nep-ino New Economics Papers
on Innovation
Issue of 2019‒01‒14
thirteen papers chosen by
Uwe Cantner
University of Jena

  1. Exploring the Impact of R&D on Patenting Activity in Small Women-Owned and Minority-Owned Entrepreneurial Firms By Link, Albert; van Hasselt, Martijn
  2. Entrepreneurial Spillovers from Corporate R&D By Tania Babina; Sabrina T. Howell
  3. Disclosure and Subsequent Innovation: Evidence From the Patent Depository Library Program By Furman, Jeffrey L.; Nagler, Markus; Watzinger, Martin
  4. Linking content and technology: On the geography of innovation networks in the Bergen media cluster By Martin, Roman; Rypestøl , Jan Ole
  5. A Public Sector Knowledge Production Function By Link, Albert; van Hasselt, Martijn
  6. Advancing Conceptualization of University Entrepreneurship Ecosystems: The Role of Knowledge-based Entrepreneurial Firms By Link, Albert; Sarala, Riikka
  7. How disruptive are disruptive operators? By Vialle, Pierre; Whalley, Jason; Parisot, Xivier
  8. A Study of Startups in Hong Kong By Lee, Paul S. N.
  9. Racing With or Against the Machine? Evidence from Europe By Gregory, Terry; Salomons, Anna; Zierahn, Ulrich
  10. R&D expenditures - growth nexus in Turkey By Ulger, Ozlem; Uçan, Okyay
  11. Technological Diversification and Smart Specialization: the role of cooperation By Artur Santoalha
  12. The innovation debt penalty: cost of debt, loan default, and the effects of a public loan guarantee on high-tech firms By Cowling, Marc; Ughetto, Elisa; Lee, Neil
  13. Adoption of AI in Firms and the Issues to be Overcome - An Empirical Analyses of the Evolutionary Path of Development by Firms By Miyazaki, Kumiko; Sato; Ryusuke

  1. By: Link, Albert (University of North Carolina at Greensboro, Department of Economics); van Hasselt, Martijn (University of North Carolina at Greensboro, Department of Economics)
    Abstract: The relevant economics literature on the impact of R&D on patenting activity falls within two methodological areas of inquiry. The first area might be classified as a test of the Schumpeterian hypothesis. The second and lesser research area might be classified as an estimation of the knowledge production function relationship between R&D and patenting. This paper focuses on estimates of the R&D-to-patenting relationship for a random sample of small, entrepreneurial firms whose research projects were supported through the U.S. Small Business Innovation Research (SBIR) program. Our paper contributes to the R&D-to-patenting literature in two ways. It examines empirically a unique set of small, entrepreneurial firms funded by the public sector, and it explores the effect of the gender and ethnicity of firm owners on the propensity of their firms to patent from funded research projects.
    Keywords: Patenting; R&D; Entrepreneurship; Gender; Minorities;
    JEL: J15 J16 L26 O32 O34
    Date: 2019–01–04
  2. By: Tania Babina; Sabrina T. Howell
    Abstract: This paper documents that corporate R&D investment increases employee departures to entrepreneurship. We use U.S. Census data, and instrument for R&D with its tax credit-induced cost. The ideas or skills that spill into startups seem to benefit from focused, high-powered incentives; for example, R&D-induced startups are much more likely to receive venture capital. The effect also seems to reflect ideas or skills that are poor complements to the firm’s assets. As human capital is inalienable and portable, and startups are crucial to economic growth, R&D-induced labor reallocation to startups appears to be a novel channel of R&D spillovers.
    JEL: G3 O3
    Date: 2018–12
  3. By: Furman, Jeffrey L. (Boston University Questrom School of Business); Nagler, Markus (LMU Munich); Watzinger, Martin (LMU Munich)
    Abstract: How important is information disclosure through patents for subsequent innovation? To answer this question, we examine the expansion of the USPTO Patent Library system after 1975. Before the Internet, patent libraries gave inventors access to patent documents. We find that after patent library opening, local patenting increases by 17% relative to control regions. Additional analyses suggest that the disclosure of technical information is the mechanism underlying this effect: inventors start to cite more distant prior art and the effect ceases after the introduction of the Internet. Our analyses thus provide evidence that disclosure plays an important role in cumulative innovation.
