nep-ino New Economics Papers
on Innovation
Issue of 2018‒04‒16
nineteen papers chosen by
Uwe Cantner
University of Jena

  1. Mergers and Demand-Enhancing Innovation By Bourreau, Marc; Jullien, Bruno; Lefouili, Yassine
  2. Innovation, Productivity Dispersion, and Productivity Growth By Lucia Foster; Cheryl Grim; John C. Haltiwanger; Zoltan Wolf
  3. Importance of Creativity of Employees in Adaptation of Food Companies to Innovative Trends in the World By Klimczuk-Kochańska, Magdalena
  4. R&D, IP, and firm profits in the North American automotive supplier industry By Lutz, Stefan Heinz Hermann
  5. Innovation Networks and Clusters Dynamics By He, Ming; Walheer, Barnabé
  6. Management innovation driving sustainable supply management By Koster, Mieneke; Vos, Bart; Schroeder, Roger
  7. Innovation and Geographical Spillovers: New Approaches and Empirical Evidence By Segarra Blasco, Agustí, 1958-; Arauzo Carod, Josep Maria; Teruel, Mercedes
  8. A Survey of Big Data Technologies and Internet of Things for Economic Growth and Sustainable Development By Paul Adeoye Omosebi; Adetunji Philip Adewole
  9. Spillovers and R&D Incentive under Incomplete Information By Chatterjee, Rittwik; Chattopadhyay, Srobonti; Kabiraj, Tarun
  10. Reconciling the Original Schumpeterian Model with the Observed Inverted-U Relationship between Competition and Innovation By Roberto Bonfatti; Luis A. Bryce Campodonico; Luigi Pisano
  11. Public Support to Business R&D and the Economic Crisis: Spanish Evidence By Ascensión Barajas; Elena Huergo; Lourdes Moreno Marín
  12. Cluster performance: an attempt to evaluate the Lithuanian case By Salvatore Monni; Francesco Palumbo; Manuela Tvaronavičienė
  13. Trend-analysis of science, technology and innovation policies for BNCTs By Steffi Friedrichs
  14. Demographics and Automation By Daron Acemoglu; Pascual Restrepo
  15. Innovation Networks and Clusters Dynamics By Desmarchelier, Benoît; Zhang, Linjia
  16. Collaboration Networks and Innovation: How to Define Network Boundaries By Galaso, Pablo; Kovářík, Jaromír
  17. Context and the role of policies to attract foreign R&D in Europe By Rodríguez-Pose, Andrés; Wilkie, Callum
  18. EU Cybersecurity and the Paradox of Progress By Pupillo, Lorenzo
  19. The IT Revolution and Southern Europe’s Two Lost Decades By Fabiano Schivardi; Tom Schmitz

  1. By: Bourreau, Marc; Jullien, Bruno; Lefouili, Yassine
    Abstract: This paper investigates the impact of horizontal mergers on firms' incentives to invest in demand-enhancing innovation. In our baseline model, we identify three key effects of a merger on the merging firms' incentives to innovate: the margin expansion effect, the demand expansion effect, and the innovation diversion effect. The first effect is negative, while the second is positive and the third can be either positive or negative depending on the nature of the innovation. We show that the overall impact of a merger on innovation can be either positive or negative and provide sufficient conditions and specific models under which each of these two scenarios arises. Finally, we extend our model to incorporate spillovers and synergies in R&D.
    Keywords: Horizontal Mergers; Innovation; Competition
    JEL: D43 L13 L40
    Date: 2018–03
  2. By: Lucia Foster; Cheryl Grim; John C. Haltiwanger; Zoltan Wolf
    Abstract: We examine whether underlying industry innovation dynamics are an important driver of the large dispersion in productivity across firms within narrowly defined sectors. Our hypothesis is that periods of rapid innovation are accompanied by high rates of entry, significant experimentation and, in turn, a high degree of productivity dispersion. Following this experimentation phase, successful innovators and adopters grow while unsuccessful innovators contract and exit yielding productivity growth. We examine the dynamic relationship between entry, productivity dispersion, and productivity growth using a new comprehensive firm-level dataset for the U.S. We find a surge of entry within an industry yields initially an increase in productivity dispersion and then after a significant lag an increase in productivity growth. These patterns are more pronounced for the High Tech sector where we expect there to be more innovative activities. These patterns change over time suggesting other forces are at work during the post-2000 slowdown in aggregate productivity.
