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on Innovation |
| By: | Mario A. Maggioni; Emanuela Marrocu; Teodora Erika Uberti; Stefano Usai |
| Abstract: | The question about how regions develop and evolve along their productive and technological path is central in many scientific fields from international economics, to economic geography, from industrial economics to regional science. Within an evolutionary perspective, we believe that a region is most likely to develop new industries or new technologies, which are closer to its pre-existing specialization. Our research builds on an empirical stream of literature, started by Hausmann and Klinger (2007) and Hidalgo et al. (2007), aimed at tracing the evolution of industrial specialisation at the country level following the evolution of export portfolios. We refocus this line of analysis on the regional European technology/knowledge space along the research avenue started by Kogler et al. (2017). We aim at investigating the pattern and the evolution of regional specialisation in the EU in terms of the interaction of (i) endogenous processes of knowledge recombination and localised technological change, (ii) exogenous technological paradigm shifts and (iii) trans-regional spatial and technological spillovers and networking dynamics. More specifically, our paper maps the technological trajectories of 198 EU regions over the period 1986-2010 by using data on 121 patent sectors in the NUTS2 regions of the 11 most innovative EU countries, plus Switzerland and Norway. We map the knowledge space following two approaches: a micro level one, based on co-classification information contained in patent documents (Engelsman and Van Raan, 1992; Kogler et al., 2017), and a macro level, based on conditional co-specialisations of regions in the same patent classes (Hidalgo et al., 2007). These two representations of the knowledge space serve as a basis for understanding the evolution of regional technological specialization, measured in terms of the sector-region relative technological advantage (RTA), and for modelling its dynamics as a function of spatial, technological and socio-cognitive proximity. Preliminary results show that regional technological paths display a significant level of path dependence in, which the technological specialization is significantly shaped by both localised technological change and recombinant innovation. We also find evidence of local spillover spillovers induced by both geographic and technological proximity. |
| JEL: | O14 O31 O33 O52 R11 R12 C21 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:dis:wpaper:dis1904&r=all |
| By: | Gaessler, Fabian (MPI-IC Munich); Hall, Bronwyn H. (MPI-IC Munich); Harhoff, Dietmar (MPI-IC Munich) |
| Abstract: | A \"patent box\" is a term for the application of a lower corporate tax rate to the income derived from the ownership of patents. This tax subsidy instrument has been introduced in a number of countries since 2000. Using comprehensive data on patents filed at the European Patent Office, including information on ownership transfers pre- and post-grant, we investigate the impact of the introduction of a patent box on international patent transfers, on the choice of ownership location, and on invention in the relevant country. We find that the impact on transfers is small but present, especially when the tax instrument contains a development condition and for high value patents (those most likely to have generated income), but that invention itself is not affected. This calls into question whether the patent box is an effective instrument for encouraging innovation in a country, rather than simply facilitating the shifting of corporate income to low tax jurisdictions. |
| Keywords: | patent box; ip box; innovation tax; beps; epo; invention incentive; patent ownership; |
| JEL: | H32 K34 O34 |
| Date: | 2019–08–05 |
| URL: | http://d.repec.org/n?u=RePEc:rco:dpaper:177&r=all |
| By: | Dario Diodato; Ahmad Andrea Morrison |
| Abstract: | The geographical distribution of innovative activities is an emerging subject, but still poorly understood. While previous efforts highlighted that different technologies exhibit different spatial patterns, in this paper we analyse the geography of innovation in the very long run. Using a US patent dataset geocoded for the years 1836-2010, we observe that ? while it is true that differences in technologies are strong determinant of spatial patterns ? changes within a technology over time is at least as important. In particular, we find that regional entry follows the technology life cycle. Subsequently, innovation becomes less geographical concentrated in the first half of the life cycle, to then re-concentrate in the second half. |
| Keywords: | technological regime, spatial patterns of innovation, life cycle, patents, US Economic Geography |
| JEL: | R11 O11 |
| Date: | 2019–07 |
| URL: | http://d.repec.org/n?u=RePEc:egu:wpaper:1924&r=all |
| By: | Omer Unsal; Blake Rayfield |
| Abstract: | In 1971, the patent for the Automated Teller Machine (ATM) was awarded to David Wetzel. While possibly not the first application of financial technology, since 1971 time, the innovation in the financial industry has grown beyond expectations. However, most studies in innovation ignore the financial sector altogether. In this study, we investigate financial technology firms and innovation. After identifying firms that are considered financial technology, we collect innovation outcomes such as patents and data breaches associated with those firms. We show that patent activity has enjoyed modest growth year over year, however firms still have challenges to overcome such as market risk and data security. This study serves as a perspective on financial technology. This paper is also forthcoming in the International Finance Review. |
