy park
    JEL: O31 O32
    Date: 2016–12
  12. By: Fazlıoğlu, Burcu; Dalgıç, Başak; Yereli, Ahmet Burçin
    Abstract: This paper explores the effects of firms’ innovation activities on their productivity changes systematically for Turkish manufacturing firms differentiating between different typologies of innovation. To do so, we utilize a recent and comprehensive firm level dataset over the period 2003-2014, mainly constructed on the four consecutive waves of the “Community Innovation Surveys”. We employ endogenous switching methodology controlling for endogeneity and selection bias issues as well as analyzing counterfactual scenarios. The main finding of the study points to firm heterogeneity in terms of both propensity to innovate and their benefiting from innovation activities. Our results indicate that all types of innovation activity have positive effects on the productivity of firms with respect to non-innovating firms. Further, we find robust evidence for the differential impact of innovation on firm productivity across different innovation types.
    Keywords: Internal and External R&D, Product and Process Innovation, Organizational and Marketing Innovation, Firm Productivity
    JEL: D22 L25 O30
    Date: 2016–12–23
  13. By: Martinez, Catalina (CSIC-IPP, Institute of Public Goods and Policies, Madrid, Spain); Zuniga, Pluvia (UNU-MERIT, and OECD)
    Abstract: Using contract level data, we study the relation between the inclusion of know-how in cross-border patent licensing agreements and the contractual terms used by firms to deal with moral hazard risks. We use official data on international technology contracts with patent licensing terms registered by affiliated and unaffiliated parties before the Department of Technology Transfer of the National Institute of Intellectual Property (INPI) in Brazil between 1996 and 2012. We find that contracts between unaffiliated parties involving know-how transfer show distinctive contractual and technology features compared to the rest: (i) they involve younger but lower quality technologies (compared to contracts without know-how); (ii) they are more prone to up front lump-sum payments than royalty or combined payments (royalty and fixed); and (iii) they are more likely to be accompanied by the licensing of other IPRs, in addition to patents, such as trademarks.
    Keywords: patents, licensing, know-how, trademarks, technology contracts, Brazil
    JEL: O32 D23 L24
    Date: 2016–11–21
  14. By: Riccardo Cappellin
    Abstract: Investments, balance of payment equilibrium and a new industrial policy in Europe Riccardo Cappellin Faculty of Economics University of Rome ?Tor Vergata? Via Columbia, 2, 00133 Roma - Italy This paper aims to indicate that an economic recovery of the European economy can be pulled by an increase of the aggregate demand and by the adoption of a new industrial policy having a territorial dimension. While the Domar?s and Thirlwall?s model indicates that growth is determined by the growth of exports and does not consider investments, the paper indicates that an appropriate distribution of investments between the exporting and the domestic sector can determine both an increase of GDP and an equilibrium of the balance of payment. The model of innovation and investment pulled growth illustrated in the paper, indicates that a greater immaterial investment in R&D, education and project design and planning leads to greater innovation; this latter is the factor leading to an increase of the propensity to invest by the firms and then the investment leads to an increase of GDP, which may be compatible with the constraint of the equilibrium of the balance of payment. The paper clarifies the specific characteristics of the domestic goods and services, such as those of: housing, mobility, health and education, leisure and culture, energy and environment, which aim to respond to the increasing needs by the European citizens of new goods and services and better infrastructures, especially in the largest European cities. A new industrial policy differs from horizontal policies aiming to enhance the supply of the production factors or by the traditional industrial policies focusing on key technologies and sectors or on selected leading companies and should be pulled by the demand and innovation and be organized according to the new markets (lead-markets) and productions, which are emerging in developed countries notwithstanding the current slow growth. JEL Codes: E14, L52, O14, O18, O33, Keywords: balance of payment, investment, innovation, industrial structure, industrial policies, macroeconomic policies
    Keywords: balance of payment; investment; innovation; industrial structure; industrial policies; macroeconomic policies
    JEL: E14 L52 O14 O18 O33
    Date: 2016–12
  15. By: Tsvetkova, Alexandra; Thill, Jean-Claude; Conroy, Tessa
    Abstract: This paper distinguishes between internal (produced within the firm) and external (produced by other firms) knowledge and studies the effects of both knowledge types on survival in a cohort of computer and electronic product manufacturing companies started in 1991 in the continental US metropolitan statistical areas (MSAs). Estimation results suggest that innovative companies face lower hazard but this effect seems to be driven by company’s initial characteristics, as producing more knowledge measured by successful patent applications does not translate into a higher likelihood of survival. In contrast, an innovative environment decreases survival likelihood in the whole sample, yet this result appears to be driven by non-patenting establishments. In the subset of non-patenting firms an innovative environment has a strong negative effect on survival whereas no significant relationship is identified in the subset of innovative firms.
