nep-ino New Economics Papers
on Innovation
Issue of 2019‒06‒17
fourteen papers chosen by
Uwe Cantner
University of Jena

  1. Effects of R&D subsidies on regional economic dynamics: Evidence from Chinese provinces By Jonathan Eberle; Philipp Boeing
  2. Linkage of Patent and Design Right Data: Analysis of Industrial Design Activities in Companies at the Creator Level (Japanese) By IKEUCHI Kenta; MOTOHASHI Kazuyuki
  3. Technology Transfer at the U.S. National Institute of Standards and Technology (NIST) By Link, Al
  4. Tax Policy for Innovation By Bronwyn H Hall
  5. Concordance and Complementarity in IP Instruments By Marco Grazzi; Chiara Piccardo; Cecilia Vergari
  6. R&D and market size: who benefits from orphan drug regulation? By Simona Gamba; Laura Magazzini; Paolo Pertile
  7. Technical progress and structural change: a long-term view By Alessandro Nuvolari; Emanuele Russo
  8. The Impact of Spillover Pools on Firm Patent Applications in Japan (Japanese) By EDAMURA Kazuma
  9. Sustainability strategies, investments in industry 4.0 and cicular economy results By Valentina De Marchi; Eleonora Di Maria
  10. Effects of Buyer and Supplier Relationships and Capital Relationships on R&D Activities (Japanese) By YAMAGUCHI Akira; IKEUCHI Kenta; FUKAO Kyoji; KWON Hyeog Ug; KIM Young Gak
  11. Artificial Intelligence and Big Data in Entrepreneurship: A New Era Has Begun By Martin Obschonka; David B. Audretsch
  12. The Industry Anatomy of the Transatlantic Productivity Growth Slowdown By Gordon, Robert J; Sayed, Hassan
  13. Creativity-Enhancing Technological Change in the Production of Scientific Knowledge* By Link, Al; Scott, John
  14. The birth and development of the Italian automotive industry (1894-2015) and the Turin car cluster. By Enrietti, Aldo; Geuna, Aldo; Nava, Consuelo R.; Patrucco, Pier Paolo

  1. By: Jonathan Eberle (Department of Economic Geography and Location Research, Philipps University Marburg); Philipp Boeing (ZEW - Leibniz Centre for European Economic Research, Mannheim and Peking University, China Center for Economic Research (CCER), Beijing)
    Abstract: We investigate the impact of research and development (R&D) subsidies on R&D inputs of large- and medium-sized firms and on additional innovation and economic activities in Chinese provinces. A panel vector autoregressive (VAR) model and corresponding impulse response function (IRF) analysis allow us to differentiate between direct and indirect effects, which add up to total effects. We find that an increase of R&D subsidies significantly decreases private R&D investments, although there is a significant positive effect on the R&D personnel employed in firms. We interpret these findings as a partial crowding-out effect because public funds substitute some private funds while total R&D inputs still increase. Complementarily, we find a positive secondary effect on the provincial patent activity, our measure of technological progress. Interestingly, we also find potentially unintended effects of R&D subsidies on increases in the investment rate in physical capital and residential buildings. Although R&D subsidies fail to incentivize private R&D expenditures, firms increase total R&D inputs, and provincial economies benefit from secondary effects on technological progress and capital deepening.
    Keywords: China, R&D subsidies, regional economic growth, panel VAR, impulse response functions
    JEL: C33 R11 R58 O38 O47
    Date: 2019–06
  2. By: IKEUCHI Kenta; MOTOHASHI Kazuyuki
    Abstract: In addition to technological superiority (functional value), attention to design superiority (semantic value) is increasing as a source of competitiveness of new products relative to competing products. In this research, we connect patent right data and design right data at the inventor / creator level, and quantitatively analyze corporate organizations related to design innovation. First, machine learning was performed on a classification model for name disambiguation of inventors / creators using patent right and design right applications to the Japan Patent Office. The training data was constructed using rare name information that is less likely to have the same problem. By interconnecting the inventors' and creators' identifiers estimated with the learned classification model, we identified design creators who also created the patent inventions. Next, using this information, the participation status of the design creator in the patent invention was organized by time series and design category. As a result, it was found that the division of innovative labor into invention activity and design activity is in progress. Furthermore, we confirmed that this division of labor is particularly advanced among major patent applicants. As background information, specialization and fragmentation of innovation activities, utilization of external designers and open innovation may be examples of progress influencing the process.
