nep-ino New Economics Papers
on Innovation
Issue of 2020‒07‒27
eleven papers chosen by
Uwe Cantner
University of Jena

  1. Competition and Innovation: Evidence from Worldwide Corporate R&D Spenders By Michele Cincera; Ela Ince; Anabela Marques Santos
  2. Types of Innovation and Firm performance By Michele Cincera; Ela Ince
  3. Public-private R&D partnerships: A solution to increase knowledge sharing in R&D cooperation By Hervouet, A.; Trommetter, M.
  4. Inventing the Endless Frontier: The Effects of the World War II Research Effort on Post-war Innovation By Daniel P. Gross; Bhaven N. Sampat
  5. How novel is Transformative Innovation Policy? By Grillitsch, Markus; Hansen, Teis; Madsen, Stine
  6. Mapping General Purpose Technologies with Patent Data By Sergio Petralia;
  7. Delivering the 2.4 Percent: Unlocking UK Pharma R&D Investment through Evidence-Based Policies By Brassel, S.; Cookson, G.
  8. Sources of knowledge flow between developed and developing nations By Florian Seliger; Gaéran de Rassenfosse
  9. On ‘Trade Induced Technical Change: The Impact of Chinese Imports on Innovation, IT and Productivity’ By Campbell, Douglas L.; Mau, Karsten
  10. Co-construction of innovation processes: What types of innovation networks do exist in digital agriculture ? By Boris Biao; Leila Temri; Nina Lachia
  11. The (Anti-)Competitive Effect of Intellectual Property Rights By Martin Wörter; Michael Peneder; Mark Thompson

  1. By: Michele Cincera; Ela Ince; Anabela Marques Santos
    Abstract: The paper aims at assessing the effect of competition of firm-level innovation. The sample is composed of the world top corporate R&D spender listed in the EU-2017 industrial R&D Scoreboard, and the analysis covers the years spanning 2007 to 2016. We use an industry-year-indicator, the inverse of the Lerner index, to measure the competition level R&D expenditures are used as a proxy for innovation. Model is estimated using two-stage least squares, to control for potential endogeneity of the competition indicator. Results confirm the existence of an inverted-U relationship between competition and innovation. Further analysis is undertaken splitting the overall firm sample into services and manufacturing sectors according to technology and knowledge intensities. We validate the inverted-U shaped relationship between competition and innovation for the firms in medium-high-tech and high-tech manufacturing sectors whereas we do not observe the impact for the firms in medium-low and low-tech manufacturing sectors nor service sectors.
    Keywords: Competition, Innovation, Manufacturing, Services.
    Date: 2019–07
  2. By: Michele Cincera; Ela Ince
    Abstract: The paper brings together firm-level R & D spending information with patent information and aims to investigate the impact of different types of patented inventions on firm output growth performance controlling for R & D spending and other firm financials. We consider forward-looking indicators of breakthrough and general innovation, and backward-looking indicators of originality and radicalness in innovation activities. Firm performance is estimated through a Cobb-Douglas production function. We allow for non-linearity in relationship between innovation strategy and firm performance and we investigate sectoral heterogeneity looking at the impact in health industries and ICT producers. Models are estimated using two-stage least squares and generalised method of moments to control for potential endogeneity of innovation indicators. Our findings confirm non-linearity and sectoral heterogeneity in relationship between the different types of innovation and firm performance. While ICT producers are growing with breakthrough innovations, general-purpose technologies and, to a certain extend, with original and radical innovations, the growth of firms operating in health industries is not explained by breakthrough innovations nor by specific trend of feature of ICT and the choice of incremental innovation strategy by pharmaceutical and biotechnology firms
    Keywords: Breakthrough innovation, Generality, Originality, Radicalness, Firm growth
    Date: 2019–07
  3. By: Hervouet, A.; Trommetter, M.
    Abstract: Knowledge sharing is crucial for the success of most R&D cooperations. This paper investigates the best conditions for fostering knowledge sharing in R&D cooperation and looks at how the establishment of Public-Private R&D Partnerships (PPP in R&D) could be a useful tool for this purpose. In this end, it proposes a theoretical model, related to the R&D cooperation literature, that takes into consideration the impacts of firms outside R&D cooperation and the presence of two kinds of spillover: a technology spillover and a product rivalry effect. The model shows that both spillovers can affect knowledge sharing negatively, and that PPP in R&D can be useful to promote knowledge sharing. First, public authorities can choose partners that will facilitate efficient knowledge sharing. Second, to avoid the negative impacts of spillovers on behavior in terms of knowledge sharing, public laboratories should be used as intermediaries for the prior and strategic knowledge of firms. Public labs can use the prior knowledge of firms to innovate, and then spread this innovation among the partners of the PPP, without spreading the prior knowledge of the firms.
