nep-ino New Economics Papers
on Innovation
Issue of 2022‒01‒10
thirteen papers chosen by
Uwe Cantner
University of Jena

  1. Innovation Performance and the Signal Effect: Evidence from a European Program By Nadine Levratto; Aurelien Quignon
  2. Improving effectiveness of Lithuania’s innovation policy By OECD
  3. The geography of environmental innovation: A critical review and agenda for future research By Losacker, Sebastian; Hansmeier, Hendrik; Horbach, Jens; Liefner, Ingo
  4. World Corporate Top R&D investors: Paving the way to carbon neutrality By Sara Amoroso; Leonidas Aristodemou; Chiara Criscuolo; Antoine Dechezleprete; Helene Dernis; Nicola Grassano; Laurent Moussiegt; Lorenzo Napolitano; Daisuke Nawa; Mariagrazia Squicciarini; Alexander Tuebke
  5. Policy-Induced Innovation in Clean Technologies: Evidence from the Car Market By Rik L. Rozendaal; Herman R. J. Vollebergh
  6. Evaluating the US pharmaceutical patent policy By Izhak, Olena; Saxell, Tanja; Takalo, Tuomas
  7. Technology-Skill Complementarity and Labor Displacement: Evidence from Linking Two Centuries of Patents with Occupations By Leonid Kogan; Dimitris Papanikolaou; Lawrence D. W. Schmidt; Bryan Seegmiller
  8. Product recalls, market size and innovation in the pharmaceutical industry By Federico Nutarelli; Massimo Riccaboni; Andrea Morescalchi
  9. The emergence of a global innovation system – a case study from the water sector By Jonas Heiberg; Bernhard Truffer
  10. Bank regulation, lending and patenting: Evidence from the EBA capital exercise By Krzyzanowski, Jan; Walz, Uwe
  11. Transitions as a coevolutionary process: the urban emergence of electric vehicle inventions By Andrea Ferloni
  12. Entrepreneurial Ecosystems and Regional Persistence of High Growth Firms: A 'Broken Clock' Critique By Coad, Alex; Srhoj, Stjepan
  13. Asymmetries in Global Value Chain Integration, Technology and Employment Structures in Europe: Country and Sectoral Evidence By Filippo Bontadini; Rinaldo Evangelista; Valentina Meliciani; Maria Savona

  1. By: Nadine Levratto (EconomiX - UPN - Université Paris Nanterre - CNRS - Centre National de la Recherche Scientifique); Aurelien Quignon (EconomiX - UPN - Université Paris Nanterre - CNRS - Centre National de la Recherche Scientifique)
    Abstract: This paper seeks to estimate the effect of a European policy that subsidizes innovation investments. By carefully selecting observables, we compare recipients of the program with non-recipient firms to overcome the endogeneity of R&D grants. We conduct a difference-indifferences design on the universe of a unique firm-level dataset of European SMEs between 2008 and 2017. We find a significant effect of proof of concept grants, which implies an increase in the number of patent applications and the probability of patenting. There are positive impacts on credit financing, which suggest a signal effect to investors about the project quality of young firms.
    Keywords: Innovation,Patent,Financing constraints,H2020,R&D subsidies
    Date: 2021–12–06
  2. By: OECD
    Abstract: This paper concludes the project “Support to Improve Effectiveness of Lithuania’s Innovation Policy” which summarises the findings, policy options and recommended actions. It aimed at providing support to efforts of the Government of Lithuania to better deliver existing policies, and develop and implement appropriate new policies, instruments and institutions in selected areas of science, technology and innovation (STI) policy. The report takes stock of recent policy actions taken since the “OECD Review of Innovation Policy: Lithuania 2016”. Drawing on international good practices it explores the scope for improvement in selected areas of STI policy: a) consolidation of innovation agencies and enhancing Lithuania’s STI Council, b) public procurement of innovation , c) mission-oriented innovation policies, and d) industry 4.0 and artificial intelligence. The project has been aligned with ongoing Lithuanian reform processes, some of which are reflected in the ‘New Generation Lithuania’ plan related to the EU’s Recovery and Resilience Facility.