| Keywords: | Financial Technology; Financial Innovation; Patents; Data Breach |
| JEL: | O33 O16 |
| Date: | 2019–07 |
| URL: | http://d.repec.org/n?u=RePEc:nfi:nfiwps:2019-wp-03&r=all |
| By: | Pelin Demirel (Dyson School of Design Engineering, Imperial College London, UK.); Gamze Ozturk Danisman (Faculty of Economics Administrative and Social Sciences, Bahcesehir University, Istanbul,Turkey) |
| Abstract: | As the circular economy (CE) concept gains growing popularity among consumers and producers, small and medium-sized enterprises (SME) increasingly look for ways to reorganize their offering and operations to integrate into the CE. This study examines the impact of (1) circular eco-innovations and (2) external funding available for CE activities on the growth of European SMEs using a dataset of 5100 SMEs across 28 European countries in 2016. Findings reveal that a significant threshold investment (i.e. higher than 10% of revenues) into circular eco-innovations is required for SMEs to benefit from investing into the CE. Moreover, the majority of circular eco-innovations fail to boost the growth rates of SMEs, with the exception of investments into eco-design innovations. While traditional forms of debt and grant finance targeted to CE activities are found to have no or negative impact on the growth of SMEs, equity finance (i.e. angel and venture capital investments) contributes positively to their growth. The study offers insights into the lower levels of SME engagement in the CE as well as policy implications for improving engagement. |
| Keywords: | Circular Economy, Eco-Innovation, Eco-design, Entrepreneurship, Finance, Growth, SMEs. |
| Date: | 2019–06 |
| URL: | http://d.repec.org/n?u=RePEc:sru:ssewps:2019-13&r=all |
| By: | Teodora Borota; Fabrice Defever; Giammario Impullitti |
| Abstract: | In this paper, we document large heterogeneity in innovation policy and performance between old and new EU member states, and present firm-level evidence on the close link between foreign direct investment (FDI) spillovers and eastern European _firms' innovation. Guided by these facts and motivated by the pressing debate on further EU integration, we build a two-region endogenous growth model to analyse the gains from innovation policy cooperation in an economic union. The two regions, the West (the old members) and the East (the new post-2004 members), feature firms competing in innovation for market leadership, are integrated via free trade and costly technology transfer via FDI and have different innovation performance and policy. Calibrating the model to reproduce key features of the EU economy, we compare the outcomes of an East-West R&D subsidy war with a cooperation scenario with unified subsidy across regions, and obtain three main results. First, we find that the dynamic gains spurring from the impact of cooperation on the economy's growth rate are sizable and substantially larger than the static gains obtained internalising the strategic motive for subsidies. Second, our model suggests that the presence of FDI and multinational production alleviates the strategic motive and increases the gains from cooperation. Third, separating FDI and innovation policy generates larger gains from cooperation, a policy complementarity driven by the knowledge spillovers carried by FDI. |
| Keywords: | Optimal innovation policy, growth theory, international policy coordination, EU integration, FDI spillovers |
| JEL: | O41 O31 O38 F12 F42 F43 |
| Date: | 2019–08 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp1640&r=all |
| By: | Mario Benassi (University of Milan, Italy); Elena Grinza (University of Milan, Italy); Francesco Rentocchini (University of Milan, Italy) |
| Abstract: | Objectives. The main objective of the present study is to provide a comprehensive coverage of the patenting activity at the European Patent Office by companies in the remit of the fourth industrial revolution (4IR). We also aim at moving forward the understanding of the firm-level patenting activity of 4IR technologies. Methodology. We do so by conducting an empirical assessment of the development of technologies related to the 4IR via the analysis of patents filed at the European Patent Office between 1985 and 2014. We employ a new matched patent-firm data set provided by the Bureau Van Dijk: ORBIS-IP. Findings. In line with results from the recent literature, we find evidence of a surge in patenting activity related to the 4IR in the past three decades, particularly in networked devices. Our results also suggest that firms filing 4IR patents have become progressively younger on average. At the same time, we find a steady growth in the average number of 4IR patent applications filed yearly by each company. Research limits. Our exploration is a first step towards a better comprehension of the 4IR patent arena. Being mainly a “thick” description, we did not analyze antecedents and effects of 4IR patent applications. A comparative and longitudinal analysis of patent applications and patents granted would be a first step in this direction. As a second step, quantitative and qualitative studies on how 4IR patents contribute to firms’ exploration and exploitation capabilities as well as to firm performance would be highly beneficial. Practical implications. Further variance decompositions show that the surge in 4IR patent applications is mainly explained by incumbent firms filing more 4IR patent applications over time, rather