nep-ino New Economics Papers
on Innovation
Issue of 2020‒02‒24
fourteen papers chosen by
Uwe Cantner
University of Jena

  1. Making a Market: Infrastructure, Integration and the Rise of Innovation By Andersson, David; Berger, Thor; Prawitz, Erik
  2. Innovation Strategies and Productivity Growth in Developing Countries: Evidence from Pakistan By Wadho, Waqar; Chaudhry, Azam
  3. Understanding Regional Branching Knowledge Diversification via Inventor Collaboration Networks By Adam Whittle; Balázs Lengyel; Dieter F. Kogler
  4. Effects of cluster policies on regional innovation networks: Evidence from France By Konan Alain N’Ghauran; Corinne Autant-Bernard
  5. Academic Engagement, Commercialization, and Scholarship: Empirical Evidence from Agricultural and Life Scientists at U.S. Land-grant Universities By Bradford L. Barham; Jeremy D. Foltz; Ana Paula Melo
  6. Peer Networks and Entrepreneurship: A Pan-African RCT By Vega-Redondo, Fernando; Pin, Paolo; Ubfal, Diego; Benedetti-Fasil, Cristiana; Brummitt, Charles; Rubera, Gaia; Hovy, Dirk; Fornaciari, Tommaso
  7. The cost of weak institutions for innovation in China By Andrés Rodríguez-Pose; Min Zhang
  8. The adopter versus the technology: their importance as determinants of adoption and their use in research By Montes de Oca Munguia, Oscar; Pannell, David J.; Llewellyn, Rick
  9. Mismatch Cycles By Isaac Baley; Ana Figueiredo; Robert Ulbricht
  10. The Origins of Creativity: The Case of the Arts in the United States since 1850 By Karol J. Borowiecki
  11. Extending the Race between Education and Technology By David Autor; Claudia Goldin; Lawrence F. Katz
  12. Influence in Economics and Aging By Jelnov, Pavel; Weiss, Yoram
  13. From particles to firms: a kinetic model of climbing up evolutionary landscapes By Nicola Bellomo; Giovanni Dosi; Damian A. Knopoff; Maria Enrica Virgillito
  14. Technology Contagion in Networks By Come Billard

  1. By: Andersson, David (Uppsala University); Berger, Thor (Research Institute of Industrial Economics (IFN)); Prawitz, Erik (Research Institute of Industrial Economics (IFN))
    Abstract: We exploit exogenous variation arising from the historical rollout of the Swedish railroad network across municipalities to identify the impacts of lowered interaction costs on innovative activity. A network connection led to a surge in local innovation due to an increased entry, productivity, and specialization of independent inventors. As the railroad network expanded, it further led to the emergence of a national market for ideas: inventors in connected areas began to develop ideas with applications outside the local economy, which were subsequently sold to firms along the network. Our findings suggest that the reduced interaction cost between firms, intermediaries, and inventors was a key driver of the historical emergence of a market for ideas.
    Keywords: Technological Change; Infrastructure; Innovation
    JEL: N70 O30 O33
    Date: 2020–02–18
  2. By: Wadho, Waqar; Chaudhry, Azam
    Abstract: We examine the determinants of product, process, and organizational innovation, and their impact on firm labor productivity using data from a unique innovation survey of firms in Pakistan. We find significant heterogeneity in the impact of different innovations on labor productivity: Organizational innovation has the largest effect followed by process innovation. But unlike much of the literature, we found a negative impact of product innovation suggesting a disruption effect of new products; however, this is mitigated if new products are paired with process or organizational innovations. We find a strong impact of engaging in knowledge creation on product and process innovation. We found that external knowledge networks and innovation cooperation play no significant role in firms’ decision to perform R&D and its intensity, though vertical linkages with suppliers (clients) promote product (process) innovations. Foreign competition has a negative effect on product innovation and a positive effect on organizational innovation.
