nep-ipr New Economics Papers
on Intellectual Property Rights
Issue of 2011‒11‒14
thirteen papers chosen by
Roland Kirstein
Otto von Guericke University Magdeburg

  1. Patent Pools and the Direction of Innovation - Evidence from the 19th-century Sewing Machine Industry By Ryan L. Lampe; Petra Moser
  2. Incentives and innovation: evidence from CEO compensation contracts By Francis, Bill; Hasan, Iftekhar; Sharma, Zenu
  3. On specifying heterogeneity in knowledge production functions By Giovanni Guastella; Frank van Oort
  4. University-industry linkages and the role of the geographical proximity By Renato Garcia; Veneziano Araujo; Suelene Mascarini; Emerson Santos
  5. Knowledge Transfer in the Mirror: Reflections on the Determinants of Research Groups and Companies Collaborative Patterns within Andalusia's Regional Innovation System By Hugo Pinto
  6. Pricing under the Threat of Piracy: Flexibility and Platforms for Digital Goods By Dirk Bergemann; Thomas Eisenbach; Joan Feigenbaum; Scott Shenker
  7. The Effects of Innovation Partnership, Foreign Ownership and Enhanced Management Practices on the Use of Patents in Brazilian Manufacturing By Barros, Henrique M.
  8. Ownership, access and sequential investment By Mai, Maxim; Smirnov, Vladimir; Wait, Andrew
  9. Complementarities between organizational changes, R&D activity and technological cooperation for the French manufacturing firms By Hajjem, Olfa; Ayadi, Mohamed; Garrouste, Pierre
  10. Effects of licensing reform on firm innovation : evidence from India By Seker, Murat
  11. Successful Knowledge Transfer from Universities of Applied Sciences in Germany Analysis of Best Practice Examples based on empirical analysis and expert interviews By Angelika Jager
  12. How do distinct firm characteristics affect behavioural additionalities of public R&D subsidies? Empirical evidence from a binary regression analysis By Iris Wanzenböck; Thomas Scherngell; Fischer Manfred
  13. International Research Networks in Pharmaceuticals: Structure and Dynamics By Uwe Cantner; Bastian Rake

  1. By: Ryan L. Lampe; Petra Moser
    Abstract: Patent pools allow a group of firms to combine their patents as if they were a single firm. Theoretical models predict that pools encourage innovation in pool technologies, albeit at the cost of innovation in substitutes. Empirical evidence is scarce because modern pools are too recent to allow empirical analyses. This article examines data on patents and innovations by new firms for a historical pool in the sewing machine industry (1856-1877) to examine effects on innovation. Contrary to theoretical predictions, this analysis suggests that pools may discourage innovation in pool technologies and shift R&D towards technologically inferior substitutes.
    JEL: D4 K21 L10 L24 L4 N61 N81 O3
    Date: 2011–11
  2. By: Francis, Bill (Lally School of Management, Rensselaer Polytechnic Institute); Hasan, Iftekhar (Lally School of Management, Rensselaer Polytechnic Institute, and Bank of Finland); Sharma, Zenu (Long Island University)
    Abstract: We investigate the relationship between chief executive officer (CEO) compensation and innovation. In an empirical examination of compensation contracts of S&P 400, 500, and 600 firms we find that long-term incentives in the form of options are positively related to patents and citations to patents. In addition, convexity of options has a positive effect on innovation. We also find no relationship between pay for performance sensitivity (PPS) with patents and citations to patents while we did discover a positive relationship between these and golden parachutes. Finally, we show that subsequent to project failure managers’ compensation contracts are reset favourably. We provide support for the theory that compensation contracts that offer long-term commitment and protection from failure are more suitable for innovation.
