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on Innovation |
| By: | Jessica Birkholz |
| Abstract: | This study explores the regional innovation system characteristics that build the basis for the regional absorptive capacity of entrepreneurial knowledge. Regionalized patent data is combined with firm level and regional information for German regions over the period 1995 until 2015. Network analysis is applied to identify regional innovation system characteristics on three different layers: 1) cooperation between incumbent firms, 2) learning regimes, and 3) the technological knowledge base. Random forest analyses on basis of conditional inference classification trees are used to identify the most important characteristics for the regional absorption of entrepreneurial knowledge in general and on different efficiency levels. It is shown that characteristics on all three layers impact the regional absorption of entrepreneurial knowledge. Further, the direction and magnitude of the effect regional innovation system characteristics have on the regional knowledge absorption vary across different levels of absorption rates. It is concluded that for a successful implementation of policies to increase the impact of entrepreneurial knowledge on regional development, the regional innovation system needs to be monitored and adapted continuously. |
| Keywords: | Entrepreneurship, Regional absorptive capacity, Smart specialization |
| JEL: | L26 O33 D85 |
| Date: | 2022–04 |
| URL: | http://d.repec.org/n?u=RePEc:atv:wpaper:2205&r= |
| By: | Haufler, Andreas (LMU Munich and CESifo); Schindler, Dirk (Erasmus University Rotterdam) |
| Abstract: | Many countries have introduced patent box regimes in recent years, offering a reduced tax rate to businesses for their IP-related income. In this paper, we analyze the effects of patent box regimes when countries can simultaneously use patent boxes and R&D subsidies to promote innovation. We show that when countries set their tax policies non-cooperatively, innovation is fostered, at the margin, only by the R&D subsidy, whereas the patent box tax rate is targeted at attracting international profit shifting. In equilibrium, patent box regimes emerge endogenously under policy competition, but never under policy coordination. We also compare the competition for mobile patents with the competition for mobile R&D units and show that enforcing a nexus principle is likely to reduce the aggressiveness of patent box regimes. |
| Keywords: | corporate taxation; profit shifting; patent boxes; R&D tax credits; tax competition; |
| JEL: | H25 H87 F23 |
| Date: | 2022–09–09 |
| URL: | http://d.repec.org/n?u=RePEc:rco:dpaper:336&r= |
| By: | Leogrande, Angelo; Costantiello, Alberto; Laureti, Lucio |
| Abstract: | In this article we estimate the value of “Non-R&D Innovation Expenditures” in Europe. We use data from the European Innovation Scoreboard-EIS of the European Commission from the period 2010-2019. We test data with the following econometric models i.e.: Pooled OLS, Dynamic Panel, Panel Data with Fixed Effects, Panel Data with Random Effects, WLS. We found that “Non-R&D Innovation Expenditures” is positively associated among others to “Innovation Index” and “Firm Investments” and negatively associated among others to “Human Resources” and “Government Procurement of Advanced Technology Products”. We use the k-Means algorithm with either the Silhouette Coefficient and the Elbow Method in a confrontation with the network analysis optimized with the Distance of Manhattan and we find that the optimal number of clusters is four. Furthermore, we propose a confrontation among eight machine learning algorithms to predict the level of “Non-R&D Innovation Expenditures” either with Original Data-OD either with Augmented Data-AD. We found that Gradient Boost Trees Regression is the best predictor for OD while Tree Ensemble Regression is the best Predictor for AD. Finally, we verify that the prediction with AD is more efficient of that with OD with a reduction in the average value of statistical errors equal to 40,50%. |
| Keywords: | Innovation, and Invention: Processes and Incentives; Management of Technological Innovation and R&D; Diffusion Processes; Open Innovation. |
| JEL: | O30 O31 O32 O33 O34 |
| Date: | 2022–09–11 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:114526&r= |
| By: | Bergé, Laurent R.; Doherr, Thorsten; Hussinger, Katrin |
| Abstract: | How do intellectual property rights influence academic science? We investigate the consequences of the introduction of software patents in the U.S. on the publications of university researchers in the field of computer science. Difference-in-difference estimations reveal that software scientists at U.S. universities produced fewer publications (both in terms of quantity and quality) than their European counterparts after patent rights for software inventions were introduced. We then introduce a theoretical model that accounts for substitution and complementarity between patenting and publishing as well as for the direction of research. In line with the model's prediction, further results show that the decrease in publications is largest for scientists at the bottom of the ability distribution. Further, we evidence a change in the direction of research following the reform towards more applied research. |
| Keywords: | patent rights,publications,economics of science,difference-in-difference estimation,model of science production |
| JEL: | I23 O31 O34 O38 L38 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:22034&r= |
| By: | Pöge, Felix (Boston University) |
