nep-ino New Economics Papers
on Innovation
Issue of 2020‒11‒16
seven papers chosen by
Uwe Cantner
University of Jena

  1. Schumpeter and Keynes: Economic growth in a super-multiplier model By Nomaler, Önder; Spinola, Danilo; Verspagen, Bart
  2. The role of gender in linking external sources of knowledge and R&D intensity By AMOROSO Sara; AUDRETSCH David
  3. Revisiting the optimal patent policy tradeoff for environmental technologies Revisiting the optimal patent policy tradeoff for environmental technologies By Clement Bonnet
  4. Secular Stagnation and innovation dynamics: an agent-based SFC model. Part I By Andrea Borsato
  5. Corruption, Transaction Costs and Innovation in Africa By Laura Nelima Barasa
  6. Inflation, Innovation and Growth: A Survey By Chu, Angus C.
  7. Declining business dynamism: Structural and policy determinants By Flavio Calvino; Chiara Criscuolo; Rudy Verlhac

  1. By: Nomaler, Önder (UNU-MERIT); Spinola, Danilo (UNU-MERIT, Maastricht University); Verspagen, Bart (UNU-MERIT, Maastricht University)
    Abstract: We present a model of economic growth that is based on Keynesian ideas (the role of autonomous demand in economic growth) as well as Schumpeterian notions (technological change). Our model fits in the Sraffian supermultiplier (SSM) tradition, and we endogenise the growth rate of autonomous demand, and semi-endogenise productivity growth. The basic model has a steady state that is consistent with a stable employment rate. Consumption smoothing (between periods of high and low employment) by workers is the mechanism that keeps the growing economy stable. We also introduce a version of the model where the burden for stabilisation falls upon government fiscal policy. This also yields a stable growth path, although the parameter restrictions for stability are more demanding in this case.
    Keywords: Economic growth model, Sraffian supermultiplier, Research and Development , R&D, Keynesian theory, Technological change
    JEL: O31 O33 O41 E11 E12 E62
    Date: 2020–11–06
  2. By: AMOROSO Sara (European Commission - JRC); AUDRETSCH David
    Abstract: Scholars examining the effect of knowledge spillovers on R&D and innovation all agree on one thing—there is a strong relationship between the firm’s R&D effort and knowledge spillovers. The sign of this relationship depends, however, on many things, such as the type of spillovers (horizontal, vertical, or from other sources), the level of appropriability, the type of firm (e.g., age and sector), and the measurement of the spillover itself. A missing piece of evidence to this literature is the role of gender in the founding team of the firm. Our contribution is to fill this gap by explicitly analysing the role played by gender in the founding team. Given that the relationship between a firm’s R&D intensity and external knowledge spillovers is ultimately context-specific, we analyse the differences between male-owned and female-owned young entrepreneurial firms with respect to the influence that knowledge spillovers have on their R&D intensity.
    Keywords: Women entrepreneurs, absorptive capacity, knowledge intensive enterprise, spillovers, Europe
    Date: 2020–10
  3. By: Clement Bonnet (EconomiX - UPN - Université Paris Nanterre - CNRS - Centre National de la Recherche Scientifique, CEC - Chaire Economie du Climat - Université Paris Dauphine-PSL - PSL - Université Paris sciences et lettres)
    Abstract: The invention and the diffusion of environmental process of production and consumption goods are impeded by two market failures: the first on environment and the second on knowledge. The question arises whether the instruments aiming at correcting these market failures should be jointly designed or not. We investigate this question for a major instrument of support to innovation: the patent system. We demonstrate that a patent system and a discriminating environmental taxation that are jointly defined provide for a greater efficiency. We conclude that the two externalities interact with each other through the patent system.
    Keywords: environmental innovation,double externality,patent policy
    Date: 2020–10–19
  4. By: Andrea Borsato
    Abstract: The paper fills a gap in the Secular Stagnation literature and develops an agent-based SFC model to analyse the deep relationship between income distribution and productivity through the channel of innovation. With a steady gaze on US macro-economic data since 1950, we put forth the idea that the continuous shift of income fromwages to profits may have resulted in a smaller incentive to invest in R&D activity, with the decline in productivity performances that characterizes Secular Stagnation in the USA. The paper is the first step toward the growth model that will be developed in Part II.
    Keywords: Secular Stagnation, Innovation dynamics, Incomedistribution, Agentbased SFC models.
    JEL: E10 O31 O38 O43 P16
    Date: 2020–09
  5. By: Laura Nelima Barasa (University of Nairobi, Kenya)
    Abstract: This paper examines the relationship between corruption and transaction costs, as measured by asset specificity and innovation in Africa. We hypothesize that in the context of developing countries in Africa, corruption is significantly associated with innovation, and that this relationship is mediated by transaction costs, including physical asset specificity and human asset specificity. We test our hypotheses by means of a multiple mediation model. We use the product-of-coefficients approach and bootstrapping techniques to estimate firm-level data from the World Bank Enterprise Survey and Innovation Follow-up Survey for five countries in Sub-Saharan Africa. We find that corruption is positively associated with innovation, and that asset specificity positively mediates this relationship. We conclude that the positive relation between corruption and innovation offers support to the “grease-the-wheels” hypothesis. Furthermore, transaction costs involving physical asset specificity increase the likelihood of innovation in a business environment characterised by corruption, an indicator of poorly functioning institutions. Hence, policies focusing on strengthening institutions are likely to be beneficial for controlling corruption and stimulating innovation Lastly, policies pertaining to tax incentives related to physical asset investments are crucial for enhancing innovation.
    Date: 2020
  6. By: Chu, Angus C.
    Abstract: In this survey, we provide a selective review of the literature on inflation, innovation and economic growth. The relationship between inflation and economic growth is a fundamental question in economics. Most studies in this literature explore this relationship in capital-based growth models. This survey reviews a recent branch of this literature on inflation and innovation-driven growth. Specifically, we develop a canonical monetary Schumpeterian growth model to demonstrate the effects of inflation on innovation and the macroeconomy via different channels. We find that the cash-in-advance constraints on consumption and R&D investment have drastically different implications on the macroeconomic effects of inflation.
    Keywords: inflation; innovation;, economic growth
    JEL: E31 O3 O4
    Date: 2020–10
  7. By: Flavio Calvino (OECD); Chiara Criscuolo (OECD); Rudy Verlhac (OECD)
    Abstract: This paper analyses trends in business dynamism across 18 countries and 22 industries over the last two decades, using highly representative comparable data. It finds that declines in business dynamism, pervasive in many countries, are driven by dynamics occurring at a disaggregated sectoral level, rather than reallocation across sectors. Average trends within sectors point to steady declines in each country over the last two decades, even after accounting for the role of the business cycle, with market structure and firm heterogeneity emerging as prominent determinants. Investments in intangibles and digital technologies, globalisation, and changes in demographics also contribute to these trends. Policy can, however, help boost business dynamism by reducing barriers to entry and to knowledge diffusion, favouring experimentation and creative destruction, and increasing absorptive capacity and firms’ potential to benefit from technological change.
    Keywords: Business dynamism, Employment dynamics, Firm demography, Job reallocation
    Date: 2020–11–10

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