nep-ino New Economics Papers
on Innovation
Issue of 2022‒08‒29
six papers chosen by
Uwe Cantner
University of Jena

  1. Research Joint Ventures: The Role of Financial Constraints By Philipp Brunner; Igor Letina; Armin Schmutzler
  2. Flow of Ideas: Economic Societies and the Rise of Useful Knowledge By Francesco Cinnirella; Erik Hornung; Julius Koschnick
  3. R&D Tax Credits across the European Union: Divergences and convergence By Stéphane Robin; Laurence Jacquet
  4. The regional green potential of the European innovation system By SBARDELLA Angelica; BARBIERI Nicolò; CONSOLI Davide; NAPOLITANO Lorenzo; PERRUCHAS François; PUGLIESE Emanuele
  5. Putting mission-oriented innovation policies to work: A case study of the German high-tech strategy 2025 By Roth, Florian; Wittmann, Florian; Hufnagl, Miriam; Lindner, Ralf
  6. Personality and Entrepreneurship By Kritikos, Alexander

  1. By: Philipp Brunner; Igor Letina; Armin Schmutzler
    Abstract: This paper provides a novel theory of research joint ventures for financially constrained firms. When firms choose R&D portfolios, an RJV can help to coordinate research efforts, reducing investments in duplicate projects. This can free up resources, increase the variety of pursued projects and thereby increase the probability of discovering the innovation. RJVs improve innovation outcomes when market competition is weak and external financing conditions are bad. An RJV may increase the innovation probability and nevertheless lower total R&D costs. RJVs that increase innovation tend to be profitable, but innovation-reducing RJVs also exist. Finally, we compare RJVs to innovation-enhancing mergers.
    Date: 2022–07
  2. By: Francesco Cinnirella; Erik Hornung; Julius Koschnick
    Abstract: Economic societies emerged during the late eighteenth-century. We argue that these institutions reduced the costs of accessing useful knowledge by adopting, producing, and diffusing new ideas. Combining location information for the universe of 3,300 members across active economic societies in Germany with those of patent holders and World’s Fair exhibitors, we show that regions with more members were more innovative in the late nineteenth-century. This long-lasting effect of societies arguably arose through agglomeration economies and localized knowledge spillovers. To support this claim, we provide evidence suggesting an immediate increase in manufacturing, an earlier establishment of vocational schools, and a higher density of highly skilled mechanical workers by mid-nineteenth century in regions with more members. We also show that regions with members from the same society had higher similarity in patenting, suggesting that social networks facilitated spatial knowledge diffusion and, to some extent, shaped the geography of innovation.
    Keywords: economic societies, useful knowledge, knowledge diffusion, innovation, social networks
    JEL: N33 O33 O31 O43
    Date: 2022
  3. By: Stéphane Robin (UP1 - Université Paris 1 Panthéon-Sorbonne, THEMA - Théorie économique, modélisation et applications - CNRS - Centre National de la Recherche Scientifique - CY - CY Cergy Paris Université); Laurence Jacquet (THEMA - Théorie économique, modélisation et applications - CNRS - Centre National de la Recherche Scientifique - CY - CY Cergy Paris Université)
    Abstract: We examine the R&D, innovation and productivity effects of R&D tax credits (R&DTC) in 8 EU countries, in the context of a proposed EU-wide "super deduction" on R&D expenditures. Our econometric analysis, performed on industry-level panel data, shows that past R&D feeds current R&D, whether it is conducted under an R&DTC or not. Our estimate of additionality during an R&DTC phase is generally close to 1. R&D intensity also affects patenting intensity positively in Belgium, Czech Republic, France, Spain and the UK, but this relationship is R&DTC-related only in Belgium, France and Spain. Only in France and the UK do we observe a full (yet fragile) R&D-innovation-productivity relationship. In the UK, this relationship is not affected by the R&DTC scheme. In France, a 1% increase in R&D conducted under the second to fourth phases of R&DTC (1999-2017) entails a cumulated 0.37% increase in patenting intensity, which translates to a 0.16% increase in productivity. The main policy implication of these results is that a "super-deduction" on R&D is likely to help the EU reach its "R&D at 3% of GDP" objective, but only time will tell how generous it must be to really spur innovation and productivity.
    Keywords: R&D Tax Credits,Public Support to R&D,Science and Technology Policy,European Policy JEL codes: O38,H25,H54
    Date: 2022–05–30
  4. By: SBARDELLA Angelica; BARBIERI Nicolò; CONSOLI Davide; NAPOLITANO Lorenzo (European Commission - JRC); PERRUCHAS François; PUGLIESE Emanuele (European Commission - JRC)