than new entrants progressively populating the 4IR world. Finally, we uncover a general trend emerging at the firm level, whereby firms tend to specialize in few technological areas and avoid differentiation. Originality of the study. Despite a surging interest related to the 4IR from different stakeholders (mainly practitioners and policy makers), comparatively less attention has come from academia, which has focused on the single technologies comprising the 4IR such as artificial intelligence, additive manufacturing and the internet of things. Although there is a solid body of scholarship in the area of engineering and information systems that has focused on the topic (see surveys from Lu, 2017 and Liao, 2017), comparatively less studies are available within the management and economics fields. We aim at fill this gap by providing a detailed empirical assessment of the 4IR as a whole. We do so by analyzing patenting activity at the EPO in all the possible technological fields comprising the 4IR. We also attempt a first focus of patenting activity in the 4IR at the firm-level by characterizing companies along several dimensions. |
| Keywords: | Fourth Industrial Revolution; Industry 4.0; matched patent-firm data; patent applications; EPO. |
| JEL: | O30 O33 O34 |
| Date: | 2019–06 |
| URL: | http://d.repec.org/n?u=RePEc:sru:ssewps:2019-12&r=all |
| By: | Fredrik Ericsson; Sam Mealy |
| Abstract: | Advancements in science and technology are important drivers of economic growth and well-being and have the potential to help countries leapfrog stages of development. Greater investments are needed to strengthen developing countries’ research capacity and exploit the benefits of modern technologies. Financing Science, Technology and innovation (STI) in a developing country context is difficult, however. This paper tests a novel methodology to assess STI-related development finance starting from development finance data reported to the OECD through the Creditor Reporting System (CRS) database. Using this experimental methodology, total development finance to STI over the past years is estimated. Some suggestions to improve the measurement of STI in a development context are provided. Should that box be removed now? |
| Keywords: | Financing, Innovation, Official development assistance, Science, Sustainable development, Technology |
| Date: | 2019–07–31 |
| URL: | http://d.repec.org/n?u=RePEc:oec:dcdaaa:58-en&r=all |
| By: | Gaessler, Fabian (MPI-IC Munich); Wagner, Stefan (ESMT Berlin) |
| Abstract: | Pharmaceutical firms typically enjoy market exclusivity for new drugs from concurrent protection of the underlying invention (through patents) and the clinical trials data submitted for market approval (through data exclusivity). Patent invalidation during drug development renders data exclusivity the sole source of protection and shifts the period of market exclusivity at the project level. In instrumental variables regressions we quantify the effect of a one-year reduction in expected market exclusivity on the likelihood of drug commercialization. The effect is largely driven by patent invalidations early in the drug development process and by the responses of large originators. We hereby provide first estimates of the responsiveness of R&D investments to market exclusivity expectations. |
| Keywords: | patents; drugs; data exclusivity; clinical trials; |
| JEL: | K41 L24 L65 O31 O32 O34 |
| Date: | 2019–08–05 |
| URL: | http://d.repec.org/n?u=RePEc:rco:dpaper:176&r=all |
| By: | Inmaculada Martínez-Zarzoso (University of Goettingen / Germany); Adriana Peluffo (Universidad de la República (Uruguay)); Ernesto Silva (Universidad de la República (Uruguay)) |
| Abstract: | Innovation and export decisions are closely interlinked. Both activities contribute to firm performance in various ways: exporting provides a wider market to sell products, while innovation provides new and better products to supply those markets and/or more efficient ways to reduce costs. The connection of innovation and exporting is of major interest to developing countries aiming to achieve higher growth and wellbeing given that foreign markets are both a new challenge and a source of knowledge for firms. This study analyzes whether different types of innovation affect export behavior at the firm level for an unbalanced panel of Uruguayan manufacturing firms. Logistic regression and matching with difference-in-differences (MDID) techniques are applied to data from 2003 to 2012. Using logit models we find that previous innovation increases the probability of exporting. Unlike other studies, productivity-enhancing (or cost-reducing) innovation shows a stronger correlation than product innovation pointing out that price competition is more important than quality competition for Uruguayan products in foreign markets. Furthermore, using MDID we establish a direct causal link from innovation to exporting. Finally, we analyze export intensity by means of Tobit models. We find that innovation fosters export intensity. Overall, the findings indicate that active innovation policies along with other export promotion policies help to promote firms’ participation in foreign markets. |
| Keywords: | product innovation, process innovation, exporting |
| JEL: | F14 D21 C23 O31 O33 |
| Date: | 2018–11–06 |
| URL: | http://d.repec.org/n?u=RePEc:got:iaidps:238&r=all |
| By: | Nicolò Barbieri (University of Ferrara; SEEDS, Italy); Alberto Marzucchi (SPRU, Science Policy Research Unit, University of Sussex (UK)); Ugo Rizzo (University of Ferrara, and SEEDS, Italy) |
