nep-ino New Economics Papers
on Innovation
Issue of 2019‒09‒30
sixteen papers chosen by
Uwe Cantner
University of Jena

  1. Cross-country evidence on the contributions of research institutions to innovation By Caroline Paunov; Martin Borowiecki; Nevine El-Mallakh
  2. New evidence on determinants of IP litigation: A market-based approach By Dirk Czarnitzki; Kristof Van Criekingen
  3. The antecedents of new R&D collaborations with different partner types: On the dynamics of past R&D collaboration and innovative performance By Rene Belderbos; Victor Gilsing; Boris Lokshin; Martin Carree; Juan Fernández Sastre
  4. Public procurement as policy instrument for innovation By Dirk Czarnitzki; Paul Hünermund; Nima Moshgbar
  5. Digitization and knowledge spillover effectiveness: Evidence from the "German Mittelstand" By Proeger, Till; Runst, Petrik
  6. World Innovation:Evidence from 100 years of Patent Data By Enrico Berkes; Kristina Manysheva; Marti Mestieri
  7. A Theory of Falling Growth and Rising Rents By Philippe Aghion; Antonin Bergeaud; Huiyu Li; Peter Klenow; Timo Boppart
  8. Testing the Employment Impact of Automation, Robots and AI: A Survey and Some Methodological Issues By Barbieri, Laura; Mussida, Chiara; Piva, Mariacristina; Vivarelli, Marco
  9. Corporate Venture Capital (CVC) investments and technological performance: Geographic diversity and the interplay with technology alliances By Rene Belderbos; Jojo Jacob; Boris Lokshin
  10. Entrepreneurial Persistence beyond Survival: Measurement and Determinants By Caliendo, Marco; Goethner, Maximilian; Weißenberger, Martin
  11. Patent-Based News Shocks By Cascaldi-Garcia, Danilo; Vukotic, Marija
  12. A Law of Functional Expansion - Eliciting the Dynamics of Consumer Goods Innovation with Design Theory By Pascal Le Masson; Kenza El Qaoumi; Armand Hatchuel; Benoit Weil
  13. Synergizing Ventures By Ufuk Akcigit; Emin Dinlersoz; Jeremy Greenwood; Veronika Penciakova
  14. The Decline in Entrepreneurship in the West: Is Complexity Ossifying the Economy? By Naudé, Wim
  15. Innovative Design Within Tradition - Injecting Topos Structures in C-K Theory to Model Culinary Creation Heritage By Armand Hatchuel; Pascal Le Masson; Benoit Weil; Daniel Carvajal-Perez
  16. Knowledge searching strategies, testing for complementarities on the innovation behavior of the firm By Alejandro Bello-Pintado; Felipe Berrutti; Carlos Bianchi; Pablo Blanchard

  1. By: Caroline Paunov (OECD); Martin Borowiecki (OECD); Nevine El-Mallakh (Université Paris 1 Panthéon-Sorbonne)
    Abstract: This paper presents preliminary evidence on the patenting activities of 21 200 research institutions - 20 091 higher education institutions (HEIs) and 1 109 public research institutes (PRIs) - for 36 OECD countries and China from 1992 to 2014. Our evidence, which builds on a database that matches research institutions to a sample of their patent applications, indicates patent applications to the European Patent Office (EPO) filed by research institutions grew faster than industry patents. Those jointly filed by industry and research institutions grew even faster. However, research institutions’ share in patent applications remains low and their ratio of patents granted to applications is below that of industry. An econometric analysis at postal code level shows that geographical proximity to research institutions is associated with higher industry patenting. Results from an instrumental variable estimation indicate that research institutions positively influence local industry patenting, including in life sciences and digital technologies.
    Keywords: China, Higher education institutions (HEIs), innovation, local knowledge spillovers, OECD countries, patents, public research institutes (PRIs), universities
    JEL: I23 O31 O34
    Date: 2019–09–24
  2. By: Dirk Czarnitzki; Kristof Van Criekingen
    Abstract: We contribute to the economic literature on patent litigation by taking a new perspective. In the past, scholars mostly focused on specific litigation cases at the patent level and related technological characteristics to the event of litigation. However, observing IP disputes suggests that not only technological characteristics may trigger litigation suits, but also the market positions of firms, and that firms dispute not only about single patents but often about portfolios. Consequently, this paper examines the occurrence of IP litigation cases in Belgian firms using the 2013 Community Innovation Survey with supplemental information on IP litigation and patent portfolios. The rich survey information regarding firms’ general innovation strategies enables us to introduce market-related variables such as sales with new products as well as sales based mainly on imitation and incremental innovation. Our results indicate that when controlling for firms’ IP portfolio, the composition of turnover in terms of innovations and imitations has additional explanatory power regarding litigation propensities. Firms with a high turnover from innovations are more likely to become plaintiffs in court. Contrastingly, firms with a high turnover from incremental innovation and imitation are more likely to become defendants in court, and, moreover, are more likely to negotiate settlements outside of court.
