nep-ino New Economics Papers
on Innovation
Issue of 2019‒04‒29
eleven papers chosen by
Uwe Cantner
University of Jena

  1. Limits to green growth and the dynamics of innovation By Salvador Pueyo
  2. Innovation, Productivity, and Spillovers Effects: Evidence from Chile By Crespi, Gustavo; Figal Garone, Lucas; Maffioli, Alessandro; Stein, Ernesto H.
  3. Tax Policy for Innovation By Bronwyn H. Hall
  4. International R&D networks of firms: A country-level analysis of the EU framework programmes By Ukrainski, Kadri; Kanep, Hanna; Kirs, Margit; Karo, Erkki
  5. Sectoral productivity Growth and Innovation Policies By Ivanova, Olga; Chatzouz, Moustafa
  6. FDI Patterns and Global Value Chains in the Digital Economy By Antonello Zanfei; Andrea Coveri; Mario Pianta
  7. Understanding the capabilities for digital innovations from a digital technology perspective By Wiesböck, Florian; Hess, Thomas
  8. The 2018 EU Industrial R&D Investment Scoreboard By Hector Hernandez Guevara; Nicola Grassano; Alexander Tuebke; Lesley Potters; Petros Gkotsis; Antonio Vezzani
  9. Has the Swedish Business Sector Become More Entrepreneurial than the US Business Sector? By Heyman, Fredrik; Norbäck, Pehr-Johan; Persson, Lars
  10. Patent protection, innovation, and technology transfer in a Schumpeterian economy By Huang, Chien-Yu; Yang, Yibai; Zheng, Zhijie
  11. Smart Specialisation Evaluation: Setting the Scene By Carlo Gianelle; Fabrizio Guzzo; Elisabetta Marinelli

  1. By: Salvador Pueyo
    Abstract: Central to the official "green growth" discourse is the conjecture that absolute decoupling can be achieved with certain market instruments. This paper evaluates this claim focusing on the role of technology, while changes in GDP composition are treated elsewhere. Some fundamental difficulties for absolute decoupling, referring specifically to thermodynamic costs, are identified through a stylized model based on empirical knowledge on innovation and learning. Normally, monetary costs decrease more slowly than production grows, and this is unlikely to change should monetary costs align with thermodynamic costs, except, potentially, in the transition after the price reform. Furthermore, thermodynamic efficiency must eventually saturate for physical reasons. While this model, as usual, introduces technological innovation just as a source of efficiency, innovation also creates challenges: therefore, attempts to sustain growth by ever-accelerating innovation collide also with the limited reaction capacity of people and institutions. Information technology could disrupt innovation dynamics in the future, permitting quicker gains in eco-efficiency, but only up to saturation and exacerbating the downsides of innovation. These observations suggest that long-term sustainability requires much deeper transformations than the green growth discourse presumes, exposing the need to rethink scales, tempos and institutions, in line with ecological economics and the degrowth literature.
    Date: 2019–04
  2. By: Crespi, Gustavo; Figal Garone, Lucas; Maffioli, Alessandro; Stein, Ernesto H.
    Abstract: This paper estimates the direct and spillover effects of two matching grants schemes designed to promote firm-level research and development (R&D) investment in Chile on firm productivity. Because the two programs target different kinds of projects—the National Productivity and Technological Development Fund (FONTEC) subsidizes intramural R&D, while the Science and Technology Development Fund (FONDEF) finances extramural R&D carried out in collaboration with research institutes—analyzing their effects can shed light on the process of knowledge creation and diffusion. The paper applies fixed-effects techniques to a novel dataset that merges several waves of Chile’s National Manufacturing Surveys collected by the National Institute of Statistics with register data on the beneficiaries of both programs. The results suggest that while both programs have had a positive impact on participants’ productivity, only FONDEF-funded projects have generated positive spillovers on firms’ productivity. The analysis reveals that the spillover effects on productivity display an inverted-U relationship with the intensity of public support. Spillover effects were found to occur only if firms were both geographically and technologically close.
    Keywords: Chile, impact evaluation, innovation, matching grants programs productivity, spillover effects
    Date: 2019–02
  3. By: Bronwyn H. Hall
    Abstract: A large number of countries around the world now provide some kind of tax incentive to encourage firms to undertake innovative activity. This paper presents the policy rationale for these incentives, discusses their design and potential effectiveness, and reviews the empirical evidence on their actual effectiveness. The focus is on the two most important and most studied incentives: R&D tax credits and super deductions, and IP boxes (reduced corporate taxes in income from patents and other intellectual property).