    JEL: L13 L24 O30 O38
    Date: 2020
  4. By: Daniel P. Gross; Bhaven N. Sampat
    Abstract: During World War II, the U.S. government launched an unprecedented effort to mobilize science for war: the newly-established Office of Scientific Research and Development (OSRD) entered thousands of R&D contracts with industrial and academic contractors, spending one to two orders of magnitude more than what the government was previously investing in science. In this paper, we study the long-run effects of the OSRD-supported research effort on U.S. invention. Using data on all OSRD contracts, we show that these investments had large effects on the direction and location of U.S. invention and high-tech industrial employment, setting in motion agglomeration forces which shaped the technology clusters of the postwar era. Our results demonstrate the effects of a large, mission-driven government R&D program on the growth of domestic technology clusters and long-run technological progress.
    JEL: H56 N42 N72 O31 O32 O33 O38 R11
    Date: 2020–06
  5. By: Grillitsch, Markus (Lund University); Hansen, Teis (Lund University); Madsen, Stine (Lund University)
    Abstract: The focus and instruments of innovation policy have changed fundamentally over the last decades. Recently transformative innovative policy has caught the attention of scholars and policy makers, arguing that this is a new shift in the policy discourse. Even though grand challenges such as global warming and migration flows, as well as technological change such as artificial intelligence and industry 4.0 have fired the debate on transformative innovation policies in recent years, it has a long history – even going back to Schumpeter. This book chapter unfolds the historical and conceptual roots of transformative innovation policy, compares critically the different strands of literature, and discusses important questions for future research.
    Keywords: Innovation policy; transformative innovation policy; mission-oriented innovation policy; innovation systems policy; system failures; transformative challenges
    JEL: O30 O38
    Date: 2020–07–06
  6. By: Sergio Petralia;
    Abstract: This article develops a three-dimension indicator to capture the main features of General Purpose Technologies (GPTs) in patent data. Technologies are evaluated based on their scope for improvement and elaboration, the variety of products and processes that use them, and their complementarity with existing and new technologies. Technologies’ scope for improvement is measured using patenting growth rates. The range of its uses is mapped by implementing a text-mining algorithm that traces technology-specific vocabulary in the universe of all available patent documents. Finally, complementarity with other technologies is measured using the co-occurrence of technological claims in patents. These indicators are discussed and evaluated using widely studied examples of GPTs such as Electric & Electronic (at the beginning of the 20th century) and Computer & Communications. These measures are then used to propose a simple way of identifying GPTs with patent data. It is shown there exist a positive association between the rate of adoption of GPTs in sectors, measured in terms of the number of GPT patents, and their growth.
    Keywords: Technological Change, General Purpose Technologies, Disruptive Technologies
    JEL: O33 O34
    Date: 2020–07
  7. By: Brassel, S.; Cookson, G.
    Abstract: In the 2017 Industrial Strategy, the Government committed to increasing investment in UK Research and Development to the OECD-average of 2.4% of Gross Domestic Product (GDP) by 2027, with a longer-term goal of reaching 3% to put the UK in the upper quartile. Whilst there is universal agreement that increasing R&D investment in the UK is a worthy goal, there is an ongoing discussion over how best to achieve it. To stimulate this debate, the Office of Health Economics (OHE) was commissioned to investigate how the UK Government and the UK pharmaceutical industry can collaborate to deliver the life science sector's share of this ambitious R&D target. The report finds that the pharmaceutical industry will be a key partner in realising the Government's ambition and based upon evidence from a range of similar countries identifies the most appropriate policies to delivering the 2.4% goal.
