nep-ino New Economics Papers
on Innovation
Issue of 2018‒11‒12
fourteen papers chosen by
Uwe Cantner
University of Jena

  1. Globalisation, structural change and innovation in emerging economies: The impact on employment and skills By Vivarelli, Marco
  2. The Impact of Public R&D Investments on Patenting Activity: Technology Transfer at the U.S> Environmental Protection Agency By Link, Albert; Morris, Cody; van Hasselt, Martijn
  3. Collaborative Innovation with External Partners in China: Cultural Similarity Effect By Chun-Yao Tseng
  4. Research and innovation policy in Italy By Nascia, Leopoldo; Pianta, Mario
  5. Moving Beyond the Valley of Death: Regulation and Venture Capital Investments in Early-Stage Biopharmaceutical Firms By Yujin Kim; Chirantan Chatterjee; Matthew J. Higgins
  6. Connecting to Power: Political Connections, Innovation, and Firm Dynamics By Akcigit, Ufuk; Baslandze, Salomé; Lotti, Francesca
  7. Innovation in Global Value Chains By Lema, Rasmus; Pietrobelli, Carlo; Rabellotti, Roberta
  8. Business Ecosystems and Innovation By abe Harraf
  9. Technical progress and growth since the crisis By Philippe Aghion; Céline Antonin
  10. Business Model Innovation and Selection of Entry Barriers By Adam Dewitte
  11. Are Food Neophobic Consumers Reluctant to Innovative Traditional Pork Products? An Analysis in Six European countries using A Non-Hypothetical Choice Experiment By Kallas, Z.; Vitale, M.; Candek-Potokar, M.; Lebret, B.; Pugliese, C.; Cerjak, M.; Oliver, M.A.; Tomazin, U.; Aquilani, C.; Gil, J.M.
  13. General Equilibrium Rebound from Energy Efficiency Innovation By Derek Lemoine
  14. Imports, Exports and Domestic Innovation By Boddin, Dominik

  1. By: Vivarelli, Marco (UNU-MERIT, IZA, and Università Cattolica del Sacro Cuore, Milano)
    Abstract: This paper aims to provide a critical overview of the drivers that the relevant theoretical and empirical literature suggests being crucial in dealing with the challenges an emerging country may encounter in its attempts to further catch-up a higher income status, with a particular focus devoted to the implications for the domestic labour market. In the first part of the paper, attention will be focused on structural change, capability building and technological progress, trying to map - using different taxonomies put forward by the innovation literature - the concrete ways through which an emerging country can engage a successful catching-up, having in mind that developing countries are deeply involved into globalised markets where domestic innovation has to be complemented by the role played by international technology transfer. In the second part of the paper, the focus will be moved to the possible consequences of this road to catching-up in terms of employment and skills. In particular, the prescriptions by the conventional trade theory will be contrasted with a view taking into account technology transfer, labour-saving technological progress and skill-enhancing trade.
    Keywords: catching-up, structural change, globalisation, capabilities, technology transfer, technologic change, innovation, emerging economies
    JEL: O14 O31 O33
    Date: 2018–10–23
  2. By: Link, Albert (University of North Carolina at Greensboro, Department of Economics); Morris, Cody (University of North Carolina at Greensboro, Department of Economics); van Hasselt, Martijn (University of North Carolina at Greensboro, Department of Economics)
    Abstract: This paper presents estimates of the impact of public R&D on patenting activity at the U.S. Environmental Protection Agency (EPA). Using a time series of public sector agency data, we estimate the per-capita R&D elasticity of new patent applications using a knowledge production function framework model that is an expanded version of what other scholars have used with private sector data. New patent applications are an important step in the technology transfer activities of a federal agency. We estimate this elasticity to be about 2.0. This elasticity value represents an initial estimate of the impact of EPA’s R&D investments on its technology transfer activity.