| Abstract: | The paper investigates the nature and impact of green technological change. We focus on the search and impact spaces of green inventions: we explore the knowledge recombination processes leading to the generation of inventions and their impact on subsequent technological developments. Using a large sample of patents, filed during the period 1980-2012, we employ established patent indicators to capture the complexity, novelty and impact of the invention process. Technological heterogeneity is controlled for by comparing green and non-green technologies within narrow technological domains. We find that green technologies are more complex and appear to be more novel than non-green technologies. In addition, they have a larger and more pervasive impact on subsequent inventions. The larger spillovers of green technologies are explained only partially by novelty and complexity. |
| Keywords: | environmental inventions, patent data, knowledge recombination, knowledge impact |
| JEL: | O33 O34 Q55 |
| Date: | 2019–08 |
| URL: | http://d.repec.org/n?u=RePEc:srt:wpaper:0819&r=all |
| By: | Sang Yoon (Tim) Lee (Queen Mary University of London and CEPR); Yongseok Shin (Washington University in St. Louis, Federal Reserve Bank of St. Louis and NBER) |
| Abstract: | We construct a multi-layer model of skills, occupations, and sectors. Technological progress among middle-skill occupations raises the employment shares and relative wages of lower- and higher-skill occupations (horizontal polarization), and those of managers over workers (vertical polarization). Polarization is faster within sectors that rely more on middle-skill workers, endogenously boosting their TFP. This shrinks their employment and output shares (structural change) if sector outputs are complementary. We empirically validate our theoretical predictions, and show that task-specific technological progress, which was faster for routine-manual tasks and slower for interpersonal tasks, played a major role in transforming the U.S. economy since 1980. |
| Keywords: | job polarization, structural change, wage inequality |
| JEL: | J24 J31 L16 O14 O33 |
| Date: | 2019–07–02 |
| URL: | http://d.repec.org/n?u=RePEc:qmw:qmwecw:888&r=all |
| By: | Barrenho, E.;; Miraldo, M.;; Propper, C;; Rose, C.; |
| Abstract: | This paper examines the effect of peers and networks on the uptake of innovation in surgery.Using a rich matched patient-surgeon data set covering all relevant surgeons, we construct a wide set of time varying measures of peer behaviour and network effects. Our estimates allow for simultaneity bias and treatment of the network as partially unknown. The findings show the importance of multiple channels in affecting the diffusion of innovative behaviour across individual surgeons. |
| Keywords: | innovation; peer effects; unknown networks; |
| Date: | 2019–07 |
| URL: | http://d.repec.org/n?u=RePEc:yor:hectdg:19/10&r=all |
| By: | Randolph Luca Bruno; Elodie Douarin; Julia Korosteleva; Slavo Radosevic |
| Abstract: | The paper explores the determinants of productivity gap within the European Union in four industrial manufacturing sectors (computers, chemicals, basic metals and food) of strong macroeconomic significance and varied 'Research and Development' (R&D) intensity. Our analysis reveals that some of the most important factors determining productivity gap across the EU are related to technology gap variables - R&D intensity and R&D embedded in purchased equipment and machinery - and how they interact. While the signs for both R&D and embedded R&D are as expected and our results emphasise the relevance of technology for closing the productivity gap, this is not the case with the interaction between these two variables. The estimates for the interaction terms are indeed very significant and consistently negative in three out of four sectors. This negative relationship suggests that there is no complementarity between these two modes of technology acquisition - R&D and embedded R&D investments - which are however each separately crucial for catching up. In policy terms, this situation suggests that there is a lack of coordination between R&D policy and technology transfer (FDI, trade and industrial policy). Given that, our results also show a widening productivity gap between the countries of the EU periphery (South and East) and the rest of the sample. |
| Keywords: | productivity; technology gap; multilevel analysis; European Union. |
| Date: | 2019–08–09 |
| URL: | http://d.repec.org/n?u=RePEc:ssa:lemwps:2019/25&r=all |
| By: | Blake Rayfield; Omer Unsal |
| Abstract: | In this study, we use a hand-collected dataset of employee lawsuits to understand the effect of employee allegations on firms’ innovation in a human capital-intensive industry. We gather more than 2,293 employee disputes between 2000 and 2015 and test the relationship between employee lawsuits and Food and Drug Administration (FDA) product approvals in the pharmaceutical industry. We find that employee disputes lower the total number of FDA-approved products. We document that firms with frequent employee allegations maintain low innovation outcomes. Additional results show that case characteristics are an important determinant of FDA approvals; labor unions and case duration delay time-to-approval of submitted products, which may explain the deteriorated innovation outcomes. Overall, our findings highlight the importance of employee treatment in the workplace environment, which is ultimately related to firms’ innovation performance. |
| Keywords: | Institutional Investors, Labor Relations, Innovation |
| JEL: | G30 G39 G23 O32 |
| Date: | 2019–07 |
| URL: | http://d.repec.org/n?u=RePEc:nfi:nfiwps:2019-wp-01&r=all |