    Keywords: Economics of Innovation; Other
    JEL: I1
    Date: 2020–06–01
  8. By: Florian Seliger (KOF Swiss Economic Institute, ETH Zurich, Switzerland); Gaéran de Rassenfosse (EPFL Lausanne, Switzerland)
    Abstract: This paper provides a long-term view on the sources of knowledge flow between developed and developing nations. It relies on patent data to explore three potential sources: R&D collaboration, technology sourcing, and technology transfer. All three sources provide a very consistent message. First, knowledge flows with East Asia, particularly China, are occurring more frequently. Second, knowledge flows are increasingly concentrateded in information and communication technologies. Third, the United States & Canada had traditionally larger patenting activity with Asia than Europe, but the share of activity between Europe and Asia has been increasing in recent years. Fourth, larger patenting activity between the United States & Canada and Asia implies that the U.S./Canada region is more likely to benefit from reverse knowledge flows as China progresses towards becoming a technological leader.
    Keywords: international technology sourcing; R&D offshoring; R&D collaboration;technology transfer; patent
    JEL: E21 E32 D12 C22
    Date: 2019–02
  9. By: Campbell, Douglas L.; Mau, Karsten (RS: GSBE other - not theme-related research, Macro, International & Labour Economics)
    Abstract: Bloom, Draca, and Van Reenen (2016) find that Chinese import competition induced a rise in patenting, IT adoption, and TFP by up to 30% of the total increase in Europe in the late 1990s and early 2000s. We uncover several coding errors in an important robustness check of their patent results. When corrected, we find no statistically significant relationship between Chinese competition and patents. Other specifications in the original paper use a problematic log(1+patents) transformation. This normalization induces bias given low average patent counts for firms in China-competing sectors, and rapidly declining patents across the sample.
    JEL: F14 F13 L25 L60
    Date: 2020–07–09
  10. By: Boris Biao (UMR MOISA - Marchés, Organisations, Institutions et Stratégies d'Acteurs - Cirad - Centre de Coopération Internationale en Recherche Agronomique pour le Développement - INRA - Institut National de la Recherche Agronomique - CIHEAM-IAMM - Centre International de Hautes Etudes Agronomiques Méditerranéennes - Institut Agronomique Méditerranéen de Montpellier - CIHEAM - Centre International de Hautes Études Agronomiques Méditerranéennes - Montpellier SupAgro - Institut national d’études supérieures agronomiques de Montpellier - Montpellier SupAgro - Centre international d'études supérieures en sciences agronomiques, Montpellier SupAgro - Institut national d’études supérieures agronomiques de Montpellier); Leila Temri (UMR MOISA - Marchés, Organisations, Institutions et Stratégies d'Acteurs - Cirad - Centre de Coopération Internationale en Recherche Agronomique pour le Développement - INRA - Institut National de la Recherche Agronomique - CIHEAM-IAMM - Centre International de Hautes Etudes Agronomiques Méditerranéennes - Institut Agronomique Méditerranéen de Montpellier - CIHEAM - Centre International de Hautes Études Agronomiques Méditerranéennes - Montpellier SupAgro - Institut national d’études supérieures agronomiques de Montpellier - Montpellier SupAgro - Centre international d'études supérieures en sciences agronomiques, Montpellier SupAgro - Institut national d’études supérieures agronomiques de Montpellier); Nina Lachia (Chaire AgroTIC - Montpellier SupAgro - Institut national d’études supérieures agronomiques de Montpellier)
    Keywords: digital innovation,innovation network,stakeholder network,agriculture
    Date: 2019–05–15
  11. By: Martin Wörter (KOF Swiss Economic Institute, ETH Zurich, Switzerland); Michael Peneder (Austrian Institute of Economic Research, Vienna, Austria); Mark Thompson (Austrian Institute of Technology, Vienna, Austria)
    Abstract: We test whether intellectual property rights (IPRs) foster or hinder innovation by estimating IV structural equations for a large sample of Swiss firms. We find that better appropriability conditions at the industry level raise the number of competitors. However, conditional on the given industry structure, individual firms face fewer competitors, if they actually use IPRs. The further impact of fewer competitors is to raise R&D, when initial competition is strong, but to reduce it, when initial competition is weak (“inverted U†).
    Keywords: patents, innovation, competition, simultaneous system
    JEL: O31 O32 O34 D22
    Date: 2019–03

This nep-ino issue is ©2020 by Uwe Cantner. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.