nep-ino New Economics Papers
on Innovation
Issue of 2019‒12‒09
eight papers chosen by
Uwe Cantner
University of Jena

  1. The impact of board directors on the innovation of new ventures By Christopher F. Baum; Hans Lööf; Andreas Stephan; Ingrid Viklund-Ros
  2. Who patents, how much is real invention and how relevant? A snapshot of firms and their inventions based on the 2016 SIPO China Patent Survey By Margit Molnar; Hui Xu
  3. Determinants of Staged Project Management and Success in Innovation: Empirical Analysis based on the Japanese National Innovation Survey By HANEDA Shoko; IKEDA Yuya
  4. Determinants and Impacts of Incorporation of Local Public Technology Transfer Organizations: Evidence from Japan's Kohsetsushi By FUKUGAWA Nobuya
  5. Job Composition and Its Effect on UK Firms in the Digital Era By Mabel Sánchez Barrioluengo
  6. Technical progress, capital accumulation, and distribution By Naoki Yoshihara; Roberto Veneziani
  7. A Global View of Creative Destruction By Chang-Tai Hsieh; Peter J. Klenow; Ishan B. Nath
  8. Social innovation in community energy in Europe: a review of the evidence By Hewitt, Richard J; Bradley, Nicholas; Compagnucci, Andrea Baggio; Barlagne, Carla; Ceglarz, Andrzej; Cremades, Roger; McKeen, Margaret; Otto, Ilona M.; Slee, Richard William