    Keywords: CEO compensation; innovation and incentives
    JEL: D82 O31
    Date: 2011–10–03
  3. By: Giovanni Guastella; Frank van Oort
    Abstract: Within the Geography of Innovation literature, the Knowledge Production Function approach has become a reference framework to investigate the presence of localized knowledge spillovers and spatial econometric tools have been applied to study interregional spillovers. A linear specification for the KPF is assumed linking patents to R&D expenditure. This approach however suffers of different drawbacks. First patent applications are count data in nature. Patents per inhabitants may produce an unrealistic picture of the spatial distribution of innovative activities. Secondly, spatial heterogeneity is not usually observed, producing both omitted variables bias and spatial correlation in the error structure. Third, a positive R&D-patents linkage may arise as a spurious correlation if market size is not observed, causing R&D to be endogenous. This paper uses a regional cross section model to study the spatial distribution of high tech patents across 232 European regions in the period 2005/2006 to address these issues. Two main processes drive technological change in the model: research activities and knowledge generated outside firms and in a second moment embedded through either formal or informal acquisition. Among the different knowledge sources we particularly focus on the role of firms working in Knowledge Intensive Business Services and on that of universities. In developing the empirical model we take into account that a) patents are count data; b) the exclusion of market size will cause biased and inconsistent model parameters estimates; c) estimates of interregional spillovers may be biased by the omission of heterogeneity in the model specification. Empirical results indicate that, as expected, a count data distribution best fits the data, producing less spatially autocorrelated residuals. Regional innovative activity is explained by both investments in research and localization of KIBS, but only the first generates positive interregional externalities. Scientific universities do not directly affect the production of new knowledge. However, different knowledge production processes characterize regions with and without scientific universities, with R&D driving innovation in the sooner and KIBS in the latter. Finally, most of what are assumed to be interregional spillovers reveal to be, at a more careful inquiry, effect due to unaccounted spatial heterogeneity in regional innovation.
    Date: 2011–09
  4. By: Renato Garcia; Veneziano Araujo; Suelene Mascarini; Emerson Santos
    Abstract: The main aim of this paper is to exam the local dimension of the university and industry linkages. It is widely recognized in the literature that academic research is an important source of new knowledge to the innovative efforts of the firms. Many authors, such as Audrescht and Feldman (1996), Acs and Varga (2005), Breschi and Lissoni (2009), have shown that academic research is positively correlated with firms’ innovation at the geographical level. There are two reasons that are pointed out for this correlation. First, there are many ways in which knowledge generated by academic research can spill over to the firms, such as research papers, patents and informal contacts. Second, geographical proximity can encourage cooperation between academic researchers and the R&D staff in the firms. In this way, this paper tries to measure empirically the geographical dimension of the university-industry linkages in Brazil, in the same way to the first effort presented in ERSA 2010 (Garcia et al, 2010). To do that, it was used data from the Brazilian Research Council (CNPq), collected at the CNPq Directory of Research Groups of Brazilian universities. The data shows that in 2008 there were 22,797 research groups from 422 institutions. Among these research groups, 2,726 declared that they have interactions with more than 3,800 firms, which means 5,132 interactions between university and industry. Data were organized both in firm-level and in research group-level; allow the identification of the localization of the firm and of the research group. Among the 5,132 interactions between firms and research groups, it was possible to see that 43.6% of interactions occur inside the same city; 51.2% inside the same region; and 75.3% in the same state. These results show the importance of the local dimension of the interactions between academic research of the university and innovative efforts of the firms. In addition, it was done some empirical tests in order to identify the main factors that contribute to foster university-industry linkages.
    Date: 2011–09
  5. By: Hugo Pinto
    Abstract: Knowledge transfer is a crucial aspect for the new paradigm of science-industry cooperation. The new role of universities and the relevance of external knowledge to firm's competitiveness brought a huge attention to this process both in analytical and decision-making terms. Commonly, formal mechanisms as intellectual property rights licensing, research contracts and spinning-off are the focus of the policy interventions and studies but the role of informality is being underlined by several recent research results. This article explores the crucial factors that induce science and industry collaborations in Andalusia, a catching-up region in Spanish and European context. The study uses limited dependent and count data regression analysis based in a survey applied in parallel to research groups and firms. The estimated regressions create a mirror image between these two institutional spheres stressing aspects that are more relevant in each reality to stimulate the existence, number, diversity and informality of knowledge transfer. The results give relevant insights for policies to stimulate knowledge transfer in technology moderate intensive South European regions.
