nep-ino New Economics Papers
on Innovation
Issue of 2019‒03‒04
twelve papers chosen by
Uwe Cantner
University of Jena

  1. Networks and Spillovers in Software in Israeli Hi-Tech By Cohen, Shani; Gandal, Neil
  2. Productivity Panics – Polemics and Realities By Auerbach, Paul
  3. The impact of stock options on risk-taking: Founder-CEOs and innovation By Hickfang, Michael; Holder, Ulrike
  4. Specialisation, diversification and the ladder of green technology development By François Perruchas; Davide Consoli; Nicolò Barbieri
  5. Back in Business: Industrial Policy for Emerging Economies in the New Globalization By Berglof, Erik; Cable , Vince
  6. The past and Future of Manufacturing in Central and Eastern Europe: Ready for Industry 4.0? By Naudé, Wim; Surdej, Aleksander; Cameron, Martin
  7. Materialism and Economic Progress By Lingguo Xu; Peter E. Earl; D. S. Prasada Rao
  9. Trademarks and Appropriability in the Digital Era: Evidences from Swedish Video Games Industry By Long, Vicky; Domeij, Bengt
  10. Evolution of entrepreneurial teams in technology-based new ventures By Zabara, Tatiana
  11. The Employment Effects of Technological Innovation, Consumption, and Participation in Global Value Chains: Evidence from Developing Asia By Bertulfo, Donald Jay; Gentile, Elisabetta; de Vries , Gaaitzen J.
  12. Higher Education Subsidy Policy and R&D-based Growth By Takaaki Morimoto; Ken Tabata

  1. By: Cohen, Shani; Gandal, Neil
    Abstract: A large literature has used patent data to measure knowledge spillovers across inventions but has not explicitly considered the collaboration networks formed by inventors as a mechanism for shaping these knowledge flows. Using a recently developed methodology, we examine the incidence and nature of knowledge flows mediated by the collaboration networks of inventors. We apply this methodology to three sectors in which programming skills are vital: (i) Information and Communication Technology/Information Security (ICT/IS) (ii) Financial Technology (Fin-Tech,) and (iii) Medical Technology (Med-Tech.) These are all areas of innovation in which Israel should have a comparative advantage. We find the following: (I) the quality of the Israeli ICT/information security inventions is systematically linked to the structure of the collaborative network. In particular, we find positive and significant direct and indirect knowledge spillovers. (II) We find no evidence of such spillovers in either Fin-Tech or Med-Tech.
    Date: 2019–01
  2. By: Auerbach, Paul (Kingston University London)
    Abstract: Widespread uneasiness has emerged concerning a perceived slowdown in productivity growth. The question posed here is whether our destiny is indeed tied to inexorable movements in productivity and innovation, whatever these things may be, or can we build a future contingent upon collective choices and guided by human needs and desires?
    Keywords: Artificial Intelligence; innovation; productivity; Schumpeter; technological change; total factor productivity.
    JEL: O10 O30 O33 O40 O47
    Date: 2019–02–25
  3. By: Hickfang, Michael; Holder, Ulrike
    Abstract: This paper investigates whether and how founder-CEOs' risk incentives (VEGA) are related to firm innovation. We exploit a change in the accounting treatment of stock-based compensation under FAS 123R in 2005 to show a relationship between founders' risk-taking incentive and innovation. Using a sample of 226 firm-year observations between 2002 and 2008, we first show that stock options are incentives that encourage founder-CEOs to engage in risk-taking behaviour and that these were significantly reduced as a result of FAS 123R. Secondly, we find that innovation activities of the observed firms are significantly declining due to the reduction of the option compensation and the associated reduction in VEGA of founder-CEOs. Finally, our difference-in-differences approach provides strong evidence that there is a relationship between CEOs risk-taking and innovation output. Our results imply that even in founder-led firms it is important to incentivise founders' risk-taking behaviour in order that firms continue to innovate and remain competitive.
