nep-ino New Economics Papers
on Innovation
Issue of 2023‒05‒01
nine papers chosen by
Uwe Cantner
University of Jena

  1. Trade and Diffusion of Embodied Technology: An Empirical Analysis By Stephen Ayerst; Faisal Ibrahim; Gaelan MacKenzie; Swapnika Rachapalli
  2. Closing the gap between research and projects in climate change innovation in Europe By Larosa, Francesca; Mysiak, Jaroslav; Molinari, Marco; Varelas, Panagiotis; Akay, Haluk; McDowall, Will; Spadaru, Catalina; Fuso-Nerini, Francesco; Vinuesa, Ricardo
  3. The role of localised, recombinant and exogenous technological change in European regions By T.E. Uberti; M.A. Maggioni; E. Marrocu; S. Usai
  4. Not like the others: frontier scientists for high-impact inventions By Thomas Schaper; Samuel Arts; Reinhilde Veugelers
  5. The Green Innovation Premium: Evidence from U.S. Patents and the Stock Market By Markus Leippold; Tingyu Yu
  6. Identifying Technology Opportunity Using a Dual-attention Model and a Technology-market Concordance Matrix By MOTOHASHI Kazuyuki
  7. Interdisciplinary Papers Supported by Disciplinary Grants Garner Deep and Broad Scientific Impact By Minsu Park; Suman Kalyan Maity; Stefan Wuchty; Dashun Wang
  8. Search and Performance in Ecosystems: The Changing Role of Product Architectures By Axel Zeijen; Luigi Marengo; Stefano Brusoni
  9. Related or Unrelated Diversification: What is Smart Specialization? By \"Onder Nomaler; Bart Verspagen

  1. By: Stephen Ayerst; Faisal Ibrahim; Gaelan MacKenzie; Swapnika Rachapalli
    Abstract: Using data from patents, citations, inter-sectoral sales and customs, we examine the international diffusion of technology through imports of sectoral knowledge and production inputs. We construct measures of the flow of technology embodied in imports. These measures are weighted by inter-sectoral knowledge and production input-output linkages that capture the relevance of this technology for generating new innovations in different sectors in importing countries. We develop an instrumental variable strategy to identify the causal effects of technology embodied in imports on innovation and diffusion outcomes. For sectors in importing countries, increases in both knowledge- and production-weighted embodied technology imports lead to technology diffusion (measured using backward citations in new patent applications) and increases in the rate of new innovations (measured using the forward citations those patents receive). Effects are substantially larger for knowledge-weighted imports of embodied technology, which also lead to improvements in the average quality of new innovations.
    Keywords: Development economics; International topics; Productivity; Trade integration
    JEL: O33 F14 O31 O19 F61
    Date: 2023–04
  2. By: Larosa, Francesca; Mysiak, Jaroslav; Molinari, Marco; Varelas, Panagiotis; Akay, Haluk; McDowall, Will; Spadaru, Catalina; Fuso-Nerini, Francesco; Vinuesa, Ricardo
    Abstract: Innovation is a key component to equip our society with tools to adapt to new climatic conditions. The development of research-action interfaces shifts useful ideas into operationalized knowledge allowing innovation to flourish. In this paper we quantify the existing gap between climate research and innovation action in Europe using a novel framework that combines artificial intelligence (AI) methods and network science. We compute the distance between key topics of research interest from peer review publications and core issues tackled by innovation projects funded by the most recent European framework programmes. Our findings reveal significant differences exist between and within the two layers. Economic incentives, agricultural and industrial processes are differently connected to adaptation and mitigation priorities. We also find a loose research-action connection in bioproducts, biotechnologies and risk assessment practices, where applications are still too few compared to the research insights. Our analysis supports policy-makers to measure and track how research funding result in innovation action, and to adjust decisions if stated priorities are not achieved.
