nep-ipr New Economics Papers
on Intellectual Property Rights
Issue of 2008‒03‒08
ten papers chosen by
Roland Kirstein
Otto von Guericke University Magdeburg

  1. Gains and Pains from Contract Research: A Transaction and Firm-level Perspective By Grimpe, Christoph; Kaiser, Ulrich
  2. Financial Constraints: Routine Versus Cutting Edge R&D Investment By Binz, Hanna L.; Czarnitzki, Dirk
  3. Durable Goods, Innovation and Network Externalities By Cerquera Dussán, Daniel
  4. The governance of localized knowledge externalities By Antonelli Cristiano; Pierpaolo Patrucco; Quatraro Francesco
  5. Crafting Firm Competencies to Improve Innovative Performance. By Lokshin, Boris; Gils, Anita van; Bauer, Eva
  7. Motivations, Capability Handicaps and Firm Responses in the Early Phase of Internationalization from Emerging Economies: A study in the Indian Pharmaceutical Industry By Dixit M.R.;
  8. The role of government in agricultural innovation: Lessons from Bolivia By Hartwich, Frank; Jansen, Heinz-Gerhard
  9. The Calm Before the Storm? - Anticipating the Arrival of General Purpose Technologies By Daniel Schiess; Roger Wehrli
  10. The Voyage of the Beagle in Innovation Systems Land.Explorations on Sectors, Innovation, Heterogeneity and Selection By Srholec, Martin; Verspagen, Bart

