nep-ino New Economics Papers
on Innovation
Issue of 2017‒08‒13
seventeen papers chosen by
Uwe Cantner
University of Jena

  1. TV and Entrepreneurship By Viktor Slavtchev; Michael Wyrwich
  2. Clean Energy Innovation in Latin America By Miller, Justin; Viscidi, Lisa
  3. Input and Output Additionality of R&D Subsidies By Dirk Czarnitzki; Katrin Hussinger
  4. The Role of Regional Context on Innovation Persistency of Firms By Tavassoli, Sam; Karlsson, Charlie
  5. Innovation pathways and trajectories in India's auto component industry By Tiwari, Rajnish; Kalogerakis, Katharina
  6. Ethnic diversity in start-ups and its impact on innovation By Brixy, Udo; Brunow, Stephan; D''Ambrosio, Anna
  7. To Support R&D or Linkages? Seeking a better policy mix for SME support By SUZUKI Jun
  8. Does Foreign Ownership Explain Company Export and Innovation Decisions? Evidence from Japan By OKUBO Toshihiro; Alexander F. WAGNER; YAMADA Kazuo
  9. Creative and science oriented employees and firm innovation : a key for smarter cities? By Brunow, Stephan; Birkeneder, Antonia; Rodriguez-Pose, Andrés
  10. R&D and Product Dynamics By MIYAGAWA Tsutomu; EDAMURA Kazuma; KAWAKAMI Atsushi
  11. Moving Citizens and Deterring Criminals: Innovation in Public Transport Facilities By Canavire-Bacarreza, Gustavo; Duque, Juan Carlos; Urrego, Joaquin A.
  12. Headquarters and Skill Biased Technical Change (Japanese) By KAWAKAMI Atsushi
  13. Government Financing of R&D: A Mechanism Design Approach By Lach, Saul; Neeman, Zvika; Schankerman, Mark
  14. Credit Market Quality, Innovation and Trade By Cristina Terra; Enrico Vasconcelos
  15. Learn, Innovate, Improve (LI²): Lessons from the Colorado Works Innovation Initiative By Jonathan McCay; Elizabeth Brown; Michelle Derr; Talia Kahn-Kravis; Ann Person; Marykate Zukiewicz
  16. Disentangling the Effects of Technological and Organizational Changes in the Rise of the Factory: The Case of the Japanese Fabric Industry, 1905-1914 By Tetsuji Okazaki
  17. Embracing an Entrepreneurial Ecosystem: An Analysis of the Governance of Research Joint Ventures By Audretsch, David; Link, Albert

  1. By: Viktor Slavtchev (Halle Institute for Economic Research (IWH)); Michael Wyrwich (FSU Jena)
    Abstract: Can TV influence the entrepreneurial decisions of individuals? To identify causal effects, we utilize a quasi-natural experiment, namely that during the division of Germany after WWI into the capitalistic West Germany and the socialistic East Germany, West TV was exogenously available only in some regions of the latter. Using regional and individual data, we show that, after the Reunification, entrepreneurship is higher among the residents of East German regions with West TV signal, indicating a direct effect of TV on the entrepreneurial mindset of exposed individuals. Moreover, we find second-order effects due to intergenerational transmission, which cause persistent differences.
    Keywords: Entrepreneurship, TV, Culture, Occupational choice, Institutions
    JEL: L26 J24 M13 P20 P30 O30 D02 D03 Z10
    Date: 2017–08–08
  2. By: Miller, Justin; Viscidi, Lisa
    Abstract: Clean energy research and commercialization have taken off over the last decade. The annual number of clean technology patent documents more than tripled between 2000 and 2014,while venture capital (VC) investment in the clean tech sector overall doubled in 2010-2014 compared to the previous five years, with most clean tech research and investment focused on energy. But more needs to be done. Governments must triple annual spending on energy research and development (R&D) to more than $50 million to meet climate change mitigation goals, according to the International Energy Agency. This report examines clean energy technology development in Brazil, Mexico and Chile, which are among the Latin American countries with the greatest potential to expand clean energy research and commercialization. All three countries are part of “Mission Innovation,” a global initiative to accelerate public and private clean energy innovation, which was launched during the 2015 United Nations climate talks in Paris. Member countries have committed to double clean energy research and development spending over the five years to 2020.
