nep-ino New Economics Papers
on Innovation
Issue of 2021‒11‒08
thirteen papers chosen by
Uwe Cantner
University of Jena

  1. Do patents really foster innovation in the pharmaceutical sector? Results from an evolutionary, agent-based model By Giovanni Dosi; Elisa Palagi; Andrea Roventini; Emanuele Russo
  2. Do universities look like patent trolls? An Empirical Study of University Patent Infringement Litigation in the United States By G.S Ascione; L. Ciucci; C. Detotto; V. Sterzi
  3. Financing Energy Innovation: Internal Finance and the Direction of Technical Change By Joëlle Noailly, Roger Smeets
  4. Killer Aquisitions and Beyond: Policy Effects on Innovation Strategies By Schmutzler, Armin; Letina, Igor; Seibel, Regina
  5. Governance structure, technical change and industry competition By Mattia Guerini; Philipp Harting; Mauro Napoletano
  6. Intellectual Property Rights, Technology Transfer and International Trade By Ana Maria Santacreu
  7. Specialized Investments and Firms' Boundaries: Evidence from Textual Analysis of Patents By Bena, Jan; Erel, Isil; Wang, Daisy; Weisbach, Michael S.
  8. Towards the factory 4.0? Convergence and divergence of lean models in Italian automotive plants By Angelo Moro; Maria Enrica Virgillito
  9. Scale-up phase in deeptech start-ups: Replication or massive learnings? By Louise Taupin; Pascal Le Masson; Blanche Segrestin
  10. Place-based Innovation Ecosystems for emerging mobility-based business models By Miguel Ángel De Urquía; Ramón Compañó; Sergio Díez
  11. Start-Up Subsidies and the Sources of Venture Capital By Hottenrott, Hanna; Berger, Marius
  12. The Heterogeneous Impacts of Higher Education Institutions on Regional Firm Location: Evidence from the Swiss Universities of Applied Sciences By Tobias Schlegel; Uschi Backes-Gellner
  13. The long-term effect of research grants on the scientific output of university professors By Hussinger, Katrin; Carvalho, João N.

  1. By: Giovanni Dosi; Elisa Palagi; Andrea Roventini; Emanuele Russo
    Abstract: The role of the patent system in the pharmaceutical sector is highly debated also due to its strong public health implications. In this paper we develop an evolutionary, agent-based model of the pharmaceutical industry to explore the impact of different configurations of the patent system upon innovation and competition. The model is able to replicate the main stylized facts of the drug industry as emergent properties. We perform policy experiments to assess the impact of different IPR regimes changing the breadth and length of patents. Results suggest that enlarging the extent and duration of patents yields adverse effects in terms of innovation outcomes, as well as of market competition and consumer welfare. Such general conclusions hold even if one takes into account the possible positive effects on R&D intensity and information disclosure triggered by patents.
    Keywords: Innovation; Intellectual property rights; Market power; Pharmaceutical sector; Agent-based models.
    Date: 2021–10–28
  2. By: G.S Ascione; L. Ciucci; C. Detotto; V. Sterzi
    Abstract: In an attempt to increase revenues from patenting and licensing activities, some universities have started in recent years to pursue "overzealous" strategies to protect their existing patents, by enforcing them in court and selling them to the highest bidder. In our paper, we provide the first comprehensive evidence on the characteristics of universities' litigation strategies, by comparing patents litigated by universities to those litigated by patent trolls and other entities. In doing so, we collect data on patent infringement lawsuits in the United States in the years 2003-2016 and we analyze three dimensions that have been identified in the literature as characteristics of patent trolls' behavior - (i) the intensity with which a patent is litigated, (ii) the choice to file a patent lawsuit in the Federal District Court of Texas Eastern, and (iii) the quality of the asserted patents. We find that while overall universities' litigation strategies seem to differ from those of patent trolls, this is not the case in the ICT field, the most targeted by trolls, where universities frequently litigate their patents in the Eastern District of Texas and that are of lower quality compared to patents litigated by other entities.