    Date: 2011–09
  6. By: Dirk Bergemann (Cowles Foundation, Yale University); Thomas Eisenbach (Research Group, Federal Reserve Bank of New York); Joan Feigenbaum (Dept. of Computer Science, Yale University); Scott Shenker (ICSI and Dept. of Electrical Engineering and Computer Science, University of California, Berkeley)
    Abstract: We consider the optimal design of flexible use in a digital-rights-management policy for a digital good subject to piracy. Consumers can acquire the digital good either as a licensed product or as an unlicensed copy. The ease of access to unlicensed copies is increasing in the flexibility accorded to licensed copies. The content provider has to trade off consumers' valuation of a licensed copy against the sales lost to piracy. We enrich the basic model by introducing a "secure platform" that is required to use the digital good. We show that the platform allows for the socially optimal provision of flexibility for the digital good but only if both are sold by an integrated firm.
    Keywords: Digital goods, Digital rights management, Platform, Flexibility, Piracy
    JEL: C79 D42 L15
    Date: 2011–11
  7. By: Barros, Henrique M.
    Date: 2011–10
  8. By: Mai, Maxim; Smirnov, Vladimir; Wait, Andrew
    Abstract: We extend the property-rights framework to allow for: a separation of the ownership rights of access and veto; and sequential investment. Parties investing first (ex ante) do so before contracting is possible. Parties that invest second (ex post) can contract on (at least some) of their investment costs. Along with this cost-sharing effect, the incentive to invest is affected by a strategic effect generated by sequential investment. Together these effects can overturn some of the predictions of the property-rights literature. For example, the most inclusive ownership structure might not be optimal, even if all investments are complementary.
    Keywords: holdup; sequential investment; firm organization; veto; access; property rights
    Date: 2011–10
  9. By: Hajjem, Olfa; Ayadi, Mohamed; Garrouste, Pierre
    Abstract: This article analyzes the determinants of the French companies’ innovation activity while highlighting the importance and the complementarities of the organizational and technological practices’impact. Our results suggest on one hand, that the product or process innovation is determined by the internal and external attributes of the company (size, demand pull and technological class). On the other hand, the complementarities tests between the technological (R&D activity and technological partnership) and organizational practices showed that these strategies are interconnected and that they have complementary effects which call for their simultaneous adoption. Accordingly, to be able to benefit completely from the positive effect of the partnership and the R&D efforts on innovation, they must be accompanied by certain organizational practices related to a good skills management and the implementation of an organizational architecture facilitating the knowledge creation and sharing.
    Keywords: innovation; complementarities; technological and organizational competencies
    JEL: L23 O32 C25
    Date: 2011–10
  10. By: Seker, Murat
    Abstract: The regulatory environment in a country can affect firm performance. This study investigates the impact of a particular regulation, namely license requirements for certain firm activities, on the innovation performance of Indian firms. First it presents a model of firm and industry evolution that explains the dynamics of multi-product firms. Then, using a firm level panel data set, it shows that removal of license requirements led to roughly 5 percentage points faster innovation rates where innovation is measured as introduction of new product varieties that had not existed in the market. The results are robust to inclusion of controls for the other policy reforms that occurred during the period of licensing reform.
