nep-ino New Economics Papers
on Innovation
Issue of 2020‒11‒30
twelve papers chosen by
Uwe Cantner
University of Jena

  1. Free movement of inventors: open-border policy and innovation in Switzerland By Cristelli, Gabriele; Lissoni, Francesco
  2. Government as the First Investor in Biopharmaceutical Innovation: Evidence From New Drug Approvals 2010 - 2019 By Ekaterina Galkina Cleary; Matthew J. Jackson; Fred D. Ledley
  3. The Role of Collaboration Networks for Innovation in Immigrant-Owned New Technology-Based Firms By Scandura, Alessandra; Bolzani, Daniela
  4. Patent-related actions taken in WTO members in response to the COVID-19 pandemic By Wu, Xiaoping; Khazin, Bassam Peter
  5. Labor market reform and innovation: Evidence from Spain By García-Vega, María; Kneller, Richard; Stiebale, Joel
  6. Patent Screening, Innovation, and Welfare By Schankerman, Mark; Schuett, Florian
  7. Does mission-oriented funding stimulate private R&D? Evidence from military R&D for US states By Gianluca Pallante; Emanuele Russo; Andrea Roventini
  8. Growing Through Spinoffs: Corporate Governance, Entry, And Innovation By Maurizio Iacopetta; Raoul Minetti; Pierluigi Murro
  9. Job Creation in the Wind Power Sector Through Marshallian and Jacobian Knowledge Spillovers By Aldieri, Luigi; Grafström, Jonas; Paolo Vinci, Concetto
  10. Idea Diffusion and Property Rights By Boyan Jovanovic; Zhu Wang
  11. Towards a holistic user innovation policy By Bengtsson, Lars; Edquist, Charles
  12. Addressing the productivity paradox with big data: A literature review and adaptation of the CDM econometric model By Schubert, Torben; Jäger, Angela; Türkeli, Serdar; Visentin, Fabiana

  1. By: Cristelli, Gabriele; Lissoni, Francesco
    Abstract: We study the innovation effects of the Agreement on the Free Movement of Persons (AFMP), signed by Switzerland and the EU in 1999. Using geocoded patent data, complemented by matched inventor-immigrant-census records, we identify a large number of cross-border inventors (CBIs), commuters from neighbouring countries working in Swiss R&D labs. We show that, during the AFMP implementation phase, the influx of CBIs increased differentially across regions at different driving distances from the border. That caused a 24% increase in patents, mostly due to large and medium patent holders (as opposed to very large ones) and to inventor teams mixing CBIs and natives. The latter were not displaced and increased their productivity, thanks to complementarity between their knowledge assets and those of CBIs.
    Keywords: Immigration, Innovation, Patents, Inventors, Free Movement of Persons
    JEL: F22 J61 O31 O33
    Date: 2020–11
  2. By: Ekaterina Galkina Cleary (Bentley Univeristy); Matthew J. Jackson (Bentley University); Fred D. Ledley (Bentley University)
    Abstract: The discovery and development of new medicines classically involves a linear process of basic biomedical research to uncover potential targets for drug action, followed by applied, or translational, research to identify candidate products and establish their effectiveness and safety. This Working Paper describes the public sector contribution to that process by tracing funding from the National Institutes of Health (NIH) related to published research on each of the 356 new drugs approved by the U.S. Food and Drug Administration from 2010-2019 as well as research on their 219 biological targets. Specifically, we describe the timelines of clinical development for these products and proxy measures of their importance, including designations as first-in-class or expedited approvals. We model the maturation of basic research on the biological targets to determine the initiation and established points of this research and demonstrate that none of these products were approved before this enabling research passed the established point. This body of essential research comprised 2 million publications, of which 424 thousand were supported by 515 thousand Funding Years of NIH Project support totaling $195 billion. Research on the 356 drugs comprised 244 thousand publications, of which 39 thousand were supported by 64 thousand Funding Years of NIH Project support totaling $36 billion. Overall, NIH funding contributed to research associated with every new drug approved from 2010-2019, totaling $230 billion. This funding supported investigator-initiated Research Projects, Cooperative Agreements for government-led research on topics of particular importance, as well as Research Program Projects and Centers and training to support the research infrastructure. This NIH funding also produced 22 thousand patents, which provided marketing exclusivity for 27 (8.6%) of the drugs approved 2010-2019. These data demonstrate the essential role of public sector-funded basic research in drug discovery and development, as well as the scale and character of this funding. It also demonstrates the limited mechanisms available for recognizing the value created by these early investments and ensuring appropriate public returns. This analysis demonstrates the importance of sustained public investment in basic biomedical science as well as the need for policy innovations that fully realize the value of public sector investments in pharmaceutical innovation that ensure that these investments yield meaningful improvements in health.
    Keywords: innovation, basic research, translational science, technology transfer, NIH funding, Bayh-Dole, public policy, federal funding.