    Keywords: University patents;patent litigation;patent assertion entities;patent quality
    Date: 2021
  3. By: Joëlle Noailly, Roger Smeets
    Abstract: Achieving the goals of the Paris Agreement and of climate neutrality by 2050 in the European Union will require mobilizing financial investments towards clean energy innovation. This study examines the role of internal finance (cash flows and cash holdings) and financing constraints for innovation in energy technologies. We construct a dataset for 1,300 European firms combining balance-sheet information and patenting activities in renewable (REN) and fossil-fuel (FF) technologies and estimate the sensitivity of patenting activities to firm’s internal finance. We use count estimation techniques and control for a large set of firm-specific characteristics and market developments in REN and FF technologies. We find that patenting activities of firms specialized in REN innovation are significantly more sensitive to a shock in cash flows than firms specializing in FF innovation. Hence, our results emphasize that innovative firms in clean energy may be particularly vulnerable to financing constraints. We discuss the implications of these results for energy transition policies aiming to redirect finance towards clean energy R&D.
    Date: 2021–11–02
  4. By: Schmutzler, Armin; Letina, Igor; Seibel, Regina
    JEL: O31 L41 G34
    Date: 2021
  5. By: Mattia Guerini (OFCE - Observatoire français des conjonctures économiques - Sciences Po - Sciences Po); Philipp Harting; Mauro Napoletano (OFCE - Observatoire français des conjonctures économiques - Sciences Po - Sciences Po)
    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 pos- sible 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
    Date: 2020
  6. By: Ana Maria Santacreu
    Abstract: I study the short- and long-term effects of regional trade agreements (RTA) with strict intellectual property (IP) provisions. An empirical analysis using gravity methods suggests that regions signing these agreements share more technology in the form of technology licensing following the year of enforcement. I set up a multi-country model with endogenous productivity through innovation and adoption to quantify the effect of such agreements on innovation, growth and welfare. Adopters pay royalties to innovators for the use of their technology; the model allows for various degrees of IP rights enforcement ranging from pure imitation to perfect enforcement of IP rights. An improvement of IP protection in exchange for market access increases welfare, growth and innovation in the world. Developed countries benefit from a higher return to innovation and a lower home trade share, accruing welfare gains both in the short and long term. Developing countries are impacted through three channels: (i) internal IP reforms increase the return to domestic innovators, (ii) lower trade costs increase profits from exports, and (ii) higher royalty payments reduce the return to adopters. A counterfactual exercise shows that while the first two forces dominate in the long run, there are short-term losses from a lower return to adoption.
    Keywords: Technology Licensing; Regional Trade Agreements; Intellectual Property Rights
    JEL: F12 O33 O41 O47
    Date: 2021–07–20
  7. By: Bena, Jan (University of British Columbia); Erel, Isil (Ohio State University and European Corporate Governance Institute); Wang, Daisy (Ohio State University); Weisbach, Michael S. (Ohio State University and European Corporate Governance Institute)
    Abstract: Inducing firms to make specialized investments through bilateral contracts can be challenging because of potential holdup problems. Such contracting difficulties have long been argued to be an important reason for acquisitions. To evaluate the extent to which this motivation leads to mergers, we perform a textual analysis of the patents filed by the same lead inventors of the target firms before and after the mergers. We find that patents of inventors from target firms become 28.9% to 46.8% more specific to those of acquirers’ inventors following completed mergers, benchmarked against patents filed by targets and a group of counterfactual acquirers. This pattern is stronger for vertical mergers that are likely to require specialized investments. There is no change in the specificity of patents for mergers that are announced but not consummated. Overall, we provide empirical evidence that contracting issues in motivating specialized investment can be a motive for acquisitions.
    JEL: G34 L14 L22
    Date: 2021–08
  8. By: Angelo Moro; Maria Enrica Virgillito
    Abstract: This paper studies the interplay in terms of techno-organisational change between the adoption of I4.0 technologies and lean production systems. Leveraging on the results of two field-work analyses conducted under a collaboration with the Sabattini Foundation and the metal workers trade union FIOM in the period 2016-2018, we compare an ensemble of factories producing both high-end/highly customised and low-end products. Emerging patterns of convergence and divergence in the techno-organisational configurations of these factories confirm that this wave of technological innovation is far from leading to total automation or the digital revolution. On the contrary, it appears to be integrated into the historical trend of 'leanification' of production processes in the automotive sector, despite the organisational variety shaped by the actual implementation of this production model.
    Keywords: Industry 4.0; Lean production; Automotive; Work organisation; Technological innovation; Organisational innovation.