    Date: 2019–03
  3. By: Link, Al (University of North Carolina at Greensboro, Department of Economics)
    Abstract: This paper analyzes the inter-relationship among technology transfer mechanisms using data specific to the U.S. National Institute of Standards and Technology (NIST). An overview of the history of NIST and U.S. policies that emphasize the economic importance of technology transfer are discussed. The empirical analysis focuses on NIST's investments in R&D and the cascading impact of those investments on new inventions disclosed, new patent applications, new patents issued, and the new patent licenses; and accounting for the effects of R&D on these three investments, an overall estimate of the R&D elasticity of new patent licenses is calculated to be 0.7976. The paper concludes with a policy-focused summary of the implications of the empirical findings, and a suggested roadmap for future research related to technology transfer from U.S. Federal laboratories.
    Keywords: technology transfer; federal laboratories; NIST; R&D; patents;
    JEL: H40 O31 O38
    Date: 2019–06–19
  4. 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).
    Keywords: R&D tax credit, patent box, super deduction, IP box, tax subsidy, innovation
    JEL: H25 O32 O38
    Date: 2019–06
  5. By: Marco Grazzi; Chiara Piccardo; Cecilia Vergari
    Abstract: This work investigates the relationship between proxies of innovation activities, such as patents and trademarks, and firm performance in terms of revenues, growth and profitability. By resorting to the virtual universe of Italian manufacturing firms this work provides a rather complete picture of the Intellectual Property (IP) strategies pursued by Italian firms, in terms of patents and trademarks, and we study whether the two instruments for protecting IP exhibit complementarity or substitutability. In addition, and to our knowledge novel, we propose a measure of concordance (or proximity) between the patents and trademarks owned by the same firm and we then investigate whether such concordance exert any effect on performance.
    Keywords: Trademarks; Patents; Innovation; Intellectual Property; Complementarity; Concordance; Technological proximity; firm performance; firm growth.
    Date: 2019–06–14
  6. By: Simona Gamba (Department of Economics (University of Verona)); Laura Magazzini (Department of Economics (University of Verona)); Paolo Pertile (Department of Economics (University of Verona))
    Abstract: Since the early 80s, orphan drug regulations have been introduced to stimulate R&D for rare diseases. We develop a theoretical model to study the heterogeneous impact on optimal R&D decisions of the incentives for diseases with different levels of prevalence. We show the mechanisms through which the type of incentives deployed by orphan drug regulations may stimulate R&D more for orphan diseases with comparatively high prevalence, thus increasing inequality within the class of orphan diseases. Using data from the Food and Drug Administration on the number of orphan designations, our empirical analysis shows that, while R&D has increased over time for all orphan diseases, the increase has been much greater for the less rare. According to our baseline specification, the difference between the predicted number of orphan designations for a disease belonging to the highest and the lowest class of prevalence is 5.6 times larger after 2008 than it was in 1983. Our findings support the idea that the type of incentives in place may be responsible for this increase in inequality within orphan diseases.
    Keywords: pharmaceuticals, innovation, orphan regulations, market size, inequality
    JEL: I14 I18 O31 O38 C35
    Date: 2019–06
  7. By: Alessandro Nuvolari; Emanuele Russo
    Abstract: Along the development path, countries experience large transformations in their economic structure as productive resources move towards different economic activities. ''Modern economic growth'' is also associated with a self-sustained process of technical change which leads to the emergence of new products and sectors characterized by different scopes for productivity gains and demand growth. In this paper we study the interactions between structural change and technological progress from a long-term perspective. We first analyze the secular patterns of structural change across agriculture, manufacturing and services using historical data in the attempt to test some broad conjectures concerning sectoral reallocations at different stages of development (i.e. the so-called Petty-Clark law) and discuss the specific role of manufacturing as an engine of growth. Second, we provide an overview of the literature on sectoral innovation patterns as well as of recent evidence linking structural transformations and sector-specific technological opportunities to aggregate productivity growth. In the final part we present productivity decompositions using a sectoral innovation taxonomy to study the contribution of different groups of activities characterized by heterogeneous innovation patterns. Our results suggest that structural change towards knowledge-intensive activities provides a source of productivity growth in both developing and advanced countries. In turn, this points at the need for a more disaggregated analysis of structural change to capture the diversity in the rate and direction of technical progress across sectors.