    Abstract: The brief provides an overview of green technological development across European regions employing the Economic Fitness Complexity approach to establish a green technology space. The study explores the associations between comparative advantage in specific technological domains and a region’s capacity to develop green technologies, i.e. its Green Fitness. Furthermore, it addresses the interaction between the green and non-green knowledge bases, with a particular focus on whether regional know-how in the non-green technological realm can be exploited in the green domain and vice versa. To this aim, a metric of regional Green Potential is proposed. The analysis suggests that regions specialised in green domains, irrespective of their complexity, have a higher propensity to develop technologies connected with green technologies. Green technologies are linked mostly to technologies related to the production or transformation of materials; with engines and pumps; and with construction methods. The regions with the highest Green Potential are not necessarily those with the highest Green Fitness. The results suggest that there is a potential for green and non-green technological advances to generate positive spillovers in terms of capabilities to produce innovations across the spectrum of technological complexity.
    Keywords: Green Deal, Economic Complexity, Green Capabilities, Regional Green Potential
    Date: 2022–05
  5. By: Roth, Florian; Wittmann, Florian; Hufnagl, Miriam; Lindner, Ralf
    Abstract: Over the last years, numerous national governments as well as the European Union have initiated so-called missions to guide transformation processes and tackle grand challenges, such as climate change, digitalization and an aging society. Previous research on mission-oriented innovation pol-icies (MOIP) has mainly focused on conceptual reflections about mission goals and early stages of the implementation process, but paid little attention to the actual implementation of missions. The aim of the paper is to untangle and reveal the complex processes involved in developing and ap-plying MOIP concepts in political practice (e.g. the role of policy instruments and actors) and pro-vide insights for the advancement of mission approaches. To do so, we focus on the three stages of mission formulation, mission design and mission implementation. The three-fold framework al-lows delineating different areas of negotiation and contestation, exploring potential bottlenecks when bringing missions into action. The empirical part of the paper draws on the case of the German High-Tech Strategy 2025 (HTS) which entails twelve missions across different sectors. Even though the German Government offi-cially claims that the current HTS is guided by a mission-driven approach and 12 missions are de-tailed, the analysis finds considerable problems when it comes to translating this into practice in Germany's political landscape. Our findings call for a conceptual systemic underpinning of MOIP, which contributes to a reduction of complexity and provide better access to understanding the interplay of different instruments and their mix. This way, the discussion paper aims to contribute to a better understanding of the preconditions as well as the main challenges in putting missions to work and to inform the next generation of innovation policies that are currently being issued in Germany and elsewhere.
    Date: 2022
  6. By: Kritikos, Alexander
    Abstract: Does personality matter? Is an individual who is open to experience more or less likely to become an entrepreneur? Is it better to score low or high in agreeableness for surviving as an entrepreneur? To the extent that personality captures one part of entrepreneurial abilities, which are usually unobservable, the analysis of traits and personality characteristics helps better understanding such abilities. This article reviews research on the relationship between personality and entrepreneurship since 2000 and shows that possessing certain personality characteristics will make it more likely that an individual will start an own business and hire staff. More specifically, with respect to the entry decision, research finds that nearly all so-called Big Five factors as well as several specific personality characteristics influence the entry probability into entrepreneurship. Further, entrepreneurs are more likely to hire, the higher they score in risk tolerance, trust, openness to experience, and conscientiousness. However, different factors such as low scores in agreeableness, the only Big Factor that does not affect entrepreneurial entry, influence entrepreneurial survival. And for some of characteristics that influence entrepreneurial entry, like high scores in the factor openness for experience or in risk tolerance, "revolving door effects" are found, explaining why some entrepreneurs subsequently exit again the market.
    Keywords: entrepreneurship,personality
    JEL: L26
    Date: 2022

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