    JEL: G30 G32 G38 D80 O31
    Date: 2018
  4. By: François Perruchas (INGENIO [CSIC-Universitat Politecnica de Valencia], Spain); Davide Consoli (INGENIO [CSIC-Universitat Politecnica de Valencia], Spain); Nicolò Barbieri (University of Ferrara, Italy)
    Abstract: This paper elaborates an empirical analysis of the temporal and geographical distribution of green technology, and on how specific country characteristics enable or thwart environmental inventive activities. Using patent data on 63 countries over the period 1970-2012 we identify key drivers of cross-country diversification and specialization. Our first finding is that countries diversify towards green technologies that are related to their existing competences. Notably, the maturity of the green technology matters more than the level of development of each country. The second main result is that countries move along cumulative paths of specialization, and towards more complex green technologies. Interestingly, the complexity of green technologies is not an obstacle to further specialisation. The latter holds also for developing countries that are most exposed to climate change hazards.
    Keywords: Environmental Technology; Technological diversification; Technological specialisation
    JEL: O14 O33 Q55
    Date: 2019–02
  5. By: Berglof, Erik (London School of Economics); Cable , Vince (London School of Economics)
    Abstract: We explore the potential roles of industrial policy in the transition from middle-income to high-income status, and the actual experience of industrial policy in emerging economies. Guided by the conceptual framework of the neo-Schumpeterian approach, we look at industrial policy in the context of structural transformation, i.e., in transforming economic structures as well as the institutions supporting these structures. Today’s emerging economies face a dual structural transformation challenge: (i) to move closer to the current world technology frontier (traditional catch-up), and (ii) to adjust to technological change in advanced economies and increasingly binding environmental and social constraints. The feasible set of industrial policy is constrained by state capacity. The paradox of industrial policy is that it is most straightforward when state capacity is the most constrained. We suggest that emerging economies still should explore what we denote as sector-based horizontal policies addressing market and state failures in individual industries.
    Keywords: emerging economies; industrial policy; innovation; state capacity; structural transformation
    JEL: F43 L52 O31 O38 O43 O47
    Date: 2018–02–20
  6. By: Naudé, Wim (Maastricht University); Surdej, Aleksander (OECD); Cameron, Martin (Trade Advisory Research (Pty) Ltd)
    Abstract: In this paper we determine the industry 4.0 (I4.0) readiness of eight Central and Eastern European countries (CEECs): Bulgaria, the Czech Republic, Lithuania, Hungary, Poland, Romania, the Slovak Republic and Slovenia. We outline the nature of manufacturing in the region, describe three distinct time periods of industrialization since 1990, and explain the nature of I4.0. Using measures reflecting three key dimensions of I4.0-readiness, namely technological, entrepreneurial and governance competencies, we find that the Czech Republic, Lithuania, Hungary and Slovenia are most I4.0-ready, and that Bulgaria, Slovakia, Romania and Poland are the least ready of the CEECs. We make a number of recommendations. All the countries in the region could do more to promote entrepreneurship; to diversify and grow manufacturing export markets through focused trade facilitation and competitive exchange rates; and to cooperate regionally on industrial policy - through for instance establishing a regional CEEC I4.0 Platform.
    Keywords: industrialization, technology, manufacturing, innovation, entrepreneurship, Eastern and Central Europe, industry 4.0, industrial policy
    JEL: O14 O25 O33 O52 P27
    Date: 2019–02
  7. By: Lingguo Xu (School of Economics, The University of Queensland); Peter E. Earl (School of Economics, The University of Queensland); D. S. Prasada Rao (School of Economics, The University of Queensland)
    Abstract: Most empirical studies on the impact of materialism have focused on its effects at the micro-level, such as on individual wellbeing. This paper explores one of the macroeconomic impacts of materialism: its relationship with economic progress. A new conceptualization of materialism based on self-identity construction is offered and used to hypothesize that materialism drives economic progress by encouraging consumption and innovation. This analysis is tested using a survey item from the World Values Survey as an index for materialism. The empirical results, based on a short panel of data covering 74 nations and two periods, provide sufficient support to the conclusion that materialism can be a positive force for economic progress.
    Keywords: Materialism; consumption; innovation; economic growth; economic progress; World Values Survey
    JEL: O11 O40 P36
    Date: 2019–02–26
  8. By: Lauriane Dewulf; Michele Cincera
    Abstract: The objective of this paper is twofold. First, it provides further knowledge about profitability of industry scientific publications as it is not clear yet whether industry scientific publications are profitable to firms. Second, it considers the central role of academic partners in the profitability of firms’ scientific publications as previous empirical studies do not consider such role. To investigate the subject, we perform several regressions with firms profits as dependent variable. The results provide evidence that the publication of scientific articles is not a profitable activity. Collaborations with academic institutions are the real basis of profitable results; the production of scientific publications is only one of the consequences of these collaborations. This study also shows that not all collaborations are profitable, only collaborations in high-tech sectors that lead to high-quality publications lead to larger profits. Indeed, in their quest for survival and profitability, companies competing in high-tech sectors often need the help of academic partners to exploit scientific knowledge. On average, a rise of about 8% in successful collaborations (leading to high-quality publications) raises the profit of high-tech firms by about 1%.