    Keywords: Technological Innovation,organizational innovation,labor productivity,developing countries,Labor intensive industries
    JEL: O31 O32 L25 L67 C31 C24 D22
    Date: 2020
  3. By: Adam Whittle; Balázs Lengyel; Dieter F. Kogler
    Abstract: The diversification of regions into new technologies is driven by the degree of relatedness to existing capabilities in the region. However, in such case where the necessary skills for diversification are missing, the importation of external knowledge from neighbouring regions or from further away is necessary. Despite the importance of interregional knowledge flows through collaborative work, we still have a very limited understanding of how collaboration networks across regions facilitate diversification processes. The present study investigates the diversification patterns of European NUTS2 regions into new knowledge domains via CPC technology classes reported in patent applications to the European Patent Office. The findings indicate that externally oriented inventor collaboration networks increase the likelihood that a new technology enters a region. The influence of interregional ties is higher if the external knowledge sourcing is based on a diverse set of regions and if collaboration is intense within entities located in distinct regions. Further, the results demonstrate that interregional collaboration networks in general provides the final push into related diversification activities. At the same time, internal collaboration promotes entry into knowledge domains that are weakly related to already present technologies in the region. Finally, evidence shows that diverse external connections and intense collaboration within companies across distant sites compensate for missing related skills in the region.
    Keywords: Economic Diversification, Regional Knowledge Networks, Inventor Collaboration Networks, Firm Linkages, Knowledge Sourcing, Specialisation, Patent Data Analysis
    JEL: O33 O52 R11
    Date: 2020–02
  4. By: Konan Alain N’Ghauran (Univ Lyon, UJM Saint-Etienne, CNRS, GATE L-SE UMR 5824, F-42023 Saint-Etienne, France); Corinne Autant-Bernard (Univ Lyon, UJM Saint-Etienne, CNRS, GATE L-SE UMR 5824, F-42023 Saint-Etienne, France)
    Abstract: Despite the growing body of literature evaluating cluster policies, it still remains difficult to establish conclusively their structural effects on regional innovation networks. Focusing on the French cluster policy during the period 2005-2010, this study aims at evaluating how cluster policies influence the structure of local innovation networks following network topologies that may be beneficial for regional innovation. Based on a panel data of four periods and 94 NUTS3 French regions, we estimate spatial Durbin models, allowing us to identify direct, indirect and total effects of cluster policies. The results suggest that cluster policies can result in both positive and negative total effects on the structure of local innovation networks depending on regions’ technological specialisation. Beyond the heterogeneous effects, the results also highlight that cluster policies may lead to a regional competition for the strengthening of innovation networks. This finding echoed previous research pointing out the possible "beggar-thy-neighbour" effects of cluster policies.
    Keywords: Cluster, Regional innovation, Innovation network, Policy evaluation
    JEL: L52 O33 R58
    Date: 2020
  5. By: Bradford L. Barham; Jeremy D. Foltz; Ana Paula Melo
    Abstract: This article examines the involvement of agricultural and life science faculty at U.S. land grant universities in two types of university-industry relations: academic engagement (sponsored research, industry collaborations, and presentations), academic commercialization (patenting, licensing, and start-ups) and traditional academic scholarship. It exploits large-scale, random sample cross-section surveys of nearly 1,500 scientists at the original 52 Land Grant Universities in 2005 and 2015. We fill a knowledge gap regarding the prevalence, coincidence, intensity, importance and factors shaping faculty involvement in university-industry relations (UIR). After several decades of promotion and emphasis on UIR activities participation in them has plateaued and is stable at a fairly high level. Academic engagement is far more prevalent (at 76% of faculty) and important than is academic commercialization (at 19% of faculty). Academic engagement generates 15-20 times the research funds than academic commercialization does, but both continue to be dwarfed by public funding. We find evidence of synergies between UIR activities and academic scholarship. We also explore how individual, institutional, and university-level factors help explain faculty UIR participation. We find differences across academic disciplines and highlight the role that faculty attitudes toward science and commercial activity shape involvement in UIR. Significant differences also stem from university level effects and may be contingent on culture, history, location, and quality of science.
