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on Innovation |
| By: | Joshua S. Graff Zivin; Elizabeth Lyons |
| Abstract: | Existing theories and empirical research on how innovation occurs largely assume that innovativeness is an inherent characteristic of the individual and that people with this innate ability select into jobs that require it. In this paper, we investigate whether people who do not self-select into being innovators can be induced to innovate, and whether they innovate differently than those who do self-select into innovating. To test these questions, we designed and implemented an innovation contest for engineering and computer science students which allowed us to differentiate between those who self-select into innovative activities and those who are willing to undertake them only after receiving an additional incentive for doing so. We also randomly offer encouragement to subsets of both the induced and self-selected contest participants in order to examine the importance of confidence-building interventions on each sample. We find that while induced participants have different observable characteristics than those that were ‘innately’ drawn to the competition, on average, the success of induced participants was statistically indistinguishable from their self-selected counterparts and encouragement does not change this result. Heterogeneity in treatment effects suggests an important role for the use of targeted interventions. |
| JEL: | J24 M54 O32 |
| Date: | 2018–02 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:24339&r=ino |
| By: | Antonello Zanfei (Department of Economics, Society & Politics, Università di Urbino "Carlo Bo"); Giovanni Marin (Department of Economics, Society & Politics, Università di Urbino "Carlo Bo") |
| Abstract: | TThis paper evaluates the effect of host-country environmental policy stringency on the offshoring of environmental patents for 2000 top world R&D performers. It is shown that a more stringent environmental regulation triggers both the extensive and intensive margin of patent offshoring in the field of environmental technologies. Results are robust to various different specifications, alternative definitions of innovation offshoring and of regulation restrictions, and to the consideration of possible endogeneity of regulation. It is suggested inter alia that R&D subsidies and non-market based regulatory measures are more important than market-based instruments as drivers of cross-border environmental innovation |
| Keywords: | MNE, environmental policy, patent data |
| JEL: | F10 F23 O33 Q55 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:urb:wpaper:18_03&r=ino |
| By: | Giebel, Marek; Kraft, Kornelius |
| Abstract: | We analyze the causal effect of the credit supply shock to banks induced by interbank market disruptions in the recent financial crisis 2008/2009 on their business customers' innovation activity. Using a matched bank-firm data set for Germany, we find that having relations with a more severely affected bank seriously hampers firms' current innovation activities due to funding shortages. Furthermore, we find that firms with a relationship to a less severely affected bank are more likely to initiate new product and process innovations and to reallocate human resources to innovation during the financial crisis. |
| Keywords: | financing of innovations,credit supply,financial crisis,innovative activities |
| JEL: | G01 G21 G30 O16 O30 O31 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:18011&r=ino |
| By: | Armanda Cetrulo; Valeria Cirillo; Dario Guarascio |
| Abstract: | In the last decades, labour flexibility has been introduced all across Europe with the aim of spurring jobs and productivity. This work explores the link between the use of temporary employment and the propensity to introduce product innovations by firms. The analysis performed at the sectoral level combines information on innovation, economic performance and employment for five major European economies observed over the period 1998-2012. Taking into account the variety of technological patterns, the authors find that industries using temporary employment more intensively are characterized by a weak product innovation propensity. The negative correlation between temporary employment and innovation is stronger in medium and high-tech sectors identified alternatively by Peneder classification and by the concentration of firms’ intangible assets proxing different Schumpeterian regimes of accumulation. |
| Date: | 2018–03 |
| URL: | http://d.repec.org/n?u=RePEc:ast:wpaper:0032&r=ino |
| By: | Carsten Fink; Bronwyn H. Hall; Christian Helmers |
| Abstract: | We analyze the use of intellectual property (IP) by firms in Chile over the decade 1995-2005 as the then middle-income country experienced rapid economic growth of 4.7 percent per year. We use a novel dataset that contains a combination of detailed firm-level information from the annual manufacturing census, information on firms’ innovative activities from Chile’s innovation surveys, and firms’ patent, industrial design, and trademark filings with the Chilean IP office. We use these data to look at how IP use by companies has changed over time and analyze the determinants of IP use, in particular first-time use. We find that sales growth prompts first-time use of patents and trademarks, though such use does not change the growth trajectory of firms nor does it improve their total factor productivity. We also find that trademark use is associated with new-to-the-world product innovation, which suggests that branding may be an important mechanism to appropriate returns to innovation in a middle-income country like Chile. |
| JEL: | O12 O34 |
| Date: | 2018–02 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:24348&r=ino |