| Abstract: | The relationship between competition and innovation is difficult to disentangle, as exogenous variation in market structure is rare. The 1952 breakup of Germany's leading chemical company, IG Farben, represents such a disruption. After the Second World War, the Allies occupying Germany imposed the breakup because of IG Farben's importance for the German war economy instead of standard antitrust concerns. In technology areas where the breakup reduced concentration, patenting increased strongly, driven by domestic firms unrelated to IG Farben. An analysis of patent texts shows that an increased propensity to patent does not drive the effect. Descriptively, IG Farben's successors increased their patenting activities as well, and their patenting specialized relative to the pre-breakup period. The results are consistent with a breakup-induced innovation increase by the IG Farben successors, which then spilled over to the wider chemical industry. |
| Keywords: | innovation, competition, merger, antitrust, IG Farben |
| JEL: | O31 L44 N44 |
| Date: | 2022–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp15517&r= |
| By: | Matheus Eduardo Leusin |
| Abstract: | This paper investigates how the development of AI-related inventions by Multinational Enterprises (MNEs) affects their technological trajectories and innovative performance. I combine a matched-pair analysis with an extension of the Difference-in-Difference method to analyse these effects over a novel panel dataset of MNEs. This dataset links over 30 thousand MNEs to more than 10 million patents that these companies owned directly or indirectly (i.e., through their subsidiaries) in the period from 2011 to 2019. The results indicate that MNEs introducing AI-related inventions increase the relatedness of subsequent inventions by about 10 per cent compared to a control group. These results are robust when accounting for a self-selection bias. AI is thus being used to reinforce the existing technological trajectories, rather than to disrupt them. The results also suggest that the number of subsequent inventions is about 40 per cent higher for MNEs that introduce AI during the observation period compared to the control group, without significant effects on the intensity of R&D expenditures per invention. It is argued that this increase in innovative performance is linked not only to knowledge dynamics created by learning about AI but also by AI's technical potential to be used for learning. |
| Keywords: | Technological trajectory; Relatedness; Artificial Intelligence; Innovative performance |
| JEL: | D22 O14 O33 L25 |
| Date: | 2022–02 |
| URL: | http://d.repec.org/n?u=RePEc:atv:wpaper:2201&r= |
| By: | Seung Hwan Kim; Jeong hwan Jeon; Anwar Aridi; Bogang Jun |
| Abstract: | This research aims to identify factors that affect the technological transition of firms toward industry 4.0 technologies (I4Ts) focusing on firm capabilities and policy impact using relatedness and complexity measures. For the analysis, a unique dataset of Korean manufacturing firms' patent and their financial and market information was used. Following the Principle of Relatedness, which is a recently shaped empirical principle in the field of economic complexity, economic geography, and regional studies, we build a technology space and then trace each firm's footprint on the space. Using the technology space of firms, we can identify firms that successfully develop a new industry 4.0 technology and examine whether their accumulated capabilities in their previous technology domains positively affect their technological diversification and which factors play a critical role in their transition towards industry 4.0. In addition, by combining data on whether the firms received government support for R&D activities, we further analyzed the role of government policy in supporting firms' knowledge activity in new industry 4.0 technologies. We found that firms with higher related technologies and more government support are more likely to enter new I4Ts. We expect our research to inform policymakers who aim to diversify firms' technological capabilities into I4Ts. |
| Date: | 2022–09 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2209.02239&r= |
| By: | Marco Guerzoni; Massimiliano Nuccio; Federico Tamagni |
| Abstract: | Innovation studies have largely recognized the role of knowledge in fostering innovation and growth of entrants. Previous literature has focused on entrepreneurial and managerial capabilities and education and knowledge incorporated in material and immaterial resources. We assume that new firms need to possess different pieces of knowledge, but beyond diversity, business performance relies also on knowledge distinctiveness. In other words, the complexity of a knowledge base is not simply the recombination of homogeneous pieces of knowledge but it also depends on the specific nature of each of them. This paper develops a new complexity indicator able to capture the complexity of the knowledge base by applying a topic modeling approach to the analysis of patent text. We explore the empirical relation between pre-entry complexity of knowledge, as measured by our complexity index, and post-entry growth performance of a sample of Italian firms entering the market in 2009-2011, which we then follow over the period 2012-2021. Baseline results show a significant and positive association between knowledge complexity and growth, even after controlling for firm characteristics and year, sector and region fixed-effects. Robustness analysis reveal this positive effect is stronger in the medium-long run while relatively weaker for innovative SMEs. |
