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on Innovation |
| By: | Holger Graf (Friedrich Schiller University Jena, Economics Department); Tom Broekel (University of Stavanger, Business School, Stavanger, Norway, and Centre for Regional and Innovation Economics, University of Bremen, Germany) |
| Abstract: | Cluster policies are often intended and designed to promote interaction in R&D among co-located organisations, as local knowledge interactions are perceived to be underdeveloped. In contrast to the popularity of the policy measure little is known about its impact on knowledge networks, because most scientific evaluations focus on impacts at the firm level. Using the example of the BioRegio contest, we explore cluster policy effects on local patent co-application and co-invention networks observed from 1985 to 2013, in 13 German regions. We find that the initiative increases network size and innovation activities during the funding period but not afterwards. The impact of the BioRegio contest on network cohesion is moderate. In contrast, general project-based R&D subsidisation is found to support cohesion more robustly. |
| Keywords: | Cluster Policy, Knowledge Networks, Network Analysis, Patent Data, Regional Innovation, Policy Evaluation |
| JEL: | O31 Z13 |
| Date: | 2019–10–09 |
| URL: | http://d.repec.org/n?u=RePEc:jrp:jrpwrp:2019-007&r=all |
| By: | Ksenia Gonchar (National Research University Higher School of Economics, Moscow); Maria Kristalova (Bremen University and Friedrich-Schiller-University Jena) |
| Abstract: | This paper studies how innovation strategies of Russian manufacturing firms affect various features of firm performance. A multi stage model is used, which relates the firm's decision to undertake R&D to its innovation output, technical efficiency, labor productivity, and growth. We also include imports into the knowledge production function, because catching up economies may adopt technologies embodied in imported hardware. Additionally, we link productivity and innovation output to survival. We find that both types of knowledge input - R&D and imports - strongly determine innovation. Innovations yield the strongest performance return in the case of catching up to technological frontier. Product innovation is more beneficial than process innovation in all performance features except for labor productivity. However, higher efficiency does not improve the growth rates or survival time of manufacturing firms. Taken together, these results show that innovation is not uniformly rewarded across all features of firm performance. |
| Keywords: | innovation, productivity, growth, survival, Russia |
| JEL: | C30 D24 O30 |
| Date: | 2019–02–25 |
| URL: | http://d.repec.org/n?u=RePEc:jrp:jrpwrp:2019-001&r=all |
| By: | Uluc Aysun (University of Central Florida, Orlando, FL); Zeynep Yom (School of Business, Villanova University) |
| Abstract: | This paper shows that technology shocks have the largest impact on economies when industries adopt innovations of other industries at a high rate, if costs of adopting new technologies and adjusting R&D expenditures are low, and if innovators face a high degree of competition. It is not the level but the spillover of innovations across industries that is the key determinant of these findings. Under the conditions mentioned above, R&D becomes less procyclical and smoother along the business cycle yet R&D driven innovations have a larger impact on output since these innovations spillover at a higher rate. These inferences are drawn from a dynamic stochastic general equilibrium framework describing a real economy with endogenous growth. The latter feature allows us to infer the welfare implications of R&D processes. |
| Keywords: | Research and development, spillover effects, endgenous growth |
| JEL: | E30 E32 O30 O33 |
| Date: | 2019–10 |
| URL: | http://d.repec.org/n?u=RePEc:cfl:wpaper:2019-04ua&r=all |
| By: | Swagata Bhattacharjee (Ashoka University) |
| Abstract: | Outsourcing of research is commonly observed in knowledge-intensive industries e.g. biotech. We model innovation as an ambiguous stochastic process, and assume that the commercial firms are more ambiguity averse than the research labs. We characterize the optimal sequence of short-term contracts governing innovation, and show how it facilitates ambiguity sharing. The firm's ambiguity aversion mitigates the dynamic moral hazard problem, resulting in monotonically decreasing investment and prevents equilibrium delay. However, compared to an ambiguity-neutral policymaker's benchmark, the research alliance stops experimenting earlier, and may liquidate the project even after being patented; even redesigning patent laws cannot solve both of the problems. |
| Keywords: | Ambiguity, Dynamic Contract, Patent law, Innovation, R&D |
| Date: | 2019–07 |
| URL: | http://d.repec.org/n?u=RePEc:ash:wpaper:15&r=all |
| By: | Philippe Aghion; Antonin Bergeaud; Matthieu Lequien; Marc Melitz |