    Keywords: ;
    Date: 2019–01–08
  4. By: Martin, Roman (Gothenburg University); Rypestøl , Jan Ole (University of Agder)
    Abstract: This paper deals with the geography of innovation networks and analyses combinatorial knowledge dynamics from a single cluster perspective. Addressing firms in the media cluster in Bergen, Norway, we examine how and from where companies acquire and combine different types of knowledge for their innovation activities. The empirical analysis, which is based on structured interviews with 22 media companies, identifies two main types of cluster firms: media content providers that rely heavily on symbolic knowledge and media technology providers that draw mostly on synthetic knowledge. Even though they draw on different knowledge bases, the two types of firms are strongly interlinked in their innovation activities and source knowledge from each other. Furthermore, we find that synthetic firms constitute a gateway to the regional R&D system and that the region acts as key arena for the combination of dissimilar knowledge bases.
    Keywords: innovation networks; knowledge bases; creative industries; new media; Norway
    JEL: L82 O14 O30 O31
    Date: 2019–01–07
  5. By: Link, Albert (University of North Carolina at Greensboro, Department of Economics); van Hasselt, Martijn (University of North Carolina at Greensboro, Department of Economics)
    Abstract: There are no studies of the R&D-to-patenting relationship at the federal agency level. We estimate a public sector knowledge production function using federal agency patent application data over the years 2003 through 2014. We find that the patent application elasticity with respect to per capita R&D spending is about 1.06. This measure might be interpreted as one dimension of the social returns to public sector R&D generated through newly created knowledge.
    Keywords: Patents; R&D; Knowledge production function; Technology transfer
    JEL: H11 O31 O33
    Date: 2019–01–04
  6. By: Link, Albert (University of North Carolina at Greensboro, Department of Economics); Sarala, Riikka (University of North Carolina at Greensboro, Department of Management)
    Abstract: University entrepreneurship ecosystems are increasingly important in facilitating innovation and entrepreneurial opportunities in today’s knowledge-based economies. However, we have an incomplete understanding of the role of the entrepreneurial firm as the key user of university knowledge. We propose that use of university knowledge positively influences entrepreneurial firm performance and that the entrepreneurial firm’s resource and capabilities facilitate its ability to create value from university knowledge. We test our hypotheses with survey data on knowledge intensive entrepreneurial firms from 10 European countries. Our study contributes to an increased understanding of the economic, societal, and technological contributions of universities by illustrating empirically the role of entrepreneurial firm’s resources and capabilities as moderators of value in university ecosystems.
    Keywords: entrepreneurship; strategic behavior; university-based knowledge; European Union;
    JEL: L26 O31
    Date: 2019–01–04
  7. By: Vialle, Pierre; Whalley, Jason; Parisot, Xivier
    Abstract: The issue of disruptive operators has recently gained interest among researchers and regulators. From a regulator's perspective, disruptive operators can increase competitive rivalry in markets dominated by a handful of large companies, thus allowing consumers to obtain more benefits in terms of price and quality. However, the "disruptive" qualification of an operator in related studies does not rely on a precise definition of disruption. The disruption theory, as developed by Christensen, provides such a definition but may be too restrictive. In addition, it may not be adapted to the analysis of disruption in regulated industries such as telecommunications. In this paper, we aim at deepening our understanding of disruption in the case of the Telecommunications industry, by analysing cases of mobile operators who entered the industry thanks to 3G or 4G licences. To this end we first analyse the disruption theory literature and highlight its characteristics and limitations. It allows us to propose an eclectic analytical framework of disruptive innovations that does not restrict to Christensen's theory. We then apply it to different cases of disruptive mobile operators in order to identify the level and pattern of disruption inherent to each case, and to compare them. We conclude by discussing our findings and further research perspectives.
