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on Innovation |
| By: | Jan Malek; Jo Seldeslachts; Reinhilde Veugelers |
| Abstract: | This paper provides empirical evidence on which M&A deals spur innovation, and which stifle it. To do so, we consider not only the product market position of the acquiring firm, but also the position of both target and acquirer in the technology space. Focusing on the antidiabetic drugs market, our dataset tracks the lifecycle and patenting of all individual antidiabetic projects in development between 1997 and 2017. We show that most terminations of acquired projects occur while the projects are still far from product market entry. Nevertheless, a number of these early-stage acquisitions have a positive impact on innovation. These cases arise when incumbents acquire projects close to their own projects in product markets, but only if these projects are also close in technology markets. Those deals are associated with increased subsequent patenting, which is consistent with the exploitation of technological synergies. Our results point to the crucial role of combining both product market and technology market positions in assessing the innovation effects of pharmaceutical M&As. |
| Keywords: | M&As, innovation, R&D, pharmaceutics, technology, novelty, patents |
| JEL: | L41 L65 O31 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:diw:diwwpp:dp2128 |
| By: | Dahlke, Johannes; Schmidt, Sebastian; Lenz, David; Kinne, Jan; Dehghan, Robert; Abbasiharofteh, Milad; Schütz, Moritz; Kriesch, Lukas; Hottenrott, Hanna; Kanilmaz, Umut Nefta; Grashof, Nils; Hajikhani, Arash; Liu, Lingbo; Riccaboni, Massimo; Balland, Pierre-Alexandre; Wörter, Martin; Rammer, Christian |
| Abstract: | This paper introduces the WebAI paradigm as a promising approach for innovation studies, business analytics, and informed policymaking. By leveraging artificial intelligence to systematically analyze organizational web data, WebAI techniques can extract insights into organizational behavior, innovation activities, and inter-organizational networks. We identify five key properties of organizational web data (vastness, comprehensiveness, timeliness, liveliness, and relationality) that distinguish it from traditional innovation metrics, yet necessitate careful AI-based processing to extract scientific value. We propose methodological best practices for data collection, AI-driven text analysis, and hyperlink network modeling. Outlining several use cases, we demonstrate how WebAI can be applied in research on innovation at the micro-level, technology diffusion, sustainability transitions, regional development, institutions and innovation systems. By discussing current methodological and conceptual challenges, we offer several propositions to guide future research to better understand i) websites as representations of organizations, ii) the systemic nature of digital relations, and iii) how to integrate WebAI techniques with complementary data sources to capture interactions between technological, economic, societal, and ecological systems. |
| Keywords: | web data, artificial intelligence, innovation studies, research methods |
| JEL: | C81 C45 B4 O3 R1 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:zewdip:319890 |
| By: | Laurence Jacquet; Stéphane ROBIN (CY Cergy Paris Université, THEMA) |
| Abstract: | We re-examine the R&D - innovation - productivity nexus in 8 EU countries in the context of a possible EU-wide "super deduction" on R&D expenditures, using panels of industries with a long time dimension. We introduce dynamics in the innovation production function and extended production function models, taking the availability/unavailability of R&D tax credits (R&DTC) into account. Our benchmark estimates, obtained with panel ARDL models, yield positive longrun elasticities of innovation and productivity with respect to R&D intensity. R&D conducted under an R&DTC either reinforces an already-existing positive elasticity or makes it significantly positive if it was not before. Disentangling the respective effects of ’pure’ business R&D and of government-supported R&D reveals a wider diversity of situations, however. The effect of R&DTC is less often significant, sometimes superseded by other forms of public support to R&D. The main policy implication of these results is that a harmonized "super-deduction" on R&D at the EU level may be slightly premature. Complementary analyses suggest that targeting specific industries may make such a policy more effective and accurate. |
| Keywords: | Innovation, Productivity, Dynamic Panel Data Models, Public Support to R&D, European Science and Technology Policy |
| JEL: | O30 O38 H25 H54 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ema:worpap:2025-09 |
| By: | Yankova Dima; Abbasiharofteh Milad |