| Abstract: | We analyze how demand conditions faced by a firm impacts its innovation decisions. To disentangle the direction of causality between innovation and demand conditions, we construct a firm-level export demand shock which responds to aggregate conditions in a firm's export destinations but is exogenous to firm-level decisions. Using exhaustive data covering the French manufacturing sector, we show that French firms respond to exogenous growth shocks in their export destinations by patenting more; and that this response is entirely driven by the subset of initially more productive firms. The patent response arises 3 to 5 years after a demand shock, highlighting the time required to innovate. In contrast, the demand shock raises contemporaneous sales and employment for all firms, without any notable differences between high and low productivity firms. We show that this finding of a skewed innovation response to common demand shocks arises naturally from a model of endogenous innovation and competition with firm heterogeneity. The market size increase drives all firms to innovate more by increasing the innovation rents; yet by inducing more entry and thus more competition, it also discourages innovation by low productivity firms. |
| Keywords: | innovation, export, demand shocks, patents |
| JEL: | D21 F13 F14 F41 O30 O47 |
| Date: | 2019–10 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp1657&r=all |
| By: | Marco Caliendo (University of Potsdam, IZA Bonn, DIW Berlin, IAB Nuremberg); Steffen Künn (Maastricht University and ROA, The Netherlands, IZA Bonn); Martin Weißenberger (University of Potsdam) |
| Abstract: | From an active labor market policy perspective, start-up subsidies for unemployed individuals are very effective in improving long-term labor market outcomes for participants. From a business perspective, however, the assessment of these public programs is less clear since they might attract individuals with low entrepreneurial abilities and produce businesses with low survival rates and little contribution to job creation, economic growth, and innovation. In this paper, we use a rich data set to compare participants of a German start-up subsidy program for unemployed individuals to a group of regular founders who started from nonunemployment and did not receive the subsidy. The data allows us to analyze their business performance up until 40 months after business formation. We find that formerly subsidized founders lag behind not only in survival and job creation, but especially also in innovation activities. The gaps in these business outcomes are relatively constant or even widening over time. Hence, we do not see any indication of catching up in the longer run. While the gap in survival can be entirely explained by initial differences in observable start-up characteristics, the gap in business development remains and seems to be the result of restricted access to capital as well as differential business strategies and dynamics. Considering these conflicting results for the assessment of the subsidy program from an ALMP and business perspective, policy makers need to carefully weigh the costs and benefits of such a strategy to find the right policy mix. |
| Keywords: | Entrepreneurship, Start-up Subsidies, Business Growth, Innovation, Job Creation |
| JEL: | L26 M13 J68 |
| Date: | 2019–10 |
| URL: | http://d.repec.org/n?u=RePEc:pot:cepadp:12&r=all |
| By: | Nikolay Chichkanov (National Research University Higher School of Economics) |
| Abstract: | Despite the growing interest to the field of coproduction from the service-dominant logic literature, this concept is still being emerging and most of the existing papers do not provide any empirical evidence. The aim of the study is to investigate whether those KIBS firms that involve their customers in coproduction of services are more innovative. This paper explores the relationships between a set of innovation drivers and implementation of innovations in KIBS based on a sample of 441 firms operating in Russia. The results show that coproduction of services increases the possibility of both technological and non-technological innovations in KIBS to be implemented. This finding suggests that in addition to the service offerings quality improvement, coproduction of KIBS also acts as an innovation driver, which requires an attention from innovation managers |
| Keywords: | KIBS, coproduction, client involvement, innovation, innovation drivers |
| JEL: | O30 O31 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:hig:wpaper:100sti2019&r=all |
| By: | IKEDA Yoko; IIZUKA Michiko |
| Abstract: | Under the Fourth Industrial Revolution, innovations using emerging technologies (artificial intelligence, robotics, the internet of things), are said to improve productivity and quality of life. On the other hand, the diffusion of such innovation can involve risks and uncertainties regarding safety. Generally, these risks are managed by government by means of regulation. However, it may pose challenges to firms for commercialization because emerging innovations often do not come under existing product categories nor corresponding regulations. This study answers (1) how products based on emerging technology can be commercialized, overcoming existing regulatory barriers on safety, and (2) what is the role played by standards, one type of regulation, through an examination of the case of Cyberdyne, a successful medical/healthcare robotics company in Japan. Cyberdyne developed and commercialized the world's first product using Cybernics in a wearable medical/healthcare device. The case illustrates the increasing complexity of safety regulations and a new role for standards, which is to enable firms to implement emerging technologies. It concludes with an exploration of policy considerations from a regulatory perspective in dealing with emerging technologies. |
| Date: | 2019–10 |
| URL: | http://d.repec.org/n?u=RePEc:eti:rpdpjp:19016&r=all |
| By: | Bräuer, Richard; Mertens, Matthias; Slavtchev, Viktor |