    JEL: G35 H1 H4 H5 L2 O3
    Date: 2020–08–05
  3. By: Scandura, Alessandra; Bolzani, Daniela (University of Turin)
    Abstract: This paper investigates the importance of the network of collaborations with other firms, research institutions, and business associations as key drivers of innovation, providing a comparison between immigrant-owned firms and non-immigrant-owned firms. We hypothesise that the network of collaboration is more important for innovative activities of immigrant entrepreneurs than for natives, due to their migrant condition, and that immigrant entrepreneurs’ acculturation to the host country culture moderates the influence of such network. We test our hypotheses on a unique matched-pair sample of immigrant and native domestic entrepreneurs active in high-tech mainstream (non-ethnic) markets. Our results show that universities and research institutions along with business associations are more important for immigrant-owned companies; we further show that immigrant entrepreneurs’ acculturation to the host country culture acts as a substitute for interactions with business associations. These findings are highly relevant for the academic and policy discourses on the link between immigrant entrepreneurship and innovation in developed countries.
    Date: 2020–10
  4. By: Wu, Xiaoping; Khazin, Bassam Peter
    Abstract: COVID-19, caused by SARS-Cov-2, was declared to be a pandemic by the World Health Organization on 11 March 2020. Since then, the issue of the relationship between patent protection and the development of and access to medical treatments and technologies - a longstanding and enduringly important public policy issue - has become central to the debate on the linkages between IP, innovation, access, and public health between stakeholders with divergent interests. This working paper provides an overview of the patent landscape of medical treatments and technologies related to COVID-19, and of the patent status of two investigational medical treatments: remdesivir and lopinavir/ritonavir. It then presents various patent-related actions taken by legislators, policymakers, industry sectors, and civil society organizations in WTO Members since the outbreak. Furthermore, it elaborates on patent-related policy options provided by the TRIPS Agreement, and WTO Members' national implementation and utilization of these options in their response to the COVID-19 pandemic.
    Keywords: COVID-19 pandemic,patent,open innovation,patentable subject matter,repurposed medicines,exceptions and limitations,licences,government use,transition periods,LDCs,WTO,TRIPS
    JEL: K11 K15 K30 O30 O31 O34 I18
    Date: 2020
  5. By: García-Vega, María; Kneller, Richard; Stiebale, Joel
    Abstract: We analyze the effect of a labor market reform on firms' product innovation. The re- form, which amounts to a natural experiment, differentially reduced firing costs for some firms, thereby lowering adjustment costs in the presence of demand uncertainty. Using a difference-in- differences framework, we show that the reform increased product innovations. We also provide evidence that the reform induced upgrading of product quality and enabled firms to grow faster and enter new markets. The effects are concentrated in industries with high levels of demand volatility and R&D intensity, where exible adjustments to unexpected shocks are important.
    Keywords: Innovation,New products,Productivity,Labor market reform,EPL
    JEL: D22 J3 O31 G31
    Date: 2020
  6. By: Schankerman, Mark; Schuett, Florian (Tilburg University, TILEC)
    Keywords: innovation; patent quality; screening; litigation; courts; patent fees; licensing
    Date: 2020
  7. By: Gianluca Pallante; Emanuele Russo; Andrea Roventini
    Abstract: US military Research and Development (R&D) expenditures arguably represent the best example of mission-oriented policy. They are sizeable, with a clear-cut public purpose (national defense) and with the government being their exclusive beneficiary. Exploiting a longitudinal dataset linking public R&D obligations to private R&D expenditures for US states, we investigate the impact of defense R&D on privately-financed R&D. To address potential endogeneity in the allocation of funds, we use an instrumental variable identification strategy leveraging the differential exposure of US states to national shocks in federal military R&D. We document considerable "crowding-in" effects with elasticities in the 0.11-0.14 range. These positive effects extend also to the labor market, when focusing on employment in selected R&D intensive industries and especially for engineers.
    Keywords: R&D; Innovation policy; Defense; Mission-oriented innovation.
    Date: 2020–11–12
  8. By: Maurizio Iacopetta (Observatoire français des conjonctures économiques); Raoul Minetti (Michigan State University); Pierluigi Murro
    Abstract: New firms are often based on ideas that the founders developed while working for incumbent firms. We study the macroeconomic effects of spinoffs through a growth model of product variety expansion, driven by firm entry, and product innovation. Spinoffs stem from conflicts of interest between incumbent firms' shareholders and employees. The analysis suggests that incumbents invest more in product innovation when knowledge protection is stronger. An inverted-U shape relationship emerges, however, between the intensity of spinoff activities and the strength of the rule of law. A calibration experiment indicates that, with a good rule of law, loosening knowledge protection by 53 reduces product innovation by one fifth in the short run and one seventh in the long run, but boosts the spinoff rate by one tenth and one sixth in the short and long run, respectively. Nevertheless, per capita income growth drops and welfare deteriorates. The trade-offs are broadly consistent with evidence from Italian firms.
