nep-ino New Economics Papers
on Innovation
Issue of 2023‒04‒24
five papers chosen by
Uwe Cantner
University of Jena

  1. Breakthrough Innovations and Productivity: An International Perspective By Kuusi, Tero; Nevavuo, Jenni
  2. Startup Village Conceptualisation By GOODWIN-HAWKINS Bryonny; GUZZO Fabrizio; MERIDA MARTIN Fernando; SASSO Simone
  3. Racial Discrimination and Lost Innovation: Evidence from US Inventors, 1895–1925 By Davide M. Coluccia; Gaia Dossi; Sebastian Ottinger
  4. Strapped for Cash: The Role of Financial Constraints for Innovating Firms By Esther Ann Bøler; Andreas Moxnes; Karen Helene Ulltveit-Moe
  5. The determinants of Public Grants and Venture Capital financing: Evidence from Europe By Andrea Bellucci; Gianluca Gucciardi; Daniel Nepelski

  1. By: Kuusi, Tero; Nevavuo, Jenni
    Abstract: Abstract In this paper, we shed new light on the productivity impact of breakthrough patents, as well as their role in the variability of productivity across countries. We use text analysis and machine learning–based estimates of the number of breakthrough patents and show that there was a significant drop in quantity in the early 2000s. According to our econometric analysis, the slowdown in innovation activity has a clear temporal connection with the later slowdown in productivity in the 2010s. Breakthrough patents increased productivity on a large scale until the beginning of the 2010s, in particular in industrial information and communications technology (ICT) industries. In sectors other than ICT, productivity growth was more differentiated so that productivity growth is observed in industries that invested significantly in R&D after the emergence of breakthrough patents. We also identify large differences across countries in the link between productivity and breakthrough patents.
    Keywords: Productivity, Innovation, Breakthroughs, Patents
    JEL: D24 O31 O33
    Date: 2023–03–31
  2. By: GOODWIN-HAWKINS Bryonny; GUZZO Fabrizio (European Commission - JRC); MERIDA MARTIN Fernando (European Commission - JRC); SASSO Simone (European Commission - JRC)
    Abstract: The European Commission’s long-term vision for the EU’s rural areas identifies several areas of action towards stronger, connected, resilient and prosperous rural areas and communities by 2040. A flagship action on research and innovation aims to help tackle the challenges towards fulfilling rural potential. An annual Startup Village Forum is part of this action. The Forum intends to promote knowledge exchange and cooperation activities and to work as an open and inclusive space where institutions and stakeholders can meet, discuss and shape actions for startup-driven innovation in rural areas. Drawing upon the scientific literature, in this report we develop the Startup Village concept and define it as "A place (or a network of small places) that embraces innovation and ambitious entrepreneurship as a way to unlock development potential and support wellbeing in rural areas". Next, we explore the key enabling factors of Startup Villages- discussing in particular the pivotal role played by the ecosystem in enabling innovation and entrepreneurship - and outline the Startup Village Forum’s facilitating role.
    Keywords: rural innovative entrepreneurship, rural innovation, rural entrepreneurship, rural development, rural areas, growth, startups, SMEs, innovation ecosystem, RDI, Research, Technology and Innovation
    Date: 2023–02
  3. By: Davide M. Coluccia; Gaia Dossi; Sebastian Ottinger
    Abstract: How can racial discrimination harm innovation? We study this question using data on US inventors linked to population censuses in 1895-1925. Our novel identification strategy leverages plausibly exogenous variation in the timing of lynchings and the name of the victims. We find an immediate and persistent decrease in patents granted to inventors who share their names with the victims of lynchings, but only when victims are Black. We hypothesize that lynchings accentuate the racial content of the victim’s name to patent examiners, who do not observe inventor race from patent applications. We interpret these findings as evidence of discrimination by patent examiners and provide evidence against alternative mechanisms.
    Keywords: Discrimination; Innovation; Lynchings;
    JEL: J15 N31 N32 O11 O31
    Date: 2023–03
  4. By: Esther Ann Bøler; Andreas Moxnes; Karen Helene Ulltveit-Moe
    Abstract: This paper makes use of a reform that allowed firms to use patents as stand-alone collateral, to estimate the magnitude of collateral constraints and to quantify the aggregate impact of these constraints on misallocation and productivity. Using matched firm-bank data for Norway, we find that bank borrowing increased for firms affected by the reform relative to the control group. We also find an increase in the capital stock, employment and innovation as well as equity funding. We interpret the results through the lens of a model of monopolistic competition with potentially collateral constrained heterogeneous firms. Parameterizing the model using well-identified moments from the reduced form exercise, we find quantitatively large gains in output per worker in the sectors in the economy dominated by constrained (and intangible-intensive) firms. The gains are primarily driven by capital deepening, whereas within-industry misallocation plays a smaller role.
    Keywords: intangible capital, patents, credit constraints, misallocation, productivity
    JEL: D25 G32 L25 L26 O34 O47
    Date: 2023
  5. By: Andrea Bellucci (University of Insubria, Department of Economics); Gianluca Gucciardi (UniCredit and University of Milan); Daniel Nepelski (European Commission - JRC)
    Abstract: This analysis compares the characteristics of firms supported by public and private sources in early-stage financing to investigate funding patterns for innovative companies. It examines whether the two sources of funding target similar firms in the period 2008-2017 using a portfolio approach on EU-based firms raising either Venture Capital financing, public grants under the Horizon 2020 ‘SME Instrument’ scheme, or both. The findings show that venture capitalists finance more innovative and younger firms, whereas public investors focus on smaller companies. This pattern is supported by robustness checks and expansions that address multiple dimensions of heterogeneity behaviours in the interaction of private and public funding.
    Keywords: Venture Capital, Investment, Public Grants, Horizon 2020, SME Instrument, Entrepreneurial Finance
    JEL: O30 O38 L20 L53 G20
    Date: 2023–02

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