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on Innovation |
| By: | Pilar Beneito (Department of Economic Analysis, University of Valencia, Avda. dels Tarongers s/n, 46022 Valencia (Spain).); María E. Rochina-Barrachina (Department of Economic Structure, University of Valencia, Avda. dels Tarongers s/n, 46022 Valencia (Spain).); Amparo Sanchis (Department of Economic Structure, University of Valencia, Avda. dels Tarongers s/n, 46022 Valencia (Spain).) |
| Abstract: | This paper analyses the determinants of firms’ decisions to patent abroad. We use dataspanning 2005-2013 of Spanish firms from PITEC, a panel database carried out by theINE (The National Statistics Institute). We focus on patenting firms and consider thatfirms’ decisions to apply for patents in foreign patent offices may be driven by twokinds of motivations: first, to exploit the patent in international markets where there ispotential demand for the invention and, second, to protect the invention abroad whenthe quality of the invention is high enough. In the first case we refer to market-drivendeterminants and, in the second case, to innovation type-driven determinants. Weempirically analyse these factors using information on firms’ sales in differentgeographic international markets, and also indicators of the quality and scope of theinnovations. We distinguish among EPO, USPTO and PTC patents, and estimate, first,a multivariate probit model to determine the factors underlying the decision to apply forpatents in these foreign offices. Second, we estimate a multivariate model to explain theshares of patent applications in each one of the offices. |
| Keywords: | international patenting, innovative firms, multivariate probit |
| Date: | 2017–08 |
| URL: | http://d.repec.org/n?u=RePEc:eec:wpaper:1708&r=ino |
| By: | Maxin, Hannes |
| Abstract: | The present paper solely focuses on the investment decisions of two corporate venture capital firms. These investors have to decide whether to finance a wealthless venture alone or to share the profits and the costs with the other investor, called syndication. The critical point are the innovation objectives of the corporate investors respectively the nature of innovation of the venture. To my knowledge, no other theoretical paper considers such a financing situation consisting of two CVCs. |
| JEL: | G24 M13 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc17:168199&r=ino |
| By: | Reinhilde Veugelers |
| Abstract: | Over the medium- to longer term, trends in total factor productivity growth and innovation will determine the growth and convergence trajectories of the EU economies. However, already before the crisis, Europe has suffered from disappointing innovation performance and productivity growth, and developments since then have only reinforced this trend. Persistent innovation and productivity growth divergences among EU countries, and in particular euro area countries, raise concerns of rising income differentials and long-term cohesion across countries. In this contribution we will start with describing the major trends of total factor productivity growth in the EU and EURO member countries and compared to its major global competitors. As the creation and adoption of innovations is seen as a major driver of TFP, we will describe the major trends and convergence/divergence in innovation capacity and its components directly. How big are the differences and they diminishing over time, establishing convergence? Are the laggards catching up? Or the leaders forging ahead? The analysis finds that there is substantial heterogeneity in innovation capacity among EU Member States. This heterogeneity is very stable, avoiding strong divergence, but also no consistent convergence signs. The divide between the Innovation Leaders in the North and the Innovation Laggards from the South and the East proves to be difficult to address. |
| JEL: | O33 |
| Date: | 2017–07 |
| URL: | http://d.repec.org/n?u=RePEc:euf:dispap:066&r=ino |
| By: | Suchita Srinivasan |
| Abstract: | Are environmental regulations imposed on downstream firms effective in spurring innovation in clean technologies by upstream firms? We use a novel firm-level dataset of global scope to study whether environmental regulations have percolated up the automotive global value chain, and led to innovation (measured by patenting in abatement technologies) by suppliers at different levels of the chain. Using a Poisson estimation methodology, we find that suppliers worldwide have responded to increasingly stringent emission standards imposed on automobile manufacturers (also known as original equipment manufacturers, or OEMs) by undertaking more innovation in clean abatement technologies; additionally, we find that the smaller the gap between the average environmental regulation suppliers face from the OEMs,and that in the country where the firm is located, the more the firm innovates. In addition, we provide evidence of a spread of these positive effects of regulation on innovation, with suppliers at different upstream levels responding positively to the downstream standards. This paper has important policy implications for the design of environmental policy instruments to induce innovation in clean technologies by firms along the value chain. |
| Keywords: | Environmental Regulation; Global Value Chains; Patents; Automotive Industry |
| JEL: | Q55 O31 Q58 F23 |
| Date: | 2017–06–14 |
| URL: | http://d.repec.org/n?u=RePEc:gii:ciesrp:cies_rp_52&r=ino |
| By: | Charles Kenny (Center for Global Development); Dev Patel (Center for Global Development) |
