nep-ino New Economics Papers
on Innovation
Issue of 2021‒08‒16
ten papers chosen by
Uwe Cantner
University of Jena

  1. Where cities fail to triumph: the impact of urban location and local collaboration on innovation in Norway By Fitjar, Rune Dahl; Rodríguez-Pose, Andrés
  2. Buyers' workload and R&D procurement outcomes: Evidence from the US Air Force Research Lab By Giuffrida, Leonardo M.; Raiteri, Emilio
  3. The cost of weak institutions for innovation in China By Rodríguez-Pose, Andrés; Zhang, Min
  4. Local government and innovation: The case of Italian provinces By Fortuna Casoria; Marianna Marino; Pierpaolo Parrotta; Davide Sala
  6. How Do Workers Adjust When Firms Adopt New Technologies? By Genz, Sabrina; Gregory, Terry; Janser, Markus; Lehmer, Florian; Matthes, Britta
  7. A Synthetic Model of Disruption and Experimentation By Joshua S. Gans
  8. Cultural Imprinting: Ancient Origins of Entrepreneurship and Innovation in Germany By Michael Fritsch; Martin Obschonka; Fabian Wahl; Michael Wyrwich
  9. What do Firms Gain from Patenting? The Case of the Global ICT Industry By Dimitrios Exadaktylos; Mahdi Ghodsi; Armando Rungi
  10. The Geography of Job Tasks By Enghin Atalay; Sebastian Sotelo; Daniel Tannenbaum

  1. By: Fitjar, Rune Dahl; Rodríguez-Pose, Andrés
    Abstract: The role of cities in fostering innovation has for long been taken for granted. Agglomeration and the knowledge spillovers generated in dense urban environments have been considered fundamental drivers of innovation. This view has, however, become challenged by research questioning the returns to physical agglomeration and local networking, placing instead more emphasis on the importance of interregional and international collaboration, and on innovation in peripheral regions. This paper delves into the debate on the role of cities for innovation by examining the interplay between urban location and local collaboration in Norway. It uses data from the Community Innovation Survey for 2006–2010 to map out the geographical dimension of R&D collaboration in Norwegian firms with a view to assessing whether different types of R&D collaboration in urban and rural locations affect firms’ propensity to innovate. The results show that local collaboration is associated with increased process and organisational innovation, while it does not produce higher levels of product or marketing innovation. Conversely, international collaboration is connected with higher probabilities of product, new-to-market and marketing innovations. Furthermore, location in urban or rural areas makes no difference for most innovation outcomes in Norway when other characteristics are controlled for. Location in cities also does not shape the returns to local R&D collaboration. Hence, the role of cities for innovation in Norway, whether in themselves or as sites for dense local interaction, is less relevant than the urban innovation literature would predict.
    Keywords: innovation; firms; networking; collaboration; cities; Norway; 209761
    JEL: L25 O31 O33
    Date: 2020–01–01
  2. By: Giuffrida, Leonardo M.; Raiteri, Emilio
    Abstract: Does workload constitute a bottleneck to a public agency's mission, and if so, to what extent? We ask these questions in the context of the US government's procurement of R&D. We link tender, contract, patent, and office records to the identity of the officer responsible for the procurement process to estimate how workload in the federal acquisition unit affects the execution of R&D contracts. The identification comes from unanticipated retirement shifts among contracting officers, which we use to instrument workload. We find a large increase in patenting at the extensive margin when the same officer is exposed to a declining workload. In our sample, an additional contracting officer in the procurement unit, holding fixed the procurement budget and number of purchases, leads to a two percentage point increase in the probability for an R&D contract to generate patents. We provide suggestive evidence that backlogged contracting officers are unable to devote enough time to tender and contract specifications.