| By: | Comin, Diego (Dartmouth College & CEPR); Licht, Georg (ZEW); Pellens, Maikel (ZEW & KU Leuven); Schubert, Torben (CIRCLE & Fraunhofer ISI) |
| Abstract: | Among available policy levers to boost innovation, investment in applied research organisations has received the least attention. In this paper, we analyze the case of the Fraunhofer Society, the largest public applied research organization in Germany. We analyze whether project interaction with Fraunhofer affect the performance and strategic orientation of firms. To that end, we assemble a unique dataset based on the confidential Fraunhofer-internal project management system and merge it with the German contribution to the Community Innovation Survey (CIS), which contains panel information on firm performance. Using instrumental variables that exploit the scale heteroscedasticity of the independent variable (Lewbel, 2012), we identify the causal effects of Fraunhofer interactions on firm performance and strategies. We find a strong, positive effect of project interaction on turnover and productivity growth. We also provide evidence that a major driver of the positive performance effects is the firms increased share of sales from new products and an increase in the share of workers with tertiary education. More detailed analyses reveal, amongst others that the performance effects become stronger the more often firms interact with Fraunhofer and that interactions aiming at generation of technology have a stronger effect than interactions aiming merely at the implementation of existing technologies. |
| Keywords: | Innovation; R&D; diffusion; applied research; Fraunhofer |
| JEL: | O33 O38 |
| Date: | 2018–03–07 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:lucirc:2018_007&r=ino |
| By: | Chen, Yang (Division of Economics, Xi'an Jiaotong-Liverpool University); Luan, Fushu (Division of Economics, Xi'an Jiaotong-Liverpool University); Regis, Paulo José (Division of Economics, Xi'an Jiaotong-Liverpool University) |
| Abstract: | We contribute to explore the roles of sub-national leaders and institutional environment in shaping urban innovation in China. We adopt a dynamic production function framework using a panel dataset comprising 280 prefecture cities during 2001-2014. We find that knowledge and education boost local innovative outputs and has positive spillover effects; the externalities of domestic and foreign capital are limited to local investments. Controlling for the basic production inputs, our analysis unveils a clear and significant role of meritocracy with regional dimension in sharpening the competitive advantage of city innovativeness measured by patents applications. Party secretary competition intensity and tenure encourages innovation while city mayor turnover rate has a negative effect. Marketization intensity also positively links with urban innovation. Compared with diversity and specialization, competitive industrial structures bring more creative elements into regional knowledge and idea production. |
| Keywords: | Innovation, Meritocracy, Institutions, Prefecture-Level City, China |
| JEL: | H11 R11 O30 P26 C33 |
| Date: | 2018–02–20 |
| URL: | http://d.repec.org/n?u=RePEc:xjt:rieiwp:2018-03&r=ino |
| By: | Teodora Marinova (Sofia University St. Kliment Ohridski, Faculty of Economics and Business Administration) |
| Abstract: | The traditional new product development (NPD) process is vertically integrated within a company, resulting in internally developed products by professionals. However, it encounters difficulties to optimally capture all innovation-relevant knowledge, which is distributed also among external actors such as product end users. This paper investigates if the theoretically proposed positive effect of integrating users in NPD on new product success is supported by evidence from the field. The aim is to summarize existing field insights in a conceptual model outlining the paths of influence of user integration in NPD on subsequent new product performance. By reviewing the findings of empirical studies based exclusively on real-field data from various industries, I identify factors that can be assigned to three groups: (i) Stage of the NPD process in which users are integrated, (ii) User-level factors, and (iii) Innovation setting factors. I map the relationships between the different factors in a holistic framework that can serve as guidance for practitioners who consider involving users in their innovation process. |
| Keywords: | User innovation, user integration, new product development, new product success. |
| JEL: | M3 O31 O32 O33 |
| Date: | 2018–03 |
| URL: | http://d.repec.org/n?u=RePEc:sko:wpaper:bep-2018-02&r=ino |
| By: | Victor Court (CERES-ERTI - Centre d'Enseignement et de Recherche sur l'Environnement et la Societé / Environmental Research and Teaching Institute - ENS Paris - École normale supérieure - Paris); Emmanuel Bovari (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique) |
