nep-knm New Economics Papers
on Knowledge Management and Knowledge Economy
Issue of 2008‒07‒30
twenty-two papers chosen by
Laura Stefanescu
European Research Centre of Managerial Studies in Business Administration

  1. Technological-Knowledge Dynamics in Lab-Equipment Models of Quality Ladders By Pedro Mazeda Gil; Óscar Afonso
  2. The Variable Time: crucial to understanding Knowledge Economics By Khumalo, Bhekuzulu
  3. Successful Patterns of Scientific Knowledge Sourcing: Mix and Match By Aschhoff, Birgit; Sofka, Wolfgang
  4. More open than open innovation? Rethinking the concept of openness in innovation studies. By Julien Pénin
  5. Going Global: The Challenges for Knowledge-based Economies By Squicciarini, Mariagrazia; Loikkanen, Torsti
  6. Impact Analysis of Regional Knowledge Subsidy: a CGE Approach By Giorgio Garau; Patrizio Lecca
  7. Drivers and Effects of Internationalising Innovation by SMEs By Rammer, Christian; Schmiele, Anja
  8. Reinforcing the patent system? Effects of patent fences and knowledge diffusion on the development of new industries, technical progress and social welfare By Murat YILDIZOGLU (GREThA UMR CNRS 5113)
  9. How Does Industry Specialization Affect the Efficiency of Regional Innovation Systems? By Michael Fritsch; Viktor Slavtchev
  10. On the Interplay between Strategy and Management Control Systems By Aernoudts, R.H.R.M.; De Heer, M.A.
  11. R&D Partnerships and Capability of Innovation of Small and Medium-Sized Firms in Zhongguancun, Beijing: The Power of Proximity By Nobuaki Hamaguchi; Yoshihiro Kameyama
  12. Learning from physics education research: Lessons for economics education By Simkins, Scott P.; Maier, Mark H.
  13. The role of competencies and interests in developing complex IT-artefacts: the case of a metering system. By Diego Ponte; Alessandro Rossi; Marco Zamarian
  15. Institutions, Innovation and Economic Growth By Tebaldi, Edinaldo; Elmslie, Bruce
  16. R&D, firm size, and product innovation dynamics. By Marco Corsino; Giuseppe Espa; Rocco Micciolo
  17. R&D, Firm Size, and Product Innovation Dynamics. By Marco Corsino; Giuseppe Espa; Rocco Micciolo
  18. Legacy Effects in Radical Innovation: A Study of European Internet Banking By Erik H. Schlie; Jaideep C. Prabhu; Rajesh K. Chandy
  19. The Greatest Architects of the Twentieth Century: Goals, Methods, and Life Cycles By David Galenson
  20. Il research project management By Christian Corsi
  21. Organizational Redesign, Information Technologies and Workplace Productivity By Benoit Dostie; Rajshri Jayaraman
  22. Openness to Trade and Structural Changes in the Sources of Economic Growth and Labour Demand in Turkey By Guncavdi, Oner; Kucukcifci, Suat

  1. By: Pedro Mazeda Gil (Faculdade de Economia, Universidade do Porto and CEMPRE, Rua Dr Roberto Frias, 4200-464, Porto, Portugal.); Óscar Afonso (Faculdade de Economia, Universidade do Porto and CEMPRE, Rua Dr Roberto Frias, 4200-464, Porto, Portugal.)
    Abstract: The Perpetual Inventory Model (PIM) assumes that, in each period, an arbitrary constant fraction of technological-knowledge stock is lost. By connecting the aggregate resource constraint with firms’ market value, we give a theoretical background to the PIM by showing that the technological-knowledge accumulation follows a dynamic process with an endogenous depreciation rate, which remains stable in steady state. Moreover, we relate different concepts of technological-knowledge used in the literature.
    Keywords: endogenous growth, endogenous depreciation rate, Perpetual Inventory Model, technological-knowledge dynamics
    JEL: O30 O41
    Date: 2008–07
  2. By: Khumalo, Bhekuzulu
    Abstract: Though time is a concept mostly associated with physics and philosophy, the concept of time is important to be understood in the discipline of economics. This paper attempts to highlight the importance of time in economics, particularly in knowledge economics, the discipline of economics that looks into the primary commodity, knowledge. The paper attempts to take into account the non linear time concepts that have been very important since Einstein published his papers back in 1905. Without understanding time in a comprehensive manner, it is not possible to have a firm grip on the process of the economic progression of all societies. A theory must hold true in all societies, the characteristics of time must be the same in all societies, as an atom must behave the same in similar laboratory conditions in all societies. This paper will illustrate that without understanding the variable time, it is not possible to fully comprehend knowledge economics.
    Keywords: knowledge economics; knowl; time dilation; relativity; time reversal; progression; marginal gain in knowledge; average gain in knowledge;
    JEL: O10 A20 B00 C60 O30 A12 C02 D80 B41
    Date: 2008–07–19
  3. By: Aschhoff, Birgit; Sofka, Wolfgang
    Abstract: Valuable knowledge emerges increasingly outside of firm boundaries, in particular in public research institutions and universities. The question is how firms organize their interactions with universities effectively to acquire knowledge and apply it successfully. Literature has so far largely ignored that firms may combine different types of interactions with universities for optimizing their collaboration strategies. We argue conceptually that firms need diverse (broad) and highly developed (deep) combinations of various interactions with universities to maximize returns from these collaborations. Our empirical investigation rests upon a survey of more than 800 firms in Germany. We find that both the diversity and intensity of collaborative engagements with universities propel innovation success. However, broadening the spectrum of interactions is more beneficial with regard to innovation success. Applying latent class cluster analysis we identify four distinct patterns of interaction. Our findings show that formal forms of interaction (joint/contract) research provide the best balance between joint knowledge development and value capture.