| Abstract: | This study analyses empirically the effects of import competition on firm productivity (TFPQ) using administrative firm-level panel data from German manufacturing. We find that only import competition from high-income countries is associated with positive incentives for firms to invest in productivity improvement, whereas import competition from middle- and low-income countries is not. To rationalise these findings, we further look at the characteristics of imports from the two types of countries and the effects on R&D, employment and sales. We provide evidence that imports from high-income countries are relatively capital-intensive and technologically more sophisticated goods, at which German firms tend to be relatively good. Costly investment in productivity appears feasible reaction to such type of competition and we find no evidence for downscaling. Imports from middle- and low-wage countries are relatively labour-intensive and technologically less sophisticated goods, at which German firms tend to generally be at disadvantage. In this case, there are no incentives to invest in innovation and productivity and firms tend to decline in sales and employment. |
| Keywords: | productivity,multi-product firms,import competition |
| JEL: | D22 D24 F10 F14 F60 F61 L25 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:iwhdps:202019&r=all |
| By: | Astrid Marinoni; John Voorheis |
| Abstract: | The question of who gains from high-quality entrepreneurship is crucial to understanding whether investments in incubating potentially innovative start-up firms will produce socially beneficial outcomes. We attempt to bring new evidence to this question by combining new aggregate measures of local area income inequality and income mobility with measures of entrepreneurship from Guzman and Stern (2017). Our new aggregate measures are generated by linking American Community Survey data with the universe of IRS 1040 tax returns. In both fixed effects and IV models using a Bartik-style instrument, we find that entrepreneurship increases income inequality. Further, we find that this increase in income inequality arises due to the fact that almost all of the individual gains associated with increased entrepreneurship accrue to the top 10 percent of the income distribution. While we find mixed evidence for small positive effects of entrepreneurship lower on the income distribution, we find little if any evidence that entrepreneurship increases income mobility. |
| Keywords: | entrepreneurship, innovation, income inequality |
| JEL: | L26 D63 |
| Date: | 2019–10 |
| URL: | http://d.repec.org/n?u=RePEc:cen:wpaper:19-29&r=all |
| By: | Michael Wyrwich (University of Groningen); Michael Fritsch (FSU Jena); Elisabeth Bublitz (University of Hamburg); Alina Sorgner (John Cabot University Rome) |
| Abstract: | New business formation plays an important role for economic development. Therefore, policy makers put emphasis on fostering start-up activity. Aims and scope of entrepreneurs can be just as heterogeneous as the structure of new ventures. The project "New business formation and the labor market in East and West German growth regimes" within the Collaborative Research Center (SFB 580) "Social developments in post-socialistic societies: discontinuity, tradition, structural formation" at the Friedrich-Schiller University Jena investigated the development and structures of new firms. To this end, the project team conducted the GAW survey by means of computer-assisted telephone interviewing (CATI). In total, there have been 1,105 interviews with founders of firms. The data include personal information on the founder and his or her firm. This information can be merged with administrative data of the Establishment History Panel (BHP = Betriebs-Historik Panel) of the Research Data Centre of the German Institute for Employment Research (IAB). The BHP comprises detailed information on establishment characteristics. Therefore, the GAW survey data provide the unique opportunity to link characteristics of the entrepreneur with detailed information about the characteristics of his or her company and firm growth. |
| Keywords: | Firm growth, Labour market, Growth, East and West Germany |
| JEL: | L26 P30 |
| Date: | 2018–11–06 |
| URL: | http://d.repec.org/n?u=RePEc:jrp:jrpwrp:2018-017&r=all |
| By: | Michael Fritsch (Friedrich Schiller University Jena, School of Economics and Business Administration); Muhamed Kudic (University of Bremen, Faculty of Economics and Business) |
| Abstract: | From a macro perspective, inventor networks are characterized by rather stable structures. However, the high levels of fluidity of inventors and their ties found in reality contradicts this macro pattern. In order to explain these contradicting patterns, we zoom in on the intermediate group structures of co-patenting relationships found among inventors in German laser technology research over a period of 45 years. Our findings suggest that continuity of individual actors is not a key factor in maintaining structural stability of networks. Group level explorations indicate that the successor of an existing key player belonged to the exiting key player's ego-network, indicating that the group level provides a source of stability and functionality to the system. |
| Keywords: | Inventor network, network stability, key player analysis, innovation, laser technology |
| JEL: | D22 D85 L23 O3 |
| Date: | 2019–07–29 |
| URL: | http://d.repec.org/n?u=RePEc:jrp:jrpwrp:2019-004&r=all |