    Keywords: Ambiente, Cambio climático, Energía, Innovación,
    Date: 2016
  3. By: Dirk Czarnitzki (KU Leuven, Belgium); Katrin Hussinger (CREA, Université du Luxembourg)
    Abstract: This paper analyzes the effects of public R&D subsidies on R&D input and output of German firms. We distinguish between the direct impact of subsidies on R&D investments and the indirect effect on innovation output measured by patent applications. We disentangle the productivity of purely privately financed R&D and additional R&D investment induced by the public incentive scheme. For this, a treatment effect analysis is conducted in a first step. The results are implemented into the estimation of a patent production function in a second step. It turns out that both purely privately financed R&D and publicly induced R&D show a positive effect on patent outcome.
    Keywords: R&D, Subsidies, Patents, Treatment Effects
    JEL: C14 C30 H23 O31 O38
    Date: 2017
  4. By: Tavassoli, Sam (RMIT University); Karlsson, Charlie (KTH)
    Abstract: This paper analyses the role of regional context on innovation persistency of firms. Using five waves of the Community Innovation Survey in Sweden, we have traced firms’ innovative behaviour from 2002 to 2012, in terms of four Schumpeterian types of innovation: product, process, organizational, and marketing. Employing transition probability matrix and dynamic Probit model and controlling for an extensive set of firm-level characteristics, we find that certain regional characteristics matter for innovation persistency of firms. In particular, those firms located in regions with (i) thicker labour market or (ii) higher extent of knowledge spillover exhibit higher probability of being persistent innovators up to 14 percentage points. Such higher persistency is mostly pronounced for product innovators.
    Keywords: location; innovation; persistence; product innovations; process innovations; market innovations; organizational innovations; firms; Community Inno¬vation Survey
    JEL: D22 L20 O31 O32
    Date: 2017–08–06
  5. By: Tiwari, Rajnish; Kalogerakis, Katharina
    Abstract: India's automotive sector has grown tremendously in the post-liberalization period. The growing domestic market, increased export opportunities and greater emphasis of vehicle manufacturers on high-quality, innovative solutions have created a context for component suppliers to ramp up their innovation capabilities as well. For about past 20 years the auto component industry has consistently acted as a key enabler of various frugal vehicles launched in India. Our multi-level and multi-approach study, making use of firm and sector-level data while combining case studies with expert interviews, seeks to investigate the prevalent innovation pathways and trajectories in India's Auto Component Industry. The results indicate that firms often engage in designing and developing components making use of modern, digital technologies, and manage to reach very high levels of process and resource efficiency. The huge domestic market, and the rising global demand, for affordable, high quality products provide good incentives for investments and openness for external knowledge. Cooperation between Indian and global companies as well as mergers and acquisitions have accelerated the development of innovation capabilities in India. The focused approach on developing concrete applications within requisite parameters gives rise to "appropriate solutions" that balance economic, ecological and technological performance. The study discovered a remarkable set of innovation pathways that makes use of collaborative development, avoids over-engineering and is often driven by economies of scale. All this is also stimulated by the state that developed into a key promoter of innovations.
    Keywords: Innovation Pathways,Innovation Trajectories,Automotive,Auto-Components,India
    Date: 2017
  6. By: Brixy, Udo (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]); Brunow, Stephan (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]); D''Ambrosio, Anna
    Abstract: "The study analyses the impact of different ethnic compositions of start-ups in Germany on the innovativeness of the new businesses. We are able to distinguish between the ethnicity of the founders and that of the early employees following new results that demonstrate the importance of including all new firms' stakeholders for the firm's success. We make use of a measure introduced by Ruef (2002) and Ruef et al. (2003) which not only takes into account the number of different ethnicities involved, but also includes the unusualness of the ethnic compositions. Our results first reveal that foreigners are an important source of both entrepreneurs and employers. Second, we can show that only really rare combinations, of the founders and employees together, lead to more innovative businesses whereas the more common minorities are even found to have a negative impact on firms' innovativeness." (Author's abstract, IAB-Doku) ((en))
    JEL: J15 J21 L26 M13 M14
    Date: 2017–08–03
  7. By: SUZUKI Jun
    Abstract: The innovation policy mix is reported to be increasingly targeted and demand side-oriented in recent years. In this context, an important question for policy makers, scholars, and analysts in Japan as well as in other nations is how to provide policy support to small- and medium-sized enterprises (SMEs). In this study, the effects of the new generation of policy mix supporting SMEs by the Ministry of Economy, Trade and Industry (METI) in Japan, the Sapo-In program, has been analyzed using patent data from the viewpoint of the effectiveness of financial support to firms (research and development (R&D) subsidy) and the support to build linkages (soft support) on both the supply- and demand-side (matching, brokering, and consulting). The results suggest that soft support has wider impacts in terms of patenting and internal and external network formation while financial support has very limited effects. Based on these results combined with information from the report on the follow-up monitoring survey of Sapo-In projects conducted by METI, the possibility of a better policy mix is discussed.