    Keywords: climate innovation; natural language processing; knwoledge production
    JEL: H54 O32 O33 O38
    Date: 2023
  3. By: T.E. Uberti; M.A. Maggioni; E. Marrocu; S. Usai
    Abstract: How do regions develop and evolve along their productive and technological path is a central question. Within an evolutionary perspective, a given region is likely to develop new technologies closer to its pre-existing specialization. We adopt the approach of Hidalgo et al. (2007) to map the regional European technology/knowledge space to investigate the pattern and the evolution of regional specialisation in the most innovative EU countries. These dynamics depend on the interaction of three factors - (i) localised technological change, (ii) endogenous processes of knowledge recombination, and (iii) exogenous technological paradigm shifts while accounting for spatial and technological spillovers. Our paper maps the technological trajectories of 198 EU regions over the period 1986-2010 by using data on 121 patent sectors at the NUTS2 level for the 11 most innovative European countries, plus Switzerland and Norway. The results show that regional technological specialization is mainly shaped by localised technological change and exogenous technological paradigm shifts, whereas recombinant innovation contributes to a lower extent and that these effects largely depends on the increasing, decreasing or stable regional dynamics.
    Keywords: Technology/knowledge space;spatial ordered models.;recombinant innovation;patent analysis;localised technology change;evolutionary economic geography;european regions
    Date: 2023
  4. By: Thomas Schaper; Samuel Arts; Reinhilde Veugelers
    Abstract: Linking scientific articles in PubMed and biomedical U.S. patents assigned to firms, we study the role of scientists active at the knowledge frontier, identified as authors on recent top articles. We expect them to be brokers between new scientific findings and inventions in industry with a high technological impact. We find that inventions made by such “frontier authors” are indeed more impactful and more likely to become breakthroughs, not only compared to those made by non-author inventors, but also compared to inventions from non-top authors and non-recent top authors. We also show that inventions with frontier science as prior art are more impactful. Frontier author patents are more likely to use frontier science as prior art in their inventions and to be first users of such frontier science. Yet, while frontier author patents have a significant impact premium on their non-frontier science prior art patents, their frontier science patents are not particularly more successful compared to frontier science patents from other types of inventors. Our results suggest that closeness to frontier science for use in their inventions is only part of the story of superior impact of frontier scientists, which seems a much broader story.
    Keywords: (top) technology impact, frontier science, Industry science links, inventor-authors
    Date: 2023–04–05
  5. By: Markus Leippold (University of Zurich; Swiss Finance Institute); Tingyu Yu (University of Zurich)
    Abstract: This paper investigates if firms’ green innovation efforts are reflected in their stock market prices. Firms with a higher proportion of green patents experience lower stock returns than those with a lower percentage. A long-short portfolio based on green patent shares has an average annual return of 8%, which remains significant when we control for common risk factors. However, firms with high green patent shares outperform their counterparts after events that increase climate concerns and strengthen environmental regulations. Moreover, firms with green innovation attract more institutional ownership and can weakly decrease their future carbon intensity and incident involvement.
    Keywords: Green patents, cross-section of stock returns, event study, institutional investors
    JEL: G12 G14 O34 Q55
    Date: 2023–03
  6. By: MOTOHASHI Kazuyuki
    Abstract: To understand the role of new technologies in innovation, it is crucial to develop a methodology that links technology and market information. Conventionally, the relationship between technology and the market has been analyzed using a technology-industry concordance matrix, but the granularity of market information is confined by industrial classification systems. In this study, we propose a new methodology for extracting keyword-level market information related to firms’ technology. Specifically, we developed a dual-attention model to identify technical keywords from firms’ websites. We then vectorized the market information (extracted keywords) and technology information (patents) using word embedding to construct technology-market concordance matrices. Matrices were generated based on a group of high-growth companies that suggest new technologies and market opportunities in the automotive, electronics, and pharmaceutical industries.