| Keywords: | pre-entry knowledge base; complexity; text analysis; patents; firm growth; post-entry performance. |
| Date: | 2022–09–21 |
| URL: | http://d.repec.org/n?u=RePEc:ssa:lemwps:2022/25&r= |
| By: | Jeon, Doh-Shin; Lefouili, Yassine; Madio, Leonardo |
| Abstract: | We study a platform’s incentives to delist IP-infringing products and the effects of holding the platform liable for the presence of such products on innovation and consumer welfare. For a given number of buyers on the platform, platform liability increases innovation by reducing the competitive pressure that innovative products face from IP-infringing products. However, platform liability can have unintended consequences, which can overturn this intended effect on innovation. Moreover, there can be a misalignment of interests between innovators and buyers as platform liability reduces consumer surplus for a given number of innovators. We also analyze how different types of cross-group network effects affect the impact of platform liability on innovation and consumer welfare. |
| Keywords: | Platform, Liability, Intellectual Property, Innovation. |
| JEL: | K40 K42 K13 L13 L86 |
| Date: | 2022–09–19 |
| URL: | http://d.repec.org/n?u=RePEc:tse:wpaper:127344&r= |
| By: | Jessica Birkholz; Jarina Kühn; Mariia Shkolnykova |
| Abstract: | This paper contributes to the discussion on exploration and exploitation by analyzing the innovation behavior of SMEs and large firms during the first year of the COVID-19 pandemic in Germany. It provides a novel way to measure the type of firm innovation behavior in a dynamically changing environment. After collecting news articles about innovation activities conducted by firms, we applied text mining techniques to identify the positioning of each firm on the continuum from exploitation to exploration. The results of our analyses indicate three main dynamics: 1) all studied firms tend to conduct more explorative innovation activities during the COVID-19 crisis, 2) large and "technology-intensive" firms are more prone to perform explorative innovation activities than SMEs and firms that are not "technology-intensive", and 3) technology intensity is associated with explorative innovation behavior during the crisis. Our results suggest that considering technology intensity and the size of firms is important for designing effective policies during crises. |
| Keywords: | COVID-19, Crisis, Innovation, SME, Text Mining, News Data, Exploration, Exploitation |
| JEL: | O31 O33 L25 |
| Date: | 2022–04 |
| URL: | http://d.repec.org/n?u=RePEc:atv:wpaper:2203&r= |
| By: | Ann Hipp; Udo Ludwig; Jutta Günther |
| Abstract: | State socialism failed due to its inner contradictions. Despite huge investments in R&D-intensive industries, the soviet-type economy collapsed in 1989 in Eastern Germany, and the market-based system in the Western part prevailed. We compare the two parallel existing innovation systems in Germany to shed light on the success and failure of the state-led innovation system. Based on newly created indicators from archive data we show in a natural experiment setting that modernization efforts in relation to GDP was much bigger in the socialist as compared to the market economy in the last decades.These achievements, however, could not fully unfold in favor of economic growth due to obstacles related to the setting of research priorities, innovation incentives, and knowledge flow. |
| Keywords: | Comparative economic systems, natural experiment, innovation system, Germany |
| JEL: | O11 O31 N94 |
| Date: | 2021–12 |
| URL: | http://d.repec.org/n?u=RePEc:atv:wpaper:2111&r= |
| By: | Giovanni Dosi |
| Abstract: | This essay outlines the evolutionary research agenda thoroughly explored in its microeconomic aspects in the forthcoming Manual, The Foundations of Complex Evolving Economies. Part One: Innovation, Organization and Industrial Dynamics, Oxford University Press, 2023. But is there an ''evolutionary paradigm'', in the first place? And if yes, what is it? In brief, in such a paradigm, the economy is interpreted as a complex evolving system. In that, a wide set of techno-economic phenomena are understood as emergent properties - outcomes of far-from-equilibrium interactions among heterogeneous agents - characterized by endogenous preferences, most often ''boundedly rational'' - but always capable of learning, adapting, and innovating with respect to their understandings of the world in which they operate, the technologies they master, their organizational forms, and their behavioral repertoires. All that involves some crucial properties. First, if the entities are genuinely evolving, new elements, new technologies, new organizational forms, new patterns of interaction are bound to appear along the course of evolution. Second, evolution is a multi-scale phenomenon. This is a fundamental property of biological evolution, and even more so is the evolution of economies and whole societies, nested in different institutions - possibly evolving at different paces, and coupled with technological and organizational changes. Third, but relatedly, economies are complex interactive systems. Interaction generally implies emergence. There is no isomorphism between macroscopic phenomena, say, the dynamics of industries, markets, and whole economies, on the one hand, and the behaviours of individual entities, on the other. More is different (Anderson, 1972). Fourth, complexity is intimately linked with non-linearities, and thus multiple possible dynamical paths. History counts. And this, even more so, in socio-economic environments characterized by knowledge accumulation. Knowledge builds upon itself, thus involving