nep-ino New Economics Papers
on Innovation
Issue of 2018‒12‒10
ten papers chosen by
Uwe Cantner
University of Jena

  1. The nexus between climate negotiations and low-carbon innovation: a geopolitics of renewable energy patents By Clément Bonnet; Samuel Carcanague; Emmanuel Hache; Gondia Sokhna Seck; Marine Simoën
  2. Decomposition analysis of sustainable green technology inventions in China By Fujii, Hidemichi; Managi, Shunsuke
  3. Public and private financing of innovation: Assessing constraints, selection process and firm performance By Anabela Marques Santos
  4. Product Innovation of an Incumbent Firm : A Dynamic Analysis By Hagspiel, V.; Huisman, Kuno; Kort, Peter; Nunes, Claudia; Pimentel, Rita
  5. The Economic Geography of Innovation By Egger, Peter; Loumeau, Nicole
  6. Impact of Government Policies on Private R&D Investment in Agricultural Biotechnology: Evidence from China By Deng, H.
  7. Who Profits from Patents? Rent-Sharing at Innovative Firms By Patrick Kline; Neviana Petkova; Heidi Williams; Owen Zidar
  8. Open Innovation System and Entrepreneurship: A case study of the Offshore Renewable Energy By Paul Igwe; Chioma Vivienne Nwokoro
  9. The diffusion of a policy innovation in the energy sector: evidence from the collective switching case in Europe By Silvia Blasi; Silvia Rita Sedita
  10. Immigration and Innovation By Michael Landesmann; Sandra M. Leitner

  1. By: Clément Bonnet; Samuel Carcanague; Emmanuel Hache; Gondia Sokhna Seck; Marine Simoën
    Abstract: Intellectual property is a central issue in the climate negotiations. On the one hand, it shapes and encourages innovation in low-carbon technologies. On the other hand, it reduces access to these technologies by giving patent holders market power. We analyze the interactions between climate negotiations and the acquisition of patents on renewable energy technologies. First, we recall the geopolitical nature of intellectual property and explain how it is modified by the particularities of low-carbon innovation. The second part of this article is devoted to an inventory of the production of inventions in renewable energy technologies (RETs). In particular, we focus on the relative technological advantages of countries and the value of patented inventions. Major changes are observed in the geographical distribution of low-carbon innovation during the 2000s and they foreshadow a reorganization of the geopolitical balances of innovation in renewable energies.
    Keywords: Patent data, energy transition, renewable energy technology, innovation, international relations
    JEL: Q42 Q55 O31 O38
    Date: 2018
  2. By: Fujii, Hidemichi; Managi, Shunsuke
    Abstract: Sustainable green technology is an important contributor to creating a sustainable society by simultaneously promoting environmental conservation and economic development. This study examines the determinants of sustainable green technology invention in China, with a focus on the differences in green technology development priorities in each five-year plan period. This study uses patent publication data in a patent decomposition analysis framework. We find that sustainable green patent publications increased due to efficiency improvements, the prioritization of sustainable green patents, an increased R&D expenditure share and economic growth, especially during periods of gradual economic development in China. Additionally, we find that the relative priority of R&D shifted from renewable energy technology to pollution abatement and other sustainable green technology in the 12th five-year plan. The different R&D priority trends for sustainable green technologies among the five-year plans can be used to formulate effective policies that promote sustainable green technology invention.
    Keywords: sustainable green technology; patent data; decomposition analysis; China; priority change
    JEL: O32 O44 Q55 Q56
    Date: 2018–11
  3. By: Anabela Marques Santos
    Abstract: Using public support as the baseline, the aim of the Ph.D. thesis is firstly to assess its effectiveness in alleviating firms’ financing constraints (Chapter 2) and in enhancing the innovation-growth linkage (Chapter 5), in comparison with other financing sources. Secondly, the research undertaken also explores public policy effectiveness in two periods of time: ex-ante and ex-post analysis. In the former, effectiveness is assessed according to whether the characteristics of the project selected for the subsidy are in line with the policy targets (Chapter 3). In turn, the ex-post analysis assesses firms’ effectiveness in achieving the planned goal and the sustainability of the achieved outcomes (Chapter 4). Chapter 2 provides evidence that, in addition to a guarantee for loans, measures to facilitate equity investments and making existing public measures easier to obtain could be considered as the main solutions for future financing. Tax incentives for financially constrained firms are revealed to be the least important factor. Chapter 3 aims to understand which kinds of projects are selected for an innovation subsidy and if the characteristics of the project selected are in line with the policy target. The results show the selection process seems to be particularly effective in meeting the goals as regards the amount of investment, as well as the expected effect on enhanced internationalization and productivity. Nevertheless, the study also reveals some failures in the selection process, namely in terms of the intensity of the project’s contribution to growth. Chapter 4 assess firm performance after project implementation. Results show that subsidized firms reached targets linked with employment level and sales more easily than labour productivity and value creation. Chapter 5 reveals that equity financing has a greater effect on the strategic decision to innovate and the highest output additionality on firm turnover growth. Grants have a more moderate effect on innovation and firm growth (both turnover and employment).