    Keywords: IP litigation, patenting, innovation, imitation
    Date: 2018–04
  3. By: Rene Belderbos; Victor Gilsing; Boris Lokshin; Martin Carree; Juan Fernández Sastre
    Abstract: We examine firms’ propensity to adapt their R&D collaboration portfolio by establishing new types of R&D collaboration with different kinds of partners (suppliers, customers, competitors and universities & public research institutions). We argue that existing R&D collaboration with one of the two value chain partners (suppliers or customers) is associated with the formation of new R&D collaboration with the other value chain partner to ensure temporal alignment in innovation within the value chain. In contrast, issues related to governance and unintended knowledge spillovers suggest that ‘horizontal’ R&D collaboration with competitors only spurs R&D collaboration with other partner types if such competitor R&D collaboration has been discontinued earlier (‘delayed temporal alignment’). We posit that persistent prior R&D collaboration with institutional partners is an antecedent to the establishment of new R&D collaboration with industrial partners, and that discontinuation of a particular type of R&D collaboration is likely to lead to a restart of such R&D collaborative effort. Strong prior innovative performance is expected to increase the probability that firms establish R&D collaborations with new partner types, except for R&D collaboration with competitors, since the most innovative firms may fear leakage of proprietary knowledge to rivals. We find broad support for these predictions in a large panel of Spanish innovating firms (2004-2011). Our findings highlight that it is not just the configuration of R&D collaborations with existing partner types that predicts tie formation with new partner types, but also the intertemporal pattern of prior R&D collaboration and managerial discretion provided by past innovation success.
    Date: 2017–10
  4. By: Dirk Czarnitzki; Paul Hünermund; Nima Moshgbar
    Abstract: The use of public procurement to promote private innovation activities has attracted increasing attention recently. Germany implemented a legal change in its procurement framework in 2009, which allowed government agencies to specify innovative aspects of procured products as selection criteria in tender calls. We analyze a representative sample of German firms to investigate whether this reform stimulated innovation in the business sector. Across a wide set of specifications—OLS, nearest-neighbor matching, IV regressions and difference-in-differences—we find a robust and significant effect of innovation-directed public procurement on turnover from new products and services. However, our results show that the effect is largely attributable to innovations of more incremental nature rather than market novelties.
    Keywords: Public Procurement of Innovation, ublic Procurement with Contracted Innovation, Technical Change, Research and Development, Econometric Policy Evaluation
    Date: 2018–01
  5. By: Proeger, Till; Runst, Petrik
    Abstract: The Knowledge Spillover Theory of Entrepreneurship (KSTE) considers determinants of knowledge diffusion as well as their impact on entrepreneurial activities and growth. Extending the KSTE, the role of incumbent firms for the broad diffusion of new knowledge has been emphasized. For those firms, the barriers to an effective flow of information are considered using the concepts of knowledge filters and absorptive capacities. Both concepts enable the derivation of institutional measures to penetrate knowledge filters and systematically increase absorptive capacities. We interpret the process of digitization as a central process of knowledge spillover in recent years and determine digitization-related knowledge filters for particular domains of firm decision-making. Using a consultant-based in-depth evaluation of 200 SMEs conducted in the context of a federal innovation program, structural drivers, firm clusters and domain-specific knowledge filters for digitization are determined. We find little evidence for structural drivers of knowledge spillover effectiveness. However, as firms are clustered according to their digitization pattern, we show that firms realize high degrees of digitization in most domains or in none, leading us to argue that domain-specific knowledge filters are weak. Rather, knowledge spillover in digitization can be considered a process with initially strong general knowledge filter and - once this filter has been penetrated - weaker subsequent domain-specific knowledge filters. Policy and managerial implications for increasing digitization-related knowledge spillovers in SMEs are discussed.