    Keywords: Artificial intelligence, Governance, Industry 4.0, Innovation policy, Mission-orientation, Public procurement
    JEL: O31 O38 L52
    Date: 2021–12–21
  3. By: Losacker, Sebastian (University Hannover); Hansmeier, Hendrik (Fraunhofer Institute for Systems and Innovation Research ISI); Horbach, Jens (University of Applied Sciences Augsburg); Liefner, Ingo (University Hannover)
    Abstract: Environmental innovations make an important contribution to solving ecological and climate crises. Although these crises are global phenomena, the regional dimension plays a crucial role, as regions both provide the conditions for the development of environmental innovations and promote widespread use and diffusion. Against this background, this article has two objectives. Firstly, we critically review the state of research on regional determinants of environmental innovation. Secondly, based on these results, we develop an agenda for further research in regional studies that will help to better understand the geography of environmental innovation and to come up with useful region-specific policy recommendations.
    Keywords: environmental innovation; geography of innovation; sustainability transitions; regional development; geography of transitions
    JEL: O31 O33 Q55 R11
    Date: 2021–12–17
  4. By: Sara Amoroso (European Commission - JRC); Leonidas Aristodemou (OECD); Chiara Criscuolo; Antoine Dechezleprete (OECD); Helene Dernis (OECD); Nicola Grassano (European Commission - JRC); Laurent Moussiegt (OECD); Lorenzo Napolitano (European Commission - JRC); Daisuke Nawa (OECD); Mariagrazia Squicciarini; Alexander Tuebke (European Commission - JRC)
    Abstract: This biennial report continues the joint JRC-OECD analysis of the IP portfolios of the world's top 2 000 R&D investors. The report shows that global R&D and patenting activities are highly concentrated among the world’s top 2 000 R&D investors. These are equivalent to 87% of global business R&D expenditures by the private sector and 63% of patent filings across all technologies. There is much less concentration at the commercialisation stage, with only 6% of total trademarks owned by the top R&D investors. The world’s top R&D investors are key contributors to global climate-related innovation. They own 70% of global climate change mitigation or adaptation patents and over 10% of global climate-related trademarks, which is larger than their contribution to overall patents and trademarks across all fields. Looking at the potential contribution of the digital revolution to climate-related innovation at the invention stage, 20% of climate-related patents have a digital component (against 33% for patents across all technological fields). Finally, this edition of the report investigates for the first time the gender composition of both the board of directors of the top 2 000 R&D investors, and of their R&D workforce. In general, EU27 companies have on average more gender-balanced boards than the US and the Asian ones, with a women representation of at least 26%. A substantial gender gap is also observed for inventors listed in patent applications, with significant heterogeneity across countries and sectors.
    Keywords: R&D investment, Green Patent, Intellectual Property, Patents, Trademarks, Gender Balance
    Date: 2021–11
  5. By: Rik L. Rozendaal; Herman R. J. Vollebergh
    Abstract: This article tests the effects of fuel economy and greenhouse gas emission standards on the direction of innovation, in particular on breakthrough technologies in the automotive industry. We develop an intuitive measure of standard stringency that captures the policy’s most important features for the decision as to whether or not to innovate. To test the role of these standards relative to prices and taxes, we construct a firm-level panel of patents in clean and dirty automotive technologies for the years 2000-2016. Our results indicate that standards are a very robust driver inducing clean innovation, whereas taxes also seem to play a role but prices (net of taxes) do not. This effect is driven by patenting for breakthrough technologies, in particular electric vehicle and hydrogen fuel cell technologies. We find no evidence that these policies negatively impact dirty innovation.