    Keywords: E-Business,Labor Policies,Microfinance,Markets and Market Access,Knowledge for Development
    Date: 2011–11–01
  11. By: Angelika Jager
    Abstract: It is commonly accepted that universities are a source of new knowledge and an important part of innovation systems. Innovation and new knowledge are key drivers for regional economic growth and the economy of knowledge-based societies. Yet, regardless how prosperous universities’ research establishments prove to be, success in terms of economic effects and economically successful application strongly depends on how effectively the gathered knowledge and created innovation is transferred to society, the industry, and innovation networks. Therefore, the organization and governance of knowledge transfer has become an important strategic issue for universities. In times of performance related allocation of funds, this holds especially true for German universities of applied sciences, as they are very dependent on contract research and successful knowledge transfer as a source of funding for research activities. The interface of research and application of knowledge offers high potential – both for success and failure. Several models of governance and support exist. Governments and universities invest millions in transfer departments with a diversity of jobs and tasks. Some financially encourage research and knowledge transfer in general. Others are convinced that only very successful establishments should be supported. Support can be organized centrally or peripheral in the university departments, in private companies or private-public-partnerships. The proposed paper investigates models of organizing and supporting knowledge transfer focusing on German universities of applied sciences. By developing a composition of important indicators and applying empirical analysis on nationwide databases, seven best practice examples are identified. Further best practices analysis is accomplished by online research, site and region inspection and expert interviews with the universities’ representatives for knowledge transfer. The investigation proves that successful knowledge transfer depends on both internal and external factors. External factors often have strong influence and offer a high potential that needs to be realized, but can hardly be influenced. Analyzing the internal factors, it is underlined that no perfect way for organizing and managing knowledge transfer exists. But investigating the varying successful models, several conform features and interesting similarities can be identified. Keywords: Knowledge Transfer, German Universities of Applied Sciences, Best Practices Analysis
    Date: 2011–09
  12. By: Iris Wanzenböck; Thomas Scherngell; Fischer Manfred
    Abstract: In the recent past, interest of Science, Technology, and Innovation (STI) policies to influence the innovation behaviour of firms has been increased considerably. This gives rise to the notion of behavioural additionality, broadening traditional evaluation concepts of input and output additionality. Though there is empirical work measuring behavioural additionalities, we know little about what role distinct firm characteristics play for their occurrence. The objective is to estimate how distinct firm characteristics influence the realisation of behavioural additionalities. We use survey data on 155 firms, considering the behavioural additionalities stimulated by the Austrian R&D funding scheme in the field of intelligent transport systems in 2006. We focus on three different forms of behavioural additionality – project additionality, scale additionality and cooperation additionality – and employ binary regression models to address this question. Results indicate that R&D related firm characteristics significantly affect the realisation of behavioural additionality. Firms with a high level of R&D resources are less likely to substantiate behavioural additionalities, while small, young and technologically specialised firms more likely realise behavioural additionalities. From a policy perspective, this indicates that direct R&D promotion of firms with high R&D resources may be misallocated, while attention of public support should be shifted to smaller, technologically specialised firms with lower R&D experience.
    Date: 2011–09
  13. By: Uwe Cantner (School of Economics and Business Administration, Friedrich-Schiller-University Jena); Bastian Rake (Friedrich-Schiller-University Jena, Graduate College "The Economics of Innovative Change")
    Abstract: Knowledge production and scientific research have become increasingly more collaborative and international, particularly in pharmaceuticals. We analyze international research networks on the country level in different disease groups. Our empirical analysis is based on a unique dataset of scientific publications related to pharmaceutical research. Using social network analysis, we find that both the number of countries and their connectivity increase in almost all disease groups. The cores of the networks consist of high income OECD countries and remain rather stable over time. We use network regression techniques in order to analyze the dynamics of the networks. Our results indicate that an accumulative advantage based on preferential attachment and point connectivity as a proxy for multi-connectivity are positively related to changes in the countries' collaboration intensity.
    Keywords: International Cooperation, Pharmaceuticals, Research Networks, Network Dynamics, MRQAP
    JEL: R10 O31
    Date: 2011–11–08

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