nep-ino New Economics Papers
on Innovation
Issue of 2020‒12‒14
ten papers chosen by
Uwe Cantner
University of Jena

  1. Industry 4.0 related innovation and firm growth By Behrens, Vanessa; Trunschke, Markus
  2. Energy Network Innovation for Green Transition: Economic Issues and Regulatory Options By Jamasb, Tooraj; Llorca, Manuel; Meeus, Leonardo; Schittekatte, Tim
  3. The effect of technology transfers from public research institutes and universities on firm innovativeness By María García-Vega; Óscar Vicente-Chirivella
  4. Labour market reform and innovation: Evidence from Spain By Maria Garcia Vega; Richard Kneller; Joel Stiebale
  5. R&D restructuring during the Great Recession and young firms By María García-Vega
  6. Essays on the impact of different forms of collaborative R&D on innovation and technological change By Nasiri, Mohammad
  7. Governance Structure, Technical Change and Industry Competition By Mattia Guerini; Philipp Harting; Mauro Napoletano
  8. Interplay between Technological Innovation and Environmental Quality: Formulating the SDG Policies for Next 11 Economies By Sinha, Avik; Sengupta, Tuhin; Alvarado, Rafael
  9. Unions, Collective Bargaining and Firm Performance By Laroche, Patrice
  10. Atypical combination of technologies in regional co-inventor networks By Milad Abbasiharofteh; Dieter F. Kogler; Balazs Lengyel; ;

  1. By: Behrens, Vanessa; Trunschke, Markus
    Abstract: In this paper we explore the relationship between innovative firms that patent technology related to Industry 4.0 and their economic performance. By applying the new patent cartography developed by the EPO that identifies firm's 4.0 patents, this is one of the first large-scale, systematic studies on the impact of 4.0 technologies. Since 4.0 patents are more likely to be general purpose technologies, firms with 4.0 patents should be in a better position to increase their sales as 4.0 technology has on average a wider industrial applicability. Results of our Fixed Effects Least Squares regressions and Dynamic Panel Model suggest that 4.0 patent stock is positively associated to sales and that this effect is significantly larger than the effect of Non-4.0 patent stock. These effects are found to be decreasing with firm size.
    Keywords: Industry 4.0,Patents,Firm Performance,Sales Growth
    JEL: L25 O14 O33
    Date: 2020
  2. By: Jamasb, Tooraj (Department of Economics, Copenhagen Business School); Llorca, Manuel (Department of Economics, Copenhagen Business School); Meeus, Leonardo (Florence School of Regulation (FSR), Robert Schuman Centre for Advanced Studies, European University Institute, Italy and Vlerick Energy Centre, Vlerick Business School, Belgium); Schittekatte, Tim (Florence School of Regulation (FSR), Robert Schuman Centre for Advanced Studies, European University Institute, Italy and Vlerick Energy Centre, Vlerick Business School, Belgium)
    Abstract: In this age of low-cost capital and stimulus packages, is it the best time to heavily invest in tomorrow’s energy networks and research infrastructure? In the academic literature it is widely acknowledged that innovation is key to decarbonise the energy sector and foster sustainable development. However, post liberalisation has been struggling to promote R&D and innovation. Is this the case of business, regulatory, or policy failure, or are there other factors involved? In this paper, we discuss the reasons for slow uptake of new technologies in energy networks and propose some remedies for the European context, where innovation in the area of energy networks is crucial for the implementation of the Green Transition. The solutions to address this shortfall need to be considered in an overarching manner. The specific points raised here are based on incentive regulation, the establishment of competitive funding models like Ofgem’s Low Carbon Network Fund and a large European collaborative research hub.
    Keywords: Energy network infrastructure; European green deal; Innovation; Research and development
    JEL: L50 L90 O30 Q40 Q50
    Date: 2020–11–27
  3. By: María García-Vega; Óscar Vicente-Chirivella
    Abstract: Public research institutes and universities receive large amounts of public funds for the generation and transmission of knowledge. In this paper, we assess the differential impact of technology transfers from public research institutes versus technology transfers from universities on firm innovativeness. We use information of R&D acquisitions from a panel dataset of more than 10,000 Spanish firms from 2005 to 2014. Using matching and difference-in-difference estimators, we show that technology transfers from both organizations increase firm innovativeness. Our results suggest that the knowledge generated by public research institutes is particularly beneficial to firms with high levels of absorptive capacity. In contrast, the knowledge transferred by universities is relatively more beneficial to firms with low levels of absorptive capacities. Hence, public funds for public research institutes are especially important for the R&D intensive private sector. Therefore, the degree of absorptive capacities of the participating firms is important to design public programs that maximize the efficiency of public technology transfers.
    Keywords: Public Research Institutes; Universities; Technology Transfers; Firm innovativeness.
    Date: 2020
  4. By: Maria Garcia Vega; Richard Kneller; Joel Stiebale
    Abstract: This paper uses data from Spanish manufacturing firms to analyze the effect of a labor market reform on firms' innovation, growth and exporting. The reform provided additional flexibility to firms with less than 50 employees by enabling them to hire workers on a permanent basis with an extended trial period, and thus effectively reducing their firing costs. Exploiting this natural experiment in a difference-in-differences framework, we find that the reform increased the product innovations of the affected firms. We also provide evidence that the reform induced upgrading of product quality and enabled firms to grow faster and to enter new markets. The effects are concentrated in industries where flexible adjustment to unexpected shocks is likely to be important like industries with high R&D intensity and high levels of volatility. Our results suggest that a reduction of employment protection legislation (EPL) increases innovation in firms operating in environments that require high flexibility to produce because the reduction of EPL decreases labor adjustment costs.
    Keywords: innovation, new products, productivity, labour market reform, EPL
    Date: 2019
  5. By: María García-Vega
    Abstract: In this paper, I provide evidence of automation and skill-upgrading of R&D for young firms during the Great Recession of the late 2000s (henceforth abbreviated as GR). Using a difference-in-difference approach and propensity score matching, for a panel of more than 12,000 Spanish firms from 2005 to 2014, I examine if the GR had an effect on the organization of R&D in young versus older firms. I find that young firms adjust their R&D employment during the GR. I show that young firms implemented three key compositional changes in their R&D policies during the GR as compared to older firms: a) they reduced their R&D employment by firing medium-skilled R&D workers; b) they hired high-skilled R&D workers; and c) they increased their capital investments for R&D. These changes in R&D policies suggest that during the GR, young firms substituted medium-skilled R&D workers by high-skilled workers and machines. These effects are mediated by the firms’ financial health.
    Keywords: Young firms; Great Recession; Firm performance; R&D; Innovation; Automation; skillupgrading; Job polarization.
    Date: 2020
  6. By: Nasiri, Mohammad (Tilburg University, School of Economics and Management)
    Date: 2020
  7. By: Mattia Guerini (Université Côte d'Azur, CNRS, GREDEG, France; Sant'Anna School of Advanced Studies; Sciences Po., OFCE); Philipp Harting (Bielefeld University); Mauro Napoletano (OFCE Sciences-Po; SKEMA Business School)
    Abstract: We develop a model to study the impact of corporate governance on firm investment decisions and industry competition. In the model, governance structure affects the distribution of shares among short- and long-term oriented investors, the robustness of the management regarding possible stockholder interference, and the managerial remuneration scheme. A bargaining process between firm's stakeholders determines the optimal allocation of financial resources between real investments in R&D and financial investments in shares buybacks. We characterize the relation between corporate governance and firm's optimal investment strategy and we study how different governance structures shape technical progress and the degree of competition over the industrial life cycle. Numerical simulations of a calibrated set-up of the model show that pooling together industries characterized by heterogeneous governance structures generate the well-documented inverted-U shaped relation between competition and innovation.
    Keywords: Governance structure, industry dynamics, competition, technical change
    JEL: G34 L22 M12
    Date: 2020–11
  8. By: Sinha, Avik; Sengupta, Tuhin; Alvarado, Rafael
    Abstract: Since the inception of Sustainable Development Goals (SDGs), the Next 11 (N11) countries are facing difficulties in attaining the SDG objectives, as maintaining the environmental quality has been a challenge for them. In this study, we have revisited the technology policies of these countries, and in doing so, we have tried to address the problem of environmental degradation, while addressing the issues of sustained economic growth, clean and affordable energy, and quality education. In this pursuit, we have designed two indices for environmental degradation and technological advancement, and then analyzed the association between them following the Environmental Kuznets Curve (EKC) hypothesis. The empirical analysis has been done by IPAT framework, and by using bootstrapped quantile regression and rolling window heterogeneous panel casualty tests, over a period of 1990-2017. Following the results obtained from the analysis, we have tried to address the objectives of SDG 13, SDG 4, SDG 8, SDG 9, SDG 7, and SDG 10.
    Keywords: Sustainable Development Goals; Technology policy; R&D, Next 11; Environmental quality
    JEL: Q5 Q53 Q55
    Date: 2020
  9. By: Laroche, Patrice
    Abstract: The impact of unions on firm performance has been the subject of debate and controversy in most industrialized countries, particularly in the United States and the United Kingdom. The purpose of this chapter is to review and assess the scope and limitations of the economic analysis of unions as well as the controversies surrounding the conclusions of existing empirical research. Although it is difficult to draw firm and general conclusions on the effects of unions on firm performance, the existing results lead us to consider unions not solely in terms of their costs for the company. Empirical results suggest that unionism is often associated with higher productivity but this relationship might vary across industries, institutional contexts and over time. Estimates of the causal mechanisms through which unions affect productivity allow a better understanding of the effects of unions. The literature on the effect of unions on productivity recognizes that part of this effect may work through reducing employee turnover and other mechanisms, such as technological and organizational innovations, which are essential factors of productivity growth. Recent studies dealing with the effects of unions on firm profits support Freeman and Medoff's (1984) conclusion that unionization is associated with lower profitability. Finally, union activities, especially collective bargaining, trade off some economic efficiency for greater justice in workplaces and reduced inequalities.
    Keywords: unions,collective bargaining,productivity,innovation,high-performance work practices,performance
    JEL: J5 J51 J53 M54
    Date: 2020
  10. By: Milad Abbasiharofteh; Dieter F. Kogler; Balazs Lengyel; ;
    Abstract: Novel combinations of technologies are generated from existing knowledge embedded in collaborative work. Albeit inventors tend to develop specialized skills and participate in specialized work, it is their collaboration with peers with varied experience that facilitates the production of radical novelty. While this is of key importance, we lack full understanding on how the evolution of inventor collaborations is related to the nature of technological combination. In this paper, we analyse how the role of technological specialization and variety in evolving co-inventor networks is related to the creation of ‘atypical’ inventions in European NUTS2 regions. By analysing the community structure of co-inventor networks in each region, we find that the share of atypical patents is growing where co-inventor communities are strongly specialized in certain technologies and these communities are also bridged by collaborations. Evidence suggests that linking communities of dissimilar technological profiles favours atypical knowledge production the most. Our work implies that to produce radical innovative outcomes, regions must support knowledge production in specialized inventor communities and sponsor the bridging of collaborations to induce diversity.
    Keywords: patents, novelty, network communities, technological similarity, network of places
    JEL: F23 D85
    Date: 2020–11

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