    Keywords: Business survival, knowledge creation, patents, innovative environment
    JEL: L63 O3 O51
    Date: 2016–12–23
  16. By: Jacek Soltys; Dorota Kamrowska-Za?uska
    Abstract: The priorities set by the European Commission for Programming Period 2014-2020 introduced new instruments supporting regional development but also posed new requirements that must be met by European regions. One of them is smart specialization. To implement Strategy for Europe 2020, published by the European Commission in 2010, EU Member States and their regions develop strategies for smart specialization that will show directions for providing support to the strengthening of research, development and innovation. Smart specialization is an important instrument for creating a strategy for the development of innovation at the state and regional level as well as for defining and building the knowledge-based economy. This paper presents analyzes of processes responsible for identifying smart specialization in West Pomeranian and Pomeranian Regions. This article is a continuation and extension of the research on the process of emergence of smart specialization in Pomeranian Region by the inclusion of the West Pomeranian Region into this study. Both Regions are situated on the southern coast of the Baltic Sea and are seats of main Polish harbours and shipyards. Their regional capitals Gdansk and Szczecin are emerging metropolitan areas as well as economic engines of polish economy. It is our goal to analyze to what extent emergence of smart specialization is helping to focus development of innovation in areas consistent with their endogenous potentials. The aims of the paper are: comparison of the areas of smart specialization with particular emphasis on the specifics of the seaside location and endogenous potential of both regions, comparison of emergence and the process of selection of smart specialization, including its evaluation. In Pomeranian region the process of emergence of smart specialization was a bottom-up one where Regional Government invited all actors to build a partnership. The result is participation of all stakeholders to identify opportunities and specify areas of development of smart specializations for the Voivodship. In other regions of Poland it was more of a top-down process, conducted by experts and the West Pomeranian Region is an example of this approach. Methodology of the research applied for this study is desk research (analysis of literature, documents and strategies from Voivodeship Marshal Offices from both West Pomeranian and Pomeranian Regions), individual in-depth interviews, participation in the process of emerging of smart specialization in Pomorskie Voivodeship (focus group interviews, workshops, SWOT analysis and Delphi study) and comparative analysis of the process of emergence and selection of the smart specialization in both regions.