    Keywords: Disruption,innovation,telecommunications,regulated industries,business model,strategy,policy
    Date: 2018
  8. By: Lee, Paul S. N.
    Abstract: This study examines the factors contributing to the success of startups in attaining a unicorn status by comparing three successful companies, namely, WeLab, SenseTime, and GoGoVan. We investigate the development of these startups and the various stages of their growth, with a focus on the success factors for getting continuing funding from various sources. We found that a competitive business model of a startup is a first factor to nurture a unicorn. The second factor is the executive power of the founder(s). Almost without exception, there are ups and downs of running a startup, which highlights the importance of leadership. The founders do not need only vision and passion, but soft skills in managing the business and attracting financial support as well. We also found that all three startups have a "China" element. The attractiveness to Chinese market and capital seems to be a must for Hong Kong unicorn to come into shape. Interestingly, profit is not that important a factor for a startup to become a unicorn. Very often, investors buy on the potential of the startup rather than immediate profit. The four factors, namely, competitiveness, executive power of founder(s), attractiveness to Chinese market and capital, and future potential have proved to be important for a startup to succeed in Hong Kong. At the end of the paper, we discuss three different models of running a successful startup. It ranges from facilitating financial loans, using innovative AI technology to solve specific problems, to providing a one-stop e-commerce platform. We anticipate that more startups will succeed in Hong Kong since the unicorns have thrown light on the path which latecomers can follow.
    Date: 2018
  9. By: Gregory, Terry (IZA); Salomons, Anna (Utrecht University); Zierahn, Ulrich (ZEW Mannheim)
    Abstract: A fast-growing literature shows that digital technologies are displacing labor from routine tasks, raising concerns that labor is racing against the machine. We develop a task-based framework to estimate the aggregate labor demand and employment effects of routine-replacing technological change (RRTC), along with the underlying mechanisms. We show that while RRTC has indeed had strong displacement effects in the European Union between 1999 and 2010, it has simultaneously created new jobs through increased product demand, outweighing displacement effects and resulting in net employment growth. However, we also show that this finding depends on the distribution of gains from technological progress.
    Keywords: labor demand, employment, routine-replacing technological change, tasks, local demand spillovers
    JEL: E24 J23 J24 O33
    Date: 2019–01
  10. By: Ulger, Ozlem; Uçan, Okyay
    Abstract: Technological development and investment in knowledge seem to be very important in order for countries to demonstrate effective growth performance. The first concept that comes to mind when investing in information is the R&D activities. In the past, efforts to develop in countries for years can be realized within months nowadays and technological developments have rapidly changed and can be worn out in a short period of time. Therefore, it can be said that the information economy is the speed economy. The aim of this study is to investigate the relationship between R&D expenditures and GDP in Turkey for the period 1996-2014 with the help of VAR analysis. Before the study, it was determined whether the series were stationary by Augmented Dickey Fuller (ADF) and Phillips-Peron (PP) unit root tests and it was determined that the variables of GDP and R&D expenditure were stationary in the level values. According to the results of variance decomposition and effect-response functions; It is seen that the effect of GDP changes in Turkey on R&D expenditures is negligible. However, it is seen that R&D expenditures are significantly affected by the changes in GDP. Ülkelerin etkili bir büyüme performansı gösterebilmesi için teknolojik gelişmenin ve bilgiye yatırım yapılmasının oldukça önemli olduğu görülmektedir. Bilgiye yapılan yatırım denilince de ilk akla gelen kavram Ar-Ge faaliyetleridir. Geçmişte ülkelerde yıllarca devam eden gelişme çabaları günümüzde aylar içinde gerçekleşebilmekte ve teknolojik gelişmeler hızlı bir şekilde değişim göstererek kısa bir süre içinde yıpranabilmektedir. Dolayısıyla bilgi ekonomisinin hız ekonomisi olduğu söylenebilir. Bu çalışmanın amacı, Türkiye’de 1996-2014 dönemi için Ar-Ge harcamaları ve GSYİH arasındaki ilişkiyi VAR analizi yardımıyla araştırmaktır. Çalışmada önce durağanlığın belirlenmesi için Augmented Dickey Fuller (ADF) ve Phillips-Peron (PP) birim kök testiyle serilerin durağan olup olmadıkları belirlenmiş ve GSYİH ile Ar-Ge harcamaları değişkenlerinin seviye değerlerinde durağan oldukları tespit edilmiştir. Varyans ayrıştırma ve etki-tepki fonksiyonlarına ait sonuçlara göre; Türkiye’de GSYİH değişimlerinin Ar-Ge harcamaları üzerinde etkisinin yok denilebilecek kadar az olduğu görülmüştür. Ancak Ar-Ge harcamalarının GSYİH’daki değişimlerden oldukça etkilendiği görülmektedir