| Abstract: | This article provides a knowledge-based and energy-centered unified growth model of the economic transition from limited to sustained growth. In an overlapping generation framework, we introduce final energy as a production factor of a composite final good sector, along with human capital, a learning-by-doing technology, and a Schumpeterian technology. Final energy results from a CES aggregation of energy inputs that come from renewable (biomass, wind, water) and exhaustible (coal, oil, gas) primary resources. The production of those inputs also requires human capital along with specific learning-by-doing and Schumpeterian technologies. Furthermore, with an endogenous sequence of General Purpose Technologies (GPTs), we explicitly feature pure technological externalities that foster the efficiency of both learning-by-doing and R&D-based technological progress. This setting allows us to distinguish two economic regimes: (i) a pre-modern organic regime dominated by limited growth in per capita output, high fertility, low levels of human capital, technological progress generated by learning-by-doing, and rare GPT arrivals; and (ii) a modern fossil regime characterized by sustained growth of per capita output, low fertility, high levels of human capital, technological progress generated by profit-motivated R&D, and increasingly frequent GPT arrivals. Most importantly, these economic, technological and demographic regimes' changes are associated with an energy transition. This transition results from the endogenous shortage of renewable resources availability and the arrival of new GPTs, which redirect technological progress towards the exploitation of previously unprofitable exhaustible energy carriers. Calibrations of the model are currently in progress and will allow a simulation of the historical experience of England for the period 1560-2010. In a second step, we plan to reiterate these simulations to compare the different trajectories of Western Europe and Eastern Asia. |
| Keywords: | Unified Growth Theory,Useful Knowledge,Energy Transition,Demography |
| Date: | 2018–01–31 |
| URL: | http://d.repec.org/n?u=RePEc:hal:cesptp:hal-01698755&r=ino |
| By: | Josh Ederington (University of Kentucky); Georg Goetz (University of Giessen) |
| 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 and adoption are 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 and show that leapfrogging can induce reverse preemption (i.e., forward-looking incumbent firms delaying entry and adoption due to leapfrogging behavior). As an application, we demonstrate how, in an industry conducive to leapfrogging, research subsidies can actually reduce short-run consumer welfare by discouraging firms from entering the market with a basic technology. |
| Keywords: | entry, technology adoption |
| JEL: | L11 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:mar:magkse:201811&r=ino |
| By: | Gustafsson, Anders (Jönköping International Business School and the Ratio Institute); Gustavsson Tingvall, Patrik (The Ratio Institute & The European Institute of Japanese Studies (EIJS), Stockholm School of Economics); Halvarsson, Daniel (The Ratio Institute) |
| Abstract: | In this paper, we study the selection process and incentives of firms that apply for and eventually receive one or multiple governmental grants intended to stimulate innovation and growth in supported firms. The analysis departs from a rent-seeking model of heterogeneous entrepreneurs who are free to allocate their effort between production and rent-seeking. In equilibrium, highly productive entrepreneurs choose not to enter the rent-seeking contest altogether, and moderately productive entrepreneurs allocate a share of their effort both to rent-seeking and production, whereas low-productivity entrepreneurs are incentivized to allocate most, if not all, of their effort to seeking grants and can thus be called subsidy entrepreneurs. These firms also have a higher probability of receiving grants. Using detailed data over all grants administered by the three largest grant distributing agencies in Sweden, the empirical analysis suggests that supported firms tend to have relatively low productivity, higher wages, and a larger share of workers with higher education than do non-supported firms. These characteristics become more pronounced as we move from single to multiple supported firms, thus supporting the notion of subsidy entrepreneurs. |
| Keywords: | Rent-seeking; Firm subsidies; R&D grants; Industrial policy |
| JEL: | D72 H25 L52 O38 P16 |
| Date: | 2017–12–29 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:ratioi:0303&r=ino |
| By: | Ashish Arora; Andrea Fosfuri; Thomas Roende |
| Abstract: | Most technology startups are set up for exit through acquisition by large corporations. In choosing when to sell, startups face a tradeoff. Early acquisition reduces execution errors but later acquisition improves the likelihood of finding a better match since in the early market, there are fewer buyers because early acquisition requires costly absorptive capacity. Moreover, the buyer’s decision to invest in absorptive capacity is related to the startup’s decision about the timing of the exit sale. In this paper, we build a model to capture this complexity and the related tradeoffs. We find that the early market for startups is inefficiently thin if the timing of exit is a strategic choice, i.e. startups have to commit to whether to exit early or late. Too few startups are sold early, and too few buyers invest in absorptive capacity. Paradoxically, venture capital aggravates the inefficiency. However, if the timing of exit is a tactical choice, i.e. startups can choose to go late after observing the early offers, there are too many early acquisitions and too much investment in absorptive capacity by incumbents |
| JEL: | L26 O34 |
| Date: | 2018–02 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:24350&r=ino |
| By: | Fu, Kun (Loughborough University London); Larsson, Anne-Sophie (The Ratio Institute); Wennberg, Karl (Linköping University and the Ratio Institute) |
| Abstract: | We investigate the impact of country-level labour market regulations on the re-entry decision of experienced entrepreneurs, whereby they become habitual entrepreneurs. Multilevel logit models on entry decisions among 15,709 individuals in 29 European countries show that labour market regulations have a positive influence on the decision to re-enter into entrepreneurship. This positive impact is stronger among individuals holding wage jobs at the time of re-entry compared to those that do not. Our results indicate that novice and habitual entrepreneurs may respond very differently to labour market rigidity. We discuss and provide tentative explanations for these differences, and outline potential policy implications. |
