nep-ino New Economics Papers
on Innovation
Issue of 2021‒03‒08
eight papers chosen by
Uwe Cantner
University of Jena

  1. R&D in natural resource based industries: Governments should prioritize innovation which reduces environmental hazards By Mads Greaker
  2. Science, technology and innovation in the time of COVID-19 By Caroline Paunov; Sandra Planes-Satorra
  3. The Impact of Regulation on Innovation By Philippe Aghion; Antonin Bergeaud; John Van Reenen
  4. Syndication networks and company survival: Evidence from European venture-capital deals By Christopoulos, Dimitris; Köppl, Stefan; Köppl-Turyna, Monika
  5. The design and implementation of mission-oriented innovation policies: A new systemic policy approach to address societal challenges By Philippe Larrue
  6. Non-Standard Work and Innovation: Evidence from European industries By Jelena Relijc; Armanda Cetrulo; Valeria Cirillo; Andrea Coveri
  7. Building and sustaining collaborative platforms in genomics and biobanks for health innovation By Hermann Garden; Naomi Hawkins; David Winickoff
  8. Institutions and the Productivity Challenge for European Regions By Andres Rodriguez-Pose; Roberto Ganau;

  1. By: Mads Greaker (Oslo Business School - OsloMet)
    Abstract: Sustainable yield from a natural resource áuctuates in response to both natural conditions and harvesting practices. On the one hand, research and development (R&D) may reduce the áuctuations through more knowledge of ecosystem functioning. On the other hand, R&D may also increase the fluctuations if it results in more efficient harvesting operations with increased impact on the environment. We analyze the incentives for innovation in a natural resource based industry. The direction of technical change can either be towards profitability enhancing innovations or environmental hazard reducing innovations. We then pose the following research questions: Is the marketís ranking of profitability enhancing and environmental hazard reducing innovation projects in line with the ranking of the social planner? In order to investigate our research question, we develop a theoretical model of innovation in a natural resource based industry, which we also calibrate to the Norwegian aquaculture industry. Two key results emerge; first, the government should subsidize the adoption of environmental hazard reducing technology. Second, the private incentive for profitability enhancing innovation is likely to outperform the private incentives for environmental hazard reducing innovation. In fact, the optimal R&D subsidy to to the former type of R&D is negative, while the optimal R&D subsidy to the latter type of R&D is positive and larger the more serious the environmental hazard.
    Keywords: Renewable natural resources, innovation, environmental policy, aquaculture
    Date: 2020–10–21
  2. By: Caroline Paunov (OECD); Sandra Planes-Satorra (OECD)
    Abstract: Science, technology and innovation (STI) have played a key role in responding to the COVID-19 pandemic and the unprecedented socio-economic crisis it has triggered. This paper explores how the pandemic affected STI in 2020, including how STI was mobilised to provide vaccines, treatments and innovative (often digital) solutions to address “social distancing”. The paper also reviews the quick and agile STI policy responses implemented across countries to stimulate research and innovation activities to find solutions to the pandemic. Moreover, the paper covers STI policies that targeted universities, research centres, innovative businesses and entrepreneurs most affected by the crisis. It also raises key debates on the effectiveness of such policies. Follow-up work will leverage more and better data to improve this early assessment of the impacts of the crisis and STI policy responses.
    Keywords: COVID-19, OECD countries, science, STI policy, technology and innovation (STI)
    JEL: O30 I23 D20 H12
    Date: 2021–02–10
  3. By: Philippe Aghion; Antonin Bergeaud; John Van Reenen
    Abstract: Does regulation affect the pace and nature of innovation and if so, by how much? We build a tractable and quantifiable endogenous growth model with size-contingent regulations. We apply this to population administrative firm panel data from France, where many labour regulations apply to firms with 50 or more employees. Nonparametrically, we find that there is a sharp fall in the fraction of innovating firms just to the left of the regulatory threshold. Further, a dynamic analysis shows a sharp reduction in the firm's innovation response to exogenous demand shocks for firms just below the regulatory threshold. We then quantitatively fit the parameters of the model to the data, finding that innovation at the macro level is about 5.4% lower due to the regulation, a 2.2% consumption equivalent welfare loss. Four-fifths of this loss is due to lower innovation intensity per firm rather than just a misallocation towards smaller firms and lower entry. We generalize the theory to allow for changes in the direction of R&D, and find that regulation's negative effects only matter for incremental innovation (as measured by citations and text-based measures of novelty). A more regulated economy may have less innovation, but when firms do innovate they tend to “swing for the fence” with more radical (and labour saving) breakthroughs.
    Keywords: Innovation, regulation, patents, firm size.
    JEL: O31 L11 L51 J8 L25