| Abstract: | European innovation policy combines place-based and spatially blind instruments that operate under distinct logics. Building synergies between them requires not only regulatory alignment, but a better understanding of how economic actors interact across policy levels. This study examines how companies’ participation in the European Framework Programmes (FP) influences their propensity to engage in regional R&D partnerships, supported by Cohesion Policy. We analyse longitudinal data on Valencian firms using inferential network analysis (i.e., Temporal Exponential Random Graph Models). Results indicate that FP beneficiaries are more active in regional tie formation than non-FP firms, especially when academic intermediaries are involved. Yet, they also tend to collaborate with each other, limiting opportunities for knowledge diffusion among firms that do not benefit from the international collaboration premium. |
| Keywords: | rR&D network, innovation policy, intermediaries, TERGM |
| Date: | 2025–07 |
| URL: | https://d.repec.org/n?u=RePEc:egu:wpaper:2520 |
| By: | Sara Amoroso; Randolph L. Bruno; Laura Magazzini |
| Abstract: | This paper identifies the dichotomous role (bright and dark sides) of Intellectual Property Rights (IPR) protection on labor productivity among highly innovative globalised firms. The role of appropriability conditions -such as IPR protection- as "Schumpeterian" incentive to innovation has been largely explored in the empirical literature. In this paper, we contribute to this strand explore the role of appropriability conditions on firm labor productivity under different configurations of R&D activities in highly globalized companies. In line with the literature, we show that labor, capital and R&D investments lead to productivity gains, and that the strength of the patent system the firm is embedded into is positively linked to the firm’s labor productivity too. We call this the 'bright side' of IPR. However, stronger intellectual property rights might have a detrimental effect on the R&D returns, which appear to be maximized around the median level of IPR protection. In other words, too much protection might actually reduce R&D returns, again in line with the "Schumpeterian prediction". Then, we call this the ‘dark side’ of IPR. To our knowledge, this is the first paper highlighting such dichotomy (bright and dark sides of IPR) on a purpose-built high-quality database of globalized firms, which tend to be the most innovative firms in the world. |
| Keywords: | panel data, appropriability, productivity |
| Date: | 2025–07–24 |
| URL: | https://d.repec.org/n?u=RePEc:ssa:lemwps:2025/26 |
| By: | Pelissier Pierre-Mathieu (European Commission - JRC); Grabowska Marcelina (European Commission - JRC); Bergamini Michela (European Commission - JRC) |
| Abstract: | This report presents a patent landscape analysis investigating the innovation trends within the industrial biotechnology (IB) sector from 2015 to 2020. The study's primary objective is to identify the geographical hotspots of innovation, the key players, and the role of different types of organizations in driving technological advancements in IB. By employing a methodology that includes data retrieval through the Technology Innovation Monitoring (TIM) tool and careful selection of keywords and Cooperative Patent Classification (CPC) terms, the report categorizes patents across five technological areas pertinent to IB. The geographical scope of the analysis encompasses major global players as well as the European Union, providing a broad view of the innovation landscape. The report also introduces an online dashboard to facilitate further analysis and exploration of the data. This study serves as a resource for policymakers, industry stakeholders, and researchers, offering insights that can inform strategic planning and decision-making in the evolving field of industrial biotechnology. |
| Date: | 2025–06 |
| URL: | https://d.repec.org/n?u=RePEc:ipt:iptwpa:jrc139154 |
| By: | Krieger, Bastian; Rainville, Anne Marie |
| Abstract: | Public procurement requirements and voluntary standards are increasingly used to foster environmental product innovations. However, quantitative evidence on their individual and joint effects is absent, and their conceptualization remains at an early stage. This paper makes two contributions. First, it introduces the distinction between rigid threshold and flexible benchmark uses of voluntary standards in public tenders, theorizing their opposing effects on environmental product innovations. Second, using data from 5, 127 firms in the 2021 German Innovation Survey and applying linear probability models, it provides the first quantitative analysis of their individual and joint effects across varying degrees of environmental significance. Results show that public procurement requirements and voluntary standards individually increase the probability of firms introducing environmental product innovations with high environmental significance. However, their interaction reveals a negative effect - discomplementarity - likely driven by rigid standard use, which offsets the effectiveness of procurement requirements. For environmental product innovations with low environmental significance, only voluntary standards exhibit a positive effect. These findings suggest that voluntary standards might limit the capacity of public procurement to foster more radical or disruptive environmental product innovations, while supporting more incremental innovations when used independently. |