    Keywords: Digitization,Knowledge Filter,Knowledge Spillover Theory of Entrepreneurship,Small and Medium Enterprises
    JEL: D21 D82 H41 K23 L14
    Date: 2019
  6. By: Enrico Berkes (The Ohio State University); Kristina Manysheva (Northwestern University); Marti Mestieri (Northwestern University)
    Abstract: We document the evolution of innovation patterns over the last 100 years for over 75 countries as measured by patent filings in these countries. We document how innova- tion has shifted across fields, from mechanical engineering in the beginning of the XXth century, to chemistry and physics in the mid-century, medicine and the digital economy. We also document how different countries have contributed to these shifts at different points in time and how innovation correlates across countries and across fields. Finally, we use the cross-country, cross-sectoral citation patterns to document knowledge link- ages in the innovation process. We leverage on these country-sector linkages to construct an instrument for innovation and assess the impact of innovation on sectoral productiv- ity, absolute and comparative advantage.
    Date: 2019
  7. By: Philippe Aghion (College de France); Antonin Bergeaud (Banque de France); Huiyu Li (Federal Reserve Bank of San Francisco); Peter Klenow (Stanford University); Timo Boppart (IIES, Stockholm University)
    Abstract: Growth has fallen in the U.S., while firm concentration and profits have risen. Labor's share has fallen, mostly due to rising market share of low labor share firms. We propose a theory for these trends in which the driving force is falling firm-level costs of spanning multiple markets, perhaps due to ICT advances. The most efficient firms spread into new markets in response, generating a temporary burst of growth but also erecting barriers to future innovation if their efficiency is difficult for other firms to imitate. Despite rising rents, even the efficient firms do less innovation in the long run as they are more likely to face stiff competition if they enter markets against each other.
    Date: 2019
  8. By: Barbieri, Laura (Università Cattolica di Piacenza); Mussida, Chiara (Università Cattolica del Sacro Cuore); Piva, Mariacristina (Università Cattolica del Sacro Cuore); Vivarelli, Marco (Università Cattolica del Sacro Cuore)
    Abstract: The present technological revolution, characterized by the pervasive and growing presence of robots, automation, Artificial Intelligence and machine learning, is going to transform societies and economic systems. However, this is not the first technological revolution humankind has been facing, but it is probably the very first one with such an accelerated diffusion pace involving all the industrial sectors. Studying its mechanisms and consequences (will the world turn into a jobless society or not?), mainly considering the labor market dynamics, is a crucial matter. This paper aims at providing an updated picture of main empirical evidence on the relationship between new technologies and employment both in terms of overall consequences on the number of employees, tasks required, and wage/inequality effect.
    Keywords: technology, innovation, employment, skill, task, routine
    JEL: O33
    Date: 2019–09
  9. By: Rene Belderbos; Jojo Jacob; Boris Lokshin
    Abstract: Firms are increasingly operating portfolios of geographically dispersed CVC investments for accessing a variety of location-specific knowledge, often alongside traditional external knowledge-sourcing strategies such as technology alliances. We examine the conditions under which geographic diversity in corporate venture capital (CVC) investments has positive consequences for firms’ technological performance in the context of simultaneously pursued technology alliance strategies. We find that geographic diversity in CVC portfolios enhances performance as long as firms avoid knowledge redundancy in knowledge-sourcing arising from geographic overlaps with technology alliances, and the managerial complexity, coordination costs, and resource constraints stemming from the simultaneous pursuit of diversity in both technology alliances and CVC investments. Our inferences draw on a panel data set on the patents, CVC investments, and technology alliances of 55 CVC-active firms in a variety of industries.
    Keywords: CVC investments, technology alliances, technological performance
    Date: 2017–10
  10. By: Caliendo, Marco (University of Potsdam); Goethner, Maximilian (Friedrich Schiller University); Weißenberger, Martin (University of Potsdam)
    Abstract: Entrepreneurial persistence is demonstrated by an entrepreneur's continued positive maintenance of entrepreneurial motivation and constantly-renewed active engagement in a new business venture despite counter forces or enticing alternatives. It is thus a crucial factor for entrepreneurs when pursuing and exploiting their business opportunities and to realize potential economic gains and benefits. Using rich data on a representative sample of German business founders, we investigate the determinants of entrepreneurial persistence. Next to observed survival we also construct a hybrid persistence measure capturing also the motivational dimension of persistence. We analyze the influence of individual-level (human capital and personality) and business-related characteristics on both measures as well as their relative importance. We find that the two indicators emphasize different aspects of persistence. For the survival indicator, the predictive power is concentrated in business characteristics and human capital, while for hybrid persistence, the dominant factors are business characteristics and personality. Finally, we show that results are heterogeneous across subgroups. In particular, formerly-unemployed founders do not differ in survival chances, but they are more likely to lack a high psychological commitment to their business ventures.
