nep-ino New Economics Papers
on Innovation
Issue of 2018‒05‒21
fourteen papers chosen by
Uwe Cantner
University of Jena

  1. The Impact of Exports on Innovation: Theory and Evidence By Philippe Aghion, Antonin Bergeaud, Matthieu Lequien, Marc J. Melitz
  2. Innovation activities of gazelles in business services as a factor of sustainable growth in the Slovak Republic By Dana Benešová; Viera Kubičková; Anna Michálková; Monika Krošláková
  3. Climate Agreement and Technology Diffusion: Impact of the Kyoto Protocol on International Patent Applications for Renewable Energy Technologies By Mai Miyamoto; Kenji Takeuchi
  4. Exponential Innovation and Human Rights: Implications for Science and Technology Diplomacy By Juma, Calestous
  5. Endogenous growth - A dynamic technology augmentation of the Solow model By Murad Kasim
  6. Resource based industrialisation: evidence from the Iron-Ore project in Brazil By Guendalina Anzolin
  7. Explaining Trade Flows in Renewable Energy Products: The Role of Technological Development By Mai Miyamoto; Kenji Takeuchi
  8. Nothing is in the air By Fitjar, Rune Dahl; Rodríguez-Pose, Andrés
  9. Technological changes and population growth: the role of land in England By Claire Loupias; Bertrand Wigniolle
  10. An AB-SFC Model of Induced Technical Change along Classical and Keynesian Lines By Fanti, Lucrezia
  11. Space Technology and Africa’s Development: The Strategic Role of Small Satellites By Juma, Calestous; Harris, Wesley L.; Waswa, Peter B.
  12. Innovation and Diffusion of Medical Treatment By Barton H. Hamilton; Andrés Hincapié; Robert A. Miller; Nicholas W. Papageorge
  13. Heterogeneous Foreign Direct Investment and Local Innovation in Italian Provinces By Andrea Ascani; Pierre-Alexandre Balland
  14. Technology and Skill: Twin Engines of Growth By Nancy L. Stokey

  1. By: Philippe Aghion, Antonin Bergeaud, Matthieu Lequien, Marc J. Melitz
    Abstract: This paper investigates the effect of export shocks on innovation. On the one hand a positive shock increases market size and therefore innovation incentives for all firms. On the other hand it increases competition as more firms enter the export market. This in turn reduces profits and therefore innovation incentives particularly for firms with low productivity. Overall the positive impact of the export shock on innovation is magnified for high productivity firms, whereas it may negatively affect innovation in low productivity firms. We test this prediction with patent, customs and production data covering all French manufacturing firms. To address potential endogeneity issues, we construct firm-level export proxies which respond to aggregate conditions in a firm's export destinations but are exogenous to firm-level decisions. We show that patenting robustly increases more with export demand for initially more productive firms. This effect is reversed for the least productive firms as the negative competition effect dominates.
    Keywords: Innovation, trade, export, demand shocks, patents
    JEL: D21 F13 F14 F41 O30 O47
    Date: 2018
  2. By: Dana Benešová (University of Economics in Bratislava); Viera Kubičková (University of Economics in Bratislava); Anna Michálková (University of Economics in Bratislava); Monika Krošláková (University of Economics in Bratislava)
    Abstract: Gazelles create greater share of new jobs in comparison with other businesses operating on the market. These are young businesses of various sizes, but mainly small businesses. They generate a high rate of growth of production within a short time, which is based on the use of innovation, they are also the bearers of innovation. They are characterized by effective use of creativity and human resource capacities. They may be found in all sectors of economy, but to the greatest extent in the services sector and within that sector mainly in business services characterized by high knowledge intensity, high dynamics and continuous growth in employment. Gazelles of business services in the Slovak Republic intensively use all types of innovation. Management ability to optimize innovative processes according to needs of the enterprise seems to be of importance. Human resources and performance is considered to be the most important area of innovation influence. With its innovative activity they act as the accelerator of economy and changes in the thinking and culture of both enterprises, as well as the whole company toward sustainable growth.