    JEL: E24 L26 M13 O31
    Date: 2018–03
  3. By: Klimczuk-Kochańska, Magdalena
    Abstract: The purpose of this paper is to identify a gap in knowledge and understanding of the need to motivate employees for creative and pro-innovation activities in the organization. Another aim is to provide an overview of innovation in one of the low-tech industries - in the food industry. The concept of innovation and creativity is presented. The characteristics of the concept of creativity have been briefly described. Then examples of ways how food companies are dealing with current trends in the area of innovation in the world are briefly described. Among these trends, the focus on radical innovations has been highlighted, more tightly aligned firm innovation and business strategies, better insight into customers' needs and increased collaboration with other entities. Analyses based on the desk research technique were performed with the inclusion of literature regarding the examples of implementation of innovations in the food sector companies. The conducted analyses allowed us to confirm that exemplary food companies are actively engaged in improving their competitive position, by introducing creative solutions in their products or by new ways of organizing different processes. It has been shown that creativity should be used as the primary source of innovation in the food industry.
    Keywords: creativity, innovations, low-tech sectors, crowdfunding, sharing economy, open innovation
    JEL: M13 O32 Q18
    Date: 2017
  4. By: Lutz, Stefan Heinz Hermann
    Abstract: Economic theory implies that research and development (R&D) efforts increase firm productivity and ultimately profits. In particular, R&D expenses lead to the development of intellectual property (IP) and IP commands a return that increases overall profits of the firm. This hypothesis is investigated for the North American automotive supplier industry by analyzing a panel of 5000 firms for the years 1950 to 2011. Results indicate that R&D expenses in fact increase profitability at the firm level. In particular, increases in the R&D expense to sales ratio lead to increases in the profit contribution of intangible assets relative to sales. This indicates that more R&D intensive IP should command higher royalty rates per sales when licensed to third parties and within multinational enterprises alike.
    Keywords: productivity,intellectual property,royalties,MNE,transfer pricing
    JEL: D24 L20 L62 M21
    Date: 2018
  5. By: He, Ming (Division of Economics, Xi'an Jiaotong-Liverpool); Walheer, Barnabé (Division of Economics, Xi'an Jiaotong-Liverpool University)
    Abstract: CFor several decades, the manufacturing industry has been the pillar industry in terms of economic growth in China. The importance of the manufacturing industry is also highlighted by the numerous policy interventions in favour of this industry. In this paper, we identify the key industrial sectors in terms of technical performances and technological advancements for the period 1999-2007. This represents particular valuable information in the context of policy implementations. The distinguishing features of our study are five-fold. One, we make used of a tailored firm-level database. Two, we distinguish between four types of firm ownership. Three, we consider 30 manufacturing sectors. Four, we extend a well-established methodology to answer our questions. Five, we rely on a robust nonparametric estimation method. Our results confirm that firm ownership is important in explaining technical efficiency and technology gap. We also show that foreign firms set the standard for technical efficiency, and are the leaders in terms of technology advancement; that private firms show technology advancements accompanied by eciency losses; and that China has successfully revitalized state-owned firms, although there is still room for improvement. Finally, we find evidence that China's industrial development plans have been successful in stimulating technology progress in many key sectors; but that the current policy of (re)nationalization may undermine technical efficiency and slow down technology progress.
    Keywords: technology gap; technical eciency; manufacturing industry; China; metafrontier; DEA.
    Date: 2018–04–01
  6. By: Koster, Mieneke (Tilburg University, School of Economics and Management); Vos, Bart (Tilburg University, School of Economics and Management); Schroeder, Roger (Tilburg University, School of Economics and Management)
    Abstract: Although research in the area of sustainable supply management (SSM) has evolved over the past few decades, knowledge about the processes of emergence and innovation of SSM practices within organizations is surprisingly limited. These innovation processes are, however, important because of the considerable impact they may have on resulting sustainable practices and because of SSM's complex societal and intra-firm challenges. In a process study on management innovation, the sequences of SSM innovation processes in two exemplar case companies are studied to address: ‘What are the sequences through which SSM emerges within exemplar organizations?’, and ‘In what way do management innovation processes influence resulting SSM practices?’. We build on literature regarding firstly management innovation and secondly communities and internal networks of practice. An SSM innovation model and propositions are developed, proposing how the process of management innovation affects SSM practices and firm performance in a broader perspective.