  1. By: Grimpe, Christoph; Kaiser, Ulrich
    Abstract: Determining the research and development (R&D) boundaries of the firm as the choice between internal, collaborative and external technology acquisition has since long been a major challenge for firms to secure a continuous stream of innovative products or processes. While research on R&D cooperation or strategic alliances is abundant, little is known about the outsourcing of R&D activities to contract research organizations and its implications for innovation performance. This paper investigates the driving forces of external technology sourcing through contract research based on arguments from transaction cost theory and the resource-based view of the firm. Using a large and comprehensive data set of innovating firms from Germany our findings suggest that technological uncertainty, contractual experience and openness to external knowledge sources motivate the choice for engaging in contract research activities. Moreover, we show that internal and external R&D sourcing are complements: the marginal contribution of internal (external) R&D is the larger the more firms spend on external (internal) R&D.
    Keywords: Contract research, innovation, transaction cost theory, firm capabilities
    JEL: C24 O32
    Date: 2008
  2. By: Binz, Hanna L.; Czarnitzki, Dirk
    Abstract: We analyze financial constraints for R&D, where we account for heterogeneity among investments which has been neglected in previous literature. According to economic theory, investments should be distinguished by their degree of uncertainty, e.g. routine R&D versus cutting-edge R&D. Financial constraints should be more binding for cutting-edge R&D than for routine R&D. Using panel data we find that R&D spending of firms devoting a significant fraction of R&D to cutting-edge projects is curtailed by credit constraints while routine R&D investments are not. This has important policy implications with respect to the distribution of R&D subsidies in the economy.
    Keywords: R&D, Financial Constraints, Panel Data
    JEL: O31 O32
    Date: 2008
  3. By: Cerquera Dussán, Daniel
    Abstract: We develop a model of R&D competition between an incumbent and a potential entrant with network externalities and durable goods. We show that the threat of entry eliminates the commitment problem that an incumbent may face in its R&D decision due to the goods’ durability. Moreover, a potential entrant over-invests in R&D and an established incumbent might exhibit higher, equal or lower R&D investments in comparison with the social optimum. In our model, the incumbent’s commitment problem and the efficiency of its R&D level are determined by the extent of the network externalities.
    Keywords: Network externalities, Durable Goods, Innovation, Imperfect Competition
    JEL: D21 D85 L13 O31
    Date: 2007
  4. By: Antonelli Cristiano (University of Turin); Pierpaolo Patrucco (University of Turin); Quatraro Francesco (University of Turin)
    Abstract: This paper articulates the hypothesis that there is an optimal size of knowledge pools. Too little a density of innovation activities reduces the accessibility of external knowledge. Too large a density enhances congestion and reduces appropriability. Firms can benefit from actual increasing returns stemming from the indivisibility, replicability and non-exhaustibility of knowledge only when the size of innovation networks is comprised between the two extremes. The empirical evidence confirms that the output elasticity of knowledge, included in a typical Griliches production function, is itself a quadratic function of the size of innovation networks. Knowledge externalities do trigger increasing returns that are external to each firm, only within a well defined interval. Knowledge externalities are a property of the system into which firms are embedded. As such they are endogenous to the system and likely to exhibit specific properties related to the changing characteristics of the system itself. The quality of knowledge governance mechanisms in place plays a key role in assessing the actual size of the net positive effects of knowledge externalities.
    Date: 2008–01
  5. By: Lokshin, Boris (UNU-MERIT and Maastricht University); Gils, Anita van (Maastricht University); Bauer, Eva (BBDO Consulting)
    Abstract: Recent interdisciplinary research suggests that customer and technological competencies have a direct, unconditional effect on firms' innovative performance. This study extends this stream of literature by considering the effect of organizational competencies. Results from a survey-research executed in the fast moving consumer goods industry suggest that firms that craft organizational competencies - such as improving team cohesiveness and providing slack time to foster creativity - do not directly improve their innovative performance. However, those firms that successfully combine customer, technological and organizational competencies will create more innovations that are new to the market.
    Keywords: Innovation, Research and Development, Consumer Goods, Product Innovation, Production Management, Personnel Management, Capability Building
    JEL: O31 O32 L68 M11 M12
    Date: 2008
  6. By: Henrekson, Magnus (Dept. of Economics, Stockholm School of Economics); Waldenström, Daniel (Research Institute of Industrial Economics (IFN))
    Abstract: Billions of euros are allocated every year to university research. Increased specialisation and international integration of research and researchers has sharply raised the need for comparisons of performance across fields, institutions and individual researchers. However, there is still no consensus regarding how such rankings should be conducted and what output measures are appropriate to use. We rank all full professors in a particular discipline, economics, in one European nation using seven established, and some of them commonly used, measures of research performance. Our examination shows both that the rank order can vary greatly across measures, and that depending on the measure used the distribution of total research out-put is valued very differently. The renowned KMS measure in economics stands out among the measures analysed here. It exhibits the weakest correlation with the others used in our study. We conclude by giving advice to funding councils and others assessing research quality on how to think about the use of both quantitative and qualitative measures of performance.
    Keywords: Impact of research; Ranking; Research productivity; Bibliometrics; Impact Factor
    JEL: A11 A14 B41
    Date: 2008–03–04
  7. By: Dixit M.R.;
    Abstract: This paper identifies and analyses the motivations, capability handicaps and responses of a sample of Indian pharmaceutical firms in the early phase of internationalization. It distinguishes between the experiences of two types of internationalisers –initial internationalisers and later internationalisers - in the industry. It argues that the initial internationalisers face several discontinuities vis-a-vis the experience of meeting the needs of domestic market. They need to cultivate new capabilities by leveraging on whatever is available within the firms and the external environment. Their capability to cultivate depends on their internal processes to absorb the new experiences. The later internationalisers do not experience these handicaps. They can benefit from the industry experience and congregate capabilities to move faster. Their capability to congregate depends on the initial endowments of the founders. Based on its findings, the paper outlines scope for further research in capability building for internationalization in the context of emerging economies.
    Date: 2008–02–28
  8. By: Hartwich, Frank; Jansen, Heinz-Gerhard
    Abstract: "Many governments in developing countries attempt to foster agricultural development and innovation by setting up funding facilities, extension programs, and research centers and by subsidizing private-sector and farm activities through fiscal measures. However, when trying to manage complex innovation processes involving many and different actors, governments sometimes find it difficult to design effective interventions and therefore end up supporting and managing only the public research and extension organizations that directly depend upon them. With the aid of various donors, Bolivia introduced a scheme in 2001—the Bolivian Agricultural Technology System (SIBTA)—by which government support to agricultural research and extension was partly delegated to regional semiautonomous foundations. This brief presents the results of a study on the role of the Bolivian government in guiding and managing SIBTA. The study found that despite a number of weaknesses related to the design of the system and the government's limited commitment, the regional foundations have been able to effectively identify the demands of small farmers, set priorities, and provide transparency and accountability with regard to funding and decisionmaking. It suggests that instead of micromanaging such foundations, the government should focus on the big picture and conduct policy analysis and strategic planning to identify opportunities for agricultural innovation and set up incentive mechanisms and information networks that support the many actors involved in innovation processes." from text
    Keywords: Agricultural innovations, Private sector, Technological innovations, Agricultural research, Agricultural development, stakeholders, Farmers, Producer organizations, Extension,
    Date: 2007
  9. By: Daniel Schiess (CER-ETH Center of Economic Research at ETH Zurich, Switzerland); Roger Wehrli (CER-ETH Center of Economic Research at ETH Zurich, Switzerland)
    Abstract: This paper presents a Schumpeterian quality-ladder model incorporating the impact of new General Purpose Technologies (GPTs). GPTs are breakthrough technologies with a wide range of applications, opening up new innovational complementarities. In contrast to most existing models which focus on the events after the arrival of a new GPT, the model developed in this paper focuses on the events before the arrival if R&D firms know the point of time and the technological impact of this drastic innovation. In this framework we can show, that the economy goes through three main phases: First, the economy is in its old steady state. Second, there are transitional dynamics and finally, the economy is in a new steady state with higher growth rates. The transitional dynamics are characterized by oscillating cycles. Shortly before the arrival of a new GPT, there is an increase in R&D activities and growth going even beyond the old steady state levels and immediately before the arrival of the new GPT, there is a large slump in R&D activities using the old GPT.
    Keywords: Schumpeterian growth, research and development, general purpose technologies
    JEL: O11 O33 O41
    Date: 2008–02
  10. By: Srholec, Martin (Centre for Technology, Innovation and Culture (TIK) and Centre for Advanced Study (CAS) at the Norwegian Academy of Science and Letters); Verspagen, Bart (Centre for Technology, Innovation and Culture (TIK) and Eindhoven Centre for Innovation Studies (ECIS))
    Abstract: The aim of the paper is to assess heterogeneity of the innovation process. Using exploratory factor analysis on micro data from the third Community Innovation Survey in 13 countries, we identify four factors that that can be interpreted as research, user, external and production ingredients of innovation. All too often it is assumed that the differences between the rates at which these factors are found in firms' innovation strategies can be accounted for by differences across sectors and/or countries. To put this proposition under scrutiny, we partition variability of the innovation process into components identified by the different levels. The analysis shows that sectors and countries matter to a certain extent, but far most of the variance is given by heterogeneity among firms within either sectors or countries. On the other hand, a grouping of firms produced by cluster analysis ac-counts for a much higher share of the variance, which implies that the most relevant contextual fac-tors cut across the established boundaries between sectors and countries. We discuss the implica-tions of these findings for the literature on national and sectoral systems of innovation, and for the way in which evolutionary economics has analyzed the role of selection.
    Keywords: Technological Change, Innovation, Heterogenity, Variance Components Analysis, Factor Analysis, Systems of Innovation
    JEL: O31 O38 C40 C49
    Date: 2008

This nep-ipr issue is ©2008 by Roland Kirstein. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.