    Keywords: Corporate governance; Endogenous growth; Spinoffs
    JEL: E44 O40 G30
    Date: 2020–04–29
  9. By: Aldieri, Luigi (University of Salerno); Grafström, Jonas (The Ratio Institute); Paolo Vinci, Concetto (University of Salerno)
    Abstract: The empirical evidence concerning the job-creation impact of wind power technology through knowledge spillovers is yet poor. Our objective is to contribute to the literature and bridge this gap. Specifically, our analysis explores to what extent investments in innovation activities of one firm affect the neighbouring firms’ generation of knowledge spillovers in the same sector (intra-industry) or to different sectors (inter-industry) and how this complex knowledge diffusion process impacts the employment dynamics. The econometric analysis relies on a sector-based panel dataset for the USA, Europe, and Japan between 2002 and 2017. The empirical findings suggest that there were negative employment spillovers from the same technology sector (Marshallian externalities) while the spillovers from more diversified activity (Jacobian externalities) have a positive impact on job-creation. The findings have relevant policy implications for governments who are developing an industrial strategy for wind power technology.
    Keywords: Employment; knowledge spillovers; patents; renewable energy; wind power
    JEL: J21 O33 Q20 Q40 Q42
    Date: 2020–11–11
  10. By: Boyan Jovanovic; Zhu Wang
    Abstract: We study the innovation and diffusion of technology at the industry level. We derive the full dynamic paths of an industry's evolution, from birth to its maturity, and we characterize the impact of diffusion on the incentive to innovate. The model implies that protection of innovators should be only partial due to the congestion externality in meetings in which idea transfers take place. We fit the model to the early experiences of the automobile and personal computer industries both of which show an S-shaped growth of the number of firms.
    JEL: L0
    Date: 2020–10
  11. By: Bengtsson, Lars (Division of Innovation Engineering, LTH, Lund University); Edquist, Charles (CIRCLE, Lund University)
    Abstract: This paper aims to synthesize previous user innovation policy proposals into an adapted systems of innovation framework, on which a holistic user innovation policy for the household sector can be based. We identify and review policy proposals made by user innovation researchers and categorize them according to ten key activities in the systems of innovation framework. In the review of 22 publications with policy proposals on user innovation, we find that the publications lack an integrating innovation policy framework. Most of them limit their policy proposals to a few policy activities, i.e., the innovation policy proposals are partial and mono-causal. In contrast to the linear view of the innovation process, user innovation researchers predominantly adopt an institutional view of the innovation process. Based on a systems of innovation framework, we propose a holistic innovation policy framework adapted to user innovation in the household sector. It is centered on ten key activities and policy instruments related to them. Our proposals effectively provide policy development support to policy researchers, policymakers, and politicians stressing the multi-causal and non-linear features of the user innovation process.
    Keywords: User innovation; household sector; systems of innovation; innovation policy; holistic innovation policy
    JEL: L50 O31 O32 O33 O38 O39
    Date: 2020–11–10
  12. By: Schubert, Torben (Fraunhofer ISI, and Circle, Lund University); Jäger, Angela (Fraunhofer ISI); Türkeli, Serdar (UNU-MERIT, Maastricht University); Visentin, Fabiana (UNU-MERIT, Maastricht University)
    Abstract: This paper develops the plan for the econometric estimations concerning the relationship between firm productivity and the specifics of the innovation process. The paper consists of three main parts. In the first, we review the relevant literature related to the productivity paradox and its causes. Specific attention will be paid to broad economic trends, in particular the higher importance of intangibles, the increasing importance of knowledge spillovers and servitisation as drivers of the slowdown in productivity growth. In the second part, we introduce a plan for the econometric estimation strategy. Here we propose an extended Crépon-Duguet-Mairesse type of model (CDM), which enriches the original specification by the three influence factors of intangibles, spillovers, and servitisation. This will allow testing the influence of these three factors on productivity at the level of the firm within a unified framework. In the third part, we build on the literature review in order to provide a detailed plan for the data collection procedure including a description of the variables to be collected and the source from which the variables are coming. It should be noted that we will rely partly on structured data (e.g. ORBIS), while many others variables will need to be generated from unstructured sources, in particular the webpages of firms. The use of unstructured data is a particular strength of our proposed data collection procedure because the use of such data is expected to offer novel insights. However, it implies additional risks in terms of data quality or missing data. Our data collection plan explores the maximum potential of variables that will ideally be made available for later econometric treatment. Whether indeed all variables will have sufficient quality to be used in the econometric estimations will be subject to the outcomes of the actual collection efforts.
    Keywords: Productivity, Intangibles, Servitisation, Innovation, R&D, Open Innovation, IPR, Knowledge diffusion, Economic growth, Productivity Paradox, Big data, Large data sets, data collection
    JEL: C55 C80 D24 E22 L80 O31 O32 O34 O40 O47
    Date: 2020–11–11

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.
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