nep-ino New Economics Papers
on Innovation
Issue of 2019‒01‒21
nine papers chosen by
Uwe Cantner
University of Jena

  1. Moderate innovator trap – Does convergence of innovative potential occur? By Rybacki, Jakub; Kowalski, Arkadiusz Michał
  2. The impact of private R&D on the performance of food-processing firms: Evidence from Europe, Japan and North America By Pedro Andres Garzon Delvaux; Heinrich Hockmann; Peter Voigt; Pavel Ciaian; Sergio Gomez y Paloma
  3. Technological Spillover Effects of State Renewable Energy Policy: Evidence from Patent Counts By Wancong Fu; Chong Li; Jan Ondrich; David Popp
  4. Firm Size and Innovation in the Service Sector By Audretsch, David; Hafenstein, Marian; Kritikos, Alexander S.; Schiersch, Alexander
  5. Threshold Policy Effects and Directed Technical Change in Energy Innovation By Lionel Nesta; Elena Verdolini; Francesco Vona
  6. Habitual Entrepreneurs in the Making: How Labour Market Rigidity and Employment Affects Entrepreneurial Re-entry By Wennberg, Karl; Larsson, Anne-Sophie; Fu, Kun
  7. Artificial Intelligence, Jobs, Inequality and Productivity: Does Aggregate Demand Matter? By Gries, Thomas; Naudé, Wim
  8. Learning by Viewing? Social Learning, Regulatory Disclosure, and Firm Productivity in Shale Gas By T. Robert Fetter; Andrew L. Steck; Christopher Timmins; Douglas Wrenn
  9. Invisible Geniuses: Could the Knowledge Frontier Advance Faster? By Ruchir Agarwal; Patrick Gaulé

