nep-ino New Economics Papers
on Innovation
Issue of 2017‒10‒01
nineteen papers chosen by
Uwe Cantner
University of Jena

  1. Network-Mediated Knowledge Spillovers: A Cross-Country Comparative Analysis of Information Security Innovations By Lee Branstetter; Neil Gandal; Nadav Kuniesky
  2. A novel technology-industry concordance table based on linked inventor-establishment data By Dorner, Matthias; Harhoff, Dietmar
  3. Frugal innovations and 3D printing: insights from the field By Josip Maric; Florence Rodhain; Yves Barlette
  4. The visible hand of cluster policy makers: An analysis of Aerospace Valley (2006-2015) using a place-based network methodology By Delio Lucena Piquero; Jerome Vicente
  5. Financial Innovation and Money Demand: Evidence from Sub-Saharan Africa By J. Paul Dunne; Elizabeth Kasekende
  6. Analyzing the impact of R&D policy on regional diversification By Tom Broekel; Lars Mewes
  7. Receptivity and Innovation By Furukawa, Yuichi; Lai, Tat-kei; Sato, Kenji
  8. Equity Crowdfunding and Early Stage Entrepreneurial Finance: Damaging or Disruptive? By Saul Estrin; Daniel Gozman; Susanna Khavul
  9. Do Native STEM Graduates Increase Innovation? Evidence from U.S. Metropolitan Areas By John V. Winters
  10. Do Non-Compete Covenants Influence State Startup Activity? Evidence from the Michigan Experiment By Carlino, Gerald A.
  11. Balancing contradictory temporality during the unfold of innovation streams By Fanny Simon; Albéric Tellier
  12. Marine biotechnology: Definitions, infrastructures and directions for innovation By OECD
  13. The returns to entrepreneurship: Evidence from matched person-firm data By Raknerud, Arvid; van Praag, Mirjam
  14. Introducing new products that affect consumer privacy: A mediation model By Caroline Lancelot Miltgen; Jörg Henseler; Carsten Gelhard; Aleš Popovič
  15. Public Support to Business R&D and the Economic Crisis: Spanish Evidence By Barajas, Ascensión; Huergo, Elena; Moreno, Lourdes
  16. Innovation theory and the logic of generativity: from optimization to design, a new post-decisional paradigm in management science By Pascal Le Masson; Armand Hatchuel; Benoit Weil
  17. The Productivity Slowdown and the Declining Labor Share: A Neoclassical Exploration By Gene M. Grossman; Elhanan Helpman; Ezra Oberfield; Thomas Sampson
  18. Returns to Pharmaceutical Innovation in the Market for Oral Chemotherapy in Response to Insurance Coverage Expansion By Caroline S. Bennette; Anirban Basu; Scott D. Ramsey; Zachary Helms; Peter B. Bach
  19. The Partnership to Strengthen Innovation and Practice in Secondary Education (PSIPSE): 2016 Monitoring Results By Swetha Sridharan; Clemencia Cosentino; Laura Meyer

  1. By: Lee Branstetter; Neil Gandal; Nadav Kuniesky
    Abstract: A large and growing literature has used patent and patent citation data to measure knowledge spillovers across inventions and organizations, but relatively few papers in this literature have explicitly considered the collaboration networks formed by inventors as a mechanism for shaping and transmitting these knowledge flows. This paper utilizes an approach developed by Fershtman and Gandal (2011) to examine the incidence and nature of knowledge flows mediated by the collaboration networks of inventors active in the information security industry. This is an industry in which a number of nations outside the United States, including Israel, have emerged as important centers of innovation. Using data from U.S. PTO patent grants in information security, we find that the quality of Israeli information security inventions is systematically linked to the structure of the collaborative network generated by Israeli inventors in this sector. Using the Fershtman and Gandal (2011) model, this suggests that there are knowledge spillovers from the network. In some other nations, invention quality is less closely linked to the collaboration networks of inventors. This research highlights the importance of direct interaction among inventors as a conduit for flows of frontier scientific knowledge.