| Abstract: | How much innovation will be needed to meet the United Nations’ Sustainable Development Goals? We model shifts in the cross-country relationship between GDP per capita and achievement in key development indicators as “technological gains” and convergence to the best performers at a given income as “policy gains.” Assuming that the United Nations’ income growth projections for low- and middle-income countries are met, we estimate the residual demand for technology and policy innovation needed to meet several critical targets of the SDGs. Our results suggest that (i) best performers are considerably outperforming the average performance at a given income level, suggesting considerable progress could be achieved through policy change but that (ii) the targets set in the SDGs are unlikely to be met by 2030 without very rapid, ubiquitous technological progress alongside economic growth. |
| Keywords: | Sustainable Development Goals, Preston curves, innovation, technology |
| JEL: | O11 O15 O33 |
| Date: | 2017–10–26 |
| URL: | http://d.repec.org/n?u=RePEc:cgd:wpaper:469&r=ino |
| By: | Alessandro Iaria; Carlo Schwarz; Fabian Waldinger |
| Abstract: | We show that WWI and the subsequent boycott against Central scientists severely interrupted international scientific cooperation. After 1914, citations to recent research from abroad decreased and paper titles became less similar (evaluated by Latent Semantic Analysis), suggesting a reduction in international knowledge flows. Reduced international scientific cooperation led to a decline in the production of basic science and its application in new technology. Specifically, we compare productivity changes for scientists who relied on frontier research from abroad, to changes for scientists who relied on frontier research from home. After 1914, scientists who relied on frontier research from abroad published fewer papers in top scientific journals, produced less Nobel Prize-nominated research, introduced fewer novel scientific words, and introduced fewer novel words that appeared in the text of subsequent patent grants. The productivity of scientists who relied on top 1% research declined twice as much as the productivity of scientists who relied on top 3% research. Furthermore, highly prolific scientists experienced the starkest absolute productivity declines. This suggests that access to the very best research is key for scientific and technological progress. |
| Keywords: | frontier knowledge, scientific production, international knowledge flows, WWI |
| JEL: | O3 N3 N4 O31 O5 N30 N40 J44 I23 |
| Date: | 2017–10 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp1506&r=ino |
| By: | Gerda Dewit (Department of Economics, Finance and Accounting, Maynooth University.); Dermot Leahy (Department of Economics, Finance and Accounting, Maynooth University.) |
| Abstract: | We develop a model with a large R&D-intensive home ?rm that must decide whether to locate production domestically or to o¤shore it. Poli- cymakers have an interest in the ?rm?s pro?ts, the local external bene?ts generated by the ?rm?s R&D and the employment provided by the do- mestic production facility. We demonstrate that attempts to boost the ?rm?s R&D can encourage the ?rm to o¤shore its production. Hence, we highlight a possible con?ict between two policy objectives: encouraging local R&D and discouraging the o¤shoring of production. In addition, if the government is concerned about the employment large domestic ?rms create, its R&D policy could potentially harm future productivity growth. |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:may:mayecw:n285-17.pdf&r=ino |
| By: | Jay Pil Choi; Christodoulos Stefanadis |
| Abstract: | We present a potentially benign naked exclusion mechanism that can be applied to sequential innovation; a non-patentable original innovation by the incumbent supplier fosters derivative innovation by rivals. In the absence of an appropriate legal framework, the original innovator’s equilibrium exclusivity contracts block subsequent efficient entry even if there is (leader-follower) competition in the contracting phase. However, the legal framework may maximize social welfare by imposing a ban on upfront lumps-sum payments in exclusivity contracts (by all suppliers) combined with an outright ban on exclusivity contracts by the derivative innovator. The former ban precludes the exclusion of socially beneficial derivative innovation by causing the incumbent supplier to resort to accommodation, rather than to pure exclusion, strategies. The latter ban complements the former by preventing inefficient or excessive derivative innovation. |
| Keywords: | exclusivity, entry, fixed cost, lump-sum payment, sequential innovation |
| JEL: | L42 D43 D45 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_6412&r=ino |
| By: | Götz, Georg; Ederington, Josh |
| Abstract: | We develop a model in which ex ante identical firms make endogenous entry and technology adoption decisions. We show that this model is capable of matching the stylized facts in which entry is dispersed over time and that, in many industries, it is the newest firms which are the most likely to exhibit high productivity growth and adopt new innovations (i.e., leapfrogging). We then derive the characteristics of those industries where such leapfrogging is likely to occur. |
| JEL: | L11 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc17:168126&r=ino |
| By: | Olena Ivus; Edwin L.-C. Lai; Ted Sichelman |
