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on Innovation |
| By: | Bahar, Dany (Brookings Institution); Choudhury, Prithwiraj (Harvard Business School); Rapoport, Hillel (Paris School of Economics) |
| Abstract: | We investigate the relationship between the presence of migrant inventors and the dynamics of innovation in the migrants' receiving countries. We find that countries are 25 to 60 percent more likely to gain advantage in patenting in certain technologies given a twofold increase in the number of foreign inventors from other nations that specialize in those same technologies. For the average country in our sample, this number corresponds to only 25 inventors and a standard deviation of 135. We deal with endogeneity concerns by using historical migration networks to instrument for stocks of migrant inventors. Our results generalize the evidence of previous studies that show how migrant inventors "import" knowledge from their home countries, which translates into higher patenting in the receiving countries. We interpret these results as tangible evidence of migrants facilitating the technology-specific diffusion of knowledge across nations. |
| Keywords: | innovation, migration, patent, technology, knowledge |
| JEL: | O31 O33 F22 |
| Date: | 2020–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp12994&r=all |
| By: | Borota, Teodora; Defever, Fabrice; Impullitti, Giammario |
| 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 theroy; 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:ehl:lserod:103400&r=all |
| By: | Francesco Crespi; Serenella Caravella |
| Abstract: | The study focuses on the impact exerted on private R&D expenditures by regular and innovative public procurement when taken in combination or insolation with supply-push measures. The econometric analysis relies on a pulled sample of 4,206 Italian manufacturing firms observed between 2010-2014. The empirical exercise confirms previous evidences on the relevance of technology-push instruments in sustaining firms’ innovativeness. On the contrary, the ability of public procurement activities in shaping innovative investments is found to depend on a number of instances related to: i) the adoption of contemporaneous supply side measures; ii) the inclusion of innovative demand in procurement contracts. The analysis provides important suggestions with respect to the potential effectiveness of demand-side tools when implemented in weak administrative and innovation systems, as in the Italian case. Moreover, it is shown that the design of the policy mix matters, and its effectiveness improves when demand-side and supply-side instruments are jointly implemented. |
| Keywords: | Demand-pull policies, Public Procurement, Policy-mix, Non-parametric analysis. |
| JEL: | H57 O25 O38 |
| Date: | 2020–02 |
| URL: | http://d.repec.org/n?u=RePEc:rtr:wpaper:0252&r=all |
| By: | Aghion, Philippe; Bergeaud, Antonin; Lequien, Matthieu; Melitz, Marc |
| 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:ehl:lserod:103434&r=all |
| By: | Alhusen, Harm; Bennat, Tatjana; Bizer, Kilian; Cantner, Uwe; Horstmann, Elaine; Kalthaus, Martin; Proeger, Till; Sternberg, Rolf G.; Töpfer, Stefan |
| Abstract: | The 'doing-using-interacting mode' of innovation (DUI) is considered an important component of innovative activity. It describes informal innovative activities and thus complements the 'science-technology-innovation mode' (STI) based on research and development. While empirical measurement of the STI mode is well established, proxies for measuring DUI activities are still underdeveloped and no consensus has emerged concerning which intra- and extra-firm processes primarily constitute the DUI mode and how they should be measured. Based upon 81 in-depth interviews with German SMEs and regional innovation consultants, we propose a comprehensive set of 47 indicators comprising both established and new DUI processes for future empirical measurement. We argue that this measurement approach can lead to a more holistic understanding and ultimately quantifiable measurement of DUI innovativeness, which can guide further research and policymaking. |
| Keywords: | DUI,Innovation indicators,learning processes,modes of innovation,STI |
| JEL: | O3 O30 O31 R10 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ifhwps:232019&r=all |
| By: | Van Reenen, John; Bloom, Nicholas; Williams, Heidi |
| Abstract: | Economic theory suggests that market economies are likely to under-provide innovation due to the public good nature of knowledge. Empirical evidence from the US and other advanced economies supports this idea. We summarize the pros and cons of different policy instruments for promoting innovation and provide a basic “toolkit” describing which policies are most effective, based on our reading of the evidence. In the short-run, R&D tax credits or direct public funding seem the most productive, but in the longer-run increasing the supply of human capital (e.g. relaxing immigration rules or expanding university STEM admissions) are likely more effective. |
