nep-ino New Economics Papers
on Innovation
Issue of 2020‒09‒07
nine papers chosen by
Uwe Cantner
University of Jena

  1. Patterns of Innovation during the Industrial Revolution: a Reappraisal using a Composite Indicator of Patent Quality By Alessandro Nuvolari; Valentina Tartari; Matteo Tranchero
  2. Technology protectionism and the patent system: Evidence from China By Gaétan de Rassenfosse; Emilio Raiteri
  3. The effects of R&D tax incentives and their role in the innovation policy mix: Findings from the OECD microBeRD project, 2016-19 By OECD
  4. Intangible investments and productivity performance By Michele Cincera; Julie Delanote; Pierre Mohnen; Anabela Santos; Christoph Weiss
  5. Financial Support to Innovation: the Role of European Development Financial Institutions By Stefano CLÃ’; Marco FRIGERIO; Daniela VANDONE
  6. Does Economic Policy Uncertainty Affect the Export Technological Sophistication of Manufacturing Industries? By Yuanhong, Hu
  7. Quid Pro Quo, Knowledge Spillover, and Industrial Quality Upgrading: Evidence from the Chinese Auto Industry By Jie Bai; Panle Jia Barwick; Shengmao Cao; Shanjun Li
  8. Portugal in the Global Innovation Index: A panel data analysis By Marcelo P. Duarte; Fernando M. P. O. Carvalho
  9. From Traditional Regional Analysis to Dynamics of Local Development: Foundations and Theoretical Reorientations By Vlados, Charis; Deniozos, Nikolaos; Chatzinikolaou, Dimos; Digkas, Agis-Georgios