    Keywords: Workload,Public Procurement,Contracting Officer,R&D,Patents
    JEL: D23 H57 O31 O32
    Date: 2021
  3. By: Rodríguez-Pose, Andrés; Zhang, Min
    Abstract: Does the variation in the quality of local government institutions affect the capacity of firms to innovate? This paper uses a unique dataset that combines the specific features of 2,700 firms with the institutional and socioeconomic characteristics of the 25 cities in China where they operate, in order to assess the extent to which institutional quality – measured across four dimensions: rule of law, government effectiveness, corruption, and regulatory quality – affects both the innovation probability and intensity of firms. The results of the econometric analysis show that poor institutional quality in urban China is an important barrier for firm-level innovation. In particular, a deficient rule of law, high corruption, and a weak regulatory quality strongly undermine firm-level innovation. The role of these factors is far more limited in the case of innovation intensity. Better institutions also reduce the amount of time firms spend dealing with government regulations in order to facilitate innovation. The results also indicate that the cost of weak institutions for innovation is higher for private than for state-owned firms, at least in the early stages of innovation. In general, differences in institutional quality generate local urban ecosystems that impinge on the propensity of firms to innovate.
    Keywords: innovation; institutions; government quality; firms; cities; China
    JEL: R14 J01
    Date: 2020–04–01
  4. By: Fortuna Casoria (University of Lyon); Marianna Marino (SKEMA Business School); Pierpaolo Parrotta (IESEG School of Management); Davide Sala (University of Passau)
    Abstract: This paper exploits quasi-natural experiments associated with three waves of reforms occurred in Italy in 1992, 2001 and 2004, to establish 8, 4, and 3 new provinces, respectively. Using a difference-in-difference approach, we find evidence of a significant detrimental effect of (further) decentralization on innovation in Northern and Central Italian provinces. We argue that this finding can be rationalized with the costs imposed by the “mafia transplantation†phenomenon, as we find that the new provinces that were more exposed to “mafiosi in confino†reduced their innovation output extensively. We perform a number of robustness checks that corroborate our main findings.
    Keywords: local government, decentralization, innovation, mafia transplantation, difference-in-difference
    JEL: D72 H72 K42 L20 O31
    Date: 2021–04
  5. By: David Vallat (TRIANGLE - Triangle : action, discours, pensée politique et économique - CNRS - Centre National de la Recherche Scientifique - IEP Lyon - Sciences Po Lyon - Institut d'études politiques de Lyon - Université de Lyon - UJM - Université Jean Monnet [Saint-Étienne] - UL2 - Université Lumière - Lyon 2 - ENS Lyon - École normale supérieure - Lyon); Julie Fabbri; Amélie Bohas
    Abstract: Open access to knowledge promotes collaboration, sharing, and exchange; further, it nourishes creativity, democratizes innovation (Hippel, 2005, 2017), and facilitates adaptation to a very volatile environment. So how can we favour collaboration and open access knowledge in education to stimulate students'creativity? We propose in this paper to present an experiment of situated learning based on the commons concept. This experiment relies on a method developed by a group of academics studying new work practices and collaborative spaces (the Research Group on Collaborative Spaces): the Open Walked Event-based Experimentation. The OWEE research method relies on collaboration to produce open access knowledge and considers walking in common as a good way to create a community. We adapted the OWEE protocol to a new context-a learning expedition mainly with students in a closed event space-to turn them into active and reflexive visitors of the fair.
    Keywords: open knowledge,teaching,learning expeditions,common-pool-resource,Commons
    Date: 2019–10–16
  6. By: Genz, Sabrina (Institute for Employment Research (IAB), Nuremberg); Gregory, Terry (IZA); Janser, Markus (Institute for Employment Research (IAB), Nuremberg); Lehmer, Florian (Institute for Employment Research (IAB), Nuremberg); Matthes, Britta (Institute for Employment Research (IAB), Nuremberg)
    Abstract: We investigate how workers adjust to firms' investments into new digital technologies, including artificial intelligence, augmented reality, or 3D printing. For this, we collected novel data that links survey information on firms' technology adoption to administrative social security data. We then compare individual outcomes between workers employed at technology adopters relative to non-adopters. Depending on the type of technology, we find evidence for improved employment stability, higher wage growth, and increased cumulative earnings in response to digital technology adoption. These beneficial adjustments seem to be driven by technologies used by service providers rather than manufacturers. However, the adjustments do not occur equally across worker groups: IT-related expert jobs with non-routine analytic tasks benefit most from technological upgrading, coinciding with highly complex job requirements, but not necessarily with more academic skills.
