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on Innovation |
| By: | Damián Tojeiro-Rivero (Employment observatory, Department of Economics, University Rovira i Virgili, Spain.); Rosina Moreno (AQR-IREA Research Group, Department of Econometrics, Statistics and Applied Economics, Universitat de Barcelona, Spain.) |
| Abstract: | Prior literature has argued that, although both captive knowledge sourcing (CKS) and non-captive knowledge sourcing (NCKS) are effective strategies for enhancing firm innovativeness, the former plays a more defined role in determining the likelihood of a firm achieving product innovations. However, we contend that the focus should not only be on the decision to innovate but, more importantly, on the profitability firms derive from such innovations. Given that knowledge acquired from external sources can provide firms with ideas that differ from their existing competencies, NCKS may be more advantageous, as the resulting innovations are likely to exhibit higher levels of novelty. Additionally, we examine the complementarity or substitutability between CKS and NCKS in driving innovation. Our findings for Spanish firms suggest that NCKS yields greater benefits than CKS. Moreover, adopting both strategies simultaneously does not result in higher benefits; instead, a minimum threshold of NCKS, above the median, is necessary to realize observable gains. This indicates that firms must demonstrate a substantial level of commitment to NCKS to effectively exploit its potential for generating returns from their most novel innovations. |
| Keywords: | Radical Innovation, Captive Knowledge Sourcing; Non-Captive Knowledge Sourcing; Spanish firms; Panel data; Complementarity/Substitutability. JEL classification: |
| Date: | 2025–01 |
| URL: | https://d.repec.org/n?u=RePEc:ira:wpaper:202508 |
| By: | Carolina Castaldi; Nicola Cortinovis; Milene S. Tessarin |
| Abstract: | Economic geography has offered several insights to understand the role of geography in shaping creativity, innovation and the way they are connected in space. Unfortunately, most attention has been devoted to analyzing cities and urban regions as the ideal context where creativity and innovation come together. Emerging counter-narratives are challenging this urban perspective and proposing that creativity-led innovation can also thrive in rural, often more peripheral, places. Theoretically, different arguments have been proposed, yet a clear conceptualization is lacking. We propose to link these arguments to two complementary ways in which creativity-led innovation might be at play, either as innovation in creative industries or as creative workers contributing to innovation across industries. Methodologically, most evidence comes from intriguing case studies and country-specific surveys, yet comparative quantitative evidence is missing or misleading. In this study, we propose to use trademarks as an alternative indicator to patents, better fitting creativity-led innovation. We illustrate the opportunities from our conceptualization and measurement with a comparative study of European regions. Using a database combining large scale occupational data with patent and trademark activity for the period 2011-2019, we analyze the relationship between creative occupations and innovation activity in rural regions. Our findings suggest that creativity-led innovation processes operate in rural regions but can only be uncovered when using trademarks as innovation indicators. These findings bear key policy implications, as they inform efforts towards formulating and monitoring the role of creativity and innovation for rural contexts. |
| Keywords: | creativity, innovation, regions, rural, urban, creative occupations, patents, trademarks |
| Date: | 2025–06 |
| URL: | https://d.repec.org/n?u=RePEc:egu:wpaper:2517 |
| By: | Lorena M. D’Agostino (University of Milano-Bicocca, Italy.); Rosina Moreno (AQR-IREA, Universitat de Barcelona, Spain.); Damián Tojeiro-Rivero (ESADE-University Ramon Llull, Spain.) |
| Abstract: | Taking the long-established evidence on knowledge spillovers that states that part of the new created knowledge spills over to other firms mostly located in the physical proximity, we aim at providing evidence on the role of green knowledge spillovers on firms’ innovation. We posit that in addition to internal factors, firm innovation is determined by external regional factors, among which we specifically focus on the spillovers generated by environmental EU-funded research at the regional level. The results indicate that the presence of partners engaged in EU-environmental projects in a region has a positive and significant effect on process innovation. |
| Keywords: | innovation; environment; EU-funded research; Framework Programme; region; firm. JEL classification: R11, O31, O44. |
| Date: | 2024–02 |
| URL: | https://d.repec.org/n?u=RePEc:ira:wpaper:202423 |
| By: | Francesco de Cunzo; Aurelio Patelli; Angelica Sbardella; Andrea Tacchella |
| Abstract: | This paper presents new evidence on how countries are innovating in response to the growing strategic importance of critical raw materials (CRMs). Using millions of patent abstracts from the PATSTAT database, we apply a large language model (LLM) to classify CRM-related inventions into four functional roles: use, refine, recycle, and remove. A fifth category, wrong, flags false positives and improves classification accuracy. This approach moves beyond simple patent counts by identifying the specific roles CRMs play in technological development, enabling a more nuanced view of innovation strategies. Our classification reveals a significant increase in CRM-related innovation over the past two decades, with notable variation across materials, functions, and countries. While use-related patents remain dominant, recent growth in recycle and remove functions points to a shifting emphasis on circularity. Geographically, China leads across all functions, while an upward trend in recycling activity is observed across several advanced economies. A panel data analysis reveals that innovation in refining, recycling, and removing CRMs is positively associated with innovation in their use, suggesting functional complementarities that can enable both technological progress and more sustainable material strategies. These findings have important implications for policy, highlighting the value of supporting functionally diverse CRM innovation, fostering international coordination, and adopting tools for real-time innovation monitoring. By combining text mining with AI-driven functional classification of patented inventions, this study offers a scalable method for tracking material-related innovation and informing policies aimed at sustainability and technological resilience. |
