nep-ino New Economics Papers
on Innovation
Issue of 2018‒12‒17
sixteen papers chosen by
Uwe Cantner
University of Jena

  1. Spillover from the haven: Cross-border externalities of patent box regimes within multinational firms By Thomas Schwab; Maximilian Todtenhaupt
  2. Measuring Technological Innovation over the Long Run By Bryan Kelly; Dimitris Papanikolaou; Amit Seru; Matt Taddy
  3. Measuring the Impact of Household Innovation using Administrative Data By Javier Miranda; Nikolas Zolas
  4. Endogenous Technology Cycles in Dynamic R&D Networks By König, Michael; Rogers, Tim
  6. Inter-industry differences in organisational eco-innovation: a panel data study By Jose García-Quevedo; Effie Kesidou; Ester Martínez-Ros
  7. Foreign Ownership and Skillbiased Technological Change By Michael Koch; Marcel Smolka
  8. What firms don’t know can hurt them: Overcoming a lack of information on technology By Jose García-Quevedo; Francisco Mas-Verdú; Gabriele Pellegrino
  9. The Financial Innovation Hypothesis: Schumpeter, Minsky and the sub-prime mortgage crisis By Eugenio Caverzasi; Daniele Tori
  10. Firm Size and Innovation in the Service Sector By David B. Audretsch; Marian Hafenstein; Alexander S. Kritikos; Alexander Schiersch
  11. ICT and Two Categories of R&D in the Innovation Process among Firms in ASEAN Countries Based on Firm-level Survey Data By Tsuji, Masatsugu; Ueki, Yasushi; Shigeno, Hidenori; Bunno, Teruyuki; Idota, Hiroki
  12. From China with Love: The Role of FDI from Third Countries on EU Competition and R&D Activities By Ronald B. Davies
  13. Team Learning Capabilities: A Meso Model of Sustained Innovation and Superior Firm Performance By Jean-François Harvey; Henrik Bresman; Amy C. Edmondson
  14. Services in innovation networks and innovation networks in services: from traditional innovation networks (TINs) to public service innovation networks (PSINs) By Benoît Desmarchelier; Faridah Djellal; Faïz Gallouj
  15. Green Technology Diffusion: A Post-Mortem Analysis of the Eco-Patent Commons By Jorge L. Contreras; Bronwyn H. Hall; Christian Helmers
  16. The RHOMOLO economic impact assessment of the R&I and Low-Carbon ERDF Investment programme in Apulia, Italy By Francesco Di Comite; Olga Diukanova; Giovanni Mandras; Javier Gómez Prieto

  1. By: Thomas Schwab (University of Mannheim, WU Vienna & ZEW); Maximilian Todtenhaupt (University of Mannheim & ZEW)
    Abstract: In this paper, we analyze the cross-border effects of patent box regimes that reduce the tax rate on income from intellectual property. We argue that the tax cut in one location of a multinational enterprise may reduce the user cost of capital for the whole group if profit shifting is possible. This spillover effect of the foreign tax cut raises domestic R&D investment. We test this mechanism by combining information on patents, firm ownership and specific characteristics of patent box regimes. Empirical results from a micro-level analysis suggest that patent box regimes without a nexus requirement (patent havens) induce positive cross-border externalities on R&D activity within multinational groups. For firms with cross-border links, the implementation of a foreign patent haven increases domestic research activity by about 2.3% per implied tax rate differential. Furthermore, our findings suggest that patent boxes generate negative spillovers on average patent quality. This has important implications for international tax policy and the evaluation of patent box regimes.
    Keywords: Patent box, spillover, corporate taxation, innovation
    JEL: F23 H25 O31
    Date: 2017
  2. By: Bryan Kelly; Dimitris Papanikolaou; Amit Seru; Matt Taddy
    Abstract: We use textual analysis of high-dimensional data from patent documents to create new indicators of technological innovation. We identify significant patents based on textual similarity of a given patent to previous and subsequent work: these patents are distinct from previous work but are related to subsequent innovations. Our measure of patent significance is predictive of future citations and correlates strongly with measures of market value. We identify breakthrough innovations as the most significant patents – those in the right tail of our measure – to construct indices of technological change at the aggregate, sectoral, and firm level. Our technology indices span two centuries (1840-2010) and cover innovation by private and public firms, as well as non-profit organizations and the US government. These indices capture the evolution of technological waves over a long time span and are strong predictors of productivity at the aggregate, sectoral, and firm level.