    Keywords: smart specialization; coastal regions; maritime economy; regional knowledge-based development; innovation strategy
    JEL: O2 O3 O38
    Date: 2016–12
  17. By: Zizi Goschin; Steliana Sandu; Georgiana Gloria Goschin
    Abstract: Research and development (R&D) is an important driver of productivity, competitiveness and economic growth, both nationally and regionally. In Romania all national development strategies acknowledged R&D as a priority sector, but the territorial component of the national innovation system is still underdeveloped. Moreover, research and development activity might be among the factors accountable for the increasing regional economic disparities, as the territorial distribution of its potential and performance is extremely unbalanced, the capital region (Bucharest-Ilfov) concentrating over half of R&D endowment. Romania is still lacking a strong regional R&D policy to address such disparities and the recent economic crisis brought about new hardships on the Romanian innovation system. Following a significant rise in research and development funding prior to the crisis, R&D intensity declined from 0.58 % in 2008 la 0.38 % in 2014, placing Romania at the bottom of European Union hierarchy. The convergence of the regional R&D and innovation system is as an essential component of successful regional development because, on the one hand, it provides a key asset to improve local economic competitiveness and, on the other hand, facilitates cohesion in the social sector. In this context our paper explored the convergence patterns of R&D in Romania over 1995-2014 and several subperiods, with a focus on the recent economic crisis, applying the ?sigma? and "beta? convergence methods, as introduced by Barro and Sala-i-Martin (1995). We used county level (NUTS3) data provided by the National Institute of Statistics. The diagnostics for spatial dependence have been performed, but Moran?s I test for errors couldn?t reject spatial randomness (on all time spans considered), therefore classic OLS model has been applied as the best fit for our data. We found a discontinuous sigma convergence trend, with some temporary periods of divergence that disrupted the convergence process, and conditional beta convergence over 1995-2014. When exploring the relevant subperiods of this time span, the results indicated absolute (unconditional) beta convergence until 2008, but no evidence of either convergence or divergence afterwards. The annual average speed of convergence declined from 6.97% over 1995-2000 to 2.65% over 2000-2008. Sigma convergence has been also reversed during the crisis, but seems to have resumed in the last couple of years. Our findings clearly show the disruptive impact of the economic crisis on the convergence path, from the perspective of both sigma and beta technique. The persistence of high R&D regional inequalities and low convergence calls for adequate policies, able to stimulate the regional innovation potential and underpin faster development of the Romanian regional research and innovation system.
    Keywords: research and development; sigma and beta convergence; Romania
    JEL: R11 C51
    Date: 2016–12
  18. By: Marina Van Geenhuizen; Razie Nejabat
    Abstract: An entrepreneurial perspective to introduction of sustainable energy solutions to the market has been recognized as important for decades, but mainly concerning large firms. Today, attention is increasingly turning to young high-technology ventures which, compared to large incumbents, are more flexible, creative, responsive and willing to take risks enabling them to work as a trigger or accelerator of profound changes. At the same time, these young firms suffer from a lack of resources, specifically investment capital, the last mainly caused by a slow development due to resistance from society, among others, existing energy infrastructures (?valley of death?). In this context, an often advised strategy is to partner with a larger company. This paper explores the time dimension in market introduction of sustainable energy solutions while taking an in-depth approach to collaboration and investment capital amidst a set of other firm-specific and external factors. First, we compare the five countries, Netherlands, Norway, Sweden, Denmark and Finland, with regard to favorable circumstances to adoption of sustainable energy solutions, particularly continuity in supporting policies. Next, we build a carefully selected sample of 37 university spin-off firms representing different ?theoretical positions? regarding country, but also established collaboration networks, amount of investment capital granted, and type of energy system - solar, wind, biomass, etc. - and we apply rough-set analysis as a ?qualitative? causal analysis. In addition, we deploy five in-depth case studies for deepening understanding. We found that out of nine firm-specific and firm-external factors, three factors have a strong influence on speed of market introduction. These are first of all country, but also type of energy technology (system) and richness in collaboration networks. Country was found to have a positive influence on reaching the market at a higher level of innovation (Nordic ?innovation leader? countries) and, conversely, a negative influence at lower levels of innovation (Netherlands and Norway). Furthermore, rich network collaboration turned out to work positively in an already positive situation (?innovation leader? country). Lacking such collaboration contributed to problematic developments, specifically in combination with solar technology. Evidence on influence of lack of capital investment turned out to be rather weak. Further, the case study analysis yielded the additional insight that speed in market introduction may also work negatively, namely, if large amounts of investment capital put pressure on the firm and market introduction occurs actually too early. The paper concludes with issues on ?theoretical? generalization, extending the sample to a larger random sample, and additional research questions.
