nep-ino New Economics Papers
on Innovation
Issue of 2018‒07‒23
eighteen papers chosen by
Uwe Cantner
University of Jena

  1. Beyond R&D:The role of embodied technological change in affecting employment By Gabriele Pellegrino; Mariacristina Piva; Marco Vivarelli
  2. European Industrial Energy Intensity: The Role of Innovation 1995-2009 By Ajayi, V.; Reiner, D.
  3. The source of the US /EU Productivity Gap:Less and less effective R&D By Davide Castellani; Mariacristina Piva; Torben Schubert; Marco Vivarelli
  4. Can organisational ambidexterity kill innovation? A case for non-expected utility decision making By Mario Le Glatin; Pascal Le Masson; Benoit Weil
  5. Smart specialisation and social innovation: from policy relations to opportunities and challenges By Manfred Spiesberger; Javier Gomez Prieto; Isabelle Seigneur
  6. Have R&D spillovers changed? By Bloom, Nick; Lucking, Brian; Van Reenen, John
  7. Sustainability Business Model: a case study of the evolution of activity system by eco-design and eco-innovation practices to value wine production By Hiam Serhan; Gwenola Yannou-Le Bris
  8. Technological changes and population growth: the role of land in England By Claire Loupias; Bertrand Wigniolle
  9. Strengthening innovation in Poland By Nicola Brandt
  10. Public R&D Support and Firms’ Performance A Panel Data Study By Nilsen, Øivind A.; Raknerud, Arvid; Iancu, Diana-Cristina
  11. Product innovation by supplying in domestic and foreign markets By Bratti, Massimiliano; Felice, Giulia
  12. How does innovation occur in India? Evidence from the JIRICO survey By BHARADWAJ, Ashish; KANG, Byeongwoo
  13. Layering the developmental state away? By Pauline Debanes
  14. Threats to scientific progress, past and present By Alessandro Iaria; Carlo Schwarz; Fabian Waldinger
  15. Entrepreneurship Culture, Knowledge Spillovers, and the Growth of Regions By Michael, Stuetzer; David, Audretsch; Martin, Obschonka; Samuel, Gosling; Jason, Rentfrow; Jeff, Potter
  16. The Relation between Research Priorities and Societal Demands: The Case of Rice By Tommaso Ciarli; Ismael Ràfols
  17. Human Capital Formation during the First Industrial Revolution: Evidence from the Use of Steam Engines By de Pleijt, Alexandra; Nuvolari, Alessandro; Weisdorf, Jacob
  18. Bidding against the odds? The impact evaluation of grants for young micro and small firms during the recession By Stjepan Srhoj; Bruno Skrinjaric; Sonja Radas

  1. By: Gabriele Pellegrino; Mariacristina Piva; Marco Vivarelli
    Abstract: In this work, we test the employment impact of distinct types of innovative investments using a representative sample of Spanish manufacturing firms over the period 2002-2013. Our GMM-SYS estimates generate various results, which are partially in contrast with the extant literature. Indeed, estimations carried out on the entire sample do not provide statistically significant evidence of the expected labor-friendly nature of innovation. More in detail, neither R&D nor investment in innovative machineries and equipment (the so-called embodied technological change, ETC) turn out to have any significant employment effect. However, the job-creation impact of R&D expenditures becomes highly significant when the focus is limited to the high-tech firms. On the other hand - and interestingly - ETC exhibits its labor-saving nature when SMEs are singled out.
    Keywords: Innovation; R&D; Embodied Technological Change; Employment; GMM-SYS
    Date: 2018–06–17
  2. By: Ajayi, V.; Reiner, D.
    Abstract: We investigate the direct role of technological innovation and other influencing factors on industry-level energy intensity based on a sample of 12 industries across 17 EU countries over 1995–2009. We develop an innovative industry-level patent dataset and find compelling evidence that patent stock negatively influences industrial energy intensity. Using a fixed effects estimator, we find a much stronger effect on energy-intensive industries with an estimated coefficient of -0.138 almost double that of less energy-intensive industries (estimated at -0.085). While our results show energy price remains the major determinant of energy intensity, the chemicals industry appears to be more susceptible to energy prices relative to other energy-intensive industries that are covered by the EU Emissions Trading Scheme (ETS). Our study reveals that asymmetric response of energy intensity to energy prices in which price rises between 2004 and 2008 accounts for more change in efficiency than when prices fall. We also explore regional differences, notably that carbon tax policy in Northern European countries, which began in the early 1990s, is responsible for a significant fraction of the decline in energy intensity in Northern Europe.
