nep-ino New Economics Papers
on Innovation
Issue of 2022‒02‒21
twelve papers chosen by
Uwe Cantner
University of Jena

  1. Digitalization, copyright and innovation in the creative industries: an agent-based model By Alessandro Nuvolari; Arianna Martinelli; Elisa Palagi; Emanuele Russo
  2. A hidden source of innovation? Revisiting the impact of initial vocational training on technological innovation By Matthies, Eike; Thomä, Jörg; Bizer, Kilian
  3. Ratio Working Paper No. 351: Knowledge Spillovers in the Solar energy sector By Grafström, Jonas
  4. Subsidies and innovation in the recent financial crisis By Giebel, Marek; Kraft, Kornelius
  5. Innovation and employment: a short update By Marco Vivarelli
  6. AI technologies and employment. Micro evidence from the supply side By Giacomo Damioli; Vincent Van Roy; Daniel Vertesy; Marco Vivarelli
  7. No inventor is an island: social connectedness and the geography of knowledge flows in the US By Diemer, Andreas; Regan, Tanner
  8. Techno-Economic study on the potential of European Industrial Companies regarding Europe's Green Deal By Norbert MALANOWSKI; Jana Steinback; Annerose Nisser; Simon Beesch; Sidonia Von Proff; Els Van Der Velde; Daniela Kretz
  9. Firms' perceptions of barriers to innovation and resilience: the Italian region of Friuli Venezia Giulia during the crisis By Iammarino, Simona; Sodano, Tiziana; Vittorino, Giovanni
  10. R&D Productivity And The Nexus Between Product Substitutability And Innovation: Theory And Experimental Evidence By Christos Ioannou; Miltiadis Makris; Carmine Ornaghi
  11. Firm innovation and generalized trust as a regional resource By Bischoff, Thore Sören; Hipp, Ann; Runst, Petrik
  12. Public subsidies and cooperation in research and development. Evidence from the lab By Acconcia, Antonio; Beraldo, Sergio; Capuano, Carlo; Stimolo, Marco

  1. By: Alessandro Nuvolari; Arianna Martinelli; Elisa Palagi; Emanuele Russo
    Abstract: The ambiguity of the empirical results on the relationship between copyright and creativity calls for a better theoretical understanding of the issue, possibly enlarging the analysis to other factors such as technology and copyright enforcement. This paper addresses these complex policy issues by developing an agent-based model (ABM) to study how the interplay between digitization and copyright enforcement affects the production and access to cultural goods. The model includes creators who compete in different submarkets and invest in activities that might lead to the generation of creative outputs in existing submarkets, new (to the creators) submarkets, or in newly 'invented' submarkets. Finally, the model features a copyright system that provides creators with the exclusive right to reproduce their original copies and a pirate market responsible for creating and distributing pirated copies.
    Keywords: Innovation; Intellectual property rights; Creative industries; Copyright; Agent-based models.
    Date: 2022–01–28
  2. By: Matthies, Eike; Thomä, Jörg; Bizer, Kilian
    Abstract: While an increasing number of studies postulate that vocational education and training (VET) activities have a positive impact on the innovative capacity of training companies, empirical evidence on the subject remains contradictory. This study exploits establishment data from a representative survey of German companies to estimate the correlations between firms' participation in initial VET and their innovation outcomes. The results based on linear probability models show that the impact of VET activity on innovation is indeed ambiguous. Overall, as expected, participation in initial VET has virtually no effect on radical product innovation. However, a positive impact of training apprentices is observed in case of incremental product innovation and process innovation activities. According to our estimates, this finding primarily applies to the case of microenterprises with fewer than ten employees. We conclude from this that active participation in the VET system primarily promotes the innovation activities of very small firms by stimulating knowledge diffusion in regional innovation systems and developing absorptive capacities at the company level. As a result, small-sized training firms should be more likely to succeed in overcoming - at least in part - some of their disadvantages in innovation.
    Keywords: Technological innovation,Vocational education and training (VET),Apprenticeships,SMEs
    JEL: I20 J24 O31
    Date: 2022
  3. By: Grafström, Jonas (The Ratio Institute)
    Abstract: The purpose of this paper is to provide an analysis of the existence and possible direction of international knowledge spillovers in the solar energy sector. Specifically, the paper investigates how the accumulation of solar energy patents and public R&D spending affected the output of domestic granted solar energy patents. The econometric analysis relies on a data set consisting of most of the OECD countries plus China and analyzes two time periods; from 1990 to 2014 and the years 2000 to 2014. To analyze the data material, a Poisson fixed-effects estimator based on the Hausman, Hall and Griliches (1984) method was used. The empirical findings suggest that the domestic accumulation of patents and R&D is important for the potential development of new ones. Indeed, early investment in specific technology can be an indicator of future leadership in that field.