    Keywords: Sustainable energy (system); young ventures; market introduction; national innovation system; collaboration; investment capital
    JEL: D22 Q42 Q48 M13
    Date: 2016–12
  19. By: Jan Hendrik Witte
    Abstract: Blockchain is a distributed database that keeps a chronologically-growing list (chain) of records (blocks) secure from tampering and revision. While computerisation has changed the nature of a ledger from clay tables in the old days to digital records in modern days, blockchain technology is the first true innovation in record keeping that could potentially revolutionise the basic principles of information keeping. In this note, we provide a brief self-contained introduction to how the blockchain works.
    Date: 2016–12
  20. By: Jingjing Liu; Peter Nijkamp
    Abstract: Along with the globalization and information-economic epoch, international knowledge spillover plays an important role in regional development, and the regional innovation system becomes more and more open-ended. As a nexus of the destination and the outside world, inbound tourism brings various economic and social resources for the development of the host region, which may also contribute to a higher level of cognitive proximity and absorptive capability as well as to greater product variety and manifold consumption externalities. Much research has addressed the influence of innovation on the tourism industry development, but only a few studies have focused on the impact of tourism on innovation. This study focusses on the influence of inbound tourism on a regional innovation system. The aims of this research are to: (1) interpret the mechanism of how inbound tourism impacts regional innovation; (2) inquire the external influence factors of the performance of inbound tourism; (3) explore the different characteristics of these effects when considering different types of innovation; (4) revisit the Tourism-Led Growth (TLG) hypothesis, and consider whether innovation can be a new vehicle to explain the influence of inbound tourism on spatial economic development. The influence of inbound tourism on innovation will provide a new perspective for analyzing the long term impact of tourism development. Furthermore, it may also be a meaningful complement to studies on the relationship between immigration, culture diversity and innovation, especially in the context of developing regions. Our study is organized as follows. First, the theoretical framework and the related hypotheses on the interaction between inbound tourism and regional innovation are presented. The network structure and diverse demands approaches as well as the effect of the regional absorptive capacity are considered and highlighted. Next, data from 30 Chinese Mainland provinces (Tibet being excluded, because part of the important indicators are unavailable) for the years 2003-2012 are used for the empirical analysis. The data come from the Chinese Patent Statistical Yearbook, the Chinese Statistical Yearbook, and the China Economic & Industry Data Database. From a methodical perspective, an entropy method and a perpetual inventory method were undertaken to measure the key variables. Next, a descriptive analysis was used to reach a preliminary idea on the above relationship. As to the existence of spatial autocorrelation, spatial panel data analysis was conducted to test these hypotheses. The study finds that inbound tourism is a driving force for a regional innovation system in China and can bring a new life to regional economic development. Firstly, inbound tourism appears to have a direct and indirect impact on regional innovation, while absorptive capacity has a significant mediating effect in this relationship. Secondly, the impact of inbound tourism on regional innovation capacity tends to be stronger in the wealthier and more international-oriented provinces. Thirdly, the effect of inbound tourism on technological innovation is mostly weaker than that of social innovation. Fourthly, this study supports the TLG hypothesis with regional innovation as the mediating variable.
    Keywords: Inbound tourism; regional innovation; absorptive capability; spatial panel data analysis; China.
    Date: 2016–12
  21. By: Andreas P. Cornett; Nils Karl Sørensen
    Abstract: The purpose of the current paper is to analyze the impact of regional potentials on the process of growth. How are different types of regions (e.g. medium sized [city] regions, rural regions, urban regions or metropolitan and high-tech cluster regions) affected by improved performance, and to what extent can differences be explained by ex-ante difference in income? Based on data from the regional innovation scoreboard (RIS) is this issue addressed relative to the income level, previous growth performance and convergence. In the first part of the paper, the innovation performance of the regions is modelled relative to the income level and the underlying influencing factors are identified. Hereby, we are able to identify strengthens and weaknesses of the innovation structure in different regions. In addition the issues of returns to scale will be considered. In the second part of the paper the innovation performance is related to the process of convergence and divergence. Earlier research has shown that although convergence is present at aggregated European Union level a much more diversified picture is revealed at the disaggregated level. Here it is frequently observed that the more wealthy and central regions move away from the other regions. One of the results is that the economic crisis has reinforced not only intraregional divergence within countries but also the traditional divide between the stronger Northwest European countries and the South and East of Europe. Finally, the paper discusses and evaluates the impact of different types of innovation performance and the level of income on the perspectives of economic growth for different types of regions. A number of scenarios a sketched for the perspectives of the regions depending on endogenous as well as external factor endowment and dynamics.