    Keywords: Industrial energy intensity, innovation, energy price, carbon tax
    JEL: O13 C33 Q41 Q55
    Date: 2018–06–19
  3. By: Davide Castellani; Mariacristina Piva; Torben Schubert; Marco Vivarelli
    Abstract: Using data on the US and EU top R&D spenders from 2004 until 2012, this paper investigates the sources of the US/EU productivity gap. We find robust evidence that US firms have a higher capacity to translate R&D into productivity gains (especially in the high-tech industries), and this contributes to explaining the higher productivity of US firms. Conversely, EU firms are more likely to achieve productivity gains through capital-embodied technological change at least in medium and low-tech sectors. Our results also show that the US/EU productivity gap has worsened during the crisis period, as the EU companies have been more affected by the economic crisis in their capacity to translate R&D investments into productivity. Based on these findings, we make a case for a learning-based and selective R&D funding, which - instead of purely aiming at stimulating higher R&D expenditures - works on improving the firms' capabilities to transform R&D into productivity gains.
    Keywords: R&D; productivity; economic crisis; US; EU
    Date: 2018–06–17
  4. By: Mario Le Glatin (CGS i3 - Centre de Gestion Scientifique i3 - MINES ParisTech - École nationale supérieure des mines de Paris - PSL - PSL Research University - CNRS - Centre National de la Recherche Scientifique); Pascal Le Masson (CGS i3 - Centre de Gestion Scientifique i3 - MINES ParisTech - École nationale supérieure des mines de Paris - PSL - PSL Research University - CNRS - Centre National de la Recherche Scientifique); Benoit Weil (CGS i3 - Centre de Gestion Scientifique i3 - MINES ParisTech - École nationale supérieure des mines de Paris - PSL - PSL Research University - CNRS - Centre National de la Recherche Scientifique)
    Abstract: The academic construction of ambidexterity articulated around notions such as exploration, exploitation (J. March 1991) has been flourishing over the years with a strong background in organisational theory to explain levels of performance and innovation. However, they have also made a call for in-depth studies to understand managerial capabilities such as decision-making (Birkinshaw & Gupta 2013; O'Reilly & Tushman 2013; Benner & Tushman 2015) supporting the tension of competing objectives. In this paper, we show that organisational ambidexterity can kill innovation as the underlying decision theories are not fully supporting the nature of decision required in regimes such as contextual ambidexterity (Gibson & Birkinshaw 2004). Two case studies from the aircraft cabin equipment industry are presented and analysed at the project management level with descriptors from organisational ambidexterity and decision-making. We propose to consider unconventional decision theories, taking into account non-expected utilities such as potential regret of imagined prospects, as a means to support management tools enabling ambidexterity at the decisional and contextual levels. First, we show that common decision models based on expected utility encoded in management tools mobilised for contextual ambidexterity can fail to support innovation. Second, we propose that a non-expected utility, such as potential regret of imagined prospects, serves the management of competing exploration/exploitation objectives. Third, the case studies help contouring a management tool extending observed attempts to sustain or extend contextual ambidexterity through unconventional decision-making.
    Keywords: decision,project management,design,ambidexterity,management tool
    Date: 2018–06–19
  5. By: Manfred Spiesberger (Centre for Social Innovation (ZSI), Vienna (Austria)); Javier Gomez Prieto (European Commission - JRC); Isabelle Seigneur (European Commission - JRC)
    Abstract: In this paper some ongoing tendencies of Social Innovation (SI) in the EU and its relation to the smart specialisation (S3) approach are discussed. The analysis is limited to the energy field, particularly to the context of renewable energy production, energy efficiency measures and heating and cooling. The paper is part of the policy support provided by the Smart Specialisation Platform on Energy (S3PEnergy) to EU regions and member states. Therefore the focus has been put on Smart Specialisation, and the relevance of such SI initiatives for economic development and potential upscaling in regions, and for an increased proactive consumer involvement. Smart specialisation is a regional policy framework for innovation driven growth. It helps to focus resources on key national and regional priorities, challenges, and needs for knowledge-based development. S3 is a bottom-up process relying on an entrepreneurial discovery process, which involves various stakeholders such as businesses, private stakeholders and policy makers for capacity and priority identification. It is evidence based and includes sound identification of priorities, monitoring and evaluation (RIS 3 guide, 2012; OECD, 2013). The social innovation approach is disaggregated here in the categories of organisational, social, financial, educational and business. Case studies were developed to understand the character of those categories.
