nep-ino New Economics Papers
on Innovation
Issue of 2020‒04‒20
nine papers chosen by
Uwe Cantner
University of Jena

  1. Foreign Direct Investments and Regional Specialization in Environmental Technologies By Davide Castellani; Giovanni Marin; Sandro Montresor; Antonello Zanfei
  2. Innovation and Entrepreneurship in Housing By Edward Kung
  3. Environmental Preferences and Technological Choices: Is Market Competition Clean or Dirty? By Philippe Aghion; Roland Bénabou; Ralf Martin; Alexandra Roulet
  4. The productivity impact of business visits across industries By Piva, Mariacristina; Tani, Massimiliano; Vivarelli, Marco
  5. Current R&I policy: The future development of China's R&I system By Frietsch, Rainer
  6. Semi-endogenous growth models with domestic and foreign private and public R&D linked to VECMs with evidence for five countries By Ziesemer, Thomas
  7. Exploring Feedback Loops between Performance Measures. Energy and Environmental Efficiency under heterogeneous Eco-Innovation groups By Nikos Chatzistamoulou; Phoebe Koundouri
  8. Exploring the patterns of Eco-Innovation index and Competitiveness index in Europe By Nikos Chatzistamoulou; Phoebe Koundouri
  9. Regional technological systems in transition: Dynamics of relatedness and techno-economic matches in China By Kroll, Henning; Neuhäusler, Peter