    Keywords: environmental policy instruments, regulatory stringency, innovation, directed technical change
    JEL: O30 Q55 Q58
    Date: 2021
  6. By: Izhak, Olena; Saxell, Tanja; Takalo, Tuomas
    Abstract: The debate on whether COVID-19 vaccine patents are slowing down the pace of vaccination and the recovery from the crisis has brought the optimal design of pharmaceutical patent policy to the fore. In this paper we evaluate patent policy in the US pharmaceutical industry. We estimate the effect of patent length and scope on generic entry prior to the expiration of new drug patents using two quasi-experimental approaches: one based on changes in patent laws and another on the allocation of patent applications to examiners. We find that extending effective patent length increases generic entry whereas broadening protection reduces it. To assess the welfare effects of patent policy, we match these empirical results with a model of new drug development, generic entry, and patent length and scope. Optimal policy calls for shorter but broader pharmaceutical patents.
    JEL: I18 K20 L13 O34 O31
    Date: 2021–12–29
  7. By: Leonid Kogan; Dimitris Papanikolaou; Lawrence D. W. Schmidt; Bryan Seegmiller
    Abstract: We construct new technology indicators using textual analysis of patent documents and occupation task descriptions that span almost two centuries (1850–2010). At the industry level, improvements in technology are associated with higher labor productivity but a decline in the labor share. Exploiting variation in the extent certain technologies are related to specific occupations, we show that technological innovation has been largely associated with worse labor market outcomes—wages and employment—for incumbent workers in related occupations using a combination of public-use and confidential administrative data. Panel data on individual worker earnings reveal that less educated, older, and more highly-paid workers experience significantly greater declines in average earnings and earnings risk following related technological advances. We reconcile these facts with the standard view of technology-skill complementarity using a model that allows for skill displacement.
    JEL: J01 J24 J3 N3 N6 O3 O4
    Date: 2021–12
  8. By: Federico Nutarelli; Massimo Riccaboni; Andrea Morescalchi
    Abstract: The idea that research investments respond to market rewards is well established in the literature on markets for innovation (Schmookler, 1966; Acemoglu and Linn, 2004; Bryan and Williams, 2021). Empirical evidence tells us that a change in market size, such as the one measured by demographical shifts, is associated with an increase in the number of new drugs available (Acemoglu and Linn, 2004; Dubois et al., 2015). However, the debate about potential reverse causality is still open (Cerda et al., 2007). In this paper we analyze market size's effect on innovation as measured by active clinical trials. The idea is to exploit product recalls an innovative instrument tested to be sharp, strong, and unexpected. The work analyses the relationship between US market size and innovation at ATC-3 level through an original dataset and the two-step IV methodology proposed by Wooldridge et al. (2019). The results reveal a robust and significantly positive response of number of active trials to market size.
    Date: 2021–11
  9. By: Jonas Heiberg (Eawag, Swiss Federal Institute of Aquatic Science and Technology, Switzerland); Bernhard Truffer (Eawag, Swiss Federal Institute of Aquatic Science and Technology, Switzerland)
    Abstract: Innovation studies is increasingly acknowledging the multi-scalar nature of the systemic contexts, in which innovations are being developed and deployed. This paper builds on and further develops a recently proposed framework for studying global innovation systems (GIS). It aims at explaining the emergence of a GIS by outlining the specific local resource-related conditions that lead to the creation of structural couplings, i.e. actors, networks and institutions that allow for multi-scalar resource flows. Deploying a qualitative case study, the paper investigates eight demonstration sites for an innovative wastewater treatment technology in North-Western Europe. It shows how resource-related deficits lead actors to draw on resources generated outside of their local context. The paper contributes to the literature on the Geography of Transitions by highlighting the importance of resource complementarities among different local contexts, as well as the crucial role of translocal systemic intermediaries in shaping emergent GIS.
    Keywords: Global innovation systems (GIS), multi-scalar resource flows, systemic intermediaries, geography of transitions, modular water technologies
    Date: 2021
  10. By: Krzyzanowski, Jan; Walz, Uwe
    Abstract: We analyze the impact of decreases in available lending resources on quantitative and qualitative dimensions of firms' patenting activities. We thereby make use of the European Banking Authority's capital exercise to carve out the causal effect of bank lending on firm innovation. In order to do so we combine various datasets to derive information on firms' financials, their patenting behaviors, as well as their relationships with their lenders. Building on this selfgenerated dataset, we provide support for the "less finance, less innovation" view. At the same time, we show that lower available financial resources for firms lead to improvement in the qualitative dimensions of their patents. Hence, we carve out a "less finance, less but better innovation" pattern.