    Keywords: Innovation; Financing; Venture capital; Public support
    Date: 2018–10–23
  4. By: Hagspiel, V. (Tilburg University, Center For Economic Research); Huisman, Kuno (Tilburg University, Center For Economic Research); Kort, Peter (Tilburg University, Center For Economic Research); Nunes, Claudia; Pimentel, Rita
    Abstract: In case of a product innovation firms start producing a new product. While doing so, such a firm should decide what to do with its existing product after the firm has innovated. Essentially it can choose between replacing the established product by the new one, or keep on producing the established product so that it produces two products at the same time. The aim of this paper is to design a theoretical framework to analyze this problem. Due to technological progress the quality of the newest available technology, and thus the quality of the innovative product that can be produced by this technology, increases over time. The implication is that a later innovation enables the firm to produce a better innovative product. So, typically the firm faces the tradeoff between innovating fast, which boosts its profits soon but only by a small amount, or innovating later, which leads to a larger payoff increase. The drawback here is that the firm is stuck with producing the established product for a longer time. We fund that a highly uncertain economic environment makes the firm delay abolishing the old product market. But if the innovative market is more volatile, the firm enters the market sooner, provided it will be active on the old market, at least for some time. Moreover, the smaller the initial demand for the innovative product market, the better the quality of the innovative product needs to be for the product innovation to be optimal.
    Keywords: product innovation; technology adoption; Dynamic Programming
    JEL: C61 D81 O33
    Date: 2018
  5. By: Egger, Peter; Loumeau, Nicole
    Abstract: This paper outlines a quantitative global multi-region model to assess the importance of country-level investment incentives towards innovation at the level of 5,633 regions of heterogeneous size. While incentives vary across countries (and time), the responses are largely heterogeneous across regions within as well as across countries. The reason for this heterogeneity roots in average technology differences -- in terms of the production of both output and innovation -- as well as in the geography (location) and amenities across regions. The model and quantitative analysis take the tradability of output as well as the mobility of people across regions into account. In the counterfactual equilibrium analysis we focus on the effects of R&D-investment incentives on three key variables -- place-specific employment, productivity, and welfare -- in a scenario where investment incentives towards innovation are abandoned. We find that the use of policy instruments which are designed to stimulate private R&D are globally beneficial in terms of productivity and welfare. In particular, low-amenity, peripheral places, and ones where patenting is relatively less common than elsewhere benefit more strongly than others, which implies that the studied nation-wide investment incentives also work as place-based policies. According to the quantification, about one-tenth of the long-run growth rate of real GDP on the globe can be attributed to the use of R&D investment incentives as used in the year 2005 alone.
    Keywords: Economic Geography; Innovation; labor mobility; Quantitative general equilibrium; structural estimation; Trade
    JEL: C68 F13 F14 O31 R11
    Date: 2018–11
  6. By: Deng, H.
    Abstract: This study evaluates the impact of Chinese government policies on private R&D investment in biotechnology. We apply survey data from 160 major agribusinesses to analyze the effects of various factors on firm R&D activities. Our findings provide evidence of inducement effects of government policy on firms R&D investment. Significant drivers of Chinese agribusiness firms decisions to invest in biotechnology R&D are public R&D subsidies, owning patents by firms, selling biotechnology products, and expectations of positive profit from commercialization of biotechnology crops. Firms collaboration with universities has no significant impact. Government R&D subsidies also significantly increase firms' biotechnology R&D investment spending. Acknowledgement : We thank the MOA, Seed Industry Association, and Agricultural Department of Zhejiang Province for helping with data collection. This research was supported by the National Natural Science Foundation of China (71210004).This research was supported by the National Natural Science Foundation of China (71210004).
    Keywords: Agricultural and Food Policy
    Date: 2018–07
  7. By: Patrick Kline; Neviana Petkova; Heidi Williams; Owen Zidar
    Abstract: This paper analyzes how patent-induced shocks to labor productivity propagate into worker compensation using a new linkage of US patent applications to US business and worker tax records. We infer the causal effects of patent allowances by comparing firms whose patent applications were initially allowed to those whose patent applications were initially rejected. To identify patents that are ex-ante valuable, we extrapolate the excess stock return estimates of Kogan et al. (2017) to the full set of accepted and rejected patent applications based on predetermined firm and patent application characteristics. An initial allowance of an ex-ante valuable patent generates substantial increases in firm productivity and worker compensation. By contrast, initial allowances of lower ex-ante value patents yield no detectable effects on firm outcomes. Patent allowances lead firms to increase employment, but entry wages and workforce composition are insensitive to patent decisions. On average, workers capture roughly 30 cents of every dollar of patent-induced surplus in higher earnings. This share is roughly twice as high among workers present since the year of application. These earnings effects are concentrated among men and workers in the top half of the earnings distribution, and are paired with corresponding improvements in worker retention among these groups. We interpret these earnings responses as reflecting the capture of economic rents by senior workers, who are most costly for innovative firms to replace.