    Keywords: sustainable growth,performances,knowledge-intensive services,innovation,gazelles,fast-growing companies,business services
    Date: 2018–03–30
  3. By: Mai Miyamoto (Graduate School of Economics, Kobe University); Kenji Takeuchi (Graduate School of Economics, Kobe University)
    Abstract: This paper examines the Kyoto Protocol's impact on the international diffusion of renewable energy technologies. Using patent application data from 133 countries from 1990 to 2013, we find that the Kyoto Protocol increased international patent applications from the countries with emission targets. When we focus on countries with more stringent targets, the effect of the Kyoto Protocol is even stronger. We find a similar effect in international patent applications to four developing countries that are large emitters of greenhouse gases (GHGs): China, India, Brazil, and Mexico. These results suggest that the Kyoto Protocol stimulated international patenting activities from countries that are committed to stringent targets for climate mitigation.
    Keywords: Renewable energy; Kyoto Protocol; International patent applications
    JEL: F14 O33 Q55
    Date: 2018–05
  4. By: Juma, Calestous (Harvard University)
    Abstract: The international community has historically maintained hope that advances in science and technology offer humanity a wide range of options for improving its well-being. Recently anxieties arising from rapid advancement in science and technology and the emergence of new global business models have re-opened debates on the relations between exponential innovation and human rights. The search for inclusive innovation models has led to the need to rethink traditional views about concepts such as “technology transfer†that continue to underpin international negotiations, especially under the United Nations (UN). This paper explores these themes and proposes alternative ways for emerging economies to expand their human potential without undue reliance on the one-way flow of scientific and technological knowledge from the industrialized countries. It calls on strengthening international science and technology advice, especially in the UN Secretariat, to help support more constructive discussions on the interactions between innovation and human rights.
    Date: 2018–02
  5. By: Murad Kasim
    Abstract: In this paper, I endeavour to construct a new model, by extending the classic exogenous economic growth model by including a measurement which tries to explain and quantify the size of technological innovation ( A ) endogenously. I do not agree technology is a "constant" exogenous variable, because it is humans who create all technological innovations, and it depends on how much human and physical capital is allocated for its research. I inspect several possible approaches to do this, and then I test my model both against sample and real world evidence data. I call this method "dynamic" because it tries to model the details in resource allocations between research, labor and capital, by affecting each other interactively. In the end, I point out which is the new residual and the parts of the economic growth model which can be further improved.
    Date: 2018–05
  6. By: Guendalina Anzolin (PHD Candidate, Department of Economics, Society & Politics, Università di Urbino "Carlo Bo")
    Abstract: This paper aims to engage in the contemporary debate around the opportunity to diversify and upgrade a country’s economic system through the contribution of natural resource sectors. Adopting a revisitation of Hirschman’s linkage theory, the analysis looks at mining arguing that the outsourcing process changed the dynamics of the sector, which is now characterised by the promotion of high-level technology and innovation. By focusing on the Brazilian mining sector, the development of consumption and backward linkages is examined in relation to the S11D iron ore project. The specificity of the case presents an in-depth analysis, permitting a caseby-case, one size-does-not-fit-‐all evaluation approach, which is crucial in formulating appropriate policy solutions to problems facing developing economies. It is argued that, overall, mining had a positive impact on the region where it operates, with strong consumption linkages. Nonetheless, due to an absent formal public policy, while backward linkages related to innovation and knowledge services are well--‐‐developed and very often at the technological frontier, the ones related to capital goods are weak and in the hands of foreigner subsidiaries
    Keywords: industrial policy, structural change, natural resources, value-chain
    JEL: O14 O25 Q32 F21
    Date: 2018
  7. By: Mai Miyamoto (Graduate School of Economics, Kobe University); Kenji Takeuchi (Graduate School of Economics, Kobe University)
    Abstract: This study investigates the trade flows of renewable energy products, focusing on the role of technological development. We estimate a gravity model that explains the trade flows among 35 OECD countries from 1996 to 2010 using patent counts as a proxy for technology level. We compare the pattern of the trade flows between two representative renewable energy products: those related to wind and solar electricity generation. The results suggest that technological level is correlated with trade flows and this correlation is weaker in the model for solar products than that for wind products. When we include China in the sample in estimation, the technological level of solar energy is no longer correlated with the exports of solar power products.
