|
on Innovation |
| By: | Fabian Gaessler (University Pompeu Fabra , Barcelona School of Management, Barcelona School of Economics, MPI-IC); Dietmar Harhoff (MPI-IC, LMU Munich, CEPR); Stefan Sorg (MPI-IC); Georg von Graevenitz (Queen Mary University of London) |
| Abstract: | We study the blocking effect of patents on follow-on innovation by others. We posit that follow-on innovation requires freedom to operate (FTO), which firms typically obtain through a license from the patentee holding the original innovation. Where licensing fails, follow-on innovation is blocked unless firms gain FTO through patent invalidation. Using large-scale data from post-grant oppositions at the European Patent Office, we find that patent invalidation increases follow-on innovation, measured in citations, by 16% on average. This effect exhibits a U-shape in the value of the original innovation. For patents on low-value original innovations, invalidation predominantly increases low-value followon innovation outside the patentee’s product market. Here, transaction costs likely exceed the joint surplus of licensing, causing licensing failure. In contrast, for patents on high-value original innovations, invalidation mainly increases high-value follow-on innovation in the patentee’s product market. We attribute this latter result to rent dissipation, which renders patentees unwilling to license out valuable technologies to (potential) competitors. |
| Keywords: | follow-on innovation; freedom to operate; licensing; patents; opposition; |
| JEL: | O31 O32 O33 O34 |
| Date: | 2024–02–13 |
| URL: | http://d.repec.org/n?u=RePEc:rco:dpaper:494&r=ino |
| By: | Bena, Jan (U of British Columbia); Erel, Isil (Ohio State U and ECGI); Wang, Daisy (Ohio State U); Weisbach, Michael S. (Ohio State U and ECGI) |
| Abstract: | The hold-up problem can impair firms' abilities to make relationship-specific investments through contracts. Ownership changes can mitigate this problem. To evaluate changes in the specificity of human capital investments, we perform textual analyses of patents filed by lead inventors from both acquirer and target firms before and after acquisitions. Inventors whose human capital is highly complementary with the patent portfolios of their acquisition partners are more likely to stay with the combined firm post-deal and subsequently make their investments more specific to the partner's assets. As ownership of another firm results in increasingly specific investments to that firm's assets, contracting issues related to relationship-specific investments is likely a motive for acquisitions. |
| JEL: | G34 L14 L22 |
| Date: | 2023–12 |
| URL: | http://d.repec.org/n?u=RePEc:ecl:ohidic:2023-27&r=ino |
| By: | Ma, Song (Yale U); Wang, Wenyu (Indiana U); Wu, Yufeng (Ohio State U) |
| Abstract: | This paper argues that firms proactively use innovation decisions to influence the mobility and human capital accumulation of their workers. We develop a dynamic model in which workers conduct R&D projects, accumulating both general and firm-specific human capital. Firms choose the scope of innovation, influencing the type of human capital workers accumulate during the process. Pursuing more general innovation leads to increased knowledge redeployability for the firm at the cost of more difficult employee retention. We estimate the model using granular innovation production and mobility data of three million inventors. Our model closely matches the observed mobility and innovation specificity over inventors' life cycles. Empirical estimates of the model parameters imply that 24% of observed innovation specificity among U.S. firms is driven by their labor market considerations, which enhances the firm value but lowers the inventors' surplus. |
| JEL: | J24 J63 O31 |
| Date: | 2023–12 |
| URL: | http://d.repec.org/n?u=RePEc:ecl:ohidic:2023-29&r=ino |
| By: | Verger, Nicolas (Grenoble Ecole de Management); DUYMEDJIAN, Raffi; Roberts, Julie |
| Abstract: | Innovation has often been heralded as important in societal progress. Current innovation practices approach creation as an endless endeavour without much consideration of the end result of those innovations. However, in a world in which natural materials are ever depleting due to extractivism modes of operations that support those same innovations, it becomes increasingly important to reflect upon – and implement – new ways through which innovation comes to an end. In some fields, including Energy Studies and Transition Studies, this process has been labelled “exnovation”. Yet, literature on the subject remains scarce, and its development limited in other fields, notably in organisation and management studies. Part of the reason for this lack of research on exnovation could be explained by a lack of thorough synthesis presenting the concept. In this study, we used bibliometric network analyses to conduct a systematic review. We have critically explored the definition of exnovation across different fields, and identified the fields in which exnovation was (or has not) featured much development. We found two major clusters of fields that leverage the concept of exnovation: transition/energy/sustainability studies, on the one hand; medicine, on the other. There is however not much interconnectivity between these clusters. Moreover, we show that these two clusters do not use the term “exnovation” in the same way. The first cluster has mentioned approaches to exnovation from a global, policy perspective. The second cluster, from a practitioner perspective. This research article then builds on these systematic findings to propose a perspective that reconciles these two views. We propose that, far from being opposite to innovation, exnovation is a complement to it. As much as innovation is the ability to implement an idea; exnovation is the ability to dis-implement it. We further discuss that both are influenced by external factors that regulate them, either from a higher scale (global) policy-side or from a lower scale (local) practice side. We conclude through the concept of “Novation” a process that integrates both in-novation and ex-novation as the input and output of the same continuum. |
| Date: | 2024–02–12 |
| URL: | http://d.repec.org/n?u=RePEc:osf:osfxxx:c2mgk&r=ino |
| By: | Keraga, Mezid N. (Ethiopian Civil Service University); Lööf, Hans (Royal Institute of Technology); Stephan, Andreas (Linnaeus University) |
| Abstract: | This paper presents new insights into the relationship between innovation and employment in low-income countries. We use firm-level data sourced from the World Bank Enterprise Survey (ES) and focus on six sub-Saharan African (SSA) economies over the period 2003-2019. The econometric results from difference-in-differences (DiD) estimations, in conjunction with propensity score matching show a positive influence of product innovation on both permanent and total firm-level employment. The evidence for employment impact of process innovations is weak. Considering relations between firms, we find a positive intra-industry spillover effect from both product and process innovation on employment in firms operating within the same two-digit industry, while the results for inter-industry spillovers are non-significant or negative. |
| Keywords: | Innovation; Employment; Sub-Saharan; Spillover effects; DID; Matching approach |
| JEL: | J20 O30 |
| Date: | 2024–02–21 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:cesisp:0497&r=ino |
| By: | Hvide, Hans K. (U of Bergen and U of Aberdeen); Meling, Tom (Ohio State U) |
| Abstract: | How does the economy adapt to new technologies? While existing literature focuses on the response by established firms, we highlight the response by entrepreneurs. The context is a natural experiment: the staggered rollout of broadband internet in Norway. We find that the new technology had small effects on the survival, employment, and asset growth of established firms, but led to a sustained 25% increase in startup rates. Startup quality did not decline. Our findings support ideas from Schumpeter (1934) and Arrow (1962) that startups play an important role in adapting the economy to new technologies. |
| JEL: | D21 D24 G39 J23 L11 L25 |
| Date: | 2023–12 |
| URL: | http://d.repec.org/n?u=RePEc:ecl:ohidic:2023-19&r=ino |