| Keywords: | Habitual entrepreneurship; employment; labour market rigidity; institutional context; multilevel modelling |
| JEL: | J24 J41 K31 L26 |
| Date: | 2017–12–15 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:ratioi:0297&r=ino |
| By: | Robert C. Allen (Division of Social Science) |
| Abstract: | Schumpeter’s ‘perennial gale of creative destruction’ blew strongly through Britain during the Industrial Revolution, as the factory mode of production displaced the cottage mode in many industries. A famous example is the shift from hand loom weaving to the use of power looms in mills. As the use of power looms expanded, the price of cloth fell, and the ‘golden age of the hand loom weaver’ gave way to poverty and unemployment. This paper argues that the fates of the hand and machine processes were even more closely interwoven. With the expansion of factory spinning in the 1780s, the demand for hand loom weavers soared in order to process the newly available cheap yarn. The rise in demand raised the earnings of hand loom weavers, thereby, creating the ‘golden age’. The high earnings also increased the profitability of developing the power loom by raising the value of the labour that it saved. This meant that less efficient–hence, cheaper to develop--power looms could be brought into commercial use than would have been the case had the golden age not occurred. The counterfactual possibilities are explored with a model of the costs of weaving by hand and by power. The cottage mode of production was an efficient system of producing cloth, but it self-destructed as its expansion after 1780 raised the demand for sector-specific skills, thus providing the incentive for inventors to develop a power technology to replace it. The power loom, in turn, devalued the old skills, so poverty accompanied progress. |
| Date: | 2017–05 |
| URL: | http://d.repec.org/n?u=RePEc:nad:wpaper:20170004&r=ino |
| By: | Adele Bianco |
| Abstract: | Work is undergoing technological upgrading and innovation driven by digitization, the so called Fourth Industrial Revolution (Schwab 2016). The technological advancement makes possible to achieve higher levels of work and total factors productivity and to implement the Sustainable Development Goals (ILO 2016; Dodds et al. 2017). The issue is particularly sensitive, because of the coming impact of technological innovation on employment and the consequential intensified risks of social unrest (Frey, Osborne 2013). This is the reason why it is extremely relevant to equip people to stay ahead of technological change. To prepare the workforce for tomorrow, the attention has to be posed particularly on educational, training and re-skilling programs (Goldin, Katz, 2010). One problem is that — in Europe, but also elsewhere — this technological and organizational revolution is likely to be realized with an army of grey-haired workers (Kuhn, Ochsen 2009), but it must be taken into account that in a very near future workers of other age groups, adult and even young workers, will be the involved in some reskilling programs and in changing schooling processes. It is therefore appropriate to promote policies aimed at reskilling these workers and at making the young people fit for the coming digital economy. From this point of view, the permanent training will acquire an unprecedented role in the history of work. The paper is structured as follows. The first paragraph gives a short definition of the digitization process that has been taking place for some years and highlights the theoretical framework and technological areas involved in the digitization process. The second section is focused on the impact of the digital economy on the employment. The third paragraph is devoted to the skills requested by the digital economy and to measures that should be undertaken to enable the workers to stay on the labour market and to make more inclusive the workplaces. Evidences make clear that managers play a relevant role in supporting this kind of implementation process, particularly referred to the older workers, and in training and in introducing new forms of work organization (Sterns et al.1994; Maurer, Weiss, Barbeite 2003). |
| Date: | 2018–02 |
| URL: | http://d.repec.org/n?u=RePEc:ast:wpaper:0030&r=ino |
| By: | Johannes van der Pol |
| Abstract: | The aim of this paper is to show how firm-level partner selection strategies impact the structure a of collaboration network. The analysis is performed in three stages. A first stage identifies how partners select their collaborators, a second stage shows how these decisions result in clusters, and a final stage studies the global network structure that emerges from the interconnection of these clusters. In order to highlight the importance of the sectors’ influence, the analysis is performed on the French Aerospace and the French Biotech collaboration networks. Results show that the firm-level strategies are the same in both sectors while the resulting global network structure is different (core-periphery structure with small-world characteristics for the aerospace network and no particular structure for the biotech sector). The difference in the global network structure can be explained by sectorial characteristics. These differences define the manner in which knowledge flows through the network. |
| Keywords: | SNA; Sectoral analysis; Collaboration network; Biotechnology; Aerospace; ERGM; Innovation |
| JEL: | L25 C23 D85 L14 C20 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:grt:wpegrt:2018-02&r=ino |