  1. By: Alessandro Nuvolari; Valentina Tartari; Matteo Tranchero
    Abstract: The distinction between macro- and microinventions is at the core of recent debates on the Industrial Revolution. Yet, the empirical testing of this notion has remained elusive. We address this issue by introducing a new quality indicator for all patents granted in England in the period 1700-1850. Our findings indicate that macroinventions did not exhibit any specific time-clustering, while microinventions were correlated with the economic cycle. In addition, we also find that macroinventions were characterized by a labor-saving bias and were mostly introduced by professional engineers. These results suggest that Allen's and Mokyr's views of macroinventions, rather than conflicting, should be regarded as complementary.
    Keywords: Industrial Revolution; Patents; Macroinventions; Microinventions
    Date: 2020–09–05
  2. By: Gaétan de Rassenfosse (Ecole polytechnique federale de Lausanne); Emilio Raiteri (Eindhoven University of Technology)
    Abstract: Governments have strong incentives to allow their inventors to free ride on foreign technologies. They can achieve this result by discriminating against foreigners in the patent system--by refusing to grant foreigners a patent for their inventions. International patent law treaties forbid this practice, which may lower the global innovation incentives and may hurt international trade. Using data on half a million inventions submitted to the Chinese patent office, we find robust evidence of anti-foreign bias in the issuance of patents in 'strategic' technology areas. Foreigners are about 50 percent more likely to be refused a strategic patent than locals.
    Keywords: industrial policy, national treatment principle, patent, technology protectionism, TRIPS
    JEL: O34 K11 F52
    Date: 2020–09
  3. By: OECD
    Abstract: This report presents new evidence on the impact of R&D tax incentives and direct funding of business R&D, drawing on distributed cross-country and firm-level analyses undertaken as part of the first phase of the OECD microBeRD project (2016-19). This “distributed” approach facilitates a harmonised analysis of confidential business R&D and tax relief microdata in 20 OECD countries. microBeRD provides new insights into the effectiveness of R&D tax incentives in encouraging business R&D in the OECD area and the heterogeneity of effects both within and across OECD countries, including the underlying impact mechanisms. The report contributes to the debate on the role of R&D tax incentives in the policy mix by providing additional comparative evidence on the effects of alternative business R&D inducement incentives.
    Keywords: Innovation, Science and technology, Tax
    JEL: O38 H25 L25
    Date: 2020–09–03
  4. By: Michele Cincera; Julie Delanote; Pierre Mohnen; Anabela Santos; Christoph Weiss
    Abstract: Companies in advanced economies are facing new challenges. Investment in intangible assets – such as R&D expenditures, ICT activities, the cost of training employees and spending on improving the organizational process – has gained relevance to overcome market pressure. In the last decade, many studies discussed the impact of intangible investment on firms’ performance. However, comparison of the effect of different types of intangible investments is less well explored. The paper aims to fill this gap by assessing the impact of several intangible investments on productivity using for the first-time data from the EIB Survey on Investment (EIBIS) covering all 28 EU members, in the period 2015-2017. We allow intangible investments to affect productivity through innovation, using an augmented version of the Crépon-Duguet-Mairesse (1998) model. Our results show that all types of intangible investments positively impact labour productivity. However, ICT and acquisition of new skills are more important for explaining productivity gains than R&D investment and organizational improvements. Furthermore, R&D and ICT investments also affect productivity indirectly through their effects on innovation, which itself increases productivity.
    Keywords: R&D; ICT; Intangible investments; Innovation; Productivity
    JEL: O30 O44 O52
    Date: 2020–03
  5. By: Stefano CLÃ’; Marco FRIGERIO; Daniela VANDONE
    Abstract: This paper explores the role of Development Financial Institutions (DFIs) in supporting innovation by facilitating the access to finance for start-ups and high-growth small and medium enterprises. After having mapped the population of DFIs in Europe, we benchmark their portfolio of equity deals to those of other European financial institutions (venture capital and private equity). We build a unique sample of European 12,437 Mergers and Aquisitions within the 2008–2017 period and for each target company we match the related patenting and economic data. We obtain a dataset of 80,713 yearly observations which allows us to empirically analyse the pre and post-deal patenting activity of companies targeted by both DFIs and other financial institutions. Our findings show that the target company patenting performance improves after receiving the support of financial institutions, and this effect is on average higher when DFIs participate to the equity deal. We also find that partnerships among DFIs and other financial institutions are associated with the best patenting performance of the target companies. These results are confirmed when a propensity score matching technique is adopted to address biases associated to the potential endogenous selection of the target company.
    Keywords: Development banking;Development Financial Institutions;public-private partnership; equitydeals; patenting activity; financial support to innovation
    Date: 2020
  6. By: Yuanhong, Hu
    Abstract: Based on data from 19 major countries from 2000-2017, this paper examines the impact of economic policy uncertainty on the export technological sophistication of manufacturing industries. The research shows that in the sample period, the export technological sophistication of manufacturing industries varies among countries, with China and India slowly increasing, Germany and Japan still at a high level, and Canada and Greece in a downward trend. From the empirical results, the expected mechanism of economic policy uncertainty forces the domestic manufacturing industries industry to accelerate R&D innovation by restraining the "technological spillover" effect of imported intermediate goods and the "financing dependence" effect of domestic credit investment, thus promoting the increase of the export technological sophistication in various countries. For countries with high economic growth rate, high degree of development and high degree of economic freedom, the positive impact of economic policy uncertainty on the export technological sophistication of manufacturing industries is more significant. From the perspective of economic policy uncertainty, the paper examines its impact on the export technological sophistication of manufacturing industries with important policy implications. Strengthening bilateral and multilateral consultations among governments and accelerating R&D innovation of domestic enterprises are effective measures to enhance export competitiveness at present.
    Keywords: Economic Policy Uncertainty,Export Technological Sophistication,R&D Innovation,Manufacturing Industry,Reflection Method
    JEL: F14 F41 F43
    Date: 2020
  7. By: Jie Bai; Panle Jia Barwick; Shengmao Cao; Shanjun Li
    Abstract: While there is a vast body of research on the benefits of FDI in developing countries, whether and how the form of FDI matters have received limited attention. In this paper, we study the impact of FDI via quid pro quo (technology for market access) on facilitating knowledge spillover and quality upgrading. Our context is the Chinese automobile industry, where foreign firms are required to set up joint ventures with domestic firms in return for market access. Using a unique dataset of detailed quality measures of vehicle performance, we show that affiliated joint ventures and domestic firms share a greater similarity in quality strength compared to non-affiliated pairs. The results suggest that quid pro quo spurs additional knowledge spillover to affiliated domestic firms, in addition to any industry-wide spillover as a result of the presence of foreign firms. The identification relies on within- product quality variation across different dimensions, and the results are robust to a variety of specifications. We rule out endogenous joint venture network formation, overlapping customer base, or direct technology transfer via market transactions as alternative explanations. Analyses leveraging additional micro datasets on part suppliers and worker flows among firms demonstrate that supplier network and labor mobility are important channels in mediating knowledge spillover. On the other hand, while ownership affiliation facilitates learning, such a requirement is not a prerequisite for knowledge spillover. Counterfactual exercises show that the role of quid pro quo is modest in explaining the overall quality improvement experienced by domestic firms.
    JEL: F23 O14 O25
    Date: 2020–08
  8. By: Marcelo P. Duarte; Fernando M. P. O. Carvalho
    Abstract: The growing awareness of the importance of national systems of innovation on countries’ development led to an increased availability of instruments designed to measure and compare the innovative capacity of countries. Such instruments provide policymakers with a panoply of relevant information, with which they can stimulate innovation within their territory, thereby increasing national competitiveness. Among the most used innovation indices, the Global Innovation Index stands out by explicitly distinguishing innovation inputs and outputs. Drawing from the Global Innovation Index input-output framework and extant literature on innovation, we intend to answer the question: Which innovation inputs are more strongly related to innovative outputs? Thus, deriving policy implications aimed at improving Portugal’s innovative readiness. Based on a conceptual model, we developed a panel dataset, grounded on the Global Innovation Index framework, composed by 92 countries during the period 2013-2018, and analysed it through a series of multiple regression techniques. Results suggest a strong, positive influence of Business Sophistication on innovation outputs in countries of the Eurozone, derived mainly from the capacity of domestic firms to absorb knowledge. Possible policy implications could be derived from this fact, such as, for instance, an encouragement to inward foreign direct investment. However, further research is needed to analyse the differentiated effects of such encouragement, as well as for other surprising results of our study.
    Keywords: Innovation; Global Innovation Index; innovation inputs, innovation outputs; panel data; Portugal.
    JEL: C33 C43 O30 O38
    Date: 2020–03
  9. By: Vlados, Charis (Democritus University of Thrace, Department of Economics); Deniozos, Nikolaos (National and Kapodistrian University of Greece - Department of Turkish Studies and Modern Asian Studies); Chatzinikolaou, Dimos (Democritus University of Thrace, Department of Economics); Digkas, Agis-Georgios (National and Kapodistrian University of Greece - Department of Turkish Studies and Modern Asian Studies)
    Abstract: The conventional and traditional regional analysis seems to gradually changing focus, content and hermeneutic optic. The regional analysis of past seems increasingly saturated, being incapable to interpret and propose policy solutions that originate primarily from the potential of local development, innovation and entrepreneurship. To this end, new, multidisciplinary approaches of local development seem to prevail progressively, leading the study of development to the analysis of dynamically evolving localities.
    Keywords: Regional analysis; Local development; Innovation environment; Entrepreneurial dynamics
    JEL: O19 R11 R58
    Date: 2019–03–26

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