    Keywords: technological change, artificial intelligence, employment stability, wages
    JEL: J23 J31 J62
    Date: 2021–08
  7. By: Joshua S. Gans
    Abstract: This paper examines how a firm's choice of the type of experiment impacts on its potential exploitation of new technological opportunities. It does so in the context of the failure of successful firms (or disruption) where the literature has informally suggested that firms undertake errors in experimental choice (in particular, choosing experiments that involved biased signals). It is shown that firms will generically choose biased over unbiased experiments even when there are no differences in their relative costs. This is done to better inform decisions regarding the exploitation of technological opportunities. It is shown that these choices can differ between incumbents and entrants based on their fundamentals as well as because of the anticipation of competition between them.
    JEL: L26 O32
    Date: 2021–07
  8. By: Michael Fritsch (Friedrich Schiller University Jena, Germany); Martin Obschonka (Queensland University of Technology, Brisbane, Australia); Fabian Wahl (University of Hohenheim, Germany); Michael Wyrwich (University of Groningen, The Netherlands, and Friedrich Schiller University Jena, Germany)
    Abstract: A region’s present-day economic performance can be deeply anchored in historical factors. We provide the first systematic evidence of a deep imprinting effect in the context of Roman rule in the south-western part of Germany nearly 2,000 years ago. Our analysis reveals that regions in the former Roman part of Germany show a stronger entrepreneurship and innovation culture today, evident by higher levels of quantity and quality entrepreneurship and innovation. The data indicate that this lasting 'Roman effect' was constituted by the early establishment of interregional social and economic exchange and related infrastructure. Our findings thus help in unpacking the hidden cultural roots of present-day economic performance, with important implications for research and economic policy.
    Keywords: Entrepreneurship, innovation, historical roots, Romans, Limes
    JEL: N9 O1 I31
    Date: 2021–08–11
  9. By: Dimitrios Exadaktylos; Mahdi Ghodsi; Armando Rungi
    Abstract: This study investigates the relationship between patenting activity, productivity, and market competition at the firm level. We focus on the Information and Communication Technology (ICT) industry as a particular case of an innovative sector whose contribution to modern economies is pivotal. For our purpose, we exploit financial accounts and patenting activity in 2009-2017 by 179,660 companies operating in 39 countries. Our identification strategy relies on the most recent approaches for a difference-in-difference setup in the presence of multiple periods and with variation in treatment time. We find that companies being granted patents increase on average market shares by 11%, firm size by 12%, and capital intensity by 10%. Notably, we do not register a significant impact of patenting on firms' productivity after challenging results for reverse causality and robustness checks. Findings are robust after we consider ownership structures separating patents owned by parent companies and their subsidiaries. We complement our investigation with an analysis of market allocation dynamics. Eventually, we argue that policymakers should reconsider the trade-off between IPR protection and market competition, especially when the benefits to firms' competitiveness are not immediately evident.
    Date: 2021–08
  10. By: Enghin Atalay; Sebastian Sotelo; Daniel Tannenbaum
    Abstract: The returns to skills and the nature of work differ systematically across labor markets of different sizes. Prior research has pointed to worker interactions, technological innovation, and specialization as key sources of urban productivity gains, but has been limited by the available data in its ability to fully characterize work across geographies. We study the sources of geographic inequality and present new facts about the geography of work using online job ads. We show that the (i) intensity of interactive and analytic tasks, (ii) technological requirements, and (iii) task specialization all increase with city size. The gradient for tasks and technologies exists both across and within occupations. It is also steeper for jobs requiring a college degree and for workers employed in non-tradable industries. We document that our new measures help account for a substantial portion of the urban wage premium, both in aggregate and across occupation groups.
    JEL: J20 J24 R12 R23
    Date: 2021–08–09

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