| Keywords: | Public procurement, Voluntary standards, Environmental innovation |
| JEL: | O31 O38 Q55 Q58 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:zewdip:319896 |
| By: | Martin Neil Baily; David M. Byrne; Aidan T. Kane; Paul E. Soto |
| Abstract: | With the advent of generative AI (genAI), the potential scope of artificial intelligence has increased dramatically, but the future effect of genAI on productivity remains uncertain. The effect of the technology on the innovation process is a crucial open question. Some inventions, such as the light bulb, temporarily raise productivity growth as adoption spreads, but the effect fades when the market is saturated; that is, the level of output per hour is permanently higher but the growth rate is not. In contrast, two types of technologies stand out as having longer-lived effects on productivity growth. First, there are technologies known as general-purpose technologies (GPTs). GPTs (1) are widely adopted, (2) spur abundant knock-on innovations (new goods and services, process efficiencies, and business reorganization), and (3) show continual improvement, refreshing this innovation cycle; the electric dynamo is an example. Second, there are inventions of methods of invention (IMIs). IMIs increase the efficiency of the research and development process via improvements to observation, analysis, communication, or organization; the compound microscope is an example. We show that GenAI has the characteristics of both a GPT and an IMI—an encouraging sign that genAI will raise the level of productivity. Even so, genAI’s contribution to productivity growth will depend on the speed with which that level is attained and, historically, the process for integrating revolutionary technologies into the economy is a protracted one. |
| Keywords: | Artificial Intelligence; Machine Learning; Productivity; Technological Growth |
| JEL: | C45 O31 O33 O40 |
| Date: | 2025–07–17 |
| URL: | https://d.repec.org/n?u=RePEc:fip:fedgfe:2025-53 |
| By: | Yoshiki Ando |
| Abstract: | Motivated by the substantial growth and upfront investments of venture capital (VC) backed firms observed in administrative US Census data, this paper develops a firm dynamics model over the life cycle. In the model, startups choose the source of financing from VC, Angel investors, or banks, depending on their growth potential, and invest in innovation. The calibrated model explains the life-cycle dynamics of firms with different sources of financing and implies that venture capitalists’ advice accounts for around 22% of the growth of VC-backed firms. A counterfactual economy without VC financing would lose aggregate consumption by around 0.4%. |
| Keywords: | Venture capital, firm dynamics, innovation, upfront investment, defaultable debt, endogenous sorting |
| JEL: | D22 D25 E22 G24 G30 O32 |
| Date: | 2025–06 |
| URL: | https://d.repec.org/n?u=RePEc:cen:wpaper:25-38 |
| By: | Reher, Leonie; Thomä, Jörg; Bizer, Kilian |
| Abstract: | This paper advances the empirical measurement of the Doing-Using-Interacting (DUI) mode of innovation, based on the conceptual framework of Alhusen et al. (2021) and its survey-based operationalization of Reher et al. (2024b). Using data from German SMEs, we examine whether the three-dimensional structure of DUI learning theorized in the literature can be mirrored empirically. Exploratory factor analysis (EFA) confirms this latent structure by identifying three main learning processes: (1) DUI internal (learning-by-doing and internal interaction), (2) DUI user-driven (learning-by-using), and (3) DUI external (learning-by-externalinteraction). However, some factor loadings are problematic, suggesting that not all of the original indicators are suitable for measuring the DUI mode of innovation. Secondly, building on the latent structure identified through EFA, short scales of various lengths are developed using Ant Colony Optimization (ACO) to address practical constraints in innovation surveys. This provides a starting point for the further development of DUI innovation indicators that are particularly suited to less RD-intensive innovation contexts, such as small firms, low-tech sectors, and lagging regions, as well as corresponding short scales. |
