nep-ino New Economics Papers
on Innovation
Issue of 2021‒12‒06
nine papers chosen by
Uwe Cantner
University of Jena

  1. Is the patent system a level playing field? The effect of patent attorney firms By Gaetan de Rassenfosse; Paul Jensen; T'Mir Julius; Alfons Palangkaraya; Elizabeth Webster
  2. How Does Basic Research Improve Innovation Performance in the World’s Major Pharmaceutical Firms? By Bart Leten; Stijn Kelchtermans; Rene Belderbos
  3. Profit Taxation, R&D Spending, and Innovation By Lichter, Andreas; Löffler, Max; Isphording, Ingo E.; Nguyen, Thu-Van; Pöge, Felix; Siegloch, Sebastian
  4. Exposure of occupations to technologies of the fourth industrial revolution By Benjamin Meindl; Morgan R. Frank; Joana Mendon\c{c}a
  5. Colocation of Entrepreneurs and New Firm Survival: Role of New Firm Founder’s Experiential Relatedness to Local Entrepreneurs By Tavassoli, Sam; Jienwatcharamongkhol, Viroj; Arenius, Pia
  6. Technological Progress, Artificial Intelligence, and Inclusive Growth By Mr. Martin Schindler; Mr. Anton Korinek; Joseph Stiglitz
  7. The Long-Term Effect of Research Grants on the Scientific Output of University Professors By Katrin Hussinger; João N. Carvalho
  8. Quantitative easing and corporate innovation By Grimm, Niklas; Laeven, Luc; Popov, Alexander
  9. R&D innovation with socially responsible firms By Domenico Buccella; Luciano Fanti; Luca Gori

