nep-ino New Economics Papers
on Innovation
Issue of 2022‒01‒17
seven papers chosen by
Uwe Cantner
University of Jena

  1. Insights into systemic resilience from innovation research By Roth, Florian; Warnke, Philine; Niessen, Pia; Edler, Jakob
  2. Innovation under central planning: patenting and productivity in the GDR By Frieling, Titus
  3. Hiring entrepreneurs for innovation By Louise Lindbjerg; Theodor Vladasel
  4. The Innovation Linkages in Europe By Costantiello, Alberto; Laureti, Lucio; Leogrande, Angelo; Marco, Matarrese
  5. Can Artificial Intelligence Reduce Regional Inequality? Evidence from China By Li, Shiyuan; Hao, Miao
  6. Effects of patent policy on growth and inequality: A perspective of exogenous and endogenous quality improvements By Lu, You-Xun; Lai, Ching-Chong
  7. Diverse Tools of Industrial Policy in Korea: A Schumpterian and Capability-based View By Lee, Keun

  1. By: Roth, Florian; Warnke, Philine; Niessen, Pia; Edler, Jakob
    Abstract: In the wake of the COVID-19 pandemic, the concept of resilience has become an increasingly important guiding principle. Voices from politics, business and society are calling for strategies which help to better weather crises or ideally prevent them from occurring in the first place.
    Date: 2021
  2. By: Frieling, Titus
    Abstract: This thesis employs novel datasets on patenting activity and TFP in the GDR to study the relationship between innovation and productivity. Patenting activity is chosen as a variable of interest due to its inherent link to the innovative process and high international and intertemporal comparability. No statistically significant relationship between patenting and future productivity growth is found in an analysis across 16 sectors of the GDR’s economy from 1950-1989. This result is unusual, and likely results out of the institutional framework of the GDR: firstly, it being a planned economy and the associated reduced productivity effects of innovations, and secondly, the GDR’s unique patent system which likely increased the number of patent applications while reducing their economic usefulness. By including the full breadth of the GDR’s patent stock, as well as robustly estimating the initial capital stock of the GDR, a more reliable account of both these variables can be made than was possible in previous studies. This thesis contributes to the literature through its use of new data and an adaptation of a proven empirical identification strategy to a new context. It also suggests avenues for further research on the relationship between patenting and innovation in the GDR and planned economies more widely.
    JEL: R14 J01 N0
    Date: 2021–12
  3. By: Louise Lindbjerg; Theodor Vladasel
    Abstract: Technical human capital improves firms' invention outcomes, but generating innovation revenue may require distinct skills in bringing new ideas to market. We argue that former founders are endowed with execution skills, a generalist ability to create and exploit market gaps by acquiring and mobilizing resources, so entrepreneurial human capital enhances innovation in established organizations. Combining register and Community Innovation Survey data from Denmark, we show that entrepreneur hires are associated with higher sales from new products and services. This result is driven by founder hires in middle management, a hierarchical position where broader decision rights and resource access increase execution skills' effectiveness. Founder hires are more tightly linked to innovation new to the firm or market, rather than world, consistent with our prediction that execution skills help bring incremental improvements to market, but do not necessarily generate radical innovation. Together, our findings suggest that entrepreneurial human capital may help firms appropriate a larger share of the value their knowledge generates.
    Keywords: innovation, learning by hiring, entrepreneurship, execution skills, human capital, middle management
    JEL: J24 L23 M12 M21 M51
    Date: 2021–12
  4. By: Costantiello, Alberto; Laureti, Lucio; Leogrande, Angelo; Marco, Matarrese
    Abstract: In this article we investigate the determinants of the Innovation Linkages in Europe. We use data from the European Innovation Scoreboard of the European Commission in the period 2000-2019 for 36 countries. Data are analyzed using Panel Data with Fixed Effects, Random Effects, Dynamic Panel at 1 Stage, Dynamic Panel at 2 Stage, Pooled OLS, WLS. Results show that the Innovation Linkages in Europe is positively associated with “Buyer Sophistication”, “Government Procurement of Advanced Technology Products”, “Finance and Support”, “Firm Investments”, “Human Resources”, and negatively associated with “Population Density”, “Employment Share Services”.
    Keywords: O30; O31, O32; O33; O36.
    JEL: O3 O30 O31 O32 O33 O34
    Date: 2021–01
  5. By: Li, Shiyuan; Hao, Miao
    Abstract: Based on the analysis of provincial-level data from 2001 to 2015, we find that regional inequality in China is not optimistic. Whether artificial intelligence, as a major technological change, will improve or worsen regional inequality is worthy of researching. We divide regional inequality into two dimensions: production and consumption, a total of three indicators. The empirical research is carried out to the eastern, central and western regions respectively. It is found that industrial intelligence improves the inequality of residents’ consumer welfare among regions, while at the same time there is the possibility of worsening regional inequality of innovation. We also clarify the heterogeneity of the mechanisms that artificial intelligence promotes innovation in different regions.
    Keywords: Artificial Intelligence; Regional Inequality; Innovation; Purchasing Power
    JEL: L25 O32
    Date: 2021–10
  6. By: Lu, You-Xun; Lai, Ching-Chong
    Abstract: In this study, we explore the effects of patent protection on growth and inequality under exogenous versus endogenous quality improvements. With an exogenous step size of quality improvement, strengthening patent protection promotes economic growth; the strengthening in patent protection has an ambiguous effect on income inequality but a negative effect on consumption inequality. However, with an endogenous step size, the growth effect of patent protection becomes ambiguous; the strengthening in patent protection still has an ambiguous effect on income inequality but a negative effect on consumption inequality. Under our calibrated parameter values, we find that strengthening patent protection raises the degree of income inequality under exogenous quality improvements. In the case of endogenous quality improvements, our results show that the strengthening in patent protection has an inverted-U effect on economic growth; both income inequality and consumption inequality decrease with the strength of patent protection.
    Keywords: innovation, patent protection, economic growth, inequality
    JEL: D30 O30 O40
    Date: 2021–12–21
  7. By: Lee, Keun
    Abstract: The current chapter presents a Schumpeterian and capability-based view of industrial policy, reflecting upon its practices in Korea over the last several decades. Given that it is typical for many developing countries to suffer from capability failure, industrial policy should go beyond correcting market failure but aim at overcoming capability failure. In this sense, it is not picking winners but picking good students and allow them a time for learning and building capabilities until they became able to compete with incumbent firms from developed countries. Specifically, this chapter discusses the following tools of industrial policy which has been practiced in Korea at different stages of development: first, tariff to protect infant industry; second, technology import by licensing to promote building of absorptive capacity; third, entry control which guaranteed rents to be paid for fixed and R&D investment; and fourth, public-private joint R&D to break into higher-end products and sectors. While these tools look different in their concrete contents, they share the important commonality of allowing some rents for the targeted sectors or firms so that such rents (extra profits) may be used to pay for building variants of capabilities, such as production capabilities in the case of tariffs or technology licensing in the 1970s, investment capabilities in entry control in the 1980s, and technological (R&D) capabilities in the case of public-private joint R&D in the 1990s.
    Keywords: industrial policy; tariffs; licensing; public-private joint R&D; entry control; infant industry; leapfrogging,
    JEL: L5 L52 O3 O38
    Date: 2020

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