| Abstract: | The doctrine of “patent exhaustion†implies that the authorized sale of patented goods “exhausts†the patent rights in the goods sold and precludes additional license fees from downstream buyers. This paper offers the first formal economic model of domestic patent exhaustion that incorporates transaction costs in consumer licensing, and examines how a shift in patent policy from absolute to presumptive exhaustion, in which the patent owner can opt- out of exhaustion via contract, affects social welfare. The results show that when transaction costs are low, presumptive exhaustion is socially optimal, because it allows welfare-enhancing price discrimination via downstream licensing. Conversely, when transaction costs are high, the regime of presumptive patent exhaustion leads to a greater loss of static efficiency, because transaction cost frictions offset the benefits of price discrimination, but dynamic benefits in promoting ex ante investment in product quality may outweigh any static inefficiencies. |
| Keywords: | intellectual property, patent exhaustion, first sale doctrine, patent licensing |
| JEL: | F10 O31 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_6638&r=ino |
| By: | Jeremy Watson (Boston University Questrom School of Business, Department of Strategy and Innovation, 595 Commonwealth Avenue, Boston, MA 02215) |
| Abstract: | Digitization has drastically lowered the costs of replicating and distributing music, enabling piracy on the demand side, as well as supply side re-use and recontextualization. This paper examines cumulative creativity and re-use through the release of derivative works in the popular music industry. Combining novel data on "digital sampling" and cover songs with a new proprietary Spotify data-set tracking online music streaming, I study how the introduction of a derivative work impacts the market for the underlying good upon which it is based. With my data-set covering 11,682 artists and their daily streaming demand between 2015 and 2016, I utilize a matched-sample difference-in-differences estimator to find that, on average, re-use causes a 3% increase in demand for the treated artists. This effect is significantly mediated by prominence -- with the effect neutralized for highly prominent artists, while artists of low prominence have a larger 6% boost in listening. Novel re-uses of artists that have not been subject to extensive past re-use appear to have the largest effect, resulting in an average 15% increase in online streaming. These results highlight an advertising effect of re-use, suggest that derivative works have limited ex post competition with upstream works, and point toward the potential benefits of permissive intellectual property rights licensing. |
| Keywords: | copyright, intellectual property, digitization, cumulative innovation, technology strategy, content industries |
| JEL: | L24 O31 O34 |
| Date: | 2017–10 |
| URL: | http://d.repec.org/n?u=RePEc:net:wpaper:1715&r=ino |
| By: | Lars Hornuf; Matthias Schmitt |
| Abstract: | Today, start-ups often obtain financing via the Internet through many small contributions of non-sophisticated investors. Yet little is known about whether these start-ups can ultimately build enduring businesses. In this paper, we hand-collected data from 38 different equity crowdfunding (ECF) portals and 656 firms that ran at least one successful ECF campaign in Germany or the United Kingdom. The evidence shows that German firms that receive ECF stand a higher chance of obtaining follow-up funding through business angels or venture capitalists and have a relatively lower likelihood to survive. We find firm age, the average age of the management team, and excessive funding during the ECF campaign all have a negative effect on firms’ likelihood to obtain post-campaign financing. By contrast, the number of senior managers, registered trademarks, subsequent successful ECF campaigns, crowd exits, and the amount of the funding target all have a positive impact. Subsequent successful ECF campaigns, crowd exits, and the number of venture capital investors are significant predictors reducing firm failure. Finally, we find that some of these factors have a differential impact for Germany and the United Kingdom. |
| Keywords: | equity crowdfunding, follow-up funding, firm survival |
| JEL: | G24 M13 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_6642&r=ino |
| By: | Suzanne Jones and Tony Hooper |
| Abstract: | The global financial crisis of 2007–08 encouraged governments to exploit information and communication technologies. The New Zealand government responded by developing an Information and Technology Strategy to 2017. This investigation surveyed middle managers awareness of the Strategy, the level of collaboration and innovation they engaged in and what they considered the barriers and enablers to be. These data were triangulated with the perceptions of senior public officials. While there was a disconnect between what senior managers expected of middle managers and how middle managers perceived their role and responsibilities, there was agreement among senior and middle managers on the barriers to innovation based on agency responsibilities and priorities. Ingrained corporate behavior has incentivised low risk, stable, reliable and accountable staff, while risk taking and entrepreneurial capabilities have not been rewarded. The Strategy was revised and simplified, and senior manager views gathered again to see if their initial perceptions had changed. |
| Keywords: | innovation, collaboration, public sector, information and communication technology, middle managers |
| URL: | http://d.repec.org/n?u=RePEc:een:appswp:201735&r=ino |