    Date: 2017
  7. By: Segarra Blasco, Agustí, 1958-; Arauzo Carod, Josep Maria; Teruel, Mercedes
    Abstract: This special issue concerns the generation of knowledge and geographical spillovers, and it includes a selection of papers that cover existent research gaps with respect to the role of space in the promotion of knowledge spillovers and innovation. These papers analyse different typologies of innovation processes carried out in several geographical areas and highlight heterogeneities of these processes, after focusing on several determinants in innovation. Empirical results indicate the positive role of geographical spillovers and the importance of accurate matching among firms, in industry and with regard to regional characteristics, in order to ensure the generation of knowledge and innovation. Keywords: innovation, geography, spillovers. JEL Codes: O30, R10
    Keywords: Innovacions tecnològiques -- Direcció i administració, Economia regional, 332 - Economia regional i territorial. Economia del sòl i de la vivenda,
    Date: 2018
  8. By: Paul Adeoye Omosebi (Centre for Econometric and Allied Research, University of Ibadan. Department of Computer Sciences, University of Lagos.); Adetunji Philip Adewole (Department of Computer Sciences, University of Lagos.)
    Abstract: Big Data is a source of innovation that has captured the attention of citizens and decision makers in both the public and private sectors. Making use of the technology innovations in big data could contribute to economic growth and sustainable development and to capture the explosive growth of big data. For some time now, the world has stepped up in its focus on evidence based policy making and monitoring of development progress, hence the measurement and analysis of diverse sources of data, combined with advanced analytics, promise to create value for decision makers and society hence for economic growth and development. There are 17 Sustainable Development Goals (SDGs), 169 SDG targets and 230 SDG indicators, The 17 Sustainable Development Goals and 169 targets demonstrate the scale and ambition of this new universal Agenda of countries to collect and maintain relevant standardized data such that it will support domestic technology development, research and innovation in developing countries. This paper highlights the new technological innovations in big data and cloud computing which can lead to economic growth and sustainable development. Also, we present a comprehensive survey of the Big Data challenges, Big Data technology challenges, cloud computing and relevant technology landscape like Internet of Things (IoT) towards economic growth and technological innovation.
    Keywords: big data, cloud computing, technology innovation, sustainable development, internet of things
    JEL: M15 O32 O40 Q01
    Date: 2018–03
  9. By: Chatterjee, Rittwik; Chattopadhyay, Srobonti; Kabiraj, Tarun
    Abstract: Spillovers of R&D outcome affect the R&D decision of a firm. The present paper discusses the R&D incentives of a firm when the extent of R&D spillover is private information to each firm. We construct a two stage game involving two firms when the firms first decide simultaneously whether to invest in R&D or not, then they compete in quantity. Assuming general distribution function of firm types we compare R&D incentives of firms under alternative scenarios based on different informational structures. The paper shows that while R&D spillovers reduce R&D incentives under complete information unambiguously, however, it can be larger under incomplete information.
    Keywords: R&D incentives, Cournot duopoly, Spillovers, Incomplete information
    JEL: D43 D82 L13 O31
    Date: 2018–03–09
  10. By: Roberto Bonfatti; Luis A. Bryce Campodonico; Luigi Pisano
    Abstract: Empirical studies have uncovered an inverted-U relationship between product-market competition and innovation. This is inconsistent with the original Schumpeterian Model, where greater competition reduces the profitability of innovation. We show that the model can predict the inverted-U if the innovators’ talent is heterogenous, and privately observable. With competition low and profitability high, talented innovators are credit constrained, since others are eager to mimic them. As competition increases, the mimickers become less eager, and talented innovators can invest more. This generates the increasing part of the relationship. With competition high, talented innovators are unconstrained, and the relationship is decreasing.