    Keywords: Long-run development; structural change; technical change; productivity growth.
    Date: 2019–06–10
  8. By: EDAMURA Kazuma
    Abstract: In this paper, the impact of spillover pools on patent application behavior of firms in Japan was analyzed empirically using firm-level data from the Survey of Research and Development and the IIP patent database. The spillover pools are calculated with technological distance using the Mahalanobis distance considering the complementarity between technologies for each industry, academia and government. The proxy for firm applications is the number of patent applications. The results of the regression on the count data model employed here show that impact of spillover pools on the number of patent application by firm is positive. Spillover pools from industry, university, and national research institute also have a positive impact on the number of firm patent applications. In addition, spillover pools from basic, applied, and development research have positive impacts.
    Date: 2019–04
  9. By: Valentina De Marchi (Department of Economics and Management ‘Marco Fanno’, University of Padova); Eleonora Di Maria (Department of Economics and Management ‘Marco Fanno’, University of Padova)
    Abstract: Environmental sustainability has increased its relevance within business strategies and innovation in particular while circular economy (CE) is receiving growing attention as a new paradigm of production and value creation. Low attention has been given to explore the relationship between digital transformation of business processes via industry 4.0 technologies and CE strategies. On the one hand, digital manufacturing supports efficient use and control of resources. On the other hand, such technologies improve product life cycle management (through IoT or big data) and new business models (product-as-a-service). The paper explores the relationship between environmental sustainability strategies, technological investments in industry 4.0 and green outcomes, based on unique data gathered through an original 2017 survey on a sample of more than 1,100 Italian firms. Results show the positive relationship between green drivers and green outcomes for firms adopting industry 4.0 technologies, both in terms of eco-efficiency and circularity. Investing in digital manufacturing, smart products, and higher variety of 4.0s technologies characterize adopters with green outcomes. Having a clear green strategy, ICT propensity, domestic production, and low customer dependency are factors positively related with green outcomes for adopters.
    Keywords: digital manufacturing, industry 4.0, circular economy, sustainability, eco-efficiency
    Date: 2019–05
  10. By: YAMAGUCHI Akira; IKEUCHI Kenta; FUKAO Kyoji; KWON Hyeog Ug; KIM Young Gak
    Abstract: In Japan small-and-medium-sized-firms invest less in R&D activities than large firms, which is contrary to the situation observed in the United States. We constructed a new dataset on buyer and supplier relationships and capital relationships including small firms whose number of employees is less than 50 and empirically tested the hypothesis that investments in R&D of buyers and suppliers or capital affiliates have substitution effects on R&D activities of small firms. We found the evidence that is consistent with our hypothesis and results indicating that on the contrary, investments in R&D of buyers, suppliers and capital affiliates complement investments in R&D of large firms.
    Date: 2019–05
  11. By: Martin Obschonka; David B. Audretsch
    Abstract: While the disruptive potential of artificial intelligence (AI) and Big Data has been receiving growing attention and concern in a variety of research and application fields over the last few years, it has not received much scrutiny in contemporary entrepreneurship research so far. Here we present some reflections and a collection of papers on the role of AI and Big Data for this emerging area in the study and application of entrepreneurship research. While being mindful of the potentially overwhelming nature of the rapid progress in machine intelligence and other Big Data technologies for contemporary structures in entrepreneurship research, we put an emphasis on the reciprocity of the co-evolving fields of entrepreneurship research and practice. How can AI and Big Data contribute to a productive transformation of the research field and the real-world phenomena (e.g., 'smart entrepreneurship')? We also discuss, however, ethical issues as well as challenges around a potential contradiction between entrepreneurial uncertainty and rule-driven AI rationality. The editorial gives researchers and practitioners orientation and showcases avenues and examples for concrete research in this field. At the same time, however, it is not unlikely that we will encounter unforeseeable and currently inexplicable developments in the field soon. We call on entrepreneurship scholars, educators, and practitioners to proactively prepare for future scenarios.