    JEL: O31 O33 O57
    Date: 2017–09
  2. By: Dorner, Matthias (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]); Harhoff, Dietmar
    Abstract: "Mapping technologies into industries is frequently required in empirical innovation studies, but many concordances only provide coarse mappings. We develop novel concordance tables between industries and technologies making use of linked inventor-employee patent data for Germany. The data comprise 235,933 patents filed between 1999 and 2011 at the European Patent Office. Data on inventors are matched and disambiguated with social security records available at the Institute for Employment Research. Employment data recorded in this database include detailed industry codes describing the industrial activities of the inventors' establishments. The linked inventor-establishment microdata allow us to identify the precise industry of origin of inventions, combine them with technology classifications from the inventors' patents and to generate novel concordance tables. We evaluate our approach by comparing the concordance tables with existing work, and we discuss the validity of patent statistics by industries as indicators for innovation." (Author's abstract, IAB-Doku) ((en)) Additional Information Hinweis/Note: Zum Entpacken der Dateien kann die freie Software 7-zip verwendet werden/The open source software 7-zip can be used for extracting Concordance tables Data set
    Date: 2017–09–19
  3. By: Josip Maric (MRM - Montpellier Research in Management - UM1 - Université Montpellier 1 - UM2 - Université Montpellier 2 - Sciences et Techniques - UPVD - Université de Perpignan Via Domitia - Université Paul Valéry - Montpellier III - Groupe Sup de Co Montpellier (GSCM) - Montpellier Business School); Florence Rodhain (MRM - Montpellier Research in Management - UM1 - Université Montpellier 1 - UM2 - Université Montpellier 2 - Sciences et Techniques - UPVD - Université de Perpignan Via Domitia - Université Paul Valéry - Montpellier III - Groupe Sup de Co Montpellier (GSCM) - Montpellier Business School); Yves Barlette (Sup de Co Montpellier Business School - MRM - Montpellier Research in Management - UM1 - Université Montpellier 1 - UM2 - Université Montpellier 2 - Sciences et Techniques - UPVD - Université de Perpignan Via Domitia - Université Paul Valéry - Montpellier III - Groupe Sup de Co Montpellier (GSCM) - Montpellier Business School)
    Abstract: In this paper, we present a growing technological sector – additive manufacturing – and discuss its hidden potential as frugal innovation. Additive manufacturing, which is also known as three-dimensional (3D) printing, constitutes a recent manufacturing process that builds layers to create a three-dimensional solid object from a digital model. 3D printing technology has been identified as one aspect of the digital revolution that has the potential to revolutionize the industrial world. This topic has been surrounded with a lot of hype when predicting future application scope. In this paper, we focus on 3D printing as a technology that, under certain circumstances of technological transfer via community-operated organizations like fab labs, enables the development of frugal solutions targeting Base-of-the-Pyramid (BoP) population. At the same time, this paper aims to contribute to the discussion on Frugal Innovations in existing scholar literature.
    Keywords: Management,Innovation,Frugal,Additive,Manufacturing,3D Printing,Technology
    Date: 2016
  4. By: Delio Lucena Piquero; Jerome Vicente
    Abstract: The paper focuses on cluster policies with particular attention to the role of R&D collaborative incentives in the structuring of knowledge networks in clusters. We disentangle the main network failures in regional innovation systems, and discuss the selection procedures designed by policy makers to enhance the production of innovation outputs. We draw evidence from the French Aerospace Valley cluster from 2006 to 2015. The empirical analysis relies on a dataset of 248 granted research consortia, from which we build 4-cohorts knowledge networks enable us evidencing the evolving structural properties of the cluster over time. We suggest avoiding the bias and limitations of 1 and 2-mode network analysis by developing an original place- based network methodology that emphasizes on structural equivalence and groups behaviors. We discuss the results focusing on the convergence degree between the network statistical findings and the policy makersÕ objectives. Finally, the methodology allows us identifying who are the agents of the structural and technological changes observed during the period.
    Keywords: Cluster policy; Networks; Collaborative incentives; Groups behaviors; Aerospace Valley
    JEL: D85 O25 O30 R10
    Date: 2017–09
  5. By: J. Paul Dunne (School of Economics, University of Cape Town); Elizabeth Kasekende (Bank of Uganda)
    Abstract: While the effect of financial innovation on money demand has been widely researched in industrialised countries, because of its major role in monetary policy, few studies have focussed on developing countries. This is surprising given the considerable growth in financial innovation in Sub-Saharan Africa in recent years and its potential implications for developing country macroeconomic policy. This paper investigates the development of financial innovation and its impact on money demand in the region using panel data estimation techniques for 34 countries between 1980 and 2013. The results indicate that there is a negative relationship between financial innovation and money demand. This implies that financial innovation plays a crucial role in explaining money demand in Sub-Saharan Africa and given innovations such as mobile money in the region this can have important implications for future policy design.