    Keywords: Industry-academic collaborations, scientific publications, industrial science, firms’ profit
    Date: 2018–12
  9. By: Long, Vicky (The Ratio Institute); Domeij, Bengt (The Ratio Institute)
    Abstract: What role can trademark play in appropriability regime, especially in a digitalized era where many innovations are easy to copy and difficult to protect, and where rapid diffusion is the norm? This study, using the Swedish video games industry as a case, aims to provide some insights and tentative answers to those questions. Combining firm-level interviews, statistical data concerning EUIPO trademarks filed by the Swedish video games industry, we present the quantitative trends of trademarking across this industry sector (i.e. timeline; distribution across technological platforms and firm sizes; correlation with turnover), as well as qualitative explanations for that. This study contributes to a meso-level explanation of the role of trademarks (registrations) in appropriability on the one hand, and to the understanding of the complexity of the general appropriability conditions (and logic) in the Digital Era, on the other.
    Keywords: Intellectual Property Rights (IPRs); Appropriability; Video Games; Digitalization; Innovation; Vicky Long; Bengt Domeij
    JEL: O32 O34
    Date: 2019–02–18
  10. By: Zabara, Tatiana (Tilburg University, School of Economics and Management)
    Abstract: The doctoral dissertation consists of one literature review and two empirical studies in the field of entrepreneurial teams in technology-based new ventures. The first chapter is a systematic literature review that critically maps the current state of the art in research on teams in academic entrepreneurship. The second chapter examines the role of a lead founder’s personality in the entrepreneurial team formation. The third chapter investigates multilevel antecedents of a new managerial hire in technology-based new venture teams.
    Date: 2019
  11. By: Bertulfo, Donald Jay (Asian Development Bank); Gentile, Elisabetta (Asian Development Bank); de Vries , Gaaitzen J. (University of Groningen)
    Abstract: Global value chains (GVCs) have been a vehicle for job creation in developing Asia, but there is mounting concern that more sophisticated and cost-effective technology could displace workers through automation or reshoring of production. We use the demand-based input–output approach in Reijnders and de Vries (2018) to examine how employment responded to consumption, trade, and technological advances in 12 economies that accounted for 90% of employment in developing Asia during the period 2005–2015. Structural decomposition analysis based on the Asian Development Bank Multiregional Input–Output Tables combined with harmonized cross-country occupation data indicates that, other things being equal, technological change within GVCs was associated with a decrease in labor demand across all sectors, and an increase in the share of nonroutine cognitive occupations. We also find that increased domestic consumption expenditures of goods and services generated an increase in labor demand large enough to offset the negative employment impact of technological change. Finally, we do not find evidence of major shifts in occupational labor demand due to reshoring.
    Keywords: developing Asia; employment; global value chains; reshoring; task relocation; technology
    JEL: D57 J21 O14
    Date: 2019–02–26
  12. By: Takaaki Morimoto (Graduate School of Economics, Osaka University,Institute of Social and Economic Research, Osaka University, Japan); Ken Tabata (School of Economics, Kwansei Gakuin University)
    Abstract: We examine how a subsidy policy for encouraging more individuals to pursue higher education affects economic growth in an overlapping generations model of R&D-based growth, including both product development and process innovation. We show that such a policy may have a negative effect on the long-run economic growth rate. When the market structure adjusts partially in the short run, the effect of an education subsidy on economic growth is ambiguous and depends on the values of the parameters. However, when the market structure adjusts fully in the long run, the education subsidy expands the number of firms but reduces economic growth. These unfavorable predictions of an education subsidy on economic growth are partly consistent with the empirical findings that mass higher education does not necessarily lead to higher economic growth.
    Keywords: Higher Education, Occupational Choice, R&D, Product Development, Process Innovation
    Date: 2018–02

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.
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