    Date: 2021–10–28
  9. By: Louise Taupin (CGS i3 - Centre de Gestion Scientifique i3 - MINES ParisTech - École nationale supérieure des mines de Paris - PSL - Université Paris sciences et lettres - CNRS - Centre National de la Recherche Scientifique, BPIFRANCE); Pascal Le Masson (CGS i3 - Centre de Gestion Scientifique i3 - MINES ParisTech - École nationale supérieure des mines de Paris - PSL - Université Paris sciences et lettres - CNRS - Centre National de la Recherche Scientifique); Blanche Segrestin (CGS i3 - Centre de Gestion Scientifique i3 - MINES ParisTech - École nationale supérieure des mines de Paris - PSL - Université Paris sciences et lettres - CNRS - Centre National de la Recherche Scientifique)
    Abstract: Because of the possible response to main, current and global issues, a particular attention is paid to deeptech start-ups and their growth mechanisms. Nevertheless, first observations on technological start-ups point out a limited growth. As deeptech start-ups are developing by nature advanced technologies, they are intended to be deployed on different markets, revealing technological genericity. Scaling these technologies encounters unfortunately some hurdles and seems to be more complex. This article focuses on scale-up for deeptech startups and on means to achieve this development phase. Literature usually considers scale-up as a phase of business model replication, suggesting low learnings. On the contrary, our hypothesis is to regard scale-up as a more complex phase in deeptech start-ups development, through additional means and learnings that have to be determined. This research is based on 8 case studies from different fields: For each start-up, we study what should be learnt and what should be relevant design strategies to ensure scale-up. Main issue in scale-up phase appears to prove that most of activities will not change, that should refer to the concept of creation heritage, taking into account external interactions.
    Keywords: Start-up deeptech,Scale-up
    Date: 2021–07–07
  10. By: Miguel Ángel De Urquía; Ramón Compañó (European Commission - JRC); Sergio Díez
    Abstract: This report presents a methodology to describe and assess place-based innovation ecosystems. The methodology is based upon a two-step qualitative and qualitative approach and the key performance indicators have been targeted to assess place-based Mobility Innovation Ecosystems. The geographical area is limited to metropolitan areas of cities, while the thematic focus is on emerging mobility business models. The methodology has been tested on five diverse case studies (Barcelona, Graz, Malta, Prague and Vigo) and confirms the adequacy and usefulness of the approach. It also determines the strengths and weaknesses of each ecosystem and offers valuable insights with regard to the ecosystem’s positioning on emerging mobility business trends. Comparing the differences and commonalties of the five case studies, we can deduce a number of best practices and recommendations for policy makers. Finally, we outline to the steps to take to assess the viability to turn separate ecosystems into a networked system of ecosystems.
    Keywords: innovation ecosystems, industrial ecosystems, industrial cluster, mobility, mobility-as-a-service
    JEL: O14 O25 O33
    Date: 2021–10
  11. By: Hottenrott, Hanna; Berger, Marius
    JEL: G24 L26 O25 O31
    Date: 2021
  12. By: Tobias Schlegel; Uschi Backes-Gellner
    Abstract: The empirical literature on knowledge spillovers provides evidence that higher education institutions (HEIs) have positive effects on regional firm location, i.e., the number of start-ups or firms located in a region. However, less is known about how HEIs in different fields of study impact regional firm location in different industries. To estimate effects on firm location in different industries, we exploit the establishment of universities of applied sciences (UASs)-bachelor degree-granting three-year HEIs in Switzerland-in different fields of study. We find that effects are heterogeneous and UASs specializing in "chemistry and life sciences" and "business, management, and services" are the only UASs that positively affect regional firm location. These positive effects are limited to service industries that are characterized by both radical service innovations and incremental product and process innovations.
    Keywords: Higher Education and Research Institutions, Government Policy, Regional Economic Development
    JEL: I23 I28 O18
    Date: 2021–11
  13. By: Hussinger, Katrin; Carvalho, João N.
    Abstract: A major source of research funding for university professors are competitive research grants. With focus on Luxembourg, we present results from a difference-in-difference analysis which show that research grants by the Luxembourg National Research Fund (FNR), the central research funding agency in Luxembourg, increase the scientific output of university professors by 31% which corresponds to one additional publication. We further show that the scientific output drops again around five years after the grant receipt. However, we find that those university professors who realize a quality increase of their journal publications in the years following the grant receipt benefit from a long-lasting publication quality effect.
    Keywords: competitive research grants,university professors,scientific output,difference-in-difference estimation
    JEL: I23 O38
    Date: 2021

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