    Keywords: R&D; Patents; Technology transfer; Knowledge production function; Environmental Protection Agency;
    JEL: C51 O33 O38 O44
    Date: 2018–10–23
  3. By: Chun-Yao Tseng (Tunghai University)
    Abstract: This study focuses on collaborative innovation in China ICT(Information and Communications Technology) industry. Although prior findings point out that collaborative innovations do facilitate innovation performance, there are some unresolved problems and one of which is the problem of ?collaborating with whom?. Is there the effect of cultural similarity in collaborative innovation. This paper aims to contribute to the literature of collaborative innovation by investigating into the effects of collaborative partners on innovation performance from the perspective of cultural similarity. Based on the analysis of patent and citation from the U.S. Patents and Trademark Office (USPTO) from 1985 to 2010, empirical results are shown the performance of collaborative innovation between China and foreign is significantly greater than that of domestic collaborative innovation in China. The performance of collaborative innovation between China and culturally similar country is significantly better than that between China assignees and culturally different country.
    Keywords: Collaborative Innovation; Cultural Similarity; External Partners; Innovation across Cultures.
    JEL: O30 O32 M14
    Date: 2018–07
  4. By: Nascia, Leopoldo; Pianta, Mario
    Abstract: Italy’s research and innovation are examined in this article moving from the structure of the country’s economy and innovation system, examining the dynamics of private and public activities and the impact of policies. As a result of the long recession started in 2008, industrial production and investment experienced dramatic reductions, weakening business performances in R&D and innovation; policies have relied on ‘horizontal’ tax incentives for R&D, patenting and new machinery, with limited effects. Austerity-driven reduction of public expenditure has led to major cuts in public R&D and university budgets, combined with new rules for evaluation and merit-based financing. As a result, gaps between Italy’s research and innovation and EU average performances have increased. Four key policy questions are identified: the possibility for Italians firms to grow with modest technological activities; the longer term impact of underfunding the public R&D and university system; the consequences of a low presence of university graduates in the labour force; the sustainability of the increasing regional divergence within Italy’s research and innovation system.
    Keywords: R&D, innovation, technology policy, Italy
    JEL: O31 O33 O52
    Date: 2018
  5. By: Yujin Kim; Chirantan Chatterjee; Matthew J. Higgins
    Abstract: Venture capitalists (VCs) traditionally invest in risky, early-stage innovations. Recent research suggests, however, that VCs may be herding into less risky, later-stage projects. Such a shift can create funding gaps for early-stage firms. Can regulation reverse this trend by providing information that may reduce the risk of early-stage investments? Using the regulatory setting of the European Union and the passage of the Orphan Drug Act (EU-ODA), we examine this question in the biopharmaceutical industry. We provide causal evidence that VCs are more likely to invest in early-stage biopharmaceutical firms operating in sub-fields disproportionately affected by EU-ODA. We also find that the level of syndication declined for early-stage investments and exit performance improved. Importantly, the shift towards early-stage investment did not lead to any higher proportion of bankruptcies. Collectively, our results suggest that the information provided by EU-ODA helped alleviate information asymmetries faced by VCs investing in early-stage biopharmaceutical firms. We conclude by discussing implications for entrepreneurial finance and innovation policy.
    JEL: G24 L51 L65
    Date: 2018–10
  6. By: Akcigit, Ufuk; Baslandze, Salomé; Lotti, Francesca
    Abstract: Do political connections affect firm dynamics, innovation, and creative destruction? We study Italian firms and their workers to answer this question. Our analysis uses a brand-new dataset, spanning the period from 1993 to 2014, where we merge: (i) firm-level balance sheet data; (ii) social security data on the universe of workers; (iii) patent data from the European Patent Office; (iv) the national registry of local politicians; and (v) detailed data on local elections in Italy. We find that firm-level political connections are widespread, especially among large firms, and that industries with a larger share of politically connected firms feature worse firm dynamics. We identify a leadership paradox: When compared to their competitors, market leaders are much more likely to be politically connected, but much less likely to innovate. In addition, political connections relate to a higher rate of survival, as well as growth in employment and revenue, but not in productivity - a result that we also confirm using a regression discontinuity design. We build a firm dynamics model, where we allow firms to invest in innovation and/or political connection to advance their productivity and to overcome certain market frictions. Our model highlights a new interaction between static gains and dynamic losses from rent-seeking in aggregate productivity.