  1. By: Christopher F. Baum (Boston College; DIW Berlin; CESIS, KTH Royal Institute of Technology); Hans Lööf (CESIS, KTH Royal Institute of Technology); Andreas Stephan (Jönköping International Business School; DIW Berlin); Ingrid Viklund-Ros (CESIS, KTH Royal Institute of Technology)
    Abstract: This paper studies the impact of knowledge spillovers on innovation in newly founded firms. Analyzing patent statistics for 12 cohorts of about 7,600 Swedish startups, we apply a recursive bivariate probit model to identify a causal impact from board members of existing innovators on potential new innovators. The results show that new entrants with members of the board linked to innovative firms are more likely to apply for patents than other young entrepreneurial firms. The spillover effect is even stronger when we substitute trademarks for patents as an innovation indicator.
    Keywords: start-ups, board of directors, knowledge diffusion, innovation, endogeneity
    JEL: C36 D24 M13 L21 O33
    Date: 2019–11–29
  2. By: Margit Molnar; Hui Xu
    Abstract: China has surpassed the United States in patent applications and has become world leader. Strong patenting activity, however, did not lead to strong productivity growth. The delinking of patenting activity from productivity growth could be explained by quality and relevance issues. Although the number of patents has been soaring, few are genuine inventions. Relatively low utilisation rates of patents point to a low degree of relevance. This paper uses a representative survey of Chinese patenting firms to provide a detailed picture of the patenting landscape along the dimensions of geographical areas, detailed industrial sectors, traditional and modern industries as defined by the Chinese government, firm age, size and ownership. It also overviews government subsidies across firms. Transport equipment makers hold most patents per firm, followed by electronics manufacturers. State-owned firms spend more on R&D per patent, but hold fewer patents per researcher than private or foreign-invested firms. High patenting performance and government support are not necessarily linked to high utilisation of patents. Smaller, younger and private firms expect a higher return on their patents and so do exterior design patent holders. Furthermore, the paper examines what drives patenting activity. Higher R&D spending by the firm and higher share of researchers in its workforce tend to be associated with higher patents per employee. Smaller and older firms tend to patent more, and government support also appears to matter. Exterior design patents are associated with different firm characteristics: R&D intensity is lower and government support matters less. Most firms consider IPR protection insufficient and the share of firms having experienced patent infringement is the greatest among the largest firms. Many of them do not do anything once their rights are infringed as they do not expect effective remedy. Instead of patenting, which may not provide sufficient protection from imitators, they adopt other strategies like reaping the first mover advantage to market their goods or sign confidentiality agreements with their staff or contracts on commercial secrets. This Working Paper relates to the 2019 Economic Survey of China ( mic-snapshot/).
    Keywords: Chinese patenting, firm-level analysis, government subsidies, invention patents, IPR
    JEL: O31 O34 O38
    Date: 2019–12–10
  3. By: HANEDA Shoko; IKEDA Yuya
    Abstract: This empirical study examines the impact of a staged approach to management of innovation projects. This approach incorporates the threat of termination at each stage of the product development process. Under these conditions, the present study identifies firms that have abandoned and/or still have ongoing projects using a unique firm-level dataset constructed from the 2015 Japanese National Innovation Survey (J-NIS2015). Combining J-NIS with a firm-level accounting and credit information dataset, the study explores the determinants and the effects of staging of innovation processes. The study results show that R&D-intensive firms with broad collaboration and a lower debt ratio are more likely to adopt a staged approach in the product development process. Success in innovation is measured by the propensity of a firm to produce innovative products (or processes) and the ratio of innovative product sales to the total sales. Additionally, the study compared firms that did not implement staging of projects to those that employed staged project management and found that staging significantly improved innovation performance and increased the degree of radicalness.
    Date: 2019–11
  4. By: FUKUGAWA Nobuya
    Abstract: Legal reforms act as a fundamental shift in incentive systems by creating and redefining incentive tools, such as ownership, discretion, and reward. This study examines the impacts of the Local Independent Administrative Corporation Law enacted in 2003 that altered patent ownership and managerial autonomy of Kohsetsushi , which are technology transfer organizations established by local governments. Key findings of the panel data analysis are as follows. First, the local governments' decision-making regarding the incorporation was not based on the goal of improving technology transfer performance measured by licensing income. Second, incorporation encouraged Kohsetsushi to allocate their resources from diffusion/extension activities to research/inventive activities. Third, incorporation positively affected patent applications, but had no effect on licensing income. Fourth, there was a U-shaped (inverted U-shaped) relationship between licensing income of non-incorporated (incorporated) Kohsetsushi and the number of technical problems consulted with them. Fifth, counterfactual analysis showed negative ATT and positive ATU, which suggests an unintended consequence of the policy. Policy implications of the results are discussed.
    Date: 2019–11
  5. By: Mabel Sánchez Barrioluengo (Manchester Institute of Innovation Research. Alliance Manchester Business School. University of Manchester)
    Abstract: This paper studies how the adoption of digital technologies has changed the employment structure of UK firms. While the scientific literature traditionally has shown inconclusive results about who is winning the race between man and machine, we argue that currently there are reasons to be less pessimistic about the effect of technology on labor. Drawing on an employer-employee panel survey in 2004 and 2011 in the UK, this study shows that the effect of the firms’ routine exposure on employment and wages varies according to the skill content of occupations and by sectors. Our results suggest that firms’ concentration on routine cognitive jobs does not generate outright job-losses and could even have a positive effect on overall employment at firm-level. On the other hand, firms exposed to routine manual task jobs are more at risk of generating a negative impact on firms’ labor, mainly decreasing their workforce. While the concentration of routine occupations has a job-creating effect in the tertiary sector, this does not necessarily imply consistent job-losses within the secondary sector. Finally, we conclude that the investment in routine workforce without the appropriate technological adoption is not enough to generate positive effects on labor at firm-level, specifically in the manufacturing sector.
    Keywords: digitalisation, employment, wages, digital technologies, routine jobs, firm, UK.
    Date: 2019–11
  6. By: Naoki Yoshihara (School of Management, Kochi University of Technology); Roberto Veneziani (Queen Mary University of London)
    Abstract: We study the effects of innovations on income distribution in capitalist economies characterised by a drive to accumulate. Consistent with the basic intuitions of Marx’s theory of technical change, we show that there is no obvious relation between ex-ante profitable innovations and the income distribution that actually emerges in equilibrium, and individually rational choices of technique do not necessarily lead to optimal outcomes. Innovations may even cause the disappearance of all equilibria. Methodologically, it is not possible to fully understand the ‘creative destruction’ induced by innovations without capturing the dialectic between individual choices and aggregate outcomes, and the complex network of relations typical of capitalist economies.
    Keywords: technical change, income distribution, profit rate
    JEL: O33 D33 B51
    Date: 2019–11
  7. By: Chang-Tai Hsieh; Peter J. Klenow; Ishan B. Nath
    Abstract: In the wake of the U.S.-Canada Free Trade Agreement, both the U.S. and Canada experienced a sustained increase in job reallocation, including firms moving into exporting. The change involved big firms as much as small firms. To mimic these patterns,we formulate a model of innovation by both domestic and foreign firms. In the model, trade liberalization quickens the pace of creative destruction, thereby speeding the flow of technology across countries. The resulting dynamic gains from trade liberalization are an order of magnitude larger than the gains in a standard static model.
    JEL: F11 F14 F43
    Date: 2019–11
  8. By: Hewitt, Richard J; Bradley, Nicholas; Compagnucci, Andrea Baggio; Barlagne, Carla; Ceglarz, Andrzej; Cremades, Roger; McKeen, Margaret; Otto, Ilona M.; Slee, Richard William
    Abstract: Citizen-driven Renewable Energy (RE) projects of various kinds, known collectively as community energy (CE), have an important part to play in the worldwide transition to cleaner energy systems. On the basis of evidence from literature review and an exploratory survey of 8 European countries, we investigate European CE through the lens of Social Innovation (SI). Broadly, three main phases of SI in CE can be identified. The environmental movements of the 1960s and the “oil shocks” of the 1970s provided the catalyst for a series of innovative societal responses around energy and self-sufficiency. These first wave CE innovations included cooperatives (e.g. in Sweden and Germany) who financed and managed risks for RE developments in the absence of support from governments and banks. A second wave of SI relates to the mainstreaming of RE and associated government support mechanisms. In this phase, with some important exceptions, successful CE initiatives were mainly confined to those countries where they were already embedded as innovators in the previous phase. In former communist countries of central and eastern Europe (Poland, former East Germany) CE development was hindered by societal mistrust of cooperative movements for their association with the state socialism of the past. In Scotland, UK, strong public support was given to CE, and a new form, the Community Development Trust, emerged and was later replicated elsewhere in the UK. The third phase of CE innovation relates to the societal response to the Great Recession that began in 2007-8 and lasted most of the subsequent decade. Though climate change had become a pressing concern, CE initiatives formed around this time were also strongly focused around democratization of energy and citizen empowerment in the context of rising energy prices, a weak economy, and a production and supply system dominated by excessively powerful multinational energy firms. CE initiatives today are more diverse than at any time previously, and though seriously constrained by mainstream energy policy in most countries, are likely to continue to act as incubators for pioneering initiatives addressing virtually all aspects of energy.
    Date: 2018–10–07

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