    Keywords: Innovation- regional income differences - economic growth ? concentration - convergence & divergence
    JEL: R11 R12 R58
    Date: 2016–12
  22. By: Piva, Mariacristina (Università Cattolica del Sacro Cuore); Tani, Massimiliano (University of New South Wales); Vivarelli, Marco (Università Cattolica del Sacro Cuore)
    Abstract: The aim of this paper is to investigate the productivity impact of business visits, relative to traditional drivers of productivity enhancement, namely capital formation and R&D. To carry out the analysis, we combine unique and novel data on business visits sourced from the U.S. National Business Travel Association with OECD data on R&D and capital formation. The resulting unbalanced panel covers on average 16 sectors per year in 10 countries during the period 1998-2011 (2,262 observations). Our results suggest that mobility through business visits is an effective mechanism to improve productivity. The estimated effect is about half as large as investing in R&D, supporting viewing business visits as a form of long-term investment rather than pure consumption expenditure. In a nutshell, our outcomes support the need to recognize the private and social value of business mobility.
    Keywords: business visits, labour mobility, knowledge, R&D, productivity
    JEL: O33
    Date: 2016–12
  23. By: Radhakrishnan, Ravi
    Abstract: This paper considers the prospect of a government patent buyout in a model of endogenous growth. To this end, the author modifies a standard quality ladder growth model by incorporating possibility of imitation, and rent protection activities (RPAs) by the innovator. The government finances the buyout by imposing a per unit sales-tax on the goods. The author shows that in this set-up, patent buyout by the government can lead to higher level of welfare without lowering an economy's growth rate along the balanced path. He highlights two sources of welfare improvement: elimination of monopoly pricing, and reduction in RPAs.
    Keywords: innovation,imitation,patent,growth
    JEL: O31 O34 O38
    Date: 2016
  24. By: Milene Simone Tessarin; Paulo César Morceiro, André Luis Squarize Chagas
    Abstract: The innovation in industry occurs due to direct investment of the firm, motivated by economic interests, as profit, market share, economies of scope, etc. However, same these decisions can be influenced by indirect shocks occurring in closest industry, as an innovation in automobile industry motivating changes in its chain production. The aim of this paper is to evaluate the peer effects on the innovation indicators in Brazilian manufacturing industry. For this, we proposed a new way to measure the proximity of the industries. We consider the typical goods produced by an industry in the main subsector and in other sub-sectors. These sub-sectors are considered neighbors because they use the same technological and production bases. The sectorial proximity was building through a detailed “sectorial diversification matrix” of firms producing goods in one or more subsector (of a total 103 subsectors of the Brazilian manufacturing) in 2013. Brazilian Institute of Geography and Statistics (IBGE) provided the data from a specific request, special to this work. The data composed a W-matrix relating one by one sector. As an innovation proxy, we considered the number of engineers employed divided by the total number of 2 employees in each subsector. This indicator is a proxy recognized of the innovative efforts of companies, because innovation and technological intensity are related to technical staff' skills. To test the peer effects hypothesis we considered the Moran's I test, and we used the LM and the LM robust tests to choose a best econometric model that confirms the sectorial spatial dependence. The results suggest the existence of strong sectorial peer effects among subsectors with the same technological level (low and medium-low, and high and medium-high). Moreover, there is a weak neighborhood effect between subsectors of different technological levels. Therefore, the technological level of a sector is a good indicator of their relations of sectorial neighborhood. These results can be useful for policymakers assign public policies focused on subsectors generating greater spillovers effects on the production and innovation structure. We think this work is a contribution to the use of spatial econometric analysis beyond the geographical neighborhood. It also sheds light on a fertile research agenda, which is currently absent in the industrial organization literature.