| Abstract: | Diese Studie verbessert die empirische Messung des Doing-Using-Interacting (DUI)-Innovationsmodus auf Grundlage des konzeptionellen Rahmens von Alhusen et al. (2021) und der umfragebasierten Operationalisierung von Reher et al. (2024b). Anhand von Daten deutscher KMU wird untersucht, ob sich die in der Literatur theoretisch hergeleitete dreidimensionale Struktur des DUI-Lernens auch empirisch abbilden lässt. Eine explorative Faktorenanalyse (EFA) bestätigt diese latente Struktur, indem sie drei zentrale Lernprozesse identifiziert: 1. DUI internal: beschreibt die innerbetriebliche Bedeutung von Schulungen, Fehlerkultur, (informellen) Wissensaustauschs oder des Personalmanagements im Innovationsprozess. 2. DUI user-driven: bezieht sich auf die Einbindung von Kundenwissen in Innovationen durch Kooperation, Kundenkontakt oder Produktspezifikationen. 3. DUI external: umfasst innovationsbezogenes Lernen durch den Austausch mit Zulieferern, Wettbewerbern, Akteuren innerhalb und außerhalb des eigenen Sektors, Beratungsunternehmen und öffentlichen Institutionen sowie die Bedeutung von Netzwerken und Branchenverbänden. Einige Faktorladungen sind jedoch problematisch, was darauf hindeutet, dass nicht alle ursprünglichen Indikatoren zur Messung des DUI-Innovationsmodus geeignet sind. Darüber hinaus werden - basierend auf der durch die EFA identifizierten latenten Struktur - mittels Ant Colony Optimization (ACO) Kurzskalen unterschiedlicher Länge entwickelt, um praktischen Einschränkungen in Innovationsumfragen zu begegnen. Dies stellt einen Ausgangspunkt für die Weiterentwicklung von DUI-Innovationsindikatoren dar, die insbesondere für weniger F&E-intensive Innovationskontexte geeignet sind - etwa in kleinen Unternehmen, in Low-Tech-Sektoren oder in strukturschwachen Regionen - sowie für entsprechende Kurzskalen. |
| Keywords: | innovation measurement, innovation indicator, modes of innovation, SMEs |
| JEL: | O30 O31 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:ifhwps:321860 |
| By: | Grassano Nicola; M'barek Robert (European Commission - JRC) |
| Abstract: | Pharmaceuticals and Medical Technologies (PMTs) patents represent 12.6% of the total IP5 patent families filed worldwide in the period 2010-2020. The US are the biggest player in the field, filing 25.1% of all PMTs IP5 patent families 2010-2020. The EU is second with 17.2%, followed by Japan (8.5%), South Korea (4.4%) and China (3.2%). Among EU Member States, Germany has by far the highest number of PMTs IP5 patent families filed in the observed period, accounting for 36% of all the patents filed by the EU 2010-2020. |
| Date: | 2025–06 |
| URL: | https://d.repec.org/n?u=RePEc:ipt:iptwpa:jrc142609 |
| By: | Davide Consoli; Francesco Lelli; FSandro Montresor; Francois Perruchas; Francesco Rentocchini |
| Abstract: | Given the crucial role of Venture Capital (VC) in financing the green transition, and its uneven geographical distribution, we examine how the proximity of VC investors to green start-ups influences the success of their deals. Considering the intrinsically higher risk profile of start-ups in the greensector, we maintain that their spatial proximity to VC investors will have a larger effect here than in other sectors. Furthermore, considering recent advancements in the digitalization of VC, we also argue that a digital kind of proximity between investors and green investees in accessing digital technologies (platforms) could matter for that, by also reducing the binding effect of spatial proximity on the success of VC green deals. Using data from Dealroom, and combining them with the SpeedTest open dataset by Ookla, we test for these arguments with respect to a large sample of about 12, 000 green start-ups, originally identified by combining multiple methods (text scraping, topic modelling, and machine learning), located in 27 EU (+3) countries from 2000 to 2020. Econometric estimates at the level of realised vs. potential VC green deals confirm that spatial proximity is more relevant for green than for non-green start-ups. The new quasi- dyadic indicator of digital proximity that we propose does also significantly and positively correlates with the actual occurrence of green deals, and negatively moderate the effect of spatial proximity, supporting our argument of a substitution relationship between the two. Policy implications are drawn accordingly. |
| Date: | 2025–07 |
| URL: | https://d.repec.org/n?u=RePEc:egu:wpaper:2521 |
| By: | Gibson, Gráinne; Lenihan, Helena; Perez-Alaniz, Mauricio; Rammer, Christian |