    Date: 2017
  6. By: Tom Broekel; Lars Mewes
    Abstract: Existing studies on regional diversification highlight the importance of local path dependencies and related competences. However, little attention has been paid to other factors potentially contributing to diversification processes. Foremost, this concerns the role of R&D policy. This study investigates the relation between R&D policy and regional technological diversification in German labor market regions from 1996 to 2010. We find no evidence for proactive R&D policies, as subsidized R&D projects do not promote regional technological diversification. In contrast, R&D subsidies? allocation is rather risk-averse with subsidies being more likely allocated to already established technologies and those related to region?s technology portfolio.
    Keywords: regional diversification, innovation, policy, R&D subsidies, relatedness
    JEL: R11 O31 O33 O38
    Date: 2017–09
  7. By: Furukawa, Yuichi; Lai, Tat-kei; Sato, Kenji
    Abstract: In this study, we investigate the relationship between receptivity to novelty and innovation. Consumers’ receptivity to novelty, as an individual propensity toward new goods, might be perceived to encourage innovation at the aggregate level unambiguously. On analyzing data from the World Values Survey and the World Intellectual Property Organization, however, we find that there is an inverted U-shaped relationship between average receptivity and innovation at country level; receptivity may not always be conducive to innovation. To capture a mechanism behind this counterintuitive fact, we develop a new dynamic general equilibrium model with the understanding that innovation consists of two separate activities of inventing new goods and introducing them to the society. In our model, consumer receptivity encourages firms to invent but discourages them from introducing. Interacted with population size and the elasticity of substitution, these opposing forces generate a non-monotonic relationship. While economies with moderate receptivity can achieve sustained innovation and thereby long-run growth, those with too much or too little receptivity are likely to be caught in an underdevelopment trap, in which innovations eventually fail. These results suggest a theory that explains the inverted-U.
    Keywords: Openness to novelty; aversion to novelty; underdevelopment traps; endogenous growth; innovation cycles
    JEL: E32 O40 Z10
    Date: 2017–09
  8. By: Saul Estrin; Daniel Gozman; Susanna Khavul
    Abstract: Equity crowdfunding (ECF) offers founders of new ventures an online social media marketplace where they can access a large number of investors who, in exchange for an ownership stake, provide finance for business opportunities that they find attractive. In this paper, we first quantify the evolution of the ECF market in the UK, the world leader, as well as the benign regulatory environment. ECF already represents more than 15% of British early stage entrepreneurial finance. We then use qualitative methods to explore three research questions. First, do these large financial flows via ECF platforms supplement or merely divert more traditional forms of funding for entrepreneurs? Second, do investors understand and appropriately evaluate the risks that they are bearing by investing in this new asset class? Finally, does ECF finance bring with it the spillovers, e.g. advice and guidance critical to entrepreneurial success, associated with other sources of funding such as Venture Capital? Our study is based on extensive interviews with investors, entrepreneurs (including some who chose not to use ECF in favour of traditional funding sources) and regulators. We conclude that ECF provides real additionality to the sources of entrepreneurial finance while not bringing major new risks for investors. This suggests other jurisdictions might consider implementing the British "principles based" regulatory framework.
    Keywords: equity crowdfunding, early stage entrepreneurial finance, financial regulation, investor choices
    JEL: G3 G21 L26 M21
    Date: 2017–09
  9. By: John V. Winters (Oklahoma State University)
    Abstract: This paper examines the effects of college graduates educated in STEM fields on patenting intensity in U.S. metropolitan areas. Some prior research suggests a positive effect on urban innovation from foreign-born STEM workers, but little is known about the effects of native STEM graduates on innovation. My preferred results use time-differenced 2SLS regressions, and I introduce a novel approach to instrumenting for the growth in native STEM graduates. I find positive effects of foreign STEM on innovation, roughly consistent with previous literature. However, my preferred approach yields a negative coefficient estimate for native STEM graduates on innovation that is not statistically significant but suggests that a meaningfully large positive effect is unlikely during the 2009-2015 time-period. I discuss possible explanations and implications.
    Keywords: STEM; innovation; patents; human capital; higher education
    JEL: I25 J24 J61 O31 R12
    Date: 2017–08
  10. By: Carlino, Gerald A. (Federal Reserve Bank of Philadelphia)
    Abstract: This paper examines how the enforceability of employee non-compete agreements affects the entry of new establishments and jobs created by these new firms. We use a panel of startup activity for the U.S. states for the period 1977 to 2013. We exploit Michigan’s inadvertent policy reversal in 1985 that transformed the state from a non-enforcing to an enforcing state as a quasi-natural experiment to estimate the causal effect of enforcement on startup activity. Our findings offer little support for the widely held view that enforcement of non-compete agreements negatively affects the entry rate of new firms or the rate of jobs created by new firms. In a difference-in-difference analysis, we find that a 10 percent increase in enforcement led to an increase of about 1 percent to about 3 percent in the startup job creation rate in Michigan and, in general, to essentially no change in the startup entry rate. Extending our analysis to consider the effect of increased enforcement on patent activity, we find that enforcement had differential effects across technological classifications. Importantly, increased enforcement had a positive and significant effect on the number of quality-adjusted mechanical patents in Michigan, the most important patenting classification in that state.