    Keywords: creative destruction; Firm Dynamics; Innovation; Political Connections; productivity
    JEL: D7 O3 O4
    Date: 2018–10
  7. By: Lema, Rasmus (Aalborg University); Pietrobelli, Carlo (UNU-MERIT, and University Roma Tre); Rabellotti, Roberta (University of Pavia, and Aalborg University)
    Abstract: Developing countries are faced with significant challenges related to building and deepening their innovation capabilities. In this chapter, we focus on innovation in global value chains and on the role that such chains play in building and deepening capability. We also focus on the trajectories along which firms, once inserted into global value chains and located in developing countries, acquire or lose innovation capability. To do so, we bring together the global value chains and innovation systems approaches. Our key arguments are that global value chains interact with innovation systems in multiple ways and that these interactions have important implications for the speed, depth, and overall quality of capability building in developing-country firms. We outline five innovation capability trajectories and show how capability building at the firm level interrelates with the various ways in which global value chains and innovation systems co-evolve.
    Keywords: global value chains, innovation systems, technological capabilities, innovation policy, co-evolution
    JEL: F23 D23 L22 L25 O10 O32 O38
    Date: 2018–10–24
  8. By: abe Harraf (University of Northern Colorado - Monfort Collge of Business)
    Abstract: The concept of Business Ecosystems has become a topic that has received increased attention within management literature and amongst practitioners. This concept refers to the idea that the nature of competition within our contemporary economy has fundamentally changed. No longer do organizations compete with one another in a zero-sum game. Today, organizations are simultaneously collaborating and competing with one another in order to co-create value, co-evolve capabilities with one another, and develop innovations in a more effective, timely and efficient manner. Although this concept has been praised for its ability to create value and share that value amongst ecosystem members, including customers, little research has been conducted to investigate the potential drawbacks of this new form of competition. This paper identifies that business ecosystems can have negative effects on innovation and competition as they develop oligopolistic market structures.
    Keywords: Business Ecosystems, Keystone organizations, innovation, Oligopoly
    JEL: O31
    Date: 2018–07
  9. By: Philippe Aghion (Harvard University (Cambridge, Massachusetts)); Céline Antonin (Observatoire français des conjonctures économiques)
    Abstract: The 2008 crisis revived doubts about growth and resuscitated the debate on secular stagnation initiated by Hansen in 1938. Particularly in a post-crisis context of zero or very low growth, Schumpeterian theory may seem to be outdated. Nevertheless, in this article, we show that it remains a valid conceptual framework. We begin by recalling the main highlights of Schumpeter's model of growth. We then argue that this conceptual framework remains relevant to many aspects of growth, notably secular stagnation, structural reforms and the debate on inequality. We show that because of creative destruction, the growth in productivity induced by innovation is underestimated. In addition, we explain why the Schumpeterian framework calls for a complementarity between structural reforms and macroeconomic policy. Finally, we show the positive impact of innovation and creative destruction on social mobility.
    Keywords: Technical progress; Growth; Schumpeter; Innovation; Secular stagnation; Inequality; Structural reforms
    Date: 2018–09
  10. By: Adam Dewitte (IAE Lille - Institut d'Administration des Entreprises - Lille - Université de Lille, Sciences et Technologies)
    Abstract: The concept of business model innovation has lead to numerous research in strategy. However, little attention has been given on topics related to entry strategies. Consequently, this theoretical paper aims to link two research streams, i.e. the literature on business model and that of entry strategy, to provide insightful knowledge for both fields. In particular we try to better understand the role of business model innovation on entry barrier' effectiveness. Using previous theoretical works and empirical examples, we first discuss the ability of an innovative business model (1) to lower entry barriers and (2) to provide first mover advantages for a new entrant. These advantages may lead to new entry or mobility barriers development. We finally identify four research propositions to guide future empirical research.
    Keywords: Mots-clés : Business Model,Business Model Innovation,Entry Strategy,Entry Barriers,Strategic Management
    Date: 2017–06–01
  11. By: Kallas, Z.; Vitale, M.; Candek-Potokar, M.; Lebret, B.; Pugliese, C.; Cerjak, M.; Oliver, M.A.; Tomazin, U.; Aquilani, C.; Gil, J.M.