  1. By: Davide Castellani (Henley Business School, University of Reading, UK); Giovanni Marin (Department of Economics, Society, Politics, University of Urbino, Italy; SEEDS); Sandro Montresor (Gran Sasso Science Institute, Italy); Antonello Zanfei (Department of Economics, Society, Politics, University of Urbino, Italy)
    Abstract: The paper builds on (eco-)innovation geography and international business studies to investigate the effects of MNEs on regional specialisation in green technologies. Combining the OECD-REGPAT and the fDi Markets datasets with respect to 1,050 European NUTS3 regions over the period 2003-2014, we find that MNEs can positively impact on regions’ specialisation in environmental technologies, when their Foreign Direct Investments (FDIs) occur in industries with a green technological footprint. The effect of green FDIs is further reinforced if they involve R&D activities. We also find that the relatedness of environmental technologies to pre-existing regional specialisations exerts a negative moderating effect on the role of green R&D FDIs in shaping patterns of specialisation. In particular, green R&D FDIs have a larger effect in regions whose prior knowledge base is highly unrelated to environmental technologies. This result is consistent with the idea that MNEs inject the host region with external knowledge, which makes the development of green-technologies less place-dependent.
    Keywords: green regional specialisation; MNEs; FDIs; environmental innovation
    JEL: O31 O33 R11 R58
    Date: 2020–04
  2. By: Edward Kung
    Abstract: In this chapter, I discuss innovation and entrepreneurship in residential real estate and construction (housing). Based on R&D spending and patent statistics, housing does not appear to be a very innovative sector. But in the last two decades, there has been a significant increase in the amount of investment going to real estate technology companies. I discuss the companies and technologies which have drawn the most attention from investors. I then review the literature on two major innovation trends in housing: the growth of the internet as a tool for housing search, and the development of home-sharing platforms which allow homeowners to use their homes as short-term rentals. These innovations have likely increased the efficiency of housing markets, leading to higher quality matches between buyers and sellers, and more efficient utilization of space. However, the effects are hard to measure due to the difficulty of separating quality changes from price changes. In comparison to residential real estate, there appears to have been less recent innovation in residential construction. In many areas, residential construction is artificially constrained by local land use policies, and estimates from the literature suggest that relaxing these constraints could increase economic growth significantly. Finally, I discuss anti-competitive practices in real estate which may hinder entrepreneurship and the adoption of new innovations, and I discuss how innovation and entrepreneurship in other sectors may affect the housing market.
    JEL: O30 R31
    Date: 2020–03
  3. By: Philippe Aghion; Roland Bénabou; Ralf Martin; Alexandra Roulet
    Abstract: This paper investigates the joint effect of consumers' environmental concerns and product-market competition on firms' decisions whether to innovate “clean” or “dirty”. We first develop a step-by-step innovation model to capture the basic intuition that socially responsible consumers induce firms to escape competition by pursuing greener innovations. To test and quantify the theory, we bring together patent data, survey data on environmental values, and competition measures. Using a panel of 8,562 firms from the automobile sector that patented in 42 countries between 1998 and 2012, we indeed find that greater exposure to environmental attitudes has a significant positive effect on the probability for a firm to innovate in the clean direction, and all the more so the higher the degree of product market competition. Results suggest that the combination of historically realistic increases in prosocial attitudes and product market competition can have the same effect on green innovation as major increase in fuel prices.
    JEL: D21 D22 D62 D64 H23 O3 O31
    Date: 2020–04
  4. By: Piva, Mariacristina (Università Cattolica del Sacro Cuore, Piacenza); Tani, Massimiliano (UNSW Canberra, and IZA, Bonn); Vivarelli, Marco (UNU-MERIT, Maastricht University, Università Cattolica del Sacro Cuore, Milano, and IZA, Bonn)
    Abstract: This paper builds on and considerably extends Piva, Tani and Vivarelli (2018), confirming the key role of Business Visits as a productivity enhancing channel of technology transfer. Our analysis is based on a unique database on business visits sourced from the U.S. National Business Travel Association, merged with OECD and World Bank data and resulting in an unbalanced panel covering 33 sectors and 14 countries over the period 1998-2013 (3,574 longitudinal observations). We find evidence that BVs contribute to fostering labour productivity in a significant way. While this is consistent with what found by the previous (scant) empirical literature on the subject, we also find that short-term mobility exhibits decreasing returns, being more crucial in those sectors characterized by less mobility and by lower productivity performances.
    Keywords: Business visits, Labour mobility, Knowledge diffusion, R&D, Productivity
    JEL: J61 O33
    Date: 2020–03–24
  5. By: Frietsch, Rainer
    Abstract: This discussion paper addresses policy learning and policy implementation in China since about 2006. In particular, the potential change of research and innovation policy under Xi Jinping is discussed, as well as core policies and strategies to further improve the Chinese innovation system and to shift it from a low-cost to an innovation-driven economy. The Internet Plus strategy and Made in China 2025 (MIC2025) as the most well-known policies that support the overall and most central "Innovation Driven Devel-opment Strategy" are briefly introduced. A first section, however, discusses policy-making processes and policy learning processes in China in general. It tries to sketch the current debate in the scientific literature, if the reform era ended and if the new au-thoritarianism under Xi Jinping is hampering policy implementation and policy learning as well as the future economic development.
    Date: 2020
  6. By: Ziesemer, Thomas (UNU-MERIT, Maastricht University)
    Abstract: We present semi-endogenous growth models with productivity as functions of domestic and foreign private and public R&D. In a small country case with a Cobb-Douglas productivity production function, foreign R&D drives steady-state growth and the production function can be a long-term relation in a vector-error-correction model (VECM). Marginal productivity conditions can be long-term relations for a vector-error-correction model if the functional form is of a VES function generalising a CES function. Combining the marginal products of VES functions with recent evidence from VECMs for five countries shows that private and public R&D have a positive effect on productivity (except for France), and a negative R&D augmenting technical change. In case of a VES function, steady states with constant R&D/productivity ratios exist only for special cases of parameter restrictions, which are not supported by the evidence.
    Keywords: Productivity, endogenous (un)balanced growth, public R&D expenditure, foreign spillover
    JEL: O38 O40 O41 H54 H87
    Date: 2020–03–31
  7. By: Nikos Chatzistamoulou (AUEB); Phoebe Koundouri
    Abstract: By following a two-stage analysis, we explore whether resource efficiency measures are interconnected through feedback loops under heterogeneous eco-innovation regimes. In the first stage we adopt the bootstrap Data Envelopment Analysis and a Directional Distance Function approach to estimate productive performance, energy and environmental efficiency of each country under a metafrontier total factor productivity framework accounting for technological heterogeneity and input complementarities. In the second, we employ the potential of the identification through heteroskedasticity estimator to tackle endogeneity concerns surrounding performance measures, we seek the drivers of resource efficiency measures. We comprise a unique balanced panel for the EU-28 from 2010 through 2014 including the eco-innovation index and hand-collected data on the global competitiveness index. Findings indicate that resource efficiency measures despite those are interconnected through feedback loops, they act either as closely related measures i.e. blood brothers or as loosely related ones i.e. distant relatives. This is particularly relevant for policy design. In this line, findings indicate that there is not a one-size-fits-all policy as the eco-innovation group each country belongs to should be considered as well since the latter respond in an asymmetric manner to candidate drivers.
    Keywords: Resource Efficiency, Environmental & Energy Efficiency, Productive Performance, Eco-Innovation Index, Sustainability, Metafrontier & Heterogeneity, Feedback loop
    Date: 2020–04
  8. By: Nikos Chatzistamoulou (AUEB); Phoebe Koundouri
    Abstract: In this technical report the interest is placed on two multi-faceted indices, the Eco-innovation index and the Global Competitiveness Index of the EU 28 member states. The former index is produced by the Eco-innovation Observatory under the DG Environment of the European Commission covering the period 2010-2018 while the latter is produced by the World Economic Forum and the period of interest is 2006-2017. Thus, we devise two unique panel datasets to explore the patterns of those indices in Europe. Findings indicate that Europe is characterized by technological and institutional heterogeneity despite the fact that countries are subject to the same policy directives. Results indicate that a pattern arises indeed. Specifically, south European countries outperform in almost every aspect of the indices examined while countries of the south and east of Europe appear to have the lowest performance on average. Findings indicate that in order to achieve higher performance a tailor made policy oriented to specific group of countries appears to be a plausible strategy in contrast to a one-size-fits-all policy.
    Keywords: Eco-Innovation Index, Global Competitiveness, Europe, Flagship Initiative, Europe 2020 Strategy
    Date: 2020–04
  9. By: Kroll, Henning; Neuhäusler, Peter
    Abstract: Based on a newly compiled set of Chinese data, this paper puts established assump-tions on the role of technological variety in perspective. It does so from two main an-gles. First, by documenting whether, in China, technological variety has played a simi-lar role for regional development as in Western economies. Second, by exploring how, more recently, this may change as China transitions towards an innovation driven economy. In summary, its findings suggest that, while technological variety has indeed so far mattered differently for China's regional development, more recently, first traces of systemic change can be identified in the both evolution of related variety and its emerging impact on aspects of regional development.
    Date: 2019

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