    Keywords: Renewable energy products; Trade; Technological development; Patent; Gravity model
    JEL: F14 O33 Q55
    Date: 2018–05
  8. By: Fitjar, Rune Dahl; Rodríguez-Pose, Andrés
    Abstract: It has often been argued that “there is something in the air” which makes firms in high-density environments—such as cities or clusters—more innovative. The co-location of firms facilitates the emergence of serendipity and casual encounters which promote innovation in firms. We assess this hypothesis using data from a survey of Norwegian firms engaged in innovation partnerships. The results indicate that there may be “much less in the air” than is generally assumed in the literature. The relationships conducive to innovation by Norwegian firms emerged as a consequence of purpose-built searches and had little to do with chance, serendipity, or “being there.”
    Keywords: innovation; tacit knowledge; agglomeration; externalities; spillovers; Norway
    JEL: N0 J50
    Date: 2017–03–02
  9. By: Claire Loupias (EPEE - Centre d'Etudes des Politiques Economiques - UEVE - Université d'Évry-Val-d'Essonne); Bertrand Wigniolle (PSE - Paris School of Economics, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Panthéon-Sorbonne - ENS Paris - École normale supérieure - Paris - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique)
    Abstract: This paper emphasizes the role of land and technological progress in economic and population growth. The model is calibrated using historical data on England concerning both economic growth rate and the factor shares (land, capital, and labor) in total income, as well as mortality tables. It is able to reproduce the dynamics of population since 1760. Moreover, it is possible to disentangle the relative effect of technical changes and mortality fall on the evolution of population. We conduct a counterfactual analysis eliminating successively the increase in life expectancy and the technological bias. With no increase in life expectancy, population would have been respectively 10% and 30% lower in 1910 and in the long run. The figures would have been respectively 40% and 60% lower, with no bias in the technical progress. Finally, population would have been 45% smaller in 1910 and 70% smaller in the long run, neutralizing both the effect of life expectancy and technological bias. So the major part of population increase is due to the technological bias evolution between land and capital.
    Keywords: endogenous fertility,land
    Date: 2018–05
  10. By: Fanti, Lucrezia
    Abstract: This paper introduces the classical idea about the so-called directed and induced technical change (ITC) within a Keynesian demand-side and evolutionary endogenous growth model in order to analyze the interplay among technical change, long-run economic growth and functional income distribution. An ITC process is analyzed within an Agent-Based Stock-Flow Consistent (AB-SFC) model, wherein credit-constrained heterogeneous firms choose both the intensity and the direction of the innovation towards a labor- or capital-saving choice of technique. In the long-run, the model reproduces the so-called Kaldor stylized facts (i.e. with a purely labor-saving technical change), however during the transitional phase the model shows a labor-saving/capital-using innovation pattern, as the aggregate output-capital ratio decreases until it stabilizes in the long-run, as well as declining labor share for long time periods and we can ascribe these evidences mainly to the directed technical change process. In order to stress the effective role of the innovation bias on the model dynamics, we compare the baseline scenario with a counterfactual scenario wherein a neutral technical progress is at work.
    Keywords: Agent-Based Macroeconomics; Stock-Flow Consistent Models; Induced Technical Change; Directed Innovation; Choice of Techniques; Labor Share; Growth and Distribution.