    Keywords: R&D Investments, R&D Incentives, Technological Development, Economic Growth, Innovation, AR-GE Yatırımları, AR-GE Teşvikleri, Teknolojik Gelişme, Ekonomik Büyüme, İnovasyon
    JEL: L60
    Date: 2018–04–04
  11. By: Artur Santoalha (TIK Centre, University of Oslo)
    Abstract: Smart Specialization is closely associated with the concept of diversification. For better understanding of Smart Specialization, this article investigates one novel explanatory factor of technological diversification: cooperation (distinguishing between cooperation within regions and cooperation between regions). Using OECD REGPAT data on patents co-applications, the empirical analysis measures the role of cooperation between institutions on technological diversification in 226 European regions over 10 periods of 5 years each, 2000–2013. Although cooperation within and between regions is important as a determinant of regional diversification, both forms of cooperation should evolve hand in hand – singly, each form of cooperation may prove ineffective for boosting regional diversification.
    Date: 2019–01
  12. By: Cowling, Marc; Ughetto, Elisa; Lee, Neil
    Abstract: High-technology firms per se are perceived to be more risky than other, more conventional, firms. It follows that financial institutions will take this into account when designing loan contracts, and that this will manifest itself in more costly debt. In this paper we empirically test whether the provision of a government loan guarantee fundamentally changes the way lenders price debt to high-tech firms. Further, we also examine whether there are differential loan price effects of a public guarantee depending on the nature of the firms themselves and the nature of the economic and innovation environment that surrounds them. Using a large UK dataset of 29,266 guarantee backed loans we find that there is a high-tech risk premium which is justified by higher default, but, in general, that this premium is altered significantly when a public guarantee is provided for all firms. Further, all these loan price effects differ on precise spatial economic and innovation attributes.
    Keywords: cost of debt; high-tech firms; public loan guarantee scheme; loan default
    JEL: G21 G28
    Date: 2018–02–01
  13. By: Miyazaki, Kumiko; Sato; Ryusuke
    Abstract: AI has been through several booms and we have currently reached the 3rd AI boom. Although AI has been evolving over six decades it seems that the current boom is different from the previous booms. In this paper, we attempt to elucidate the issues for widespread adoption of AI in firms. Through one of the authors work experience related to AI, it appears that although companies are willing to consider adopting AI for various applications, only a few are willing to make a commitment to go for full scale adoption. The main goal of this paper is to identify the characteristics of the current 3rd AI boom and to analyze the issues for adoption by firms. For this purpose we have put forward 3 research questions. 1) How has the technological performance in AI changed at the national level during the 2nd and the 3rd boom? 2) How have the key technologies and the applications of AI changed over time? 3) How is the companies' perspective on AI and what are the necessary conditions for firms to adopt AI? Through bibliometric analysis, we were able to extract the important keywords in the 3rd AI boom, which were Machine learning and Deep learning. The main focus of AI research has been shifting towards AI applications. The interviews with firms which were considering adopting AI suggested the existence of a gap between the needs of the company and what AI can deliver at present. AI could be used for finding suitable treatment for genetic illnesses if some issues are solved.
    Date: 2018

This nep-ino issue is ©2019 by Uwe Cantner. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.