    Keywords: Social Innovation, Smart Specialisation, Regional Policy, Regional Innovation, Energy Innovation.
    Date: 2018–06
  6. By: Bloom, Nick; Lucking, Brian; Van Reenen, John
    Abstract: This paper revisits the results of Bloom, Schankerman, and Van Reenen (2013) examining the impact of R&D on the performance of US firms, especially through spillovers. We extend their analysis to include an additional 15 years of data through 2015, and update the measures of firms' interactions in technology space and product market space. We show that the magnitude of R&D spillovers appears to have been broadly similar in the second decade of the 21st Century as it was in the mid-1980s. However, there does seem to have been some increase in the wedge between marginal social returns to R&D and marginal private returns with the ratio of marginal social to private returns increasing to a factor of 4 from 3. There is certainly no evidence that the need to subsidize R&D has diminished. Positive spillovers appeared to increase in the 1995-2004 boom.
    Keywords: innovation; RD; patents; productivity and spillovers
    JEL: F23 O31 O32 O33
    Date: 2018–05–01
  7. By: Hiam Serhan (AgroParisTech); Gwenola Yannou-Le Bris (LGI - Laboratoire Génie Industriel - EA 2606 - CentraleSupélec)
    Abstract: Innovation, sustainability, sustainability innovations are the challenges that today's businesses are facing. While many scholarly researches have produced a great deal of useful knowledge about various forms of sustainability and innovation and their integration in business models, there has been no attention given to the process through which a business activity model evolves from a quality management system to a sustainability business model. In this paper, through a case study, we address this gap in research by focusing on the evolution of management practices related to the dynamics of new knowledge introduced by management innovations, i.e. the implementation of management tools, ideas, processes and practices in organizations, intended to alter the way in which the managerial work is performed and to further organizational goals. Building on Engeström theoretical model of activity system and expansive learning, we show how a French wine Château has learned to improve its capabilities to reinvent its business model through the implementation of ISO standards and created sustainability values to its products, services and customers. Our results show how sustainable development is achieved through the implementation of eco-design and eco-innovation practices. They also show that sustainability in business models and practices is a dynamic and expansive learning mechanism. It is leveraged by management tools and management philosophy that help organizations exploiting their good practices, and exploring and seizing in their environment and among their key partners, the opportunities that can reconfigure the value of their products and services.
    Keywords: Business model, Eco-conception, Eco-innovation, Management,innovation, Sustainability, Value creation,Track: Governance,Word count: 9612 words,2
    Date: 2018–04–12
  8. 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
  9. By: Nicola Brandt
    Abstract: Poland’s catch up with other OECD country has been largely based on productivity growth resulting from restructuring towards more productive sectors and foreign technology absorption. The economy’s own innovation capacity is relatively weak, with low investment in research and development, no tradition of commercialising research and very limited innovation activity within firms. The government plans a higher education reform to strengthen the quality of research output, science-industry cooperation and international collaboration, which are all weak. Considerable EU funding is available to support innovation. Most of it is conditioned on science-industry co-operation, which is showing initial benefits. A lively start-up scene is gradually emerging, and the government foresees considerable public support for venture capital financing. Yet, investment in higher education and research trails behind economies that have been able to build strong science and high-tech start-up activity. Poland’s many small and medium-sized enterprises have particularly low productivity, partly related to weaknesses in vocational training and adult education, as too many workers have weak basic and digital skills. The government's education reform and digital strategy address some of these issues.
