nep-ino New Economics Papers
on Innovation
Issue of 2019‒05‒13
eleven papers chosen by
Uwe Cantner
University of Jena

  1. Knowledge to money: assessing the business performance effects of publicly-funded R&D grants By Vanino, Enrico; Roper, Stephen; Becker, Bettina
  2. Unpacking product modularity. Innovation in R&D Teams By Martinez, Daniel
  3. The distinct features of hidden champions in Germany: A dynamic capabilities view By Rammer, Christian; Spielkamp, Alfred
  4. Innovation activity in South Africa: Measuring the returns to R&D By Steenkamp Andre; Schaffer Mark; Flowerday Wayde; Goddard John
  5. Measuring China's patent quality: Development and validation of ISR indices By Böing, Philipp; Müller, Elisabeth
  6. Impact of Artificial Intelligence on Businesses: from Research, Innovation, Market Deployment to Future Shifts in Business Models By Neha Soni; Enakshi Khular Sharma; Narotam Singh; Amita Kapoor
  7. Employment and performance effects of circular economy innovations By Horbach, Jens; Rammer, Christian
  8. Trajectories of Knowledge Economy in SSA and MENA countries By Asongu, Simplice; Andrés, Antonio
  9. Funding Academic Research: Grant Application, Partnership, Award, and Output By Albert Banal-Estañol; Inés Macho-Stadler; David Pérez-Castrillo
  10. Experimentation in Dynamic R&D Competition By Anastasios Dosis; Abhinay Muthoo
  11. COMPETITIVE ADVANTAGE: AN APPROACH FROM THE DYNAMIC CAPACITIES OF LEARNING, ABSORPTION AND INNOVATION By Lucelly Carolina Meza-Ariza; Martha Torres-Barreto; Leda Paz Muñoz-Molina; Marianela Luzardo Briceño