    Abstract: The EU is supporting measures to stimulate enhanced value-added products in order to promote actions that may conserve local, rustic and threatened livestock breeds. New Traditional Pork Products (TPP) and Innovative Traditional Pork Products (ITPP) from six untapped pig breeds in Croatia (Turopolje), France (Gascon), Italy (CintaSenese), Slovenia (Kr kopolje) and Spain (Porc Negre Mallorqu ) were analysed. Consumers real purchase intention and acceptance were investigated with a specific attention on how consumers Food Neophobic attitude (FNS) may impact their preferences. An integrated experimental approach was applied using two Non-Hypothetical Discrete Choice Experiment (DCE) carried out before and after a sensory test. A mother Logit models with Random Parameters specification were estimated and the willingness to pay were derived. Preliminary results showed that food neophobic consumers are reluctant to purchase the TPP and the ITPP and exhibited lower expected and actual liking scores. When consumers are not familiar with the innovations type (meat with added dietary fiber and with natural antioxidant), the eating experience confirms expectations. However, when innovations are known, the eating experience affected preferences. In this case, marketing strategies that give consumers the occasion to taste the new products may help introducing them to new market. Acknowledgement : This study has received funding from the European Union s Horizon 2020 research and innovation programme under grant agreement No 634476 (project acronym TREASURE). The content of this paper reflects only the author s view and the European Union Agency is not responsible for any use that may be made of the information it contains.
    Keywords: Consumer/Household Economics
    Date: 2018–07
  12. By: Tanel Rebane
    Abstract: This paper examines the complementary relationship between product innovation, marketing innovation and cooperation with clients, based on data from Estonian firms. The author evaluated complementary relationship in terms of its effect on the firm’s total factor productivity. This study uses the Community Innovation Survey (CIS) and Estonian Business Register data from the years 2002–2012 and the Heckman selection model to research the complementarity effect between studied innovation activities using the supermodularity approach. The results show that product innovation and marketing innovation are complementary in the service industry, but in manufacturing industry there is lack of evidence for the effect of complementarity. Cooperation with clients showed inconclusive complementarity test results involving both innovation types in both industries. Using panel data as a robustness test showed more insights into the complementary effects between cooperation with clients and the studied forms of innovation. However, the results show a weak complementarity effect between cooperation and innovation and suggest that there is still no clear complementarity effect.
    Keywords: Product innovation, Marketing innovation, Cooperation with clients, Complementarity, Performance
    JEL: C13 D24 L25 O30
    Date: 2018
  13. By: Derek Lemoine
    Abstract: Energy efficiency improvements "rebound" when economic responses undercut their direct energy savings. I show that general equilibrium channels typically amplify rebound by making consumption goods cheaper but typically dampen rebound by increasing the cost of non-energy inputs to production. Improvements in energy efficiency are especially likely to increase total energy use when they arise in the energy supply sector because they make energy inputs cheaper in all other sectors. When energy and non-energy inputs are substitutes (complements), innovators often direct research efforts towards those consumption good sectors where improvements in efficiency are especially likely to increase (decrease) total energy use.
    JEL: D58 O31 O33 Q41
    Date: 2018–10
  14. By: Boddin, Dominik
    Abstract: By crawling online data, I create a new long-term patenting panel dataset for Germany to identify the causal effect of trade integration with Eastern Europe and China on patenting in the period 1993-2012. I exploit the cross-regional variation in the German industry structure and use trade flows to other advanced economies as instruments for regional import and export exposure. I find that an increase in the net trade exposure (defined as import- minus export exposure) causes an increase in regional patenting. This effect is purely driven by a positive link between import exposure and innovation, whereas export exposure does not influence innovation. Interestingly, the effects are heterogeneous across exposure origin. The positive link between import exposure and innovation is fully explained by trade integration with Eastern Europe. Increasing integration with China has no effects on innovation.
    JEL: F14 O30 R11 R12
    Date: 2018

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