  1. By: Rybacki, Jakub; Kowalski, Arkadiusz Michał
    Abstract: Based on β and σ convergence analysis, we find high persistence of technological gap for international innovation indices reported by the European Commission. Our research confirms the diverging scientific potential across the analyzed economies. On the other hand, estimation provides the evidence of convergence in case of R&D expenses and relative position on global technological frontier. We propose a simple fixed effect panel regression measuring relative innovativeness potential. Our model suggests that current ranking leaders i.e. Nordic countries (Sweden, Denmark and Finland) and Germany are likely to further outpace the United States. Central and Eastern Europe countries are achieving greatest relative gains, but are unlikely to exceed 70% of US potential. Peripheral Europe countries, South Africa, Turkey and Russia are projected to further lose innovativeness position, despite weaker initial position.
    Keywords: β convergence, σ convergence, European Innovation Scoreboard, moderate innovators.
    JEL: O3 O30 O33
    Date: 2018–12–19
  2. By: Pedro Andres Garzon Delvaux (European Commission – JRC); Heinrich Hockmann (Leibniz Institute of Agricultural Development in Central and Eastern Europe (IAMO) (Halle, Germany)); Peter Voigt (European Commission – DG ECFIN); Pavel Ciaian (European Commission – JRC); Sergio Gomez y Paloma (European Commission – JRC)
    Abstract: This report investigates the impact of corporate research and development (R&D) on firm performance in the food-processing industry. The agro-food industry is usually considered to be a low-tech sector (the share of total output that is attributable to R&D is around 0.27% in the EU). However, the agro-food industry is very heterogeneous. On the one hand, there are many highly innovative food-processing firms with intensive R&D activity and, on the other hand, many food-processing firms derive and adopt innovations from other sectors such as machinery, packaging and other manufacturing suppliers. We perform data envelopment analysis (DEA) with two-step bootstrapping, which allows us to correct the bias in (in)efficiency and generate unbiased estimates for (in)efficiencies. We use a corporate dataset of 307 companies from agriculture and food-processing industries from the EU, the USA, Canada and Japan for the period 1991–2009. The estimates suggest that R&D has a positive effect on firms’ performance, with marginal gains decreasing at the R&D level, and performance differences detected across regions and food sectors. General public expenditure in R&D is also associated with a positive impact on firm performance. As a result, policy support for this type of non-high-tech innovative sector is expected to generate growth. However, results that suggest heterogeneity in R&D effects across EU Member States may point to differences in the implications of innovation policies across EU regions.
    Keywords: Research and development, corporate R&D, productivity, technical efficiency, stochastic frontier analysis, DEA, double bootstrapping, agro-food, food-processing industry
    JEL: L66 O16 O30 Q16
    Date: 2018–09
  3. By: Wancong Fu; Chong Li; Jan Ondrich; David Popp
    Abstract: We examine the effect of in-state and out-of-state renewable energy policies on wind energy patenting. Using a semiparametric fixed-effects Tobit model, we regress patent counts on a series of policy variables within a state and a spatially weighted average for each of these policies implemented in other states. We develop a lower bound for the marginal effects and find important differences across policy types. For renewable portfolio standards, overall demand matters. Policies in other states increase innovation, but own-state policies do not. In contrast, for financial incentives such as tax incentives and subsidy policies, own-state policies induce innovation.
    JEL: C40 O31 Q42 Q48 Q55
    Date: 2018–12
  4. By: Audretsch, David (Indiana University); Hafenstein, Marian (DIW Berlin); Kritikos, Alexander S. (DIW Berlin); Schiersch, Alexander (DIW Berlin)
    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: 2018–12
  5. By: Lionel Nesta (GREDEG - Groupe de Recherche en Droit, Economie et Gestion - UNS - Université Nice Sophia Antipolis - UCA - Université Côte d'Azur - CNRS - Centre National de la Recherche Scientifique, OFCE - OFCE - Sciences Po); Elena Verdolini (Fondazione Eni Enrico Mattei (FEEM), Milan - affiliation inconnue); Francesco Vona (OFCE - OFCE - Sciences Po)
    Date: 2018–12–07
  6. By: Wennberg, Karl (Linköping University); Larsson, Anne-Sophie (The Ratio Institute); Fu, Kun (Loughborough University London)
    Abstract: We investigate the impact of country-level labour market regulations on the reentry decision of experienced entrepreneurs, whereby they become habitual entrepreneurs. Multilevel logit models on entry decisions among 15,709 individuals in 29 European countries show that labour market regulations have a positive influence on the decision to reenter into entrepreneurship. This positive impact is stronger among individuals holding wage jobs at the time of re-entry compared to those that do not. Our results indicate that novice and habitual entrepreneurs may respond very differently to labour market rigidity. We discuss and provide tentative explanations for these differences, and outline potential policy implications.
    Keywords: Habitual entrepreneurship; employment; labour market rigidity; institutional context; multilevel modelling
    JEL: J24 J41 K31 L26
    Date: 2018–12–10
  7. By: Gries, Thomas (University of Paderborn); Naudé, Wim (Maastricht University)
    Abstract: Rapid technological progress in artificial intelligence (AI) has been predicted to lead to mass unemployment, rising inequality, and higher productivity growth through automation. In this paper we critically re-assess these predictions by (i) surveying the recent literature and (ii) incorporating AI-facilitated automation into a product variety-model, frequently used in endogenous growth theory, but modified to allow for demand-side constraints. This is a novel approach, given that endogenous growth models, and including most recent work on AI in economic growth, are largely supply-driven. Our contribution is motivated by two reasons. One is that there are still only very few theoretical models of economic growth that incorporate AI, and moreover an absence of growth models with AI that takes into consideration growth constraints due to insufficient aggregate demand. A second is that the predictions of AI causing massive job losses and faster growth in productivity and GDP are at odds with reality so far: if anything, unemployment in many advanced economies is historically low. However, wage growth and productivity is stagnating and inequality is rising. Our paper provides a theoretical explanation of this in the context of rapid progress in AI.
    Keywords: technology, artificial intelligence, productivity, labour demand, innovation, growth theory
    JEL: O47 O33 J24 E21 E25
    Date: 2018–11
  8. By: T. Robert Fetter; Andrew L. Steck; Christopher Timmins; Douglas Wrenn
    Abstract: In many industries firms can learn about new technologies from other adopters; mandatory disclosure regulations represent an understudied channel for this type of social learning. We study an environmentally-focused law in the shale gas industry to examine firms’ claims that disclosure requirements expose valuable trade secrets. Our research design takes advantage of a unique regulatory history that allows us to see complete information on chemical inputs prior to disclosure, along with the timing of information availability for thousands of wells after disclosure takes effect. We find that firms’ chemical choices following disclosure converge in a manner consistent with inter-firm imitation and that this leads to more productive wells for firms that carefully choose whom to copy — but also a decline in innovation among the most productive firms, whose innovations are those most often copied by other firms. Our results suggest there is a long-run welfare trade-off between the potential benefits of information diffusion and transparency, and the potential costs of reduced innovation.
    JEL: L24 L51 L71 O3 Q53 Q55 Q58
    Date: 2018–12
  9. By: Ruchir Agarwal; Patrick Gaulé
    Abstract: The advancement of the knowledge frontier is crucial for technological innovation and human progress. Using novel data from the setting of mathematics, this paper establishes two results. First, we document that individuals who demonstrate exceptional talent in their teenage years have an irreplaceable ability to create new ideas over their lifetime, suggesting that talent is a central ingredient in the production of knowledge. Second, such talented individuals born in low- or middle-incomecountries are systematically less likely to become knowledge producers. Our findings suggest that policies to encourage exceptionally-talented youth to pursue scientific careers–especially those from lower income countries–could accelerate the advancement of the knowledge frontier.
    Date: 2018–12

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