    JEL: E22 E32 N1 O3 O4
    Date: 2018–11
  3. By: Javier Miranda; Nikolas Zolas
    Abstract: We link USPTO patent data to U.S. Census Bureau administrative records on individuals and firms. The combined dataset provides us with a directory of patenting household inventors as well as a time-series directory of self-employed businesses tied to household innovations. We describe the characteristics of household inventors by race, age, gender and U.S. origin, as well as the types of patented innovations pursued by these inventors. Business data allows us to highlight how patents shape the early life-cycle dynamics of nonemployer businesses. We find household innovators are disproportionately U.S. born, white and their age distribution has thicker tails relative to business innovators. Data shows there is a deficit of female and black inventors. Household inventors tend to work in consumer product areas compared to traditional business patents. While patented household innovations do not have the same impact of business innovations their uniqueness and impact remains surprisingly high. Back of the envelope calculations suggest patented household innovations granted between 2000 and 2011 might generate $5.0B in revenue (2000 dollars).
    JEL: O3 O31
    Date: 2018–11
  4. By: König, Michael; Rogers, Tim
    Abstract: We study the coevolutionary dynamics of knowledge creation and diffusion with the formation of R&D collaboration networks. Differently to previous works, we do not treat knowledge as an abstract scalar variable, but rather represent it as a multidimensional portfolio of technologies. Over time the composition of this portfolio may change due innovations and knowledge spillovers between collaborating firms. The collaborations between firms, in turn, are dynamically adjusted based on the firms' expectations of learning a new technology from their collaboration partners. We show that the interplay between knowledge diffusion, network formation and competition across sectors can give rise to a cyclical pattern in the collaboration intensity, which can be described as a damped oscillation. This theoretical finding recapitulates the novel observation of oscillations in an empirical sample of a large R&D collaboration network over several decades. Finally, we apply our findings to describe how an effective R&D policy can balance subsidies for entrants as well as R&D collaborations between incumbent firms.
    Keywords: Innovation; network formation; R&D networks; technology cycles
    JEL: D85 L24 O32 O33
    Date: 2018–11
  5. By: Nina Bohdan (Belarus State Economic University)
    Abstract: The paper examines the innovative development of Belarus in the context of international indicators and ratings of innovation. International indicators of innovation are becoming an important tool for evaluating the effectiveness of innovation policy. Innovation policy often suffers, especially in developing countries, from an insufficient understanding of the complex phenomenon of innovation. Lack of a systemic approach to innovation leads to a lack of the emphasis on innovation based on knowledge from any source and not just on the knowledge formally created through R&D. Identified are the strengths and weaknesses of innovation policy of Belarus, as well as the problems of innovative development given the Global Innovation Index, the Innovation Union Scoreboard and Knowledge Economy Index. Developed are the new directions of innovation policy for Belarus.
    Keywords: Key words: innovation, performance of innovation development, resources of innovation, efficiency innovation, national innovation system, innovation policy.
    JEL: O31 O34 O38
    Date: 2018–10
  6. By: Jose García-Quevedo (Chair on Energy Sustainability, University of Barcelona & IEB); Effie Kesidou (University of Leeds); Ester Martínez-Ros (University Carlos III)
    Abstract: Building on insights from institutional theory, the resource-based view of the firm, and internationalisation, we seek to explain the variation in the adoption of organisational eco-innovations such as environmental management systems (EMS) across sectors in Spain in the period 2009–2014. Previous studies on eco-innovation report that regulatory pressures, technology-push, market-pull, and firm factors are drivers of this process. However, this literature pays relatively little attention to non-technological forms of eco-innovation, such as EMS. As a result, just how EMS adoption can be encouraged across sectors remains unclear in the innovation literature. Here, we seek to address this problem by combining data from the following sources: the Community Innovation Survey and the Spanish Technological Innovation Panel, the International Standardisation Organisation (ISO) survey, the Industry Survey, the Environmental Protection Survey, and the Air Emissions Account. The results of the econometric analysis of panel data reveal that, first, coercive institutional pressures are driving the adoption of EMS reflecting differences across sectors in energy and pollution intensity. Second, the adoption of ISO 9000 – a highly institutionalised system of quality management – increases the adoption of EMS in each industry because of complementarities between the two systems. Third, sectors with a high percentage of internationalised firms operate a higher number of EMS.