    Keywords: Solar PV; R&D; Spillovers; Patents
    JEL: E61 O32 Q20 Q58
    Date: 2021–12–14
  4. By: Giebel, Marek; Kraft, Kornelius
    Abstract: We analyze the impact of subsidies on R&D expenditures in the financial crisis and beyond. The financial crisis has led to considerable turmoil in financing and, as a result, to restrictions of firms' access to external financing. Utilizing this fact, we identify and analyze financing constraints in two ways. First, firm financing constraints are determined via their credit rating and second, restrictions from the supply side are identified via the firm's main banks capital reserves. The results of our empirical test imply that R&D investments of non-subsidized firms decrease during the crisis. This effect is particularly pronounced for firms that are affected by financing constraints on the firm or bank side. Finally, our results imply that subsidies can at least partially compensate for these negative effects.
    Keywords: R&D investment,financing constraints,financial crisis,R&D subsidies
    JEL: G01 G21 G24 G30 O16 O30 O31 O32
    Date: 2021
  5. By: Marco Vivarelli (Dipartimento di Politica Economica, DISCE, Università Cattolica del Sacro Cuore – UNU-MERIT, Maastricht, The Netherlands – IZA, Bonn, Germany)
    Abstract: This note explores the theoretical and empirical literature on the link between innovation and employment, investigated at the macro, sectoral and micro level. While economic theory cannot provide a clear answer to the question whether new technologies are labor-saving or labor-friendly, most of the empirical studies point to a positive relationship between innovation and employment. Yet, this effect turns out to be small in magnitude and limited to product innovation and high-tech sectors, while labor saving impacts can be detected in the downstream more traditional sectors and firms.
    Keywords: Innovation, technological change, employment, job-creation,job-destruction, technological unemployment
    JEL: O33
    Date: 2022–01
  6. By: Giacomo Damioli (European Commission, Joint Research Centre (JRC), Ispra, Italy); Vincent Van Roy (European Commission, Joint Research Centre (JRC), Seville, Spain); Daniel Vertesy (International Telecommunication Union, Geneva, Switzerland – UNU-MERIT, Maastricht, The Netherlands); Marco Vivarelli (Dipartimento di Politica Economica, DISCE, Università Cattolica del Sacro Cuore – UNU-MERIT, Maastricht, The Netherlands – IZA, Bonn, Germany)
    Abstract: This study is based on a worldwide longitudinal dataset of 3,500 front-runner companies that patented AI technologies over the period 2000-2016. Our results support the labor-friendly nature of product innovation in the AI supply industries.
    Keywords: Innovation, artificial intelligence, patents, employment
    JEL: O33 O31
    Date: 2022–01
  7. By: Diemer, Andreas; Regan, Tanner
    Abstract: Do informal social ties connecting inventors across distant places promote knowledge flows between them? To measure informal ties, we use a new and direct index of social connectedness of regions based on aggregate Facebook friendships. We use a well-established identification strategy that relies on matching inventor citations with citations from examiners. Moreover, we isolate the specific effect of informal connections, above and beyond formal professional ties (co-inventor networks) and geographic proximity. We identify a significant and robust effect of informal ties on patent citations. Further, we find that the effect of geographic proximity on knowledge flows is entirely explained by informal social ties and professional networks. We also show that the effect of informal social ties on knowledge flows is greater for new entrepreneurs or ‘garage inventors’, for older or ‘forgotten’ patents, and for flows across distant technology fields. It has also become increasingly important over the last two decades.