    Keywords: Sectoral neighborhood; Innovation; Spatial econometrics
    JEL: C23 O3 L14
    Date: 2016–12–07
  25. By: BIMONTE, Giovanna (CELPE - Centre of Labour Economics and Economic Policy, University of Salerno - Italy); SENATORE, Luigi (CELPE - Centre of Labour Economics and Economic Policy, University of Salerno - Italy)
    Abstract: In this paper, we propose a new index that is able to point out the important relationship between environmental protection and investments in innovation processes. We identify the index with the acronym EICI (Environmental Innovation Comparative Index). This new empirical tool can help to explain how the level of innovation can determine different levels of air pollution in the world. We use OLS models to investigate how this new index impacts the variations in greenhouse gas emissions, and we underline some fundamental policy implications. Considering the levels of the EICI and the empirical analysis of the role of this index then we conclude that enforcing new environmental agreements with some fundamental rules, as the incentive to reduce the technological gaps among the countries, is crucial to protect the environment and at same time stimulate the investment for innovation in all countries of the world.
    Keywords: Kyoto Agreement; Environmental Index; OLS model; Environmental Policy;
    JEL: O33 Q50 Q52 Q55 Q58
    Date: 2016–12–30
  26. By: Slavo Radosevic (UCL School of Slavonic and East European Studies); Esin Yoruk (UCL School of Slavonic and East European Studies)
    Abstract: This paper discusses why we need theory and metrics of technology upgrading. It critically reviews the existing approaches to technology upgrading and motivates build-up of theoretically relevant but empirically grounded middle level conceptual and statistical framework which could illuminate a type of challenges relevant for economies at different income levels. It conceptualizes technology upgrading as three dimensional processes composed of intensity and different types of technology upgrading through various types of innovation and technology activities; broadening of technology upgrading through different forms of technology and knowledge diversification, and interaction with global economy through knowledge import, adoption and exchange. We consider this to be necessary first step towards theory and metrics of technology upgrading and generation of more relevant composite indicator of technology upgrading.
    Keywords: Technology upgrading
    Date: 2015–02
  27. By: Marina Van Geenhuizen
    Abstract: Industrial competence is increasingly dispersed across the globe, urging technology-based firms in Europe to establish international knowledge relationships at larger distances. This paper examines changing patterns of international knowledge relationships and the influence of capability factors of university spin-off firms on building such relationships, using a sample of 105 of such firms. The paper addresses the debate on capabilities among young high-tech ventures in developing an adequate internationalization network, in which opinions are contrasting, like concerning an easy globalization (born-global model) versus a reluctant and step-wise approach. In early patterns, 62 per cent of the sampled firms employed knowledge relationships abroad. The main capability factors affecting these early relationships tend to be PhD education in the founding team, participation in training, and the capability to innovate on a practical and modestly innovative level responding to market demand. The subsequent changes in relationships have led to a high overall internationalization level of 82 per cent five years later, but also reveal diverse trends on the individual level of firms, namely, no change for half of the spin-offs but an increase of spatial reach for only one third. With the aim to explore spatial internationalization patterns and changes herein, we apply logistic regression analysis. Important factors affecting both early and later international networks tend to be entrepreneurial orientation, regarding industry sector and market, while later relationships tend to be path-dependent, i.e. mainly influenced by the previous pattern.