    Keywords: higher education, innovation, Poland, research and development, vocational education
    JEL: I23 O31 O32 O4
    Date: 2018–06–29
  10. By: Nilsen, Øivind A. (Dept. of Economics, Norwegian School of Economics and Business Administration); Raknerud, Arvid (Statistics Norway); Iancu, Diana-Cristina (Statistics Norway)
    Abstract: We analyse all the major sources of direct and indirect R&D subsidies in Norway in the period 2002-2013 and compare their effects on individual firms’ performance. Firms that received support are matched with a control group of firms that did not receive support using a combination of stratification and propensity score matching. Changes in performance indicators before and after support in the treatment group are compared With contemporaneous changes in the control group. We find that the average effects of R&D support among those who obtained grants and/or subsidies are positive and significant in terms of performance indicators related to economic growth: value added, sales revenue and number of employees. The estimated effects are larger for start-up firms than incumbent firms when the effects are measured as relative effects (in percentage points), but smaller when these effects are translated into level effects. Finally, we do not find positive effects on return to total assets or productivity for firms who received support compared with the control group.
    Keywords: Public policy; Firm performance; Treatment effects; Stratification; Propensity score matching; Productivity
    JEL: C33 C52 D24 O38
    Date: 2018–06–20
  11. By: Bratti, Massimiliano (European Commission – JRC); Felice, Giulia (Politecnico di Milano)
    Abstract: This paper uses European firm-level survey data to provide some robust empirical evidence that suppliers engaged in production to order (PTO) for foreign firms are more likely to introduce product innovations than those engaged in PTO for domestic firms, even when differences in size, R&D and productivity are controlled for. We propose a demand-driven theoretical explanation based on the interactions between an upstream producer of a specialized input and a downstream producer in a framework of incomplete contracts, agency frictions, and imperfect information.
    Keywords: buyer, supplier, product innovation, production to order, foreign market
    JEL: D21 D22 F21 L23 O31
    Date: 2018–06
  12. By: BHARADWAJ, Ashish; KANG, Byeongwoo
    Abstract: Based on the first innovation survey of 1139 firms in India, this paper provides innovation activities in India. Findings in this paper will provide insights to other emerging countries that pursue endogenous innovation.
    Keywords: emerging country, India, innovation, invention, survey
    Date: 2018–01
  13. By: Pauline Debanes (FFJ - Fondation France-Japon de l'EHESS - EHESS - École des hautes études en sciences sociales, CCJ - Chine, Corée, Japon - EHESS - École des hautes études en sciences sociales - UPD7 - Université Paris Diderot - Paris 7 - CNRS - Centre National de la Recherche Scientifique)
    Abstract: The role of the state and public agencies has come to the fore again since the global financial crisis to spur innovation-led growth. Alimented by the success of global tech giants in particular, new policy rationales emerged in favor of government support for ICT startups. The paper addresses the crucial question of whether the corresponding organizational capabilities do exist to implement such policies. This article focuses on the case of South Korea, renowned at the same time for the strong capacities of the state and an institutional setting hostile to new ventures. The main contribution of the paper is to analyze institutional change within the Korean innovation bureaucracy and the evolution of its organizational capabilities, underpinning the startup promotion policies implemented since 2013. Under the appearance of continuity of state innovation capacities, the startup promotion policies foster a restructuring of the public infrastructure supporting the corporate sector. The results, drawn upon an extensive fieldwork in the Korean startup ecosystem, indicate that there is a loss of state capacities, which impede on the implementation of large-scale promotion of the manufacturing industries.
    Keywords: innovation bureaucracy, institutional change,innovation policy,Korea,state capacity
    Date: 2018–04
  14. By: Alessandro Iaria; Carlo Schwarz; Fabian Waldinger
    Abstract: A US boycott of Chinese researchers, as threatened by the Trump administration, could stifle scientific progress and technological innovation. That is the concern of Alessandro Iaria, Carlo Schwarz and Fabian Waldinger, whose research looks at the period between 1914 and 1926, when Allied scientists were cut off from their peers in Central countries - with damaging consequences for world science. Their study reveals how the interruption of international knowledge flows, as a result of the First World War and its aftermath, led to stark declines in the production of research deemed worthy of a Nobel prize nomination. Barriers to international scientific co-operation slow down the production of basic science and its application in new technologies. In contrast, policies that widen access to frontier research could benefit society beyond the confines of science itself.