    Keywords: entrepreneurship, start-ups, persistence, survival
    JEL: L26 M13
    Date: 2019–09
  11. By: Cascaldi-Garcia, Danilo (Federal Reserve Board); Vukotic, Marija (University of Warwick)
    Abstract: In this paper we exploit firm-level data on patent grants and subsequent reactions of their stocks to identify technological news shocks. Changes in stock market valuations due to announcements of individual patent grants represent expected future increases in the technology level, which we refer to as patent-based news shocks. Our patent-based news shocks resemble diffusion news in that they do not affect total factor productivity in the short-run but account for about 20 percent of its variations after five years. These shocks induce positive comovement between consumption, output, investment and hours. Unlike the existing empirical evidence, patent-based news shocks generate a positive response in inflation and the federal funds rate, in line with a standard New Keynesian model. Patenting activity in electronic and electrical equipment industries within the manufacturing sector and computer programming and data processing services within the services sector play a crucial role in driving our results.
    Keywords: News Shocks ; Patents ; Patent-based news shocks
    JEL: E3 E32 L60
    Date: 2019
  12. By: Pascal Le Masson (CGS i3 - Centre de Gestion Scientifique i3 - MINES ParisTech - École nationale supérieure des mines de Paris - PSL - PSL Research University - CNRS - Centre National de la Recherche Scientifique); Kenza El Qaoumi (CGS i3 - Centre de Gestion Scientifique i3 - MINES ParisTech - École nationale supérieure des mines de Paris - PSL - PSL Research University - CNRS - Centre National de la Recherche Scientifique); Armand Hatchuel (CGS i3 - Centre de Gestion Scientifique i3 - MINES ParisTech - École nationale supérieure des mines de Paris - PSL - PSL Research University - CNRS - Centre National de la Recherche Scientifique); Benoit Weil (CGS i3 - Centre de Gestion Scientifique i3 - MINES ParisTech - École nationale supérieure des mines de Paris - PSL - PSL Research University - CNRS - Centre National de la Recherche Scientifique)
    Abstract: For more than two decades, mobile phone industry has shown that innovation is not only functional optimization and combination but can also be a "functional expansion". Sometimes called radical or disruptive innovation, this phenomenon leads to the development of new method for engineers and designers. However, the intensity remains undemonstrated: is functional expansion a rare phenomenon (few products during very short periods of time)-or is it an intense phenomenon, that even might have accelerated in the last decades? To answer these questions, the paper overcomes two main obstacles: how to measure functional expansion? And what would be a law of functional expansion, that would enable to test the importance and newness of the phenomena? Building on recent advances on the measurement of innovation and on new computational models of design derived from most advanced design theories, this paper presents unique data on functional expansion of 8 consumer products and tests that functional expansion significantly accelerated in the mid 1990s. The paper confirms quantitatively that our societies are now in a new design regime, a regime of innovative design.
    Keywords: Functional expansion,Technology,Design theory,Innovation
    Date: 2019
  13. By: Ufuk Akcigit (University of Chicago); Emin Dinlersoz (U.S. Census Bureau); Jeremy Greenwood (University of Pennsylvania); Veronika Penciakova (University of Maryland)
    Abstract: Venture capital and growth are examined both empirically and theoretically. Empirically, VC-backed startups have higher early growth rates and patenting levels than non-VC-backed ones. Venture capitalists increase a startup's likelihood of reaching the right tails of firm size and innovation distributions. Furthermore, there is positive assortative matching: better venture capitalists match with better startups, creating a synergistic effect. An endogenous growth model, where venture capitalists provide both expertise and financing to business startups, is constructed to match these facts. The degree of assortative matching and the taxation of VC-backed startups are important for growth.