    JEL: J01 O3 O34
    Date: 2018–11
  8. By: Paul Igwe (University of Lincoln); Chioma Vivienne Nwokoro (Eastern Palm University)
    Abstract: This article examines the innovation in the offshore renewable energy (ORE) industry using Open Innovation System (OIS), platforms and network perspective. Despite the benefits of ORE, Operation and Maintenance (O&M) costs account for up to one-third of total wind energy project lifecycle expenditure requiring relationships with multiple external partners to improve the supply chain and O&M activities. Therefore, management of the O&M activities of the supply chain and logistics has become an excellent place to drive efficiency and reduce cost thereby creating innovative products and services, business clusters and job opportunities. Findings show how strategic resources help offshore companies to reduce cost and achieve environmental, economic and social benefit derived from ORE. The OIS is used to explain the importance of new resources in technology, knowledge sharing and relationships, and stresses the role of stakeholders in addressing the challenges. The limitation of this study is related to reliance on secondary data. However, it provided an opportunity to elaborate on OIS theory and reinforces the importance of knowledge sharing, collaboration and network advantage. Overall, this provided insights into the constituent resources needed for successful OIS, regional entrepreneurship and helps move renewable energy research from a technological advancement challenges to a problem of strategic resources and relational capabilities.
    Keywords: Open Innovation System, Regional Entrepreneurship, Dynamic Capabilities, Renewable Energy
    JEL: Q55 R38 Q28
    Date: 2018–10
  9. By: Silvia Blasi (University of Padova); Silvia Rita Sedita (University of Padova)
    Abstract: This paper investigates the factors that influence the dissemination of an energy policy innovation, the collective switching, adopting the business ecosystem as unit of analysis. Collective switching is a new phenomenon that recent literature has not yet investigated. It is characterised by a group of people with common characteristics that, through an intermediary, negotiates with the energy suppliers and, thanks to its bargaining power, is able to obtain advantageous contracts. The 6C framework is adopted in order to perform a cross-country analysis oriented to single out differences in the collective switching ecosystems. Through a comparative case study analysis, which examines in rich detail 11 European countries’ collective switching campaigns, this work provides an accurate description of the collective switching business ecosystem and the ways it reacts to a policy innovation. Semi-structured interviews, conducted with consumer associations that organised collective switching campaigns, provide insights for the definition of some policy interventions.
    Keywords: Business Ecosystem, policy innovation, collective switching, energy sector, Europe
    JEL: Q40 O52 O57
    Date: 2018–11
  10. By: Michael Landesmann (The Vienna Institute for International Economic Studies, wiiw); Sandra M. Leitner (The Vienna Institute for International Economic Studies, wiiw)
    Abstract: Do High-Skilled Third-Country (i.e. Non-EU) Migrants Contribute to Productivity Growth? In order to foster innovation and enhance economic development and growth, attracting skilled professionals from abroad has become an important policy goal in many economies, initiating a global race for talent. This paper looks at the private company sector in a group of 13 old EU Member States and examines the role of high-skilled third-country (HS-TC) migrants for innovation – as captured by real labour productivity and total factor productivity (TFP) growth – between 2004 and 2015. It utilises four different indicators of HS-TC migration and defines high skills in terms of either educational attainment (ISCED classification) or the skills required in an occupation (ISCO classification) which helps identify the presence of a jobs-skills mismatch for HS-TC migrants. Taking into account the endogenous nature of HS-TC migration, we find some selective evidence of a negative causal link between the share of HS‑TC migrants, on the one hand, and labour productivity and TFP growth, on the other. Furthermore, differences in the results for the ISCED- and ISCO-based skills measures point to a non-negligible jobs‑skills mismatch in terms of an over-representation of HS-TC migrants in lower productivity occupations. We also find that HS-TC migrants are relatively less productive than HS EU migrants. Results for selected individual industries are more mixed, with some industries even benefiting in productivity terms from a higher share of HS-TC migrant workers.
    Keywords: high-skilled third-country migrants, innovation, EU, real labour productivity growth, total factor productivity growth
    JEL: O15 F22 D24
    Date: 2018–12

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