    JEL: I23 O31
    Date: 2020–01
  6. By: Vega-Redondo, Fernando (Universidad de Alicante); Pin, Paolo (Bocconi University); Ubfal, Diego (Bocconi University); Benedetti-Fasil, Cristiana (European University Institute); Brummitt, Charles (Harvard University); Rubera, Gaia (Bocconi University); Hovy, Dirk (Bocconi University); Fornaciari, Tommaso (Bocconi University)
    Abstract: Can large-scale peer interaction foster entrepreneurship and innovation? We conducted an RCT involving almost 5,000 entrepreneurs from 49 African countries. All were enrolled in an online business course, and the treatment involved random assignment to either face-to-face or virtual (Internet-mediated) interaction. We find positive treatment effects on both the submission of business plans and their quality, provided interaction displays some intermediate diversity. Network effects are also significant on both outcomes, although diversity plays a different role for each. This shows that effective peer interaction can be feasibly implemented quite broadly but must also be designed carefully, in view of the pursued objectives.
    Keywords: social networks, peer effects, entrepreneurship, innovation, semantic analysis
    JEL: C93 D04 D85 O12 O31 O35
    Date: 2019–12
  7. By: Andrés Rodríguez-Pose; Min Zhang
    Abstract: Does the variation in the quality of local government institutions affect the capacity of firms to innovate? This paper uses a unique dataset that combines the specific features of 2,700 firms with the institutional and socioeconomic characteristics of the 25 cities in China where they operate, in order to assess the extent to which institutional quality – measured across four dimensions: rule of law, government effectiveness, corruption, and regulatory quality – affects both the innovation probability and intensity of firms. The results of the econometric analysis show that poor institutional quality in urban China is an important barrier for firm-level innovation. In particular, a deficient rule of law, high corruption, and a weak regulatory quality strongly undermine firm-level innovation. The role of these factors is far more limited in the case of innovation intensity. Better institutions also reduce the amount of time firms spend dealing with government regulations in order to facilitate innovation. The results also indicate that the cost of weak institutions for innovation is higher for private than for state-owned firms, at least in the early stages of innovation. In general, differences in institutional quality generate local urban ecosystems that impinge on the propensity of firms to innovate.
    Keywords: innovation, institutions, government quality, firms, cities, China
    JEL: H1 O3 O31
    Date: 2020–02
  8. By: Montes de Oca Munguia, Oscar; Pannell, David J.; Llewellyn, Rick
    Abstract: Research on the determinants of adoption of agricultural innovations (technologies and practices) has failed to converge towards a consistent explanation for why farmers do or do not choose to adopt new technologies and practices. This absence of convergence matters because it indicates that agricultural extension and policy are influenced by a body of literature that is often not able to offer clear recommendations on the variables that can be used to design interventions. Our analysis shows that adopter and technology characteristics are important determinants of adoption, but researchers have been mainly focused on researching the adopter and the general farming context, with relatively little attention on understanding the influence on adoption of the characteristics of the technology itself.
    Keywords: Environmental Economics and Policy
    Date: 2020–01–24
  9. By: Isaac Baley; Ana Figueiredo; Robert Ulbricht
    Abstract: This paper studies the dynamics of skill mismatch over the business cycle. We build a tractable directed search model, in which workers differ in skills along multiple dimensions and sort into jobs with heterogeneous skill requirements along those dimensions. Skill mismatch arises due to information and labor market frictions. Estimated to the U.S., the model replicates salient business cyclic properties of mismatch. We show that job transitions in and out of bottom job rungs, combined with career mobility of workers, are important to account for the empirical behavior of mismatch. The predicted career dynamics provide a novel narrative for the scarring effect of unemployment. The model suggests significant welfare costs associated with mismatch due to learning frictions.