    Keywords: Eco-innovation, Institutional theory, Internationalisation, Panel data, EMS
    JEL: O30 Q50 Q58
    Date: 2018
  7. By: Michael Koch; Marcel Smolka
    Abstract: We conduct an empirical investigation into the effects of foreign ownership on worker skills using firm-level data from Spain. To control for endogeneity bias due to selection into foreign ownership, we combine a difference-in-differences approach with a propensity score weighting estimator. Our results provide novel evidence that foreign-acquired firms actively raise the skills of their workforce in response to the acquisition by hiring high-skilled workers and providing worker training. To pin down the mechanism, we exploit unique information on whether firms use their foreign parent in exporting to foreign markets. Our results suggest a fundamental role for market access through the foreign parent in explaining skill upgrading in foreign-acquired firms. We reveal substantial productivity gains within foreign-acquired firms and we show that these gains derive from a concurrent effort to raise worker skills and adopt more advanced technology, suggesting a skill bias in technological innovations. We develop a simple theoretical model of foreign ownership featuring technology-skill complementarities in production that can rationalize our findings.
    Keywords: multinational enterprises, mergers and acquisitions, skill-biased technological change, worker training, productivity
    JEL: D22 D24 F23 G34
    Date: 2018
  8. By: Jose García-Quevedo (University of Barcelona & IEB); Francisco Mas-Verdú (Polytechnic University of Valencia & IEB); Gabriele Pellegrino (École Polytechnique Fédérale de Lausanne)
    Abstract: The availability of information on technology is a key factor in the innovation process. Firms that lack such information thereby face a major barrier to innovation. Yet little is known about the types of companies that lack this information. This paper examines what characterises firms that lack information on technology and analyses how innovative companies can overcome this gap in their knowledge. Empirical analysis was conducted with the Panel of Technological Innovation (PITEC), based on the information from the Spanish version of the Community Innovation Survey (CIS). The analysis leads to three principal conclusions. First, a large number of firms perceive the lack of information on technology as a barrier to innovation. Second, there are notable sector differences in the way firms perceive this barrier: High-tech firms perceive lower levels of this barrier. Third, not all sources of information on technology are equally effective at overcoming this barrier. The most useful sources are consultants, commercial laboratories and private R&D institutes.
    Keywords: Information on technology, barriers to innovation, sources of information, overcoming obstacles
    Date: 2017
  9. By: Eugenio Caverzasi; Daniele Tori
    Abstract: Neo-Schumpeterian economics inspired by the work of Schumpeter and the financial Keynesianism of Minsky are often regarded as unrelated theoretical strands. In this paper, we try to combine these two literatures building on a parallelism between non-financial and financial firms. We focus on recent financial innovations, highlighting how the evolution experienced by US financial institutions led them to transcend their traditional role of credit providers, shaping as 'producers' of financial products, through securitization. This allows on the one hand to broaden the application of Neo-Schumpeterian insights to the financial sector and, on the other, to provide an original explanation of the so-called sub-prime crisis by applying the Financial Instability Hypothesis of Minsky to the alternative context of financial production. We maintain that the 2007-8 crisis was not the result of an innovation in the real sector, but came from an innovation (or a series of innovations) intrinsic to the financial system itself, which fostered credit creation. We argue that this 'cluster of innovations' can be placed under the label 'securitization', defined as the business of packaging and reselling loans, with repo agreements as the main source of funds.