    Keywords: financing,bank lending,patents
    JEL: D22 G30 G31 G38 N24 O31 O34
    Date: 2021
  11. By: Andrea Ferloni (Institute of Geography and Sustainability (IGD), University of Lausanne- UNIL)
    Abstract: The transition to Electric Vehicles (EVs) is a coevolutionary process involving at least three sectors—EV, battery, and smart grid—in replacing combustion cars. This paper contributes to research on the geography of transitions by linking increased relatedness between technologies over time with their co-location, exploring the spatial emergence of transition industries and the role of local economic systems in enabling it. Patent citations are used to construct three main paths from 1920 to 2020 that permit to geolocate key inventions and to elaborate on the role of cities in supporting knowledge exchanges and recombinations. The case study suggests that a coevolutionary perspective can contribute to understanding the geography of transitions in three ways: by showing how new technology configurations imply varying power relations between industrial fields, by elaborating on the capacity of urban regions to adapt to these, and by illustrating the role of actors and networks in this process.
    Keywords: Coevolution, Electric Vehicle, Geography of transitions, Large Urban Regions, Patent networks, Main path analysis
    Date: 2021
  12. By: Coad, Alex; Srhoj, Stjepan
    Abstract: The Entrepreneurial Ecosystems (EE) approach makes specific predictions regarding how EE inputs are converted into high-growth firms (HGFs) as an output. A simulation model draws out our hypothesis of regional persistence in HGF shares. Based on intuitions that EEs are persistent, we investigate whether regional HGF shares are persistent, using census data for 2 European countries taken separately (Croatia for 2004-2019, and Slovenia for 2008-2014). Overall, there is no clear persistence in regional HGF shares - regions with large HGF shares in one period are not necessarily likely to have large HGF shares in the following period. This is a puzzle for EE theory. In fact, there seems to be more persistence in industry-level HGF shares than for regional HGF shares. We formulate a ‘broken clock’ critique - just as a broken clock is correct twice a day, EE recommendations may sometimes be correct, but are fundamentally flawed as long as time-changing outcomes (HGF shares) are predicted using time-invariant variables (such as local universities, institutions and infrastructure).
    Keywords: High-Growth Firms, Persistence, Regional Persistence; Entrepreneurial Ecosystems; Clusters; Sectoral Systems of Innovation
    JEL: L52 L78 M21 O38
    Date: 2021–12–07
  13. By: Filippo Bontadini; Rinaldo Evangelista; Valentina Meliciani; Maria Savona
    Abstract: This paper provides empirical evidence on the complex role played by technology in affecting the relationship between the participation of EU countries and industries in Global Value Chains (GVCs) and their employment structure over the period 2000-2014. The empirical analysis is based on country/industry level data for 21 EU countries on employment, trade in value added, patents and investments in intangible assets, and focusses on backward linkages within GVCs. The role of technology is analysed by taking into account both the technological intensity of offshoring industries and that of their GVC partners. We study the employment structure by looking at the shares of managers and manual workers, which reflect the “functional specialisation” of the country-sector within GVCs. We find that pre-existing asymmetries in the functional specialisation are highly persistent over time, with little sign of convergence over our observed period. Furthermore, GVC participation is not related to changes in the employment structure. However, this relationship appears to be mediated by country-industries’ initial technological performance. Technological leader industries exhibit, in fact, larger shares of employment in headquarter functions, and this functional specialisation tends to be strengthened as they increase their integration into GVCs. In contrast, country-industries that start off as technological laggards see integration into GVCs accompanied by an increase in the share of employment in fabrication functions. The technological profile of the partners is also found to play a role in the relationship between GVC integration and the functional specialisation of the offshoring country/industry, although different patterns emerge depending on the nature of the partner (manufacturing vs service).
    Keywords: global value chains, employment, technology, intangible assets, patents
    JEL: F14 F15 O33
    Date: 2021

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