    Keywords: Business cycles, cleansing, learning about skills, multidimensional sorting, scarring effect of unemployment, search-and-matching, skill mismatch, sullying
    JEL: E24 E32 J24 J64
    Date: 2020–02
  10. By: Karol J. Borowiecki (Department of Business and Economics, University of Southern Denmark, Odense, Denmark)
    Abstract: This research illuminates the historical development of creative activity in the United States. Census data is used to identify creative occupations (i.e., artists, musicians, authors, actors) and data on prominent creatives, as listed in a comprehensive biographical compendium. The analysis rst sheds light on the socio-economic background of creative people and how it has changed since 1850. The results indicate that the proportion of female creatives is relatively high, time constraints can be a hindrance for taking up a creative occupation, racial inequality is present and tends to change only slowly, and education plays a signi cant role for taking up a creative occupation. Second, the study systematically documents and quanti es the geography of creative clusters in the United States and explains how these have evolved over time and across creative domains. Third, it investigates the importance of outstanding talent in a discipline for the local growth of an artistic cluster.
    Keywords: Creativity, artists, geographic clustering, agglomeration economies, urban history
    JEL: R1 N33 Z11
    Date: 2019–03
  11. By: David Autor; Claudia Goldin; Lawrence F. Katz
    Abstract: The race between education and technology provides a canonical framework that does an excellent job of explaining U.S. wage structure changes across the twentieth century. The framework involves secular increases in the demand for more-educated workers from skill-biased technological change, combined with variations in the supply of skills from changes in educational access. We expand the analysis backwards and forwards. The framework helps explain rising skill differentials in the nineteenth and twenty-first centuries, but needs to be augmented to illuminate the recent convexification of education returns and implied slowdown in the growth of the relative demand for college workers. Increased educational wage differentials explain 75 percent of the rise of U.S. wage inequality from 1980 to 2000 as compared to 38 percent for 2000 to 2017.
    JEL: J2 J31
    Date: 2020–01
  12. By: Jelnov, Pavel (Leibniz University of Hannover); Weiss, Yoram (Tel Aviv University)
    Abstract: We study the relationship between age and influence in a closed group of 1,000 leading economists. We consider, as a measurement of influence, monthly RePEc rankings. We find that the rankings are not related to age but are related to experience. The optimal level of experience is 30 years from Ph.D. graduation. Additionally, we observe no robust difference in the effect of age and experience between Nobel laureates and leading non-Nobelists. Finally, we find that labor economists enjoy an especially steep improvement in the rankings before they reach the peak; however, the rankings also peak relatively early in their careers.
    Keywords: aging, citations, influence, Nobel, research productivity
    JEL: J24
    Date: 2020–01
  13. By: Nicola Bellomo; Giovanni Dosi; Damian A. Knopoff; Maria Enrica Virgillito
    Abstract: This paper represents the first attempt to bridge the evolutionary theory in economics and the theory of active particles in mathematics. It seeks to present a kinetic model for an evolutionary formalization of socio-economic systems. The derived new mathematical formulation intends to formalize the processes of learning and selection as the two fundamental drivers of evolutionary systems [7]. To coherentl y represent the aforementioned properties, the kinetic theory of active particles [1] is here further developed, including the complex interaction of two hierarchical functional subsystems. Modeling and simulations enlighten the predictive ability of the approach. Finally, we outline the potential avenues for future research.
    Keywords: Evolutionary dynamics; idiosyncratic learning; market selection; active particles; kinetic theory.
    Date: 2020–02–15
  14. By: Come Billard (University of Paris-Dauphine, France.)
    Abstract: We represent a social system as a network of agents and model the process of technology diffusion as a contagion propagating in such a network. By setting the necessary conditions for an agent to switch (ie. to adopt the technology), we address the question of how to maximize the contagion of a technology subject to a Moore’s law (eg. solar modules) in a network of agents. We focus the analysis on the effects of the network structure and technological learning on diffusion. To this end, we study three classes of networks, namely lattice, small-world and random networks. Our numerical results show that both the lattice and the small-world networks facilitate the contagion. These networks exhibit high levels of clustering, and additional contacts increase the probability of contagion through social reinforcement. Conversely, networks exhibiting short path length and a low level of clustering (ie. random networks) guarantee an equivalent speed of diffusion with smaller ranges (ie. variance) in terms of aggregate adoption. Whatever the structure, learning effects are critical for contagion to spread in agents networks.
    Keywords: networks, complex contagion, technology, Moore’s law, cascades
    Date: 2020–01

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