    Date: 2023–03
  7. By: Minsu Park; Suman Kalyan Maity; Stefan Wuchty; Dashun Wang
    Abstract: Interdisciplinary research has emerged as a hotbed for innovation and discoveries. The increasing dominance of grant-supported research, combined with growing interest in funding interdisciplinary work, raises fundamental questions on the role of interdisciplinary grants in supporting high-impact interdisciplinary advances. Here we develop a measurement framework to quantify the interdisciplinarity of both research grants and publications and apply it to 350K grants from 164 funding agencies over 26 countries and 1.3M papers that acknowledged the support of these grants from 1985 to 2009. Our analysis uncovers two contradictory patterns. On the one hand, interdisciplinary grants tend to produce interdisciplinary papers and interdisciplinary papers are associated with high impact. On the other hand, compared to their disciplinary counterparts, interdisciplinary grants produce much fewer papers and interdisciplinary papers that they support have substantially reduced impact. We show that the key to resolving this discrepancy lies in the power of disciplinary grants: Highly interdisciplinary papers supported by deeply disciplinary grants garner disproportionately high impacts from both core disciplines and broader fields. Further, the broad and deep impacts of disciplinary grants are not simply due to funding size, reception of ideas within disciplinary boundaries, or collaborative formats. When it comes to producing key interdisciplinary advances, disciplinary grants appear to do more with less and seem especially powerful when paired with other similar disciplinary grants. Amidst the rapid rise of support for interdisciplinary work across the sciences, these results highlight the underexplored role of disciplinary grants in driving crucial interdisciplinary advances, suggesting that interdisciplinary research is a risky endeavor and requires deep disciplinary expertise and investments.
    Date: 2023–03
  8. By: Axel Zeijen; Luigi Marengo; Stefano Brusoni
    Abstract: A crucial assumption in organization theory is that product architectures form a stable basis on which firms make strategic choices, over a period of time. However, emerging digital technologies challenge this idea, by allowing firms to redesign architectures at will. In this paper, we explore this novel phenomenon, its effects, and its theoretical implications. We develop an NK model suitable for studying (i) variable interdependence structures between components and (ii) the dynamics of search and adaptation in ecosystems. We find that the possibility to redesign product architectures undercuts the stability on which vertical relationships are based. We distinguish two pathways through which firms can benefit from redesigning product architectures: by enhancing the fitness landscape (landscape redesigns) or by altering the conditions on which inter-firm coordination is based (ecosystem redesigns). The availability of these two pathways depends on a firm's positioning (vertical scope and location in the value chain). Our results shed light on the changing role of interdependence structures in ecosystems, the differential advantages of integration and specialization strategies, and the effects of digital technologies in both technical and organizational domains.
    Keywords: Digital technologies; ecosystems; firms' boundaries.
    Date: 2023–04–13
  9. By: \"Onder Nomaler; Bart Verspagen
    Abstract: In this paper, we investigate the nature of the density metric, which is employed in the literature on smart specialization and the product space. We find that although density is supposed to capture relatedness between a country's current specialization pattern and potential products that it may diversify into, density is also correlated strongly to the level of diversification of the country, and (less strongly) to the ubiquity of the product. Together, diversity and ubiquity capture 93% of the variance of density. We split density into a part that corresponds to related variety, and a part that does not (i.e., unrelated variety). In regressions for predicting gain or loss of specialization, both these parts are significant. The relative influence of related variety increases with the level of diversification of the country: only countries that are already diversified show a strong influence of related variety. In our empirical analysis, we put equal emphasis on gains and losses of specialization. Our data show that the specializations that were lost by a country often represented higher product complexity than the specializations that were gained over the same period. This suggests that 'smart' specialization should be aimed at preserving (some) existing specializations in addition to gaining new ones. Our regressions indicate that the relative roles of related and unrelated variety for explaining loss of specialization are similar to the case of specialization gains. Finally, we also show that unrelated variety is also important in indicators that are derived from density, such as the Economic Complexity Outlook Index.
    Date: 2023–03

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