| Abstract: | Climate change can cause major challenges for Small and Medium-sized Enterprises (SMEs). Responding and adapting to such challenges is crucial, as SMEs are vital for driving economic growth and employment in most countries. Investing in R&D is a key way in which SMEs can build the capacities required for responding and adapting to climate change-related challenges. However, the extent to which such challenges affect SMEs' R&D activities remains a critical gap in existing knowledge. Using detailed firm-level data on 1, 730 SMEs in Ireland, our study is the first to explore this issue. We achieve this, using information on SMEs' climate changerelated challenges, from a new module of the 2018-2020 wave of the Irish part of the Community Innovation Survey (CIS), the Innovation in Irish Enterprises Survey (IIE). By combining a matching approach with probit regression analysis, we find that climate changerelated challenges can increase the probability of SMEs investing in R&D. Such challenges can also increase the probability of SMEs engaging in continuous, as opposed to occasional R&D. Based on our findings, the above impacts are mainly driven by climate change, resulting in higher costs/input prices. Our study highlights the importance of R&D for SMEs to adapt and respond to climate change and provides critical insights for SMEs and policymakers alike. |
| Keywords: | Climate change-related challenges, small and medium sized enterprises, research and development, climate change adaptation, climate change mitigation |
| JEL: | Q54 Q55 O32 O33 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:zewdip:319901 |
| By: | Lasarte Lopez Jesus (European Commission - JRC); Gonzalez Hermoso Hugo; M'barek Robert (European Commission - JRC) |
| Abstract: | Life sciences-related sectors play a vital role in addressing EU challenges, driving innovation in key areas like healthcare, biotechnology, and agriculture to enhance competitiveness, sustainability, and strategic autonomy. This policy brief examines the socioeconomic relevance, structure, and trends of Life Sciences sectors using three key economic indicators: employment, value added and R&D business expenditure. The analysis shows that Life Sciences sectors are crucial to the EU economy, accounting for 9.4% of GDP and employing 29 million people. These sectors have also driven economic growth in recent years, with increasing GDP contributions and job creation in productive sectors, and offer high growth potential and innovation capacity to address EU challenges. |
| Date: | 2025–06 |
| URL: | https://d.repec.org/n?u=RePEc:ipt:iptwpa:jrc142396 |
| By: | Albora Giambattista (European Commission - JRC); Diodato Dario (European Commission - JRC); Napolitano Lorenzo (European Commission - JRC) |
| Abstract: | "The economic complexity framework is inspired by evolutionary and institutional literature. It interprets the economy as an interconnected ecosystem by shifting the focus from aggregate quantities like GDP that reveal how much countries or regions produce to a more granular view revealing what they actually do (e.g. in which products they export or the in which technologies they innovate). This approach leverages high-quality trade and patent data as well as advanced techniques from machine learning, network science, and complex dynamical systems to provide a nuanced understanding of a country's economic sophistication and capabilities.These factsheets aim to showcase the potential of the economic complexity framework by providing quantitative insights into policy-relevant issues and to illustrate the kind of insights it can offer policymakers regarding the industrial and innovation landscape of Europe. Each factsheet focuses one EU member state and follows a fixed structure comprising six sections, each consisting of a chart and some accompanying text to aid interpretation. Overall, the factsheets aim to provide a comprehensive overview of the analytical potential of the economic complexity framework, demonstrating its value in informing policy decisions and contributing to economic development. They highlight the importance of understanding the intricate dynamics of industrial and innovation systems to drive strategic economic growth in the EU." |
| Date: | 2025–06 |
| URL: | https://d.repec.org/n?u=RePEc:ipt:iptwpa:jrc140945 |
| By: | Krieger, Bastian; Füner, Lena; Prüfer, Malte |
| Abstract: | Public procurement offers sizable market opportunities for young firms. We investigate the firm- and founder-level characteristics determining young firms' decision to apply for public tenders, as well as the procurers' selection of an awardee. We distinguish between observable and unobservable characteristics as well as price-based tenders (tenders awarded solely on the price criterion) and criteria-based tenders (tenders awarded based on additional criteria next to the price). Using representative survey data for 4, 314 young firms in Germany, we estimate a multinomial two-stage selection model. In the first stage, firms decide to "not apply, " to "apply for price-based tenders, " or to "apply for criteria-based tenders." In the second stage, procurers choose the awardee among the applicants of each tender type. We find the firm and founder determinants largely differ with regard to the first and second stage, as well as price- and criteria-based tenders. |
| Keywords: | Public procurement, Young firms |
| JEL: | H57 L26 O38 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:zewdip:319891 |