    Keywords: innovation, competition, Schumpeterian Model of Growth, asymmetric information
    JEL: O38 E60 G38
    Date: 2018
  11. By: Ascensión Barajas (Unit of Impact Assessment, CDTI, Centro para el Desarrollo Tecnológico Industrial. Universidad Autónoma de Madrid); Elena Huergo (GRIPICO (Group for Research in Productivity, Innovation and Competition). Department of Economic Analysis, Universidad Complutense de Madrid.); Lourdes Moreno Marín (GRIPICO (Group for Research in Productivity, Innovation and Competition). Department of Economic Analysis, Universidad Complutense de Madrid.)
    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
  12. By: Salvatore Monni (Roma Tre University); Francesco Palumbo (Roma Tre University); Manuela Tvaronavičienė (Vilnius Gediminas Technical University)
    Abstract: The article takes place in the research area of the ongoing European project 'Cluster Development Med' (Horizon 2020) regarding the innovation and technology in the sustainable development field. Authors suggest a model, which allows to identify the most successful clusters and make comparisons between and within them. The analysis defines where they perform a positive or negative trend in the area examined. The model embraces three dimensions of cluster activity, so called, "Resources, Activities, Processes". They have been determined on the work of the Lithuanian association "Knowledge Economy Forum" , called "Cluster Analysis". Data for practical evaluation purposes were obtained through two stage process. First, an interview on site with the coordinators of the Lithuanian clusters for data collection was done through a questionnaire survey, developed in collaboration with the Science and Innovation Agency of the Lithuanian Government. Secondly, the data have been aggregated by applying one of multi-criteria methods, specifically, Simple Additive Weighting method. Finally, the multi-criteria analysis results were used to estimate the efficiency of the clusters. The results were compared through suggested benchmarking. Suggested model can be used for evaluation of performance of different clusters.
    Keywords: Lithuania,performance measurement,cluster,firm performance,cluster performance
    Date: 2017–09–29
  13. By: Steffi Friedrichs
    Abstract: This “Trend-Analysis of Science, Technology and Innovation Policies for BNCTs” aims to analyse policies pertaining to nanotechnology and biotechnology over the past years with regard to their directionality and technology-specificity.The analysis provides some evidence that technology-push policies are favoured for young technology fields, while application-pull policies tend to be applied to more mature fields. In technology-specific policies, the percentage of pure application-pull policies is much lower than that observed for general STI policies. Most individual STI policies are technology-specific in their title or description. Most general STI policies also mention a specific technology and are thus applicable to both the field of general STI and the field of the respective technology. In the case of biotechnology, nanotechnology and ICT, by contrast, at least one third of the policies are unique to the respective field, and only up to a quarter are shared with any other technology field.
    Date: 2018–04–13
  14. By: Daron Acemoglu; Pascual Restrepo
    Abstract: We argue theoretically and document empirically that aging leads to greater (industrial) automation, and in particular, to more intensive use and development of robots. Using US data, we document that robots substitute for middle-aged workers (those between the ages of 36 and 55). We then show that demographic change—corresponding to an increasing ratio of older to middle-aged workers—is associated with greater adoption of robots and other automation technologies across countries and with more robotics-related activities across US commuting zones. We also provide evidence of more rapid development of automation technologies in countries undergoing greater demographic change. Our directed technological change model further predicts that the induced adoption of automation technology should be more pronounced in industries that rely more on middle-aged workers and those that present greater opportunities for automation. Both of these predictions receive support from country-industry variation in the adoption of robots. Our model also implies that the productivity implications of aging are ambiguous when technology responds to demographic change, but we should expect productivity to increase and labor share to decline relatively in industries that are most amenable to automation, and this is indeed the pattern we find in the data.
    JEL: J11 J23 J24 O33 O47 O57
    Date: 2018–03
  15. By: Desmarchelier, Benoît (Lille 1 University); Zhang, Linjia (Division of Economics, Xi'an Jiaotong-Liverpool University)
    Abstract: Contributions in terms of clusters life cycle indicate that intense interactions between a variety of agents within the cluster are essential to its success. Despite being accepted by the literature, this view has not yet been confirmed by analyses of large temporal networks of interactions within industrial clusters. This paper proposes to fill this gap by building and studying the innovation networks of three clusters over a 10 years period. We find that clusters’ growth is all but smooth and that low assortativity and preferential attachment among agents can constitute safeguards against clusters decline. Also, we bring evidence that clusters’ innovation networks are resilient to decline. This observation supports contributions advocating for non-deterministic lifecycles in which clusters can still grow, even after a period of pronounced decline.