    Keywords: Minsky, Schumpeter, securitization, financial firms, Great Financial Crisis
    JEL: B52 G21 O33
    Date: 2018–12
  10. By: David B. Audretsch; Marian Hafenstein; Alexander S. Kritikos; Alexander Schiersch
    Abstract: A rich literature links knowledge inputs with innovative outputs. However, most of what is known is restricted to manufacturing. This paper analyzes whether the three aspects involving innovative activity - R&D; innovative output; and productivity - hold for knowledge intensive services. Combining the models of Crepon et al. (1998) and of Ackerberg et al. (2015), allows for causal interpretation of the relationship between innovation output and labor productivity. We find that knowledge intensive services benefit from innovation activities in the sense that these activities causally increase their labor productivity. Moreover, the firm size advantage found for manufacturing in previous studies nearly disappears for knowledge intensive services.
    Keywords: MSMEs, R&D, Service Sector, Innovation, Productivity, Entrepreneurship
    JEL: L25 L60 L80 O31 O33
    Date: 2018
  11. By: Tsuji, Masatsugu; Ueki, Yasushi; Shigeno, Hidenori; Bunno, Teruyuki; Idota, Hiroki
    Abstract: This paper attempts to analyze the relationship between ICT and R&D in the innovation process. R&D is categorized into two types: R&D and non-R&D. The former is R&D conducted by specific R&D sections or units, whereas the latter is implemented without explicit or formal units. ICT use in this paper consists of two roles: (i) Internal use of ICT which includes ERP, CRM, CAD/CAM, Groupware, and Intra-SNS; and (ii) External use of ICT which consists of B2B e-commerce, B2C e-commerce, EDI, SCM, and Public-SNS. ICT total contains all of these. Research questions are as follows: (i) whether R&D and formal R&D groups have different innovation processes; (ii) what are the factors of production innovation in R&D groups; and (iii) how ICT use affects (i) and (ii). This study is based on mail surveys in five ASEAN economies, such as Vietnam (Hanoi and Ho Chi Minh City), Indonesia, Laos, the Philippines, and Thailand from 2013 to 2014. The total number of valid responses was 1,061. Ordered probit analysis was employed. The significant variables common to both groups are few. In the R&D group, "ICT total" and "Cross-functional team" was significant variables, whereas in non-R&D group, "ISO9000 series" and "HRD program for workers were significant. From the above estimation results, it is clear that ICT use is positively related to innovation in R&D group, indicating ICT more contributed to their innovation.
    Keywords: internal use,external use,ordered probit,HDR,learning,QC
    Date: 2018
  12. By: Ronald B. Davies
    Abstract: This report presents empirical analysis on the linkage between mergers and acquisition FDI and acquirer innovation efforts. The data indicates that acquisitions tend to result in a spike in research in the two following years. This impact, however, is contingent on industrial linkages between target and acquirer. In particular, nonmanufacturing targets appear to have the largest impact. Further investigation using input-output linkages finds that acquirer R&D increases more when the target is a primary source of inputs for the acquirer. These effects, however, are smaller for Chinese acquirers, suggesting that concerns over whether acquisition of foreign technology is spurring faster Chinese technological growth may be misguided. Finally, these effects are smaller in more concentrated industries, suggesting the need to consider industry concentration when projecting the R&D implications of cross-border mergers.
    Keywords: Innovation; M&A; FDI
    JEL: F23 O31
    Date: 2018–07
  13. By: Jean-François Harvey (HEC Montréal); Henrik Bresman (INSEAD); Amy C. Edmondson (Harvard Business School, Technology and Operations Management Unit)
    Abstract: This paper complements the manager-centered analysis of dynamic capabilities with a team-based approach focused on team learning. We argue that team learning capabilities intertwine with managerial cognitive capabilities to support the processes of sensing, seizing, and reconfiguring. We draw from the literature on team learning to develop four categories based on the orientation (exploration/exploitation) and locus (internal/external) of learning in teams: reflexive, experimental, contextual, and vicarious learning. We integrate these categories into the dynamic capabilities framework to show their particular relevance at different points along the sensing-seizing-reconfiguring pathway, and assess their potential impact on innovation and strategic change. The framework contributes by adding a meso lens to research on dynamic capabilities to help scholars better understand how learning that occurs in teams may support entrepreneurial managers in enacting their cognitive capabilities in service of sustained innovation and superior firm performance.