    Date: 2019–06
  12. By: Gordon, Robert J; Sayed, Hassan
    Abstract: By merging KLEMS data sets and aggregating over the ten largest Western European nations (EU-10), we are able to compare and contrast productivity growth up through 2015 starting from 1950 in the U.S. and from 1972 in the EU-10. Data are provided at the aggregate level, as well as for 16 industry groups within the total economy and 11 manufacturing subindustries. The analysis focuses on outcomes over four time intervals: 1950-72, 1972-95, 1995- 2005, and 2005-15. We interpret the EU-10 performance as catching up to the U.S. in stages, with its rapid growth of 1950-72 representing a delayed adoption of the inventions that propelled U.S. productivity growth in the first half of the 20th century, and the next EU-10 stage for 1972-95 as imitating the U.S. outcome for 1950-72. A striking finding is that for the total economy the "early-to-late" productivity growth slowdown from 1972-95 to 2005-15 in the EU-10 (-1.68 percentage points) was almost identical to the U.S. slowdown from 1950-72 to 2005-15 (-1.67 percentage points). There is a very high EU-U.S. correlation in the magnitude of the early-to-late slowdown across industries. This supports our overall theme that the productivity growth slowdown from the early postwar years to the most recent decade was due to a retardation in technical change that affected the same industries by roughly the same magnitudes on both sides of the Atlantic.
    Keywords: industry decomposition; Productivity Growth; Technological change
    JEL: E01 E24 O33 O47 O51 O52
    Date: 2019–05
  13. By: Link, Al (University of North Carolina at Greensboro, Department of Economics); Scott, John (Dartmouth College)
    Abstract: We view scientific publications as a measure of technical knowledge. Using the Solow method of functional decomposition and scientific publication data from the National Institute of Standards and Technology, we find that 79 percent if the increase of scientific publications per unit of scientific personnel is explained by an increase in federal R&D capital per unit of scientific personnel. We describe the unexplained or residual 21 percent as a measure of creativity-enhancing technological change, a phenomenon that offers a way to reverse the perceived slowing of the productivity of science. The explained 79 percent offers a possible metric for federal laboratories' mandated reporting of a ROI to federal R&D. Understanding the drivers of the residual 21 percent could enable public policy to mitigate the resource constraints caused by the breakdown of exponential growth of the resources devoted to science.
    Keywords: scientific publications; technological change; R&D; knowledge production function;
    JEL: O33 O38
    Date: 2019–06–17
  14. By: Enrietti, Aldo; Geuna, Aldo; Nava, Consuelo R.; Patrucco, Pier Paolo (University of Turin)
    Abstract: By discussing the relation between the traditional Marshallian/Jacobian approach and Klepper’s concept of spinoffs and their role, this paper tries to explain the early genesis and later evolution of the Italian automotive industry, based on the for mation of the Torino’s car cluster from the late nineteenth century. Historical analysis and econometric models are integrated to identify key factors that enabled the creation and success of the automotive industry in Turin. Specifically, we investigate agglomeration economies, the role of spinoffs and institutional factors such as the level and importance of local education. Based on original archival research, we built a new database of all Italian automobile companies. Replication of Klepper’s (2007) and Boschma and Wenting’s (2007) models shows no particular influence of the Turin cluster and no early entry advantages. Our model, which integrates and extends previous contributions, confirms the existence of a spinoffs effect, and in particular the positive effect of inherited technical skills embedded in pilots. We find support also, for positive agglomeration effects at the regional level and inter industry externalities from aeronautics, a metropolitan cluster effect and the significance of metropolitan education.
    Date: 2019–04

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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