    Keywords: Industrial Clusters, Network Science, Dynamics
    Date: 2018–04–01
  16. By: Galaso, Pablo; Kovářík, Jaromír
    Abstract: Numerous studies in management, sociology, and economics have documented that the architecture of collaboration networks affects the innovation performance of individuals, firms, and regions. Little is known though about whether the association between collaboration patterns and innovation outcomes depends on the network geographical boundaries chosen by the researcher. This issue is crucial for both policy-makers and firms that rely on innovation. This article compares the association between collaboration networks and future patenting between regional and country-level collaboration networks. If we relate future innovation to the global, country-wide network our statistical analysis reproduces the findings of the previous literature. However, we find systematically less important effects of regional innovation patterns on subsequent patenting of innovators. Hence, managers and policy makers should choose the boundaries of the innovation networks that they look at carefully, aiming for integration into larger-scale collaboration communities.
    Keywords: innovation, networks, patents, network boundary, boundary specification problem
    JEL: O31 O32 O34 R11
    Date: 2018–03–08
  17. By: Rodríguez-Pose, Andrés; Wilkie, Callum
    Abstract: This paper explores the effectiveness of policies ‘in’ attracting the foreign research and development (R&D) of multinational enterprises (MNEs) to specific countries in Europe. We develop a macroeconomic investigation covering 29 European countries during the period between 1990 and 2012 in order to address: (a) whether the provision of direct financial support for business R&D is effective for the attraction of foreign R&D; (b) whether direct support is more effective than indirect support for this purpose and (c) whether the link between direct financial support for business R&D and the foreign R&D of MNEs is conditioned by the context within which the support is provided. The results of the analysis show that, first, the provision of direct financial support is generally effective for the attraction of foreign R&D by MNEs. Second, direct support for business R&D is more effective for this purpose than indirect support. Third, the provision of direct financial support for business R&D yields greater returns in contexts that are more socio-economically suitable for knowledge-intensive, innovative activity.
    Keywords: foreign R&D; multinational enterprises (MNEs); direct and indirect support; knowledge flows; innovation; Europe
    JEL: N0
    Date: 2016–09–20
  18. By: Pupillo, Lorenzo
    Abstract: Technological revolutions bring opportunities, but sometimes even greater threats. This ‘paradox of progress’ affects cyberspace and threatens the very principle and foundation of the open internet. The global debate on cyber-governance is currently in a stalemate on the norms for global stability of cyberspace and the fight against cybercrime, although the EU is making considerable efforts to strengthen cyberspace resilience and the critical information infrastructure. The author argues that the newly proposed Cybersecurity Act should be supported by additional measures to increase awareness, devise smarter policy and enable effective governance. Too many users and businesses are still failing to take cybersecurity and computer hygiene seriously. And there is a need to strengthen the pan-European coordination of deterrence, detection, and defence. This paper looks at the possibilities for the EU in this domain and argues that at a time of American diplomatic and political retrenchment from Europe and the world, it has an opportunity to play a leading role in global cybersecurity policy and governance.
    Date: 2018–02
  19. By: Fabiano Schivardi (Università LUISS "Guido Carli"); Tom Schmitz (Università Bocconi)
    Abstract: Since the middle of the 1990s, productivity growth in Southern Europe has been substantially lower than in other developed countries. In this paper, we argue that this divergence was partly caused by inefficient management practices, which limited Southern Europe’s gains from the IT Revolution. To quantify this effect, we build a multi-country general equilibrium model with heterogeneous firms and workers. In our model, the IT Revolution generates divergence for three reasons. First, inefficient management limits Southern firms’ productivity gains from IT adoption. Second, IT increases the aggregate importance of management, making its inef- ficiencies more salient. Third, IT-driven wage increases in other countries stimulate Southern high-skill emigration. We calibrate our model using firm-level evidence, and show that it can account for 28% of Italy’s, 39% of Spain’s and 67% of Portugal’s productivity divergence with respect to Germany between 1995 to 2008.
    Keywords: L23, O33
    Date: 2018

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