| By: | Giammario Impullitti; Omar Licandro; Pontus Rendahl |
| Abstract: | We study the gains from trade in an economy with oligopolistic competition, firm heterogeneity, and innovation. Oligopolistic competition together with free entry make markups responsive to firm productivity and trade costs. Lowering trade costs reduces markups on domestic sales but increases markups on export sales, as firms do not pass the entire reduction in trade costs onto foreign consumers. Nevertheless, the downward pressure dominates and the average markup declines, deterring firms from entering the market and leading to higher market concentration. Neither the increased concentration nor the incomplete pass-through of trade costs to export markups are strong enough to compensate for the increase in competition on domestic sales. Thus the overall effect of trade on markups is pro-competitive and a key source of the associated welfare gains. In addition to markups, selection and innovation provide additional channels through which the trade-induced effect on competition impacts welfare. In a quantitative exercise, we decompose the total gains from trade into these three contributing channels; we find that innovation plays a small but non-negligible role, while the main component is equally split between the pro-competitive and the selection channel. |
| Keywords: | Gains from Trade, Heterogeneous Firms, Oligopoly, Innovation, Endogenous Markups, Endogenous Market Structure. |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:not:notgep:17/14&r=ino |
| By: | Polder, Michael; Bertschek, Irene; Schulte, Patrick |
| Abstract: | Are ICT-intensive firms more resilient in times of crisis? We study this question by exploiting a novel and unique data set from the EU Micro-Moments Database. Covering 12 countries, 7 industries and the period from 2001 to 2010, the data allow us to distinguish between ICT-intensive and non-ICT-intensive firms within industries. We find evidence that during the crisis, ICT-intensive firms were hit less hard with respect to productivity and developing process innovations. |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc17:168274&r=ino |
| By: | Michel Serafinelli; Guido Tabellini |
| Abstract: | Creativity is often highly concentrated in time and space, and across different domains. What explains the formation and decay of clusters of creativity? In this paper we match data on thousands of notable individuals born in Europe between the XIth and the XIXth century with historical data on city institutions and population. After documenting several stylized facts, we show that the formation of creative clusters is not preceded by increases in city size. Instead, the emergence of city institutions protecting economic and political freedoms facilitates the attraction and production of creative talent. Keywords: innovation, agglomeration, political institutions, immigration, gravity. JEL: R10, O10, J61, N13 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:igi:igierp:608&r=ino |
| By: | Gavrilova, T.; Alsufiev, A.; Pleshkova, A. |
| Abstract: | This paper is bringing the focus on knowledge management elements and analyses their influence on the performance of the company. Namely knowledge management practices are considered the key element for enhanced innovative performance. The main research method is exploratory factor analysis with preliminary analysis of covariations among variables. Research bases on results of survey conducted among Russian companies during 2017 and intends to reveal interrelationships among KM and Performance constructs that are peculiar for Russian market. |
| Keywords: | knowledge management, organization performance, KM practices, |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:sps:wpaper:8598&r=ino |
| By: | C. Guerriero |
| Abstract: | Although the relevance of property rights and transaction costs for trade and innovation are well-known, we still lack a formal framework to think about their origins and interplay. Within trade interactions, fully protecting the original owners' property implies that some high-valuation potential buyers inefficiently refuse to buy it because of transaction costs. When instead property rights are weak, low-valuation potential buyers inefficiently expropriate the original owners' property. The trade-off between these two misallocations entails that property rights will be weaker the larger transaction costs are regardless of whether they are driven by frictions outside the control of traders or determined by the mix of the dispersion in their valuation and either the original owners' market power or their privileged information. A similar conclusion holds true for an upstream firm's property rights on an input necessary to a downstream firm to introduce a new technology and whose cost is random and ex ante non contractible. This time, transaction costs rise with the likelihood of a more productive technology. All these implications survive when a group of traders/innovators has a larger political influence on institutional design and when the disincentive to effort effect of weak property rights is taken into account. Crucially, the model predictions are consistent with the negative effects of proxies for market frictions and failures on measures of the protection of personal, intellectual, and financial property for a panel of 135 countries spanning the 2006-2015 period. Evidence from several identification strategies suggests that these relationships are indeed causal. |
| JEL: | D23 L11 P14 Z10 |
| Date: | 2017–10 |
| URL: | http://d.repec.org/n?u=RePEc:bol:bodewp:wp1110&r=ino |