    Keywords: Dynamic capabilities, Innovation, Strategic change, Team learning
    Date: 2018–12
  14. By: Benoît Desmarchelier (CLERSE - Centre Lillois d’Études et de Recherches Sociologiques et Économiques - UMR 8019 - Université de Lille - ULCO - Université du Littoral Côte d'Opale - CNRS - Centre National de la Recherche Scientifique); Faridah Djellal (CLERSE - Centre Lillois d’Études et de Recherches Sociologiques et Économiques - UMR 8019 - Université de Lille - ULCO - Université du Littoral Côte d'Opale - CNRS - Centre National de la Recherche Scientifique); Faïz Gallouj (CLERSE - Centre Lillois d’Études et de Recherches Sociologiques et Économiques - UMR 8019 - Université de Lille - ULCO - Université du Littoral Côte d'Opale - CNRS - Centre National de la Recherche Scientifique)
    Abstract: This article is dedicated to a consideration of the tertiarisation of innovation networks. While the concept of traditional innovation network (TIN) has been the object of an extensive literature, new expressions of the innovation network appear in a service and sustainable development economy: in particular Public Private Innovation Networks in Services (PPINSs), Public Service Innovation Networks (PSINs) and Public Service Innovation Networks for Social Innovation (PSINSIs). They reflect the rise to prominence of market and non-market services and of the public-private relationship in collaborative innovation. This article investigates and compares these different expressions of innovation networks. In particular, it sheds light on the different roles played by public services in each of them.
    Keywords: market services,public services,networks,innovation
    Date: 2018–09–20
  15. By: Jorge L. Contreras; Bronwyn H. Hall; Christian Helmers
    Abstract: We revisit the effect of the “Eco-Patent Commons” (EcoPC) on the diffusion of patented environmentally friendly technologies following its discontinuation in 2016, using both participant survey and data analytic evidence. Established in January 2008 by several large multinational companies, the not-for-profit initiative provided royalty-free access to 248 patents covering 94 “green” inventions. Hall and Helmers (2013) suggested that the patents pledged to the commons had the potential to encourage the diffusion of valuable environmentally friendly technologies. Our updated results now show that the commons did not increase the diffusion of pledged inventions, and that the EcoPC suffered from several structural and organizational issues. Our findings have implications for the effectiveness of patent commons in enabling the diffusion of patented technologies more broadly.
    JEL: O13 O34 Q55
    Date: 2018–11
  16. By: Francesco Di Comite (European Commission - DG ECFIN); Olga Diukanova (European Commission - JRC); Giovanni Mandras (European Commission - JRC); Javier Gómez Prieto (European Commission - JRC)
    Abstract: In this note we present the economic impact assessment of the European Regional Development Fund (ERDF) for thematic objectives TO1 "Research and innovation" and TO4 "Low-carbon economy" in the region of Apulia, Italy. The results are based on the RHOMOLO-IO demand multiplier analysis and on computer simulations with the multi-regional dynamic computable general equilibrium (CGE) model RHOMOLO. The former approach is used to calculate the sector-specific output multipliers following a demand-side shock, while the CGE simulations provide evidence of significant spillover effects spreading beyond the Apulian borders and stimulating economic growth in other regions with significant trade links with Apulia. Our results suggest that a €536 million increase in demand for the Manufacturing & Construction sector would entail an increase in total value added of €329 million, which is roughly 0.46% of the regional GDP. The RHOMOLO simulations show that the effects of policy interventions reach their peak in the last years of ERDF programming period (2020-2022), when the absorption of investment funding is at its full potential. In 2022, T01 and T04 investments of the ERDF increase Apulian by 0.2% above the baseline GDP projections. Given the high import intensity of the region, only one fourth of the overall effect is driven by the direct investments and three fourths depend on the productivity improvements achieved as a result of the specific policy design. This demonstrates that the implementation of policies that are effective in raising productivity ensures long term economic benefits even in the absence of continuous funding.
    Keywords: rhomolo, region, growth, smart specialisation, investment, impact assessment, modelling
    JEL: C54 C68 E62
    Date: 2018–11

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