  1. By: Gaetan de Rassenfosse (Ecole polytechnique federale de Lausanne); Paul Jensen (University of Melbourne); T'Mir Julius (University of Melbourne); Alfons Palangkaraya (Swinburne University of Technology); Elizabeth Webster (Swinburne University of Technology)
    Abstract: The patent system underpins the business model of some of the fastest-growing companies. Used appropriately, it should support frontier technologies and nurture new firms. Used perniciously, it can stifle innovation and protect established technological behemoths. We analyse patent examination decisions at the American, European, Japanese, Korean, and Chinese patent offices and find evidence that patent attorney firms have a surprisingly large role in the patent system. Patent attorney firm quality is most important, vis-Ã -vis invention quality, in less codified and more rapidly changing technology areas such as software and ICT. Moreover, patent attorney firm quality matters more when invention quality is low. Finally, there is a significant inter-patent office variation, with a greater patent attorney firm quality effect at the USPTO.
    Keywords: appropriation; innovation; patent attorney firm; patent system
    JEL: K20 L43 O34
    Date: 2021–11
  2. By: Bart Leten; Stijn Kelchtermans; Rene Belderbos
    Abstract: Employing a panel (1995-2015) of large R&D spending pharmaceutical firms, we investigate how internal basic research increases a firm’s innovative performance. We disentangle two mechanisms through which internal basic research affects technology development: (1) as strengthening of the firm’s absorptive capacity to build on externally conducted science, and (2) as a direct source of the firm’s innovation. We find that the positive relationship between internal basic research and innovation performance is significantly mediated by these two mechanisms, with the absorptive capacity mechanism relatively more important. The mediation relationships are more pronounced in recent years, with basic research as a direct source of innovation increasing in importance. This pattern is associated with a decline of corporate investments in basic research over time, and suggests that firms have adopted a more judicious and targeted approach to basic research aimed at getting more leverage out of a smaller commitment to basic research.
    Date: 2021–11–19
  3. By: Lichter, Andreas (Heinrich Heine University Düsseldorf); Löffler, Max (Maastricht University); Isphording, Ingo E. (IZA); Nguyen, Thu-Van (Stifterverband Essen); Pöge, Felix (Boston University); Siegloch, Sebastian (University of Mannheim)
    Abstract: We study how profit taxation affects plants' R&D spending and innovation activities. Relying on geocoded survey panel data which approximately covers the universe of R&D-active plants in Germany, we exploit around 7,300 changes in the municipal business tax rate over the period 1987–2013 for identification. Applying event study models, we find a negative and statistically significant effect of an increase in profit taxation on plants' R&D spending with an implied long-run elasticity of −1.25. Reductions in R&D are particularly strong among more credit-constrained plants. In contrast, homogeneity of effects across the plant size distribution questions policy makers common practice to link targeted R&D tax incentives to plant size. We further find lagged negative effects on the (citation-weighted) number of filed patents.
    Keywords: corporate taxation, firms, R&D, innovation, patents
    JEL: H25 H32 O31 O32
    Date: 2021–11
  4. By: Benjamin Meindl; Morgan R. Frank; Joana Mendon\c{c}a
    Abstract: The fourth industrial revolution (4IR) is likely to have a substantial impact on the economy. Companies need to build up capabilities to implement new technologies, and automation may make some occupations obsolete. However, where, when, and how the change will happen remain to be determined. Robust empirical indicators of technological progress linked to occupations can help to illuminate this change. With this aim, we provide such an indicator based on patent data. Using natural language processing, we calculate patent exposure scores for more than 900 occupations, which represent the technological progress related to them. To provide a lens on the impact of the 4IR, we differentiate between traditional and 4IR patent exposure. Our method differs from previous approaches in that it both accounts for the diversity of task-level patent exposures within an occupation and reflects work activities more accurately. We find that exposure to 4IR patents differs from traditional patent exposure. Manual tasks, and accordingly occupations such as construction and production, are exposed mainly to traditional (non-4IR) patents but have low exposure to 4IR patents. The analysis suggests that 4IR technologies may have a negative impact on job growth; this impact appears 10 to 20 years after patent filing. Further, we compared the 4IR exposure to other automation and AI exposure scores. Whereas many measures refer to theoretical automation potential, our patent-based indicator reflects actual technology diffusion. Our work not only allows analyses of the impact of 4IR technologies as a whole, but also provides exposure scores for more than 300 technology fields, such as AI and smart office technologies. Finally, the work provides a general mapping of patents to tasks and occupations, which enables future researchers to construct individual exposure measures.
    Date: 2021–10
  5. By: Tavassoli, Sam (CIRCLE, Lund University); Jienwatcharamongkhol, Viroj (Blekinge Institute of Technology); Arenius, Pia (RMIT University)
    Abstract: Geographical clustering (colocation) influences new firm survival; however, not all new firms within a cluster are impacted equally. In this paper, we elaborate on how the colocation of local entrepreneurs may have different influences on new firm founder’s learning depending on his/her fit, in terms of his/her experiential relatedness, to that of local entrepreneurs. We then associate such founder’s learning with the higher survival of his/her new firm. We test our hypotheses using a matched founder-firm dataset that covers the population of the knowledge-intensive business service sector in Sweden during 2001-2012. We find support for our propositions concerning the relatedness of new firm founders’ experiential background to that of local entrepreneurs. Specifically, we find that high level of relatedness to local entrepreneurs enhances the survival rate of a new firm started by a novice founder, whereas intermediate level of relatedness suits better for a new firm started by an experienced founder.
    Keywords: Colocation; Entrepreneurial learning; New firm survival; Experiential relatedness; Entrepreneurial performance
    JEL: M13
    Date: 2021–11–24
  6. By: Mr. Martin Schindler; Mr. Anton Korinek; Joseph Stiglitz
    Abstract: Advances in artificial intelligence and automation have the potential to be labor-saving and to increase inequality and poverty around the globe. They also give rise to winner-takes-all dynamics that advantage highly skilled individuals and countries that are at the forefront of technological progress. We analyze the economic forces behind these developments and delineate domestic economic policies to mitigate the adverse effects while leveraging the potential gains from technological advances. We also propose reforms to the global system of governance that make the benefits of advances in artificial intelligence more inclusive.
    Keywords: C. putting AI; competition Policy; employment trend; C. intellectual property right; export-led growth; Technological innovation; Artificial intelligence; Income; Global; East Asia
    Date: 2021–06–11
  7. By: Katrin Hussinger (Department of Economics and Management, Université du Luxembourg); João N. Carvalho (Universidade NOVA de Lisboa)
    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. We, however, 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. 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
  8. By: Grimm, Niklas; Laeven, Luc; Popov, Alexander
    Abstract: To what extent can Quantitative Easing impact productivity growth? We document a strong and heterogeneous response of corporate R&D investment to changes in debt financing conditions induced by corporate debt purchases under the ECB’s Corporate Sector Purchase Program. Companies eligible for the program increase significantly their investment in R&D, relative to similar ineligible companies operating in the same country and sector. The evidence further suggests that by subsidizing the cost of debt, corporate bond purchases by the central bank stimulate innovation through a wealth transfer to innovative companies with low debt levels, rather than by supporting credit constrained firms. JEL Classification: E5, G10, O3
    Keywords: corporate innovation, productivity growth, quantitative easing, unconventional monetary policy
    Date: 2021–11
  9. By: Domenico Buccella; Luciano Fanti; Luca Gori
    Abstract: This work revisits the R&D model à la D’Aspremont –Jacquemin (1988) (AJ) in a context with socially responsible firms. In the traditional model firms invest but, in equilibrium, they are cast into a prisoner’s dilemma. Socially responsible firms also invest in equilibrium. However, provided that firms consider sufficiently high consumer welfare, to invest is firms’ utility-enhancing: the prisoner’s dilemma vanishes, and the R&D investment is the firms’ Pareto-efficient choice. That is, while in the traditional AJ context to invest in R&D is Pareto-inferior for the whole society, when firms are of CSR type their R&D innovation becomes a Pareto-superior choice.
    Keywords: Process innovation; Corporate social reponsibility; Nash equilibrium; Social welfare
    JEL: D43 L13 O31
    Date: 2021–11–01

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