  1. By: Vanino, Enrico; Roper, Stephen; Becker, Bettina
    Abstract: UK Research Councils (UKRCs) spend around £3bn pa supporting R&D and innovation. We provide a comprehensive assessment of these grants on the performance of participating UK firms, using data on all projects funded by UKRCs over the 2004–2016 period and applying a propensity score matching approach. We exploit the richness of the data available in the Gateway to Research database by investigating the heterogeneous effect of these projects across several novel directions which have not been explored before. We find a positive effect on the employment and turnover growth of participating firms, both in the short and in the medium term. Exploring impacts across different types of firms we find stronger performance impacts for firms in R&D intensive industries and for smaller and less productive firms. We also consider how impacts vary depending on the characteristics of the funded research projects in terms of partners characteristics, receipt of other research grants and grant value. Finally, we focus on the different sources of grants, analysing in particular the evolution in the funding strategy of Innovate UK. Our results have implications for the extent and targeting of future Research Council funding both in the UK and elsewhere.
    Keywords: innovation; public support; R&D; Research Council; UK
    JEL: O30 O57
    Date: 2019–04–10
  2. By: Martinez, Daniel
    Abstract: Does modularity stimulate innovation or, on the other side, are these modules and standards limiting engineers to innovative? The R&D team collaboration context is somewhat paradoxical, as it requires autonomy, on the one hand, working and keeping modules separate in design, and yet interaction on the other hand, as teams need to be participative in the integrative process of bringing different modules together. This story is centered on the influences of product modularity on innovation under the specific R&D team context. Essentially, this study unpacks the understanding of the concept of product modularity in R&D organizations by establishing the two essential dimensions of product modularity (i.e., module standardization and reconfiguration), and studying the effects on innovation in R&D teams. In addition, this work enhances the understanding of the concept of alignment between task and organizational structure and provides evidence of the impact of this alignment on innovation.
    Date: 2019
  3. By: Rammer, Christian; Spielkamp, Alfred
    Abstract: Hidden Champions (HCs) are firms unknown to the wider public, but global leaders in the niche markets they serve. This paper looks at distinctive features of these firms, focusing on their dynamic capabilities. Employing a unique data base on German firms, we identify a representative sample of German HCs. Based on a matching technique, we examine differences to other firms in terms of the firms' processes, position, and path. We find that HCs' competitive strategy rests on technology leadership and customisation. HCs are more open in their knowledge management, but without compromising control over the new product development process. HCs do not invest more into innovation, but achieve higher innovation success. The higher efficiency can be linked to their superior technological capabilities and to higher investment in human capital and HR management practices that mobilise the creative potential of their employees.
    Keywords: Hidden Champions,Germany,Competitive Strategy,Knowledge Management,Innovation,Dynamic Firm Capabilities
    JEL: L21 L25 M10 M21 O31 O32
    Date: 2019
  4. By: Steenkamp Andre; Schaffer Mark; Flowerday Wayde; Goddard John
    Abstract: Improvements in productivity are necessary to effectively increase economic growth in the long term. The literature emphasizes a positive correlation between firm-level innovation and productivity gains. It is unsurprising, then, that policy makers and researchers widely acknowledge that innovation is one of the major drivers of productivity growth, and is therefore of critical importance to the competitiveness and growth of firms. Research and development (R&D) expenditure is used extensively as a proxy for innovation in the literature.Here, we use a production function approach to estimate the return to R&D in South African manufacturing firms for the period 2009–2014 using South African firm-level data. We find that the return to R&D in South African manufacturing firms is high compared to OECD countries. This analysis has been undertaken several times for OECD countries, but far less frequently for non-OECD countries. These findings therefore are not just novel for South Africa, but for the development economics literature more generally, and raise important insights for innovation policy in South Africa.
    Keywords: Productivity
    Date: 2018
  5. By: Böing, Philipp; Müller, Elisabeth
    Abstract: Because China has become one of the largest applicants of PCT patents, it is of interest to compare the quality of Chinese and non-Chinese applications. We extend a quality index based on internationally comparable citation data from international search reports (ISR) to consider foreign, domestic, and self citations. Whereas foreign citations show that Chinese PCT patent applications reach only a third of the non-Chinese quality benchmark, the extension towards domestic and self citations suggests a higher quality level that converges to or even surpasses the benchmark. We investigate these differences based on firm-level regressions and find that in China, only foreign citations, but not domestic and self citations, have a significant and positive relation to R&D stocks. Using Germany as a representative country without policy support for patenting, we show that all three citations types may be used as economic indicators if policy distortion is not a concern. Our results show that domestic and self citations suffer from an upward bias in China and should be employed with caution if they are to be interpreted as a measure of patent quality.
    Keywords: patent quality,cross-country comparison,China
    JEL: O34 O3
    Date: 2019
  6. By: Neha Soni; Enakshi Khular Sharma; Narotam Singh; Amita Kapoor
    Abstract: The fast pace of artificial intelligence (AI) and automation is propelling strategists to reshape their business models. This is fostering the integration of AI in the business processes but the consequences of this adoption are underexplored and need attention. This paper focuses on the overall impact of AI on businesses - from research, innovation, market deployment to future shifts in business models. To access this overall impact, we design a three-dimensional research model, based upon the Neo-Schumpeterian economics and its three forces viz. innovation, knowledge, and entrepreneurship. The first dimension deals with research and innovation in AI. In the second dimension, we explore the influence of AI on the global market and the strategic objectives of the businesses and finally, the third dimension examines how AI is shaping business contexts. Additionally, the paper explores AI implications on actors and its dark sides.
    Date: 2019–05
  7. By: Horbach, Jens; Rammer, Christian
    Abstract: Circular economy (CE) describes an economic concept that aims at saving resources by minimizing the use of material and energy over the entire life-cycle or products, including repair, reuse and recycling. CE innovations help to realize the goals of a sustainable development and target both the environmental, economic and social dimensions of sustainability. This paper looks at the economic and social dimensions by investigating the performance and employment effects of CE innovations at the firm level. CE innovations such as the reduction of energy and material consumption or the recycling of waste, water or material may lead to cost savings which in turn can increase the competitiveness of the firm and raise demand for a firm's products. Our econometric analysis uses data of two waves of the German part of the Community Innovation Survey (CIS). The performance effects of CE innovations measured by the financial standing of a firm and by turnover growth tend to be positive. The results of quantile regressions show that this is also the case for employment effects.
    Keywords: circular economy,Community Innovation Survey,eco-innovation,quantile regression
    JEL: C21 Q01 Q55
    Date: 2019
  8. By: Asongu, Simplice; Andrés, Antonio
    Abstract: In the first critical assessment of knowledge economy dynamic paths in Africa and the Middle East, but for a few exceptions, we find overwhelming support for diminishing cross-country disparities in knowledge-based economy dimensions. The paper employs all the four components of the World Bank’s Knowledge Economy Index (KEI): economic incentives, innovation, education, and information infrastructure. The main finding suggests that sub-Saharan African (SSA) and the Middle East and North African (MENA) countries with low levels of KE dynamics and catching-up their counterparts of higher KE levels. We provide the speeds of integration and time necessary to achieve full (100%) integration. Policy implications are also discussed.
    Keywords: Knowledge economy; Principal component analysis; Panel data; Convergence; Development
    JEL: F42 O10 O38 O57 P00
    Date: 2019–01
  9. By: Albert Banal-Estañol; Inés Macho-Stadler; David Pérez-Castrillo
    Abstract: Funding agencies tend to allocate (scarce) resources using a bottom-up competitive process. This paper analyzes the determinants and the consequences of the choices made in each of the stages of the funding process. We build on previous research (Banal-Estañol, Macho-Stadler, and Pérez-Castrillo 2013, 2018, and 2019) using, and present new results based on, one of the major public organizations funding academic research worldwide: the UK's Engineering and Physical Sciences Research Council.
    Keywords: funding research, grant application, research collaboration, award, output
    JEL: O32 I23
    Date: 2019–04
  10. By: Anastasios Dosis (ESSEC - ESSEC Business School - Essec Business School - Economics Department - Essec Business School, THEMA - Théorie économique, modélisation et applications - UCP - Université de Cergy Pontoise - Université Paris-Seine - CNRS - Centre National de la Recherche Scientifique); Abhinay Muthoo (Departement of Economics - University of Warwick - University of Warwick [Coventry])
    Abstract: We study a two-stage, winner-takes-all, R&D race, in which, at the outset, firms are uncertain regarding the viability of the project. Learning through experimentation introduces a bilateral (dynamic) feedback mechanism. For relatively low-value products , the equilibrium stopping time coincides with the socially efficient stopping time although firms might experiment excessively in equilibrium; for relatively high-value products, firms might reduce experimentation and stop rather prematurely due to the fundamental free-riding effect. Perhaps surprisingly, a decrease in the value of the product can spur experimentation.
    Keywords: Experimentation,Learning,Dynamic R&D competition,inefficiency
    Date: 2019–02–04
  11. By: Lucelly Carolina Meza-Ariza (UDI - Universidad de Investigación y Desarrollo); Martha Torres-Barreto (UIS - Universidad Industrial de Santander [Bucaramanga]); Leda Paz Muñoz-Molina (UDI - Universidad de Investigación y Desarrollo); Marianela Luzardo Briceño
    Date: 2019–04–18

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