    Date: 2019
  14. By: Naudé, Wim (Maastricht University)
    Abstract: Entrepreneurship in most advanced economies is in decline. This comes as a surprise: many scholars have expected an upsurge in entrepreneurship. What are the reasons for the decline? In this paper I first document the extent of the decline in terms of entrepreneurial entry rates; the share of young and small firms; and in terms of labor market mobility and in innovativeness. I then critically discuss the explanations that have been offered in the literature, which variously ascribes the decline to either the slowing of population growth, and/or growing market concentration, zombie-firm congestion, slower diffusion of knowledge, and burdensome business regulations. While having merit, these explanations tend to take a supply-side view and moreover fail to explain why the decline in entrepreneurship is largely confined to economies with high levels of economic complexity. I argue that we need to consider the potential of negative scale effects and evolutionary pressures from rising complexity, as well as long-run changes in aggregate demand and energy costs. Whether the decline in entrepreneurship and the ossification of the economy is undesirable, is a point for debate, calling for more research and more attention to entrepreneurship in growth theories.
    Keywords: development, start-ups, entrepreneurship, economic complexity, growth theory
    JEL: O47 O33 J24 E21 E25
    Date: 2019–09
  15. By: Armand Hatchuel (CGS i3 - Centre de Gestion Scientifique i3 - MINES ParisTech - École nationale supérieure des mines de Paris - PSL - PSL Research University - CNRS - Centre National de la Recherche Scientifique); Pascal Le Masson (CGS i3 - Centre de Gestion Scientifique i3 - MINES ParisTech - École nationale supérieure des mines de Paris - PSL - PSL Research University - CNRS - Centre National de la Recherche Scientifique); Benoit Weil (CGS i3 - Centre de Gestion Scientifique i3 - MINES ParisTech - École nationale supérieure des mines de Paris - PSL - PSL Research University - CNRS - Centre National de la Recherche Scientifique); Daniel Carvajal-Perez
    Abstract: In "Grande cuisine" creation and tradition co-evolve in a rich number of ways. Great chefs still use recipes from the 19th century and may also reinvent gastronomy itself. The creation heritage of culinary Art is the paradoxical capacity to both "respect" tradition and "break" its rules. Building on C-K theory, we show that such creative heritage needs multiple and independent layers of knowledge that "speak" of basic fixed objects. These properties correspond to general mathematical structures that we find in Topos theory. Thus, C-K/Topos predicts creative design strategies that can respect tradition in different ways. It also proves a form of "innovation within tradition"-"sheafification" in Topos words-that is not a compromise and builds on tradition itself. These findings fit with the lessons of great books of gastronomy. C-K/Topos has a wide scope of validity: it applies to any innovative design that needs preserving systemic structures, like engineering systems or social and environmental systems. C-K/Topos models with a high generality how local and radical innovation can warrant systems incremental change. C-K/Topos will have implications for teaching and research.
    Keywords: Knowledge management,Creation heritage,Tradition,Innovation,Design theory
    Date: 2019–07
  16. By: Alejandro Bello-Pintado (Universidad Pública de Navarra (España)); Felipe Berrutti (Universidad de la República (Uruguay). Facultad de Ciencias Económicas y de Administración. Instituto de Economí­a); Carlos Bianchi (Universidad de la República (Uruguay). Facultad de Ciencias Económicas y de Administración. Instituto de Economí­a); Pablo Blanchard (Universidad de la República (Uruguay). Facultad de Ciencias Económicas y de Administración. Instituto de Economí­a)
    Abstract: According to two basic building blocks of neo-Schumpeterian economics, firms innovation process shows idiosyncratic features related to their specific characteristics of the firm and of the environment where it acts. Moreover, firms innovation is recognized as an interactive process. Hence, due to systemic functioning, it is expected that the effect of two simultaneous external linkages will be different from the sum of their isolated effects. However, the external search for knowledge and information sources (KISs) may present constraints related to the searching costs and the cognitive distance between the firm and the KISs. This paper aims to contribute empirical evidence to revisit these theoretical building blocks by analyzing the search strategies conducted by firms. We identify three types of external KISs and analyze the effects of eight search strategies (KIS combinations) on firms innovation behavior. In addition, we test the complementarity or substitution effects of the simultaneous use of different KISs on the innovation behavior – effort and performance – of Uruguayan firms. We identify the specific effect of different KIS combinations but find no evidence of a linear relation between search scope and innovation behavior. Moreover, we find evidence of complementary effects between relatively closer and more distant KISs and substitution effects between relatively near KISs.
    Keywords: information sources, search strategy, complementarity, supermodularity
    JEL: D22 D83 L25 O32
    Date: 2019

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