    Keywords: Startup activity; non-compete agreements; regional economic growth
    JEL: O30 O38 R11
    Date: 2017–09–21
  11. By: Fanny Simon (Institut d'Administration des Entreprises (IAE) - Caen); Albéric Tellier (Institut d'Administration des Entreprises (IAE) - Caen)
    Abstract: This article focuses on individuals working on innovation developments during the unfolding of innovation streams. Innovation streams include both exploitation-and exploration-oriented projects. Those projects imply different temporalities and can be conducted at different paces. This research examines how different temporalities within a single innovation stream are managed first at the level of projects and then among projects. We collected data on an innovation stream in the semiconductor industry. We explain how teams and organization develop processes and tools to address different temporalities. The results show that the process of learning occurs first within projects and then among projects. Our research offers new understandings of the transition of organizations towards a project-based structure by demonstrating that changes in practices can occur first as a reaction to external events, then as the results of new arrangements triggered by management and finally as the consequences of the team's proactive actions.
    Keywords: Innovation,Temporality,Project,Exploration,Exploitation
    Date: 2016
  12. By: OECD
    Abstract: Several countries have been setting up strategic roadmaps to support marine biotechnologies that could drive innovation and help address the global sustainability goals of food, energy, and health. The report identifies and begins to address challenges facing cooperation on marine biotechnology across countries. First, the report provides on an international definition of marine biotechnology that was developed through a multi-year process. Second, the report reviews the international infrastructure in marine biotechnology and identifies the lack of standardisation as a critical issue.
    Date: 2017–09–26
  13. By: Raknerud, Arvid; van Praag, Mirjam
    Abstract: Empirical studies show low pecuniary returns of switching from wage employment to entrepreneurship. We reconsider the pecuniary gains of this switching by employing a two-stage procedure, where the randomness in the timing of inheritance transfers is used as an exclusion restriction to identify causal effects. The model is estimated on data covering the whole Norwegian population of individuals matched to the entire population of firms established in the period 2002-2011. The results indicate that the average returns to entrepreneurship are significantly negative for individuals entering entrepreneurship through self-employment and modest, but significantly positive, for incorporated startups.
    Keywords: Earnings distribution; Matched person- firm data; Random effects probit model; Returns to entrepreneurship; Self-employment
    JEL: C23 G32 J31 L26
    Date: 2017–09
  14. By: Caroline Lancelot Miltgen (Audencia Recherche - Audencia Business School); Jörg Henseler (ULISBOA - Universidade de Lisboa); Carsten Gelhard (University of Twente [Netherlands]); Aleš Popovič (Faculty of Economics - University of Ljubljana, ULISBOA - Universidade de Lisboa)
    Abstract: Many innovative products can only fully deploy their value if they rely on consumers' personal information. This issue challenges the confidence that consumers have in new innovations, and revolutionizes marketing practices. Malhotra, Kim, and Agarwal's (2004) framework provides the theoretical basis for hypotheses on the consequences of privacy concerns. An empirical study in the context of four pervasive IT innovations involving various privacy issues helps to test these hypotheses. The findings consistently show that privacy concerns have an adverse effect on consumers' intention to accept IT innovation. However, trust and risk perceptions both mediate this relationship. By understanding the underlying mechanism, firms can alleviate the potential downsides of their products and increase the odds of their market success.
    Keywords: Structural equation modeling,New product adoption, Technological innovation, Consumer privacy concerns
    Date: 2016
  15. By: Barajas, Ascensión; Huergo, Elena; Moreno, Lourdes
    Abstract: The objective of the present study is to compare the effect of public support of business R&D on technological inputs and outputs before and during the recent economic crisis. To do so, we use information provided by the Centre for the Development for Industrial Technology (CDTI), which is the main public agency in Spain that grants financial aid of its own to companies for the execution of R&D projects. Specifically, we consider firms supported through CDTI programmes for periods the 2002-2005 and 2010-2012. Impact assessment is conducted using "matching" techniques. Our preliminary results suggest that, during the crisis, public support continued to have positive effects on the resources devoted to R&D activities, and also increased the technological outputs obtained from these resources.