| Keywords: | R&D; intellectual property; tax; competition |
| JEL: | O31 O32 |
| Date: | 2019–07 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:103392&r=all |
| By: | Frederic Marty; Thierry Warin |
| Abstract: | Digital ecosystems development is characterized by a paradox in terms of innovation. At no time in history has the pace of innovation been so fast and never before have third-party firms been able to benefit so much for their own innovations from their integration into a keystone player’s ecosystem. However, such a keystone player may be encouraged to implement non-cooperative strategies to capture the innovations developed by its own complementors. Such strategies may be detrimental to trading partners, innovation and consumers. This article aims to analyse these two possible effects of the development of digital ecosystems on innovation and to infer recommendations in terms of competition policy to counteract the detrimental effects that may result from potential unbalanced co-opetitive situations. |
| Keywords: | Innovation,Competition,Digital Ecosystems,Keystone Player,Co-Opetition, |
| JEL: | L12 L13 L25 L41 |
| Date: | 2020–02–17 |
| URL: | http://d.repec.org/n?u=RePEc:cir:cirwor:2020s-10&r=all |
| By: | Anton Pichler; Fran\c{c}ois Lafond; J. Doyne Farmer |
| Abstract: | We propose a simple model where the innovation rate of a technological domain depends on the innovation rate of the technological domains it relies on. Using data on US patents from 1836 to 2017, we make out-of-sample predictions and find that the predictability of innovation rates can be boosted substantially when network effects are taken into account. In the case where a technology$'$s neighborhood future innovation rates are known, the average predictability gain is 28$\%$ compared to simpler time series model which do not incorporate network effects. Even when nothing is known about the future, we find positive average predictability gains of 20$\%$. The results have important policy implications, suggesting that the effective support of a given technology must take into account the technological ecosystem surrounding the targeted technology. |
| Date: | 2020–03 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2003.00580&r=all |
| By: | Wittberg, Emanuel (Institute for Analytical Sociology); Erlingsson, Gissur (Centre for Local Government Studies) |
| Abstract: | Does corruption affect the incentives for potential entrepreneurs to start businesses? The traditional view holds that entrepreneurship is inhibited. However, a few recent studies indicate the contrary, supporting a ‘grease the wheels’ perspective. In a novel approach to this question, we combine a local government corruption index and individual-level register data on start-ups in a low-corruption setting: Sweden. We disaggregate the analysis to individual entrepreneurs, focus on corruption in local institutions and hypothesize that local corruption deters potential entrepreneurs. Our findings are twofold. First, rejecting the ‘grease the wheels’ hypothesis, local corruption has a strong local deterring effect on potential entrepreneurs. Second, a minority of entrepreneurs relocate their start-ups from home unicipalities to elsewhere. However, contrary to expectations, relocaters could embody ‘non-productive’ or ‘destructive’ entrepreneurship: they migrate from relatively low-corrupt to relatively high-corrupt municipalities. While migrating is uncommon, and the effect is weak, it nonetheless indicates that relocaters are attracted to conditions where rent-seeking opportunities are present. |
| Keywords: | Entrepreneurship; Start-ups; Corruption; Local government; Destructive entrepreneurship |
| JEL: | D73 L26 |
| Date: | 2020–03–09 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:iuiwop:1323&r=all |
| By: | Criscuolo, Chiara; Andrews, Dan; Gal, Peter N. |
| Abstract: | We document that labor productivity of the globally most productive firms – the “frontier” – has diverged from all other firms – the “rest” – throughout the 2000s. This divergence remains after controlling for capital intensity and markups, and is strongest in ICT services, indicative of “winnertakes-all” dynamics. We also find weakening catch-up and market selection below the frontier, which can explain why this divergence at the firm level is linked to weaker aggregate productivity. The divergence is found to be stronger in industries where product market regulations are less competition friendly, highlighting the need for regulatory policy to improve the contestability of markets. |
| Keywords: | firm dynamics; regulation; knowledge diffusion; technological change; productivity |
| JEL: | O30 O40 M13 |
| Date: | 2019–08 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:103405&r=all |