    Keywords: University spin-off firms; Knowledge relationships; Spatial reach; Capability factors
    JEL: D8 L21 L26 M13
    Date: 2016–12
  28. By: Riccardo Cappellin
    Abstract: This paper aims to indicate that an economic recovery of the European economy can be pulled by an increase of the aggregate demand and by the adoption of a new European cohesion policy having an industrial and a territorial dimension. The paper illustrates a theoretical model: the model of the ?cross-sectoral demand? and the ?cross-sectoral supply?, where growth is based on the interdependent changes of the sectoral structure of the supply and the demand. A crucial role is attributed to the flows of new knowledge, innovation and investment, as factors which affect both the aggregate supply and the aggregate demand. The paper illustrates the characteristics of the equilibrium and the pattern of growth in the model of the ?cross-sectoral demand? and the ?cross-sectoral supply? and it compares this model with the traditional macroeconomic ?AD-AS model?. Then, it indicates that industrial and regional policies are complementary to the monetary and fiscal policies, as they may promote the creation of new productions and determine an increase of GDP and employment at the regional and national level, also in a short-medium term perspective and not only for long term development.
    Keywords: .
    JEL: E14 L52 O14 O18 O33
    Date: 2016–12
  29. By: Jakob Brochner Madsen
    Abstract: This paper constructs annual data on primary, secondary and tertiary education, significant inventions and great scientists in the period 1270-2011 for Britain to investigate the influence of education and science on the economic development of Britain. Institutions, culture, real book prices and other variables are used to trace the origin of innovations, great scientists and educational attainment. The regressions show that education, a highly innovative environment and knowledge spillovers were influential in shaping British economic development over the period 1270-2011.
    Keywords: Economic growth, science, education, institutions, culture
    JEL: O30 O40
    Date: 2016–01
  30. By: Cuihong Fan (Shanghai University of Finance and Economics); Byoung Heon Jun (Korea University, Seoul); Elmar G. Wolfstetter (Humboldt-University at Berlin and Korea University, Seoul)
    Abstract: We reconsider the inside innovators’ optimal licensing problem, assuming incomplete information and unit cost profiles that may or may not have the potential to propel a monopoly, taking into account restrictions concerning royalty rates and the use of exclusive licenses implied by antitrust rules. We analyze optimal licensing mechanisms using methods developed in the analysis of license auctions with downstream interaction. The optimal mechanism differs significantly from the mechanisms reported in the literature, which assumed complete information or particular cost profiles or probability distributions.
    Keywords: Innovation, licensing, optimal contracts, asymmetric information
    JEL: D21 D43 D44 D45
    Date: 2016
  31. By: John Finch; Susi Geiger; Emma Reid
    Abstract: This paper examines how environmental regulation is made operational when it legislates for modifications rather than the banning of products or substances. The continued circulation of such products draws attention to the heterogeneous conditions of their use and allows industry actors to accumulate evidence of the products' polluting effects over time. We find that this agentic quality of materials – including products and sites of application – is a vital and so far largely ignored dimension in the relationship between environmental regulation and innovation. This is captured in a process we term interactive stabilization, which describes how material agency becomes a focus for interactions between regulatory and industry actors. We develop our argument through an in-depth case study of the environmental regulation of production chemistry and identify three interactive processes: formulating regulatory principles; operationalizing these principles through technical documentation and calculation; and incremental innovation as used by chemists to address clients’ varied material problems in production. We trace stabilizing and destabilizing effects across these three processes and draw particular attention to the role of uncertainty in the operationalization of precaution as a regulatory principle. We argue that this uncertainty may lead to a form of regulatory capture that we frame as technological capture. This refers to how industry actors are able to test the limits of regulatory principles and calculations and on occasion contest these through their applied science capabilities.