    Keywords: frontier knowledge, scientific production, international knowledge flows, WW1
    JEL: O3 N3 N4 O31 O5 N30 N40 J44 I23
    Date: 2018–07
  15. By: Michael, Stuetzer; David, Audretsch; Martin, Obschonka; Samuel, Gosling; Jason, Rentfrow; Jeff, Potter
    Abstract: An extensive literature has emerged in regional studies linking organization-based measures of entrepreneurship (e.g., self-employment, new start-ups) to regional economic performance. A limitation of the extant literature is that the measurement of entrepreneurship is not able to incorporate broader conceptual views, such as behaviour, of what actually constitutes entrepreneurship. This paper fills this gap by linking the underlying and also more fundamental and encompassing entrepreneurship culture of regions to regional economic performance. The empirical evidence suggests that those regions exhibiting higher levels of entrepreneurship culture tend to have higher employment growth. Robustness checks using causal methods confirm this finding.
    Keywords: Entrepreneurship; Entrepreneurship Culture; Regional Development; Economic Growth
    JEL: L26 M13 N9 N91 O3 O31
    Date: 2018
  16. By: Tommaso Ciarli (SPRU, University of Sussex, UK); Ismael Ràfols (Ingenio (CSIC-UPV), Universitat Politecnica Valencia, Spain; CWTS, University of Leiden, The Netherlands; SPRU, University of Sussex, UK)
    Abstract: To what extent is scientific research related to societal needs? To answer this crucial question systematically we need to contrast indicators of research priorities with indicators of societal needs. We focus on rice research and technology between 1983 and 2012. We combine quantitative methods that allow investigation of the relation between `revealed' research priorities and `revealed' societal demands, measured respectively by research output (publications) and national accounts of rice use and farmers' and consumers' rice related needs. We employ new bibliometric data, methods and indicators to identify countries' main rice research topics (priorities) from publications. For a panel of countries, we estimate the relation between revealed research priorities and revealed demands. We nd that, across countries and time, societal demands explain a country's research trajectory to a limited extent. Some research priorities are nicely aligned to societal demands, con rming that science is partly related to societal needs. However, we find a relevant number of misalignments between the focus of rice research and revealed demands, crucially related to human consumption and nutrition. We discuss some implications for research policy.
    Keywords: Research priority; agenda setting; research trajectories; societal needs; scientometrics; rice
    Date: 2018–07
  17. By: de Pleijt, Alexandra; Nuvolari, Alessandro; Weisdorf, Jacob
    Abstract: We examine the effect of technical change on human capital formation during England's Industrial Revolution. Using the number of steam engines installed by 1800 as a synthetic indicator of technological change, and occupational statistics to measure working skills (using HISCLASS), we establish a positive correlation between the use of steam engines and the share of skilled workers at the county level. We use exogenous variation in carboniferous rock strata (containing coal to fuel the engines) to show that the effect was causal. While technological change stimulated the formation of working skills, it had an overall negative effect on the formation of primary education, captured by literacy and school enrolment rates. It also led to higher gender inequality in literacy.
    Keywords: Economic Growth; education; Human Capital; Industrialisation; Steam Engines; Technological change
    JEL: J82 N33 O14 O33
    Date: 2018–06
  18. By: Stjepan Srhoj (Department for Economics and Business Economics, University of Dubrovnik); Bruno Skrinjaric (The Institute of Economics, Zagreb); Sonja Radas (The Institute of Economics, Zagreb)
    Abstract: Impact evaluations of entrepreneurship policies targeting young firms have been somewhat neglected thus far in the literature. This paper seeks to contribute to this topic in the context of a long recession period, such as the one experienced in Croatia from 2009 to 2014. These policies awarded small grant amounts for activities such as business plan development, consultancy, marketing and office renovation. Awarding small grant amounts to many firms might be tempting for politicians, but is this political populism or smart policy? This paper estimates the impact of matching grants for business development on three types of outcomes: bank loans, firm survival and firm performance. The full firm-level census dataset was supplemented with entrepreneur-level court register and firm-level data on grant recipients. Policy evaluation was performed using matching techniques with a combination of nearest neighbor and exact matching, and robustness of results was tested using a placebo test and Rosenbaum bounds. The results show that grants had a positive impact on firm survival after the recession, and on obtaining long-term bank loans during the recession. However, no empirical support was found for the grants’ impact on growth in turnover, employment and labor productivity.
    Keywords: grants, recession, young firms, survival, firm performance, bank loans
    JEL: H25
    Date: 2018–05

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