    Date: 2017–07
  8. By: OKUBO Toshihiro; Alexander F. WAGNER; YAMADA Kazuo
    Abstract: We employ a comprehensive database of Japanese manufacturing firms, covering up to 220,000 firm-year observations, to examine the role that ownership structure plays in explaining differences in export and innovation decisions of firms. Firms with higher foreign ownership are more export-oriented and engage more in innovation. This result holds controlling for differences in incentive structures (the use of stock options, which themselves are also associated with more export and innovation activities) and is robust to the use of an instrument exploiting peer effects with regard to foreign ownership. We also show that pre-World War II differences in cognitive skills and non-cognitive characteristics (attitudes) still explain modern-day, cross-prefecture differences in firm choices. Overall, our results suggest that both firm-internal corporate governance and the employee pool from which a company can draw upon can play an important role for the export and innovation activity of firms.
    Date: 2017–07
  9. By: Brunow, Stephan (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]); Birkeneder, Antonia; Rodriguez-Pose, Andrés
    Abstract: "This paper examines the link between the endowment of creative and science based STEM - Science, Technology, Engineering and Mathematics - workers and the level of the firm and firm- and city-/regional-level innovation in Germany. It also looks into whether the presence of these two groups of workers has greater benefits for larger cities than smaller locations, thus justifying policies to attract these workers in order to make German cities 'smarter'. The empirical analysis is based on a probit estimation, covering 115,000 plant-level observations between 1998 and 2015. The results highlight that firms that employ creative and STEM workers are more innovative than those that do not. However, the positive connection of creative workers to innovation is limited to the boundaries of the firm, whereas that of STEM workers is as associated to the generation of considerable innovation spillovers. Hence, attracting STEM workers is more likely to end up making German cities smarter than focusing exclusively on creative workers." (Author's abstract, IAB-Doku) ((en))
    Date: 2017–08–02
  10. By: MIYAGAWA Tsutomu; EDAMURA Kazuma; KAWAKAMI Atsushi
    Abstract: In endogenous growth models and mid-term business cycles as seen in the works of Romer (1987) and Comin and Gertler (2006), it is assumed that there are positive effects of product variety. Using product-firm level data, we examine these effects empirically. Using data from the Census of Manufacture, the Survey of Research and Development (R&D), and the Basic Survey of Japanese Business Structure and Activities, we construct a database that includes number of products, R&D expenditures, and data on firm performance. We find that the number of products in R&D firms is higher than that of non-R&D firms, and that R&D firms are more sensitive than non-R&D firms for product dynamics. In the Poisson regression model, we also observe positive effects of R&D activities on product dynamics in empirical studies. As the increase in product variety contributes to productivity growth, our empirical results support the government's policies for enhancing R&D activities.
    Date: 2017–07
  11. By: Canavire-Bacarreza, Gustavo; Duque, Juan Carlos; Urrego, Joaquin A.
    Abstract: This paper explores the relationship between urban public transportation innovation and crime. In 2004, the city of Medellin in Colombia developed an innovative public transportation system based on cable cars (Metrocable) to reach dense, isolated and dangerous neighborhoods. Using Spatial Difference in Difference approaches and a rich dataset at spatial analytical level, using max-p modeling, we explore the effects of the Metrocable on crime and its mechanisms. We find a significant impact on homicides reduction in the treated neighborhoods, especially in the medium run. Homicides decreased around 41% more than the general crime reduction in the city between 2004 and 2006, and by 49% between 2004 and 2012. We explore two mechanisms through which this intervention may affect the level of criminality, one is reducing the travel costs and improving accessibility to the rest of the city for low-income population (socioeconomic mechanism); the other is the increasing of the probability of apprehension for potential and active o enders (deterrent mechanism).