| Keywords: | Critical Raw Materials, Green and Digital Technologies, Large Language Models, Text Mining |
| Date: | 2025–06 |
| URL: | https://d.repec.org/n?u=RePEc:egu:wpaper:2516 |
| By: | Alessia Matano (Dipartimento di Economia e Diritto, Università di Roma “La Sapienza”, Italy. AQR-IREA, Universitat de Barcelona, Spain.); Paolo Naticchioni (Roma Tre University and IZA, Italy.) |
| Abstract: | This paper investigates the relationship between China’s import competition and the innovation strategies of domestic firms. Using firm level data from Italy spanning 2005-2010 and employing IV fixed effects estimation techniques, we find that the impact of China’s import competition on innovation varies depending on the type of goods imported (intermediate vs. final). Specifically, imports of final goods boost both product and process innovation, while imports of intermediate goods reduce both. Additionally, we extend the analysis to consider the role of unions in moderating these responses. We find that, in unionized firms, imports' impact on innovation is mitigated, specifically to protect workers' employment prospects. |
| Keywords: | China’s Import Competition; Final and Intermediate Goods; Product and Process Innovation; Unions; IV Fixed effects estimations. JEL classification: C33, L25, F14, F60, O30, J50. |
| Date: | 2025–01 |
| URL: | https://d.repec.org/n?u=RePEc:ira:wpaper:202502 |
| By: | Giuseppe Berlingieri; Maarten De Ridder; Danial Lashkari; Davide Rigo |
| Abstract: | In theories of creative destruction, product innovation is a key driver of aggregate growth. In this paper, we confront the predictions of these theories about product dynamics with empirical patterns in product-level data on the near-universe of French manufacturing firms. We find that the process of product innovation frequently exhibits bursts-episodes in which firms rapidly add multiple products to their portfolio. Such bursts lead to substantial shifts in revenue and explain the majority of the variance in firm-level growth. We introduce a model of firm product innovation compatible with such a process that also nests the canonical models of creative destruction. We show that innovation bursts alter the equilibrium composition of age, size, and innovation efficiency of firms, and further explain the concentration of production among superstar firms. Our model thus enables the joint study of the determinants of industry concentration and growth in a setting consistent with the empirical patterns of product dynamics. |
| Keywords: | productivity, endogenous growth, firms, innovation |
| Date: | 2025–04–29 |
| URL: | https://d.repec.org/n?u=RePEc:cep:cepdps:dp2095 |
| By: | Alicia García-Herrero; Michal Krystyanczuk; Robin Schindowski |
| Abstract: | In this paper we analyse the evolution of frontier innovation in quantum computing, semiconductors and artificial intelligence in China, US and EU |
| Date: | 2025–05 |
| URL: | https://d.repec.org/n?u=RePEc:bre:wpaper:node_10917 |
| By: | Anna Kusetogullari; Huseyin Kusetogullari; Martin Andersson; Tony Gorschek |
| Abstract: | Generative Artificial Intelligence (GenAI) and Large Language Models (LLMs) are recognized to have significant effects on industry and business dynamics, not least because of their impact on the preconditions for entrepreneurship. There is still a lack of knowledge of GenAI as a theme in entrepreneurship research. This paper presents a systematic literature review aimed at identifying and analyzing the evolving landscape of research on the effects of GenAI on entrepreneurship. We analyze 83 peer-reviewed articles obtained from leading academic databases: Web of Science and Scopus. Using natural language processing and unsupervised machine learning techniques with TF-IDF vectorization, Principal Component Analysis (PCA), and hierarchical clustering, five major thematic clusters are identified: (1) Digital Transformation and Behavioral Models, (2) GenAI-Enhanced Education and Learning Systems, (3) Sustainable Innovation and Strategic AI Impact, (4) Business Models and Market Trends, and (5) Data-Driven Technological Trends in Entrepreneurship. Based on the review, we discuss future research directions, gaps in the current literature, as well as ethical concerns raised in the literature. We highlight the need for more macro-level research on GenAI and LLMs as external enablers for entrepreneurship and for research on effective regulatory frameworks that facilitate business experimentation, innovation, and further technology development. |
| Date: | 2025–05 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2505.05523 |
| By: | Melanie Arntz; Michael J. Bohm; Georg Graetz; Terry Gregory; Florian Lehmer; Cacilia Lipowski |
| Abstract: | We investigate the diffusion of frontier technologies across German firms before and during the Covid-19 crisis. Our analysis tracks the nature, timing, and pandemic-related motivations behind technology investments, using tailor-made longitudinal survey data linked to administrative worker-firm records. Technologies adopted after the onset of the pandemic increasingly facilitated remote work and mitigated the negative employment effects of the crisis. Overall, however, investments in frontier technologies declined sharply, equivalent to a loss of 1.4 years of pre-pandemic investment activity. This procyclical adoption pattern is particularly striking since the pandemic created clear incentives to experiment with new technologies. Our findings highlight how short-run fluctuations may influence medium-run economic growth through their impact on technology diffusion. |
| Keywords: | frontier technology investments, firm-level survey data, cyclicality of technology adoption, Covid-19 crisis |
| Date: | 2025–04–16 |
| URL: | https://d.repec.org/n?u=RePEc:cep:cepdps:dp2093 |