    JEL: H25 O32 O38
    Date: 2019–04
  4. By: Ukrainski, Kadri; Kanep, Hanna; Kirs, Margit; Karo, Erkki
    Abstract: Empirical studies have shown that the internationalization processes of firms in re-search and development (R&D) are slower compared to those of trade or investments. The pioneers of R&D internationalization have been high-tech companies in small mar-kets with little research resources in their home countries. The motives for internation-alization in R&D besides widening the R&D resource base concern the search for the novelty value of collaboration for innovation, but the costs are associated with collab-orative capacity and lack of experience. EU has aimed at boosting Europe's industrial leadership and competitiveness via different policy instruments, mainly R&D subsidies to SMEs and larger firms for collaborative partnerships with various institutional and geographical scopes. By comparing FP7 and Horizon2020, two recent Framework Pro-grammes (FPs), the innovation focus has strengthened besides basic research within subsidized R&D activities. Additionally, the projects involve more partnerships between higher education and research institutions, private firms and public sector bodies. The picture of the network formed by supported projects shows a concentration around larger and older EU member states while the smaller countries, but also EU13 (the new member states) locating on the periphery. Individual countries are engaged in international R&D networks with different patterns, but for EU13 countries the network-ing barriers seem to be higher, even in the most successful cases the single partner (mostly SME) projects dominate. In gaining stronger hub roles in the private firm R&D networks, the economies in all countries need to improve connectivity within and out-side their communities.
    Keywords: R&D,innovation,EU13 countries
    Date: 2019
  5. By: Ivanova, Olga; Chatzouz, Moustafa
    Abstract: This papers studies the sectoral differences in the impacts of various innovation policies, human capital and R&D intensity on the productivity growth using econometric panel data techniques. We analyze the development of the sectoral productivity as depending on both knowledge creation and knowledge adoption, where both channels of productivity growth can be influenced by various types of R&D related public policy. We use the combination of the most recent EU-KLEMS database and OECD data for econometric analysis on six aggregated sectors of the economy. In contrast with other existing studies our econometric analysis covers the whole of the economy and includes various traditional, industrial and services sectors. The main contribution of the paper is in highlighting the differences between economic sectors and identifying potential for sector-specific innovation policies.
    Keywords: Endogenous growth, R&D, panel data, R&D policy, industrial sectors
    JEL: O47
    Date: 2019–04–23
  6. By: Antonello Zanfei (Department of Economics, Society & Politics, Universit? di Urbino Carlo Bo); Andrea Coveri (Department of Economics, Society & Politics, Universit? di Urbino Carlo Bo); Mario Pianta (Scuola Normale Superiore, Florence)
    Abstract: The modern process of digitalization of the world economy entails global flows of investment in technology-based industries and knowledge activities located upstream of value chains. This work exploits the wealth of information offered by the fDi Markets database to provide an overview about the geographical patterns of FDIs and of specialization in digital industries and in technological activities.We showremarkable differences across both advanced and emerging economies in this respect. Europe is both a big attractor and a big investor in digital related business, but relies on emerging economies more to offshore production than to set up R&D labs in these countries. By contrast, North American economies are more prone to engage in knowledge intensive FDIs towards the most dynamic emerging countries than is the case of Europe.Emerging economies also play a large variety of rolesinglobal flows of investment in digital industries.However, with the relevant exceptions of China, India and the Four Asian Tigers, inward and outward FDIsof Emerging economies are predominantlyproduction-oriented, with a lower involvement in R&D, Design and ICT activities. Hence, the observed patterns of FDIs appear to consolidate existing hierarchies in digital related global production networks, creating limited upgrading opportunities in the case of most emerging economies.
    Keywords: Foreign direct investment, globalization, digitalization, global value chains.
    JEL: F12 F21 F23 L23 M21 O30
    Date: 2019
  7. By: Wiesböck, Florian; Hess, Thomas
    Abstract: With this study, we want to take a first step in this direction and try to develop a basic understanding of the capabilities for digital innovations (henceforth: digital innovation capabilities (DIC)) from a digital technology perspective. Such a perspective argues that digital innovations are based on digitalization and digital transformation capabilities (Wiesböck 2018). Hence, the aim of this paper is to develop a digital technology-centered theoretical conceptualization of an organization's DIC. This way, we want to answer the following research question: How do an organization's digitalization capabilities and digital transformation capabilities define an organization's digital innovation capabilities?