    Keywords: diffusion; informal networks; knowledge flows; social connectedness; PhD Studentship
    JEL: O33 R12 Z13
    Date: 2022–03–01
  8. By: Norbert MALANOWSKI (VDI Technologiezentrum GmbH); Jana Steinback (VDI Technologiezentrum GmbH); Annerose Nisser (VDI Technologiezentrum GmbH); Simon Beesch (VDI Technologiezentrum GmbH); Sidonia Von Proff (VDI Technologiezentrum GmbH); Els Van Der Velde (IDEA Consult); Daniela Kretz (IDEA Consult)
    Abstract: The study provides theoretical as well as case-study based evidence for the potential of European industries to become carbon neutral and provide job security and growth in the EU. The study identifies, maps, and analyses Global Innovation Networks, i.e. net-works between industry and other actors that facilitate innovation, and their role in making the European Green Deal a success. The study also presents the main current policy context in place in the EU, China and the U.S., e.g. regulatory and financial frameworks, and identifies the main drivers and barriers for investing in technologies relevant for Europe's Green Deal. In addition, a concise policy toolbox for Research & Development & Innovation (R&D&I) policies supporting technologies relevant for Eu-rope's Green Deal is discussed. It moves beyond the current European, national, regional and sectoral policy instruments and mixes of policies based on the insights obtained throughout the whole study. The findings offer an important knowledge base for devising new and additional policy instruments.
    Keywords: Green Deal, ecosystems, innovation, competitiveness
    Date: 2022–02
  9. By: Iammarino, Simona; Sodano, Tiziana; Vittorino, Giovanni
    Abstract: This paper connects the literature on obstacles to innovation to the concept of regional economic resilience by empirically assessing the relationship between the intensity of firms’ engagement in innovative activities and self-reported obstacles to innovation during the unfolding of the latest economic and financial downturn. The analysis is grounded on a unique dataset on firm-level accounting data (CAD) and information from two waves (2008-10 and 2010-12) of the Community Innovation Survey (CIS) for a representative sample of firms in the Italian region of Friuli Venezia Giulia. The main results support the existence of severe deterring barriers in the region, and suggest that during the economic and financial crisis after 2008 firms’ uncertainty about the market demand became dominant.
    Keywords: obstacles to innovation; engagement in innovative activities; regional resilience; economic crisis; financial crisis
    JEL: R14 J01 N0
    Date: 2020–07–07
  10. By: Christos Ioannou (CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique); Miltiadis Makris (University of Kent [Canterbury]); Carmine Ornaghi (University of Southampton)
    Abstract: The present study proposes a theoretical model that investigates how R&D productivity influences the relationship between product substitutability and R&D investment in a duopolistic market. We argue that the effects on R&D investment are more complex than the previous literature suggests. We show theoretically that, in unlevelled industries, the laggard's R&D investment decreases with product substitutability regardless of the R&D productivity level. In sharp contrast, in levelled industries, whether R&D investment increases or decreases with product substitutability depends crucially on the level of the R&D productivity. We choose parameters and formulate testable predictions that we take to the laboratory. We find that subjects' behavior is largely consistent with the model's predictions.
    Keywords: Experiments,Product Substitutability,R&D Productivity,Duopoly
    Date: 2021
  11. By: Bischoff, Thore Sören; Hipp, Ann; Runst, Petrik
    Abstract: Generalized trust within regions represents an important firm resource. We provide empirical evidence on the impact of trust among people in regions on innovation using two distinct data sets. The first one contains firm-level data and is used to analyze how trust affects firm-level innovation in small and medium sized enterprises (SMEs). The second data set is used to analyze the trust-innovation relationship within regions. It allows us to capture innovation in the form of patents and explore spatial patterns. Our observation period ranges from 2004 to 2019. We apply a multilevel approach, panel data models as well as spatial techniques. The results show that generalized trust has a positive impact on a firm's innovativeness, which is particularly strong for small and medium-sized firms and in regions with relatively low levels of trust.
    Keywords: Trust,innovation,regional innovation systems,SMEs
    JEL: D02 D83 O12 O18 O31
    Date: 2022
  12. By: Acconcia, Antonio; Beraldo, Sergio; Capuano, Carlo; Stimolo, Marco
    Abstract: We implement an experimental design based on a duopoly game in which subjects choose whether to cooperate in Research and Development (R&D) activities. We first conduct six experimental markets that differ in both the levels of knowledge spillovers and the intensity of competition. Consistently with the theory, we find that the probability of cooperation increases in the level of spillovers and decreases in that of market competition. We then replicate the experimental markets by providing subsidies to subjects who cooperate. Subsidies relevantly increase the probability of cooperation in focus markets, causing, however, a sensible reduction of R&D investments. Overall, our evidence suggests that, depending on the characteristics of the market, the use of public subsidies might be redundant, for firms would anyway joined their R&D efforts; or counterproductive, inducing firms to significantly reduce R&D investments compared to the non-cooperative scenario.
    Keywords: Research and Development/Tech Change/Emerging Technologies, Research Methods/ Statistical Methods
    Date: 2022–01–28

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