    Keywords: Regulation; Technology marketing; Regulatory capture; Sales
    JEL: O38 Q55 Q58
    Date: 2016
  32. By: Tödtling, Franz; Sinozic, Tanja; Auer, Alexander
    Abstract: The health sector and medical technologies are of an increasing importance in society and for regional and national economies. Much like other life sciences industries, the medical devices sector relies upon specific factors and knowledge processes that shape and support its innovation capabilities and competitiveness. Previous studies have shown that growth and innovation in this sector depend on specific local factors and conditions as well as on markets and knowledge-interdependencies at higher spatial scales. There is still a research gap on the detailed nature of these driving factors and relationships, however. In this research, we have investigated these issues for the Vienna medical devices cluster that is part of the wider life sciences sector in this region. The main aims of the study were to generate insights into how different economic, knowledge- and policy conditions, and their spatial scales, interact to support and hinder development of the medical devices industry in Vienna, and to draw policy conclusions based on these findings. (authors' abstract)
    Date: 2016–06–20
  33. By: Christian Catalini; Joshua S. Gans
    Abstract: We rely on economic theory to discuss how blockchain technology and cryptocurrencies will influence the rate and direction of innovation. We identify two key costs that are affected by distributed ledger technology: 1) the cost of verification; and 2) the cost of networking. Markets facilitate the voluntary exchange of goods and services between buyers and sellers. For an exchange to be executed, key attributes of a transaction need to be verified by the parties involved at multiple points in time. Blockchain technology, by allowing market participants to perform costless verification, lowers the costs of auditing transaction information, and allows new marketplaces to emerge. Furthermore, when a distributed ledger is combined with a native cryptographic token (as in Bitcoin), marketplaces can be bootstrapped without the need of traditional trusted intermediaries, lowering the cost of networking. This challenges existing revenue models and incumbents's market power, and opens opportunities for novel approaches to regulation, auctions and the provision of public goods, software, identity and reputation systems.
    JEL: D4 D47 O16 O3 O31 O32 O33 O34
    Date: 2016–12
  34. By: Harry Bloch; Mita Bhattacharya
    Abstract: Small and medium sized enterprises (SMEs) play a substantial role in Australian growth and job creation. We discuss approaches to understanding the drivers of innovation and then review evidence on the determinants of innovation by Australian SMEs. We also examine the role of these firms in job creation. Against this evidence and the conceptual underpinnings, we then discuss some issues that arise with the government’s current innovation agenda.
    Keywords: Australia; Research and development; SMEs; innovation; innovation policy
    Date: 2016–11
  35. By: Daniel Garcia-Macia; Chang-Tai Hsieh; Peter J. Klenow
    Abstract: Entrants and incumbents can create new products and displace the products of competitors. Incumbents can also improve their existing products. How much of aggregate productivity growth occurs through each of these channels? Using data from the U.S. Longitudinal Business Database on all non-farm private businesses from 1976–1986 and 2003–2013, we arrive at three main conclusions: First, most growth appears to come from incumbents. We infer this from the modest employment share of entering firms (defined as those less than 5 years old). Second, most growth seems to occur through improvements of existing varieties rather than creation of brand new varieties. Third, own-product improvements by incumbents appear to be more important than creative destruction. We infer this because the distribution of job creation and destruction has thinner tails than implied by a model with a dominant role for creative destruction.
    JEL: E24 O3 O4 O5
    Date: 2016–12
  36. By: Lothar Grall (Justus Liebig University Giessen)
    Abstract: This paper proposes somatic capital as a hitherto neglected variable in the discussion of factors impacting the timing of the Neolithic transition. It develops an evolutionary growth theory that builds on the trade-off between the quantity and the quality of offspring. The theory suggests that harsh climatic conditions during the ice age raised skill-intensity of the environment and altered the evolutionary optimal allocation of resources from offspring quantity to offspring quality. Higher somatic investment in offspring increased the innovation capability of individuals and ultimately accelerated the rate of technological progress. Thus, the adaptive response triggered within human populations living in cold and harsh climate for thousands of years had a significant impact on the timing of the Neolithic transition. The theory further suggests that differential somatic investment can be identified as deep-rooted determinant of comparative economic development.
    Keywords: Economic Growth, Human Evolution, Ice Age Climate, Neolithic Revolution, Out-of-Africa Expansion, Somatic Capital, Skill-Intensity, Technological Progress
    JEL: J10 O10 O30
    Date: 2016

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