    Date: 2018
  8. By: Hector Hernandez Guevara (European Commission – JRC); Nicola Grassano (European Commission – JRC); Alexander Tuebke (European Commission – JRC); Lesley Potters (European Commission – JRC); Petros Gkotsis (European Commission – JRC); Antonio Vezzani (European Commission – JRC)
    Abstract: The 2018 edition of the EU Industrial R&D Investment Scoreboard (the Scoreboard) comprises the 2500 companies investing the largest sums in R&D in the world in 2017/18. These companies, based in 46 countries, each invested over €25 million in R&D for a total of €736.4bn which is approximately 90% of the world’s businessfunded R&D. They include 577 EU companies accounting for 27% of the total, 778 US companies for 37%, 339 Japanese companies for 14%, 438 Chinese for 10% and 368 from the rest-of-the-world (RoW) for 12%. This report analyses the main changes in companies’ R&D and economic indicators over the past year and their performance over the past ten years. It also includes a patent-based analysis aimed at characterising further the innovation activity of the business sector in the 28 member states of the EU. Finally, the report comprises a 10-year analysis of the performance of Scoreboard companies based in Asian countries, examining in particular the role of foreign direct investment and related mergers and acquisitions.
    Keywords: Industrial R&D, top R&D investors, innovation, company performance, economic and innovation performance
    Date: 2018–12
  9. By: Heyman, Fredrik; Norbäck, Pehr-Johan; Persson, Lars
    Abstract: Recent studies document a 30-year decline in various measures of entrepreneurship in the U.S. Using detailed Swedish employer-employee data over the period 1990 to 2013, we find young firms to be more prominent in the Swedish business sector than in the U.S. business sector. Young Swedish firms, aged five years or less, account for more than half of all firms during this period. We also observe an increase in Swedish entrepreneurial activity for start-ups. However, increasing job destruction rates for young firms has implied a declining employment share for younger firms from the mid-2000s. Moreover, most of the job creation by young firms occurs in the expanding service sector. We discuss different explanations for why Sweden appears not to have the same strong decline in entrepreneurial activity as the U.S. has had during the last two decades. We argue that one important explanation is economic reforms in Sweden in the 1990s that mitigated several hurdles to entrepreneurship.
    Keywords: entrepreneurship; industrial structure and structural change; job dynamics; Matched employer-employee data
    JEL: J23 K23 L26 L51
    Date: 2019–04
  10. By: Huang, Chien-Yu; Yang, Yibai; Zheng, Zhijie
    Abstract: This paper analyzes the effects of intellectual property rights (IPR) protection on innovation and technology transfer in a North-South quality-ladder model with innovative Northern R&D and adaptive Southern R&D. The degree of IPR protection in two countries differs in terms of patent breadth, which determines the markups of Northern firms and their Southern affiliates, respectively. In this model, stronger IPR protection in the South leads to a permanent decrease in the North-South wage gap, a temporary increase in the Northern innovation rate, and a permanent increase in technology transfer. By contrast, stronger IPR protection in the North leads to a permanent increase in the North-South wage gap, ambiguous effects on the Northern innovation rate, and a permanent decrease in technology transfer. Finally, we perform a quantitative analysis by calibrating the model to the US-China data, and the numerical results support these policy implications.
    Keywords: Intellectual property rights protection, Schumpeterian innovation, multinational firms, technology transfer
    JEL: F12 F23 F43 O31 O34
    Date: 2019–03
  11. By: Carlo Gianelle (European Commission - JRC); Fabrizio Guzzo (European Commission - JRC); Elisabetta Marinelli (European Commission - JRC)
    Abstract: This report presents a set of preliminary conceptual and practical considerations on the evaluation of the Smart Specialisation policy. It opens a discussion that aims to set the scene for more articulated and detailed reflections. It is important that evaluation exercises are focused on selected elements of the policy scheme; this facilitates identifying suitable evaluation questions and methodologies. Evaluation is meaningful only in the presence of well-specified evaluation questions, stemming from the specific information needs of the actors involved in Smart Specialisation Strategies. A well-defined intervention logic, linking clear ends with means, is essential for evaluation. Monitoring systems act as early-warning mechanisms signalling critical aspects in the implementation, which call for deeper assessment and understanding through evaluation exercises. To plan useful evaluations and increase the chances of their results being used require an ongoing commitment to develop a learning culture and build evaluation capabilities across institutions and stakeholders.
    Keywords: Regional innovation policy; Smart Specialisation; public policy evaluation; policy monitoring
    JEL: O25 O38 R12 R58
    Date: 2019–04

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