    JEL: E24 E25 O33 O41
    Date: 2018–03–10
  11. By: Juma, Calestous (Harvard University); Harris, Wesley L. (Massachusetts Institute of Technology); Waswa, Peter B. (Arizona State University)
    Abstract: In 2014 the African Union adopted a 10-year Science, Technology and Innovation Strategy for Africa (STISA-2024). The strategy provides a flexible framework for adopting flagship programs that involve a number of countries based on their needs, capabilities and long-term development objectives. Some areas of technological endeavor, however, represent foundations upon which economic activities are constructed. One of those areas is building geospatial data infrastructure. This can be achieved through a variety of data-collecting measures ranging from large satellites to unmanned aerial vehicles. The opportunity to use remote sensing technology for development has never been greater. There are over 100 remote sensing satellites currently in orbit, with over half designed to gather imagery that could be used for development. The industry is also growing: the OECD estimates that over 250 satellites will be launched during this decade alone, compared to half that amount during the last decade. Recent innovations around satellite technologies have also driven down costs and made it viable for low-income countries to develop cost-effective satellite programs. This paper examines small satellite programs as windows of opportunity for countries to achieve their development goals. First, it locates the potential socioeconomic benefits of satellites in low-income countries. Next, it explores the recent history of, and lessons learned by, South Africa, Brazil, and South Korea. While tens of other countries have developed satellite programs, these case studies offer insights into how and why countries have created successful programs. Next, this chapter examines the latest technologies and focuses on emerging opportunities for current and future space programs. Lastly, it develops concrete options and a clear strategy for policymakers in emerging markets to consider when designing future programs.
    Date: 2017–09
  12. By: Barton H. Hamilton; Andrés Hincapié; Robert A. Miller; Nicholas W. Papageorge
    Abstract: This paper develops and estimates a dynamic structural model of demand for a multi-attribute product. The demand side equilibrium supports a product spectrum, the characteristics of which evolve over time in response to supply innovations induced by the composition and extent of aggregate demand. The direction and speed of innovation is inefficient because individuals create an externality by not accounting for their influence on the discovery process. We apply the model to drugs invented to combat the HIV epidemic, during which frequent, incremental innovations in medication were punctuated by sporadic breakthroughs. In this application products differ in their efficacy and their propensity to cause side effects. Our biennial data on four American cities track a replenished panel of individuals for over twenty years, from when drugs were not only ineffective but also created debilitating side effects, to when the market matured. We find that the externalities are quantitatively important and that even a temporary subsidy would have improved average social welfare and been more equitable.
    JEL: O31
    Date: 2018–05
  13. By: Andrea Ascani; Pierre-Alexandre Balland
    Abstract: Countries and regions all over the world compete to attract Foreign Direct Investment (FDI) as a way to access knowledge, technology, and boost economic development. Although the literature shows a positive impact of FDI on local economies, little is known about (1) the impact on innovation of neighbouring regions and the type of FDI that generates the strongest learning effects. To fill this gap, this article investigates the relationship between FDI and the innovation capacity of Italian provinces (NUTS3). In order to capture the heterogeneity of FDI in terms of knowledge inputs, we apply the Pavitt categorisation of manufacturing sectors to inward FDI within Italian provinces, thus accounting for the nature and sources of knowledge in different sectors where foreign multinationals are active. Our results suggest that only some specific typologies of inward FDI, such as that in "Science based" sectors and to a lesser extent in "Specialised supplier" activities, benefit local economies. Nevertheless, other types of inward FDI can produce possible negative outcomes in terms of local innovation. We detect only weak evidence on the spatial implications of inward FDI.
    Keywords: foreign direct investment, spillovers, Pavitt taxonomy, FDI heterogeneity
    JEL: O3 F23 R11
    Date: 2018–05
  14. By: Nancy L. Stokey
    Abstract: A model is developed in which two complementary forms of investment contribute to growth—technology and skill acquisition, and growth takes two forms—TFP and variety growth. The rate of TFP growth depends more heavily on the parameters governing skill accumulation, while variety growth depends, roughly, on the difference between the parameters governing technology and skill accumulation. Conditions for the existence of a BGP are established, and the effects of various parameters are characterized. In an example, subsidies to skill acquisition (technology acquisition) are powerful tools for stimulating TFP growth (variety growth). Investment incentives off the BGP are also explored.
    JEL: O30 O33 O34 O40
    Date: 2018–05

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