    Keywords: Ciudades, Innovación, Investigación socioeconómica, Pobreza, Seguridad ciudadana, Transporte,
    Date: 2016
  12. By: KAWAKAMI Atsushi
    Abstract: This paper investigates the relationship between headquarter work and full-time or part-time onsite workers by using the "skill biased technical change" methodology. From the middle of the 1990s in Japan, the number of full-time onsite workers and workers engaged in tasks at headquarters have been decreasing while the number of part-time onsite workers have been increasing. It was also confirmed that the role of headquarters changed from administrative tasks to entrepreneurial tasks over time. From the estimation of a limited sample which covers only single-establishment firms, we disclose that the scale of headquarters decreases the demand of full-time onsite workers. Particularly, administrative headquarters have more influence on substitution with full-time onsite workers than entrepreneurial headquarters. On the other hand, the role composition of headquarters have various effects on skill biased technical change in each industry.
    Date: 2017–07
  13. By: Lach, Saul; Neeman, Zvika; Schankerman, Mark
    Abstract: We study the design of a government loan program for risky R&D projects that generate positive externalities, undertaken by entrepreneurs in a competitive capital market environment. With adverse selection, the optimal contract requires a high interest rate but nearly zero co-financing by the entrepreneur. This contrasts sharply with observed policies, typified by a low interest rate and high co-finanacing requirement. When we add moral hazard (endogenous success), the optimal policy consists of a menu of at most two contracts, one with high interest/zero self-finanacing and a second with a lower interest but also a co-finanacing requirement. Calibrated simulations compare the optimal policy and observed program designs in terms of innovation and welfare.
    Keywords: additionality; entrepreneurship; government nance; innovation; mechanism design; R&D; start-ups
    JEL: D61 D82 O32 O38
    Date: 2017–08
  14. By: Cristina Terra; Enrico Vasconcelos
    Abstract: Using a general equilibrium model with private R&D financing, we investigate the impact of trade openness on innovation, trade pattern and welfare for two countries equal in all aspects, except for the quality of credit markets. We show that trade openness increases innovation only in the country with better credit market, while it has a negative impact on innovation when credit markets are less developed. With respect to trade pattern, the country with worse credit market imports high tech goods and exports traditional goods. In terms of welfare, opening to trade may lower the welfare of individuals in the short run, but in the long run all of them are better o under free trade than if they were under autarky
    Date: 2017–07
  15. By: Jonathan McCay; Elizabeth Brown; Michelle Derr; Talia Kahn-Kravis; Ann Person; Marykate Zukiewicz
    Abstract: This brief describes the experience of a group of county human service agencies in Colorado using an evidence-informed analytic process called “Learn, Innovate, Improve†to address the challenge of participant engagement in their Temporary Assistance for Needy Families (TANF) programs.
    Keywords: Learn, Innovate, Improve, technical assistance (TA), TANF, engagement
    JEL: I
  16. By: Tetsuji Okazaki
    Abstract: This paper attempts to contribute to the "factory debate" by disentangling the effects of the technological change and the organizational change in the rise of the factory, using a unique dataset from Japan in the early twentieth century. It is found that the productivity of a factory worker was 2.46 times larger than that of an outworker under the putting-out system, after controlling for the effect of the power loom. The impact of the factory system was almost as large as that of the power loom in the case where all the hand looms were replaced by power looms. This finding indicates how substantial the effect of the organizational change was that gathered dispersed workers under the one roof.
    Date: 2017–07
  17. By: Audretsch, David (Indiana University); Link, Albert (University of North Carolina at Greensboro, Department of Economics)
    Abstract: In this paper, we examine how one important type of relationship, research joint ventures (RJVs), is governed within the context of an entrepreneurial ecosystem. Based on agency theory, we investigate the relationship between the governance structure of an RJV and the likelihood that the venture will embrace elements of its research-based ecosystem, that is, the likelihood that the RJV will invite a university to become a research member of the venture. Using data from the National Research Joint Venture Database, we find that when the governance structure of the RJV affords the organizer/leader and research director (the principal) the ability to exert control over the activities of the other members of the RJV (the agents), universities are less likely to be invited to participate as a research member.
    Keywords: Research Joint Venture; R&D; Technology; Entrepreneurship; Innovation; Agency Theory
    JEL: O21
    Date: 2017–08–05

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