what economists in their jargon call dynamic increasing returns. As summarized in this essays Part One of the Manual addresses in the foregoing perspective, (i) Innovation and technological evolution; (ii) The theory of the firm in evolving environments; (iii) The formalization of learning processes; (iv) the theory of production; (v) consumption patterns; (vi) economic interactions and the working of markets; and, (vii) The ensuing structures and evolution of industries. Further in this essay we sketch some fundamental topics of the macroeconomic and developmental research ahead, which we mean to explore in Part Two of the Manual, in progress. At the same time the reader is warned against multiple risks of ''normalization'' by which 'evolution' is reduced to sheer 'innovation', and the latter is handled by standard econometric instruments, which are inevitably bound to largely neglect, among other features, the emergence of novelty, coupled dynamics, profound heterogeneities at all levels, and various forms of complementarities. |
| Keywords: | Economic evolution; complex systems; technological and organizational innovation; heterogeneity; market processes; bounded rationality; organizational capabilities; routines and heuristics; theory of production; industrial structures. |
| Date: | 2022–09–21 |
| URL: | http://d.repec.org/n?u=RePEc:ssa:lemwps:2022/24&r= |
| By: | Jessica Birkholz |
| Abstract: | The recognition of regional business opportunities is the crucial starting point of the entrepreneurial process that governs the persistence of regional entrepreneurship patterns. This persistence depends on the quantity of perceived opportunities and the quality of opportunities perceived by regional inhabitants. However, it is unclear which region-individual interactions relate to the quantity regional business opportunity perception and how long-standing regional entrepreneurship patterns are reflected in conceptions of entrepreneurship that govern the quality of perceived opportunities. A primary data collection in German regions with distinct long-standing entrepreneurship patterns assessed two main aspects. First, the regional embeddedness of respondents on four levels - actor, network, environmental, and cultural - is set in relation to the likelihood of opportunity perception. Second, an implicit measurement of mental representations of entrepreneurship is examined. The mental representations of entrepreneurship, reflecting the conceptions of entrepreneurship, are investigated to identify differences between the conceptions of entrepreneurship that come along with the long-standing regional entrepreneurship patterns and to detect differences between opportunity-perceivers and non-perceivers. The results suggest that regions reinforce long-standing entrepreneurship patterns with distinct individual-region relations that impact the quantity of perceived regional opportunities and distinct conceptualizations of entrepreneurship that shape the quality of perceived opportunities. Differences are observed for the perception of opportunities that are characterized by innovativeness versus those that are general in nature, showing that innovative opportunity perception is less dependent on the regional context than general opportunity perception. |
| Keywords: | Entrepreneurship; Opportunity Perception; Regional innovation system |
| JEL: | D91 L26 O33 R11 |
| Date: | 2022–04 |
| URL: | http://d.repec.org/n?u=RePEc:atv:wpaper:2204&r= |
| By: | Sancho-Bosch, Diego; Guerrero, Alex J.; Heijs, Joost |
| Abstract: | This study analyses the differentiated effects of the public support for private R&D and innovation considering the financial situation of the firm. Two main questions are analyzed. Firstly, do the firms that have less access to funds for RDI –and therefore could depend more on the public support- get more frequently support? And, secondly, do such firms show a higher level of financial additionality than the firms with less financial restrictions? Despite of the fact that market failures imply basically that firms underinvest in R&D and often lack access to financial markets, only a few papers were detected that analyze the above-mentioned questions and present contradictory non-conclusive results. All of them used only one or two –often dummy- variables as indicator to measure the financial restrictions. Moreover, only four studies analyzed the intermediating role of the financial restriction on the policy impact in terms of the financial additionality and five measures its effect on the degree of participation. The main novelty of this paper is the simultaneous use of a broad set 17 different indicators (reflecting quantitative data on the firm’s liabilities or indebtedness, assets, and liquidity) directly derived from the firms’ balance sheet. These were clustered by a factor analysis in 7 synthetic indicators, which are used in an innovation policy evaluation framework based on the Propensity Score Matching Method. The main findings show that in Spain financial constraints negatively affect the access to public funds. There are significant differences between the level and cost of debt for both probability and financial additionality. Solvency indicators report that solvent firms are negatively discriminated for the likelihood of participation, however we find different effects for the impact depending on the public support that firms receive and their size. |
| Keywords: | Public policy, innovation, financial constraints, evaluation, financial additionality |
| JEL: | G32 H25 M48 O38 |
| Date: | 2022–06–03 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:114659&r= |