    Keywords: Technology transfer, industry-science links, open innovation, university knowledge
    JEL: C30 D83 O32
    Date: 2008
  4. By: Julien Pénin
    Abstract: This paper re-examines the concept of open innovation developed in organization sciences (Chesbrough, 2003a). We claim that this paradigm, which insists on the distributive nature of innovation among a wide range of heterogeneous actors, does not put enough emphasis on the condition of access to knowledge. Yet, the open dimension of knowledge is a very important feature to sustain a collective mode of innovation. We propose therefore a stronger definition of open innovation, which is based on three constitutive characteristics: (i) Firms voluntarily release knowledge; (ii) Knowledge is open, i.e. is available to all interested parties without discrimination; (iii) dynamic interactions take place among the stakeholders to enrich the open knowledge base. Examples that fit our definition of open innovation are open science, user centered innovation (von Hippel, 2005), free-libre open source software, collective invention (Allen, 1983), etc. We conclude with a discussion on the role of IPR to secure open innovation.
    Keywords: open source, free software, intellectual property rights (IPR), open innovation, collective invention.
    Date: 2008
  5. By: Squicciarini, Mariagrazia; Loikkanen, Torsti
    Abstract: The present volume aims to provide a comprehensive and systemic overview of the challenges that going global poses to knowledge based economies. Its focus is four-fold. 1) Firstly, it investigates why companies, especially high-tech firms, go global, i.e. which are the drivers that push companies to locate – R&D facilities in particular – elsewhere than in the home country. The analysis of the competitive advantages that enterprises seek in the host countries also includes the new techno-economic geography that emerges. Attention is devoted to the time frame of these phenomena and to features such as the development stage of the home and host country, the characteristics of both firms and industries, and the Product Life Cycle of the latter. 2) Secondly, it analyses the impact that the various corporate relocation phenomena might have on intellectual capital, innovative output and the labour market, and growth and development. (Re)locating in fact impacts on knowledge creation, exploitation – including the use of IPRs – , absorption, circulation and spillovers. In turn, these play a fundamental role in shaping the productivity, competitiveness, and ultimately growth and development of both enterprises and countries. 3) Thirdly, it addresses the questions of if and to what extent the current and prospective global dynamics call for new types of governance. Such a need arises if different policy domains have to converge towards common strategic welfare enhancing objectives. Attention is also devoted to the various policies put in place by small open economies that ‘go global’, such as Finland. 4) Fourthly, it addresses the sustainability aspects of going global by investigating how to better share the social, economical and ecological benefits and responsibilities arising from globalisation, technological change, and innovation. It analyses the impact that globalisation and the knowledge-based paradigm might have on both developed and developing countries.
    Keywords: R&D; innovation; outsourcing; offshoring; knowledge spillovers
    JEL: O38 O34 O32 O33
    Date: 2008–06
  6. By: Giorgio Garau; Patrizio Lecca
    Abstract: In this paper we present a computable general equilibrium model for the region of Sardinia for the purpose of evaluating the capacity of R&D policies to affect the long run rate of growth. The model incorporates induced technical change and allow for external knowledge spillovers. We find that the cost of R&D policies may change according to the wage setting prevailing into the region. Furthermore, the capacity of such a policy to generate knowledge spillovers from the international and interregional trade are quite modest. Indeed, the capacity of the regional system to internalize the technological level embody in the imported good is partially offset by an increase in internal efficiency lowering the share of import but increasing competitiveness.
    Keywords: Regional modelling, Induced Technical Change and R&D policies
    JEL: R13 R58
    Date: 2008
  7. By: Rammer, Christian; Schmiele, Anja
    Abstract: This paper investigates the drivers and the effects of the internationalisation of innovation activities in SMEs based on a large data set of German firms covering the period 2002-2007. We look at different stages of the innovation process (R&D, design, production and sales of new products, and implementation of new processes) and explore the role of internal resources, home market competition and innovationrelated location advantages for an SME’s decision to engage in innovation activities abroad. By linking international innovation activities to firm growth in the home market we try to identify likely internationalisation effects at the firm level. The results show that export experience and experience in knowledge protection are highly important for international innovation activities of SMEs. Fierce home market competition turns out to be rather an obstacle than a driver. High innovation costs stimulate internationalisation of non-R&D innovation activities, and shortage of qualified labour expels production of new products. R&D activities abroad and exports of new products spur firm growth in the home market while there are no negative effects on home market growth from shifting production of new products abroad.
    Keywords: Internationalisation of Innovation, Globalisation, SMEs, Effects of Innovation, Absorptive Capacities, Market Structure
    JEL: F23 L22 L25 O31 O32 O47
    Date: 2008
  8. By: Murat YILDIZOGLU (GREThA UMR CNRS 5113)
    Abstract: This article extends the industry dynamics model of Vallée & Yildizoglu (2006) in order to carry out a richer theoretical analysis of the consequences of a stronger patent system. This model