    Keywords: Impact assessment, Economic crisis, Public aid, Business R&D
    JEL: H81 L2 O3
    Date: 2017–09–21
  16. By: Pascal Le Masson (CGS i3 - Centre de Gestion Scientifique i3 - MINES ParisTech - École nationale supérieure des mines de Paris - PSL - PSL Research University - CNRS - Centre National de la Recherche Scientifique); Armand Hatchuel (CGS i3 - Centre de Gestion Scientifique i3 - MINES ParisTech - École nationale supérieure des mines de Paris - PSL - PSL Research University - CNRS - Centre National de la Recherche Scientifique); Benoit Weil (CGS i3 - Centre de Gestion Scientifique i3 - MINES ParisTech - École nationale supérieure des mines de Paris - PSL - PSL Research University - CNRS - Centre National de la Recherche Scientifique)
    Abstract: In this paper we contribute to show that innovation theory can today strongly contribute to the (re)foundation of management. Innovation theory is teared apart between the historical optimal-decision-making paradigm and the new perspective on creation. Still contemporary advances in design theory provide an integrated framework that accounts for decision andcreation, their similarities and differences, and enables to introduce a relativity principle, the unknown (or the expected generativity), to account for the continuity from one activity to the other. We show how applying that general framework and that relativity principle can help extend decision-based models (decision under uncertainty, problem solving, combinatorics) and how this extension helps revisit basic managerial notions built on these models (risk management, knowledge management, coordination…). We conclude on some of the perspectives opened by this relativity principle for management.
    Keywords: Decision theory, design theory, unknown, uncertainty
    Date: 2016
  17. By: Gene M. Grossman; Elhanan Helpman; Ezra Oberfield; Thomas Sampson
    Abstract: We explore the possibility that a global productivity slowdown is responsible for the widespread decline in the labor share of national income. In a neoclassical growth model with endogenous human capital accumulation a la Ben Porath (1967) and capital-skill complementarity a la Grossman et al. (2017), the steady-state labor share is positively correlated with the rates of capital-augmenting and labor-augmenting technological progress. We calibrate the key parameters describing the balanced growth path to U.S. data for the early postwar period and find that a one percentage point slowdown in the growth rate of per capita income can account for between one half and all of the observed decline in the U.S. labor share.
    JEL: E13 E25 J24 O41
    Date: 2017–09
  18. By: Caroline S. Bennette; Anirban Basu; Scott D. Ramsey; Zachary Helms; Peter B. Bach
    Abstract: We estimated the average returns, in terms of patient survival, to the marginal innovations in oral chemotherapy market induced by Part D expansion of oral chemotherapy coverage for elderly individuals by mandating inclusion of “all or substantially all” oral anti-cancer medications on plans’ formularies. We exploited exogenous variation in the age of diagnosis for different cancer sites - and therefore the relative expansion in market size for different cancers under the Medicare’s prescription drug coverage – to isolate the effect of Part D on innovation and the health benefits that these innovative technologies provide. Using data from FDA and clinical studies from January 1994 to December 2016, we find that the approval rate for oral chemotherapies increased an additional 5.7% (95% CI: 1.7, 9.8) after implementation of Part D for every 1% increase in exposure to the Medicare market. In contrast, greater exposure to Medicare was associated with a smaller increase in the indication-specific survival gains reported in the drug’s label (3.2% [95% CI: 2.1, 4.3]) and 8.0% [95% CI: 6.1, 9.8] lower in absolute and relative gains, respectively). Similar trends were not observed for intravenously administered chemotherapy whose coverage was largely unaffected by Part D. These findings suggest that there could be diminishing returns to incentives for pharmaceutical innovation created by broad coverage mandates and that health policy tools, such as value–based pricing, may help maximize the health benefits provided by future pharmaceutical innovations.
    JEL: I11 I13 I18
    Date: 2017–09
  19. By: Swetha Sridharan; Clemencia Cosentino; Laura Meyer
    Abstract: This report summarizes the results of the 2016 monitoring effort conducted by Mathematica Policy Research for the Partnership to Strengthen Innovation and Practice in Secondary Education (PSIPSE). It provides a snapshot of (1) grantee progress on implementing secondary education interventions and reaching target populations, (2) grantee use of data and evidence to improve programs and generate learning, (3) common challenges faced by grantees and key lessons learned, and (4) the PSIPSE initiative’s overall reach and visibility.
    Keywords: Education, secondary education, teacher training, Foundation, monitoring, MEL
    JEL: I F Z

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