    Date: 2021
  4. By: Christopoulos, Dimitris; Köppl, Stefan; Köppl-Turyna, Monika
    Abstract: We look at syndication in the venture capital industry. Investments conducted by syndicates are believed to have better chances of being successful, measured by the survival probability of portfolio companies or by successful exits. Using a novel and large dataset, covering several countries, our analysis shows that strong network ties of investors are associated with success of portfolio companies in Europe. We also show that there are differences in the association of network centrality with survival between different financing rounds, the former being more important in early-stage investments. Finally, we show a strong association of network ties of investors with sales growth of portfolio companies, before and after the deal.
    Keywords: Venture Capital,Networks,Europe,Investment Syndication
    JEL: G11 G24 M13
    Date: 2021
  5. By: Philippe Larrue (OECD)
    Abstract: This paper analyses ‘mission-oriented innovation policies’ (MOIPs), a new type of systemic intervention that a growing number of countries has implemented in order to tackle mounting societal challenges. These policies aim to alleviate some of the most prevalent weaknesses within many national systems of innovation, notably the lack of holistic strategic orientation and policy co-ordination, and fragmented policy mixes. This paper leverages a dedicated analytical framework to systematically explore the challenges and opportunities that these policies present at initiative and country levels. In doing so, it provides a better understanding of the different ways in which governments design, fund and coordinate MOIPs, and contributes to broadening the range of options available to either improve or initiate this policy approach. This paper complements the MOIP Online Toolkit (, the OECD knowledge platform on MOIPs.
    Date: 2021–02–05
  6. By: Jelena Relijc; Armanda Cetrulo; Valeria Cirillo; Andrea Coveri
    Abstract: Following a market-oriented approach, policies aimed at increasing labour flexibility by weakening employment protection institutions should enable firms to efficiently allocate resources, improve their capability to compete on international markets and adjust to economic cycle. This work documents the rise of non-standard (i.e. temporary and part-time) work in five European countries (Germany, France, Italy, the Netherlands and the United Kingdom) over the period 1994-2016 and investigate the nexus between the use of non-standard work and innovation performance using data for 18 manufacturing and 23 service industries. Contrary to the objectives that market-oriented policy recommendations promised to achieve, we show that there is a significantly negative association between the share of workers employed under non- standard contractual arrangements and the introduction of both product and process innovation. Furthermore, we show that the harmful consequences of the spread of non-standard work on firms' product innovation propensity are more pronounced in high-tech sectors.
    Keywords: Non-standard work; Knowledge; Product innovation; Process innovation; Industry-level analysis.
    Date: 2021–02–21
  7. By: Hermann Garden (OECD); Naomi Hawkins (University of Exeter); David Winickoff (OECD)
    Abstract: Genomic and biobank collaborative platforms hold significant promise for the development of new discoveries and therapies. This paper explores the complex technical, legal and business challenges arising from genomics and biobanks, and brings together ideas and best practices from major national and international platforms, and from a diverse range of experts. The global sharing of biological samples and genomic data has been critical for accelerating our understanding of the biology and spread of COVID-19, and for the development of vaccines and diagnostics. Although some of the policy challenges in the field are well known, they have been reconfigured by the digitalisation of health innovation combined with the increasing complexity and volume of data, the push for global collaboration, and the growing awareness of ethical, legal, and social implications.
    Keywords: biobanks, collaborative platforms, genomics, governance, health, innovation policy, sustainability
    Date: 2021–03–01
  8. By: Andres Rodriguez-Pose; Roberto Ganau;
    Abstract: Europe has witnessed a considerable labour productivity slowdown in recent decades. Many potential explanations have been proposed to address this productivity ‘puzzle’. However, how the quality of local institutions influences labour productivity has been overlooked by the literature. This paper addresses this gap by evaluating how institutional quality affects labour productivity growth and, particularly, its determinants at the regional level during the period 2003-2015. The results indicate that institutional quality influences regions’ labour productivity growth both directly —as improvements in institutional quality drive productivity growth— and indirectly —as the short- and long-run returns of human capital and innovation on labour productivity growth are affected by regional variations in institutional quality.
    Keywords: Labour productivity; institutional quality; physical capital; human capital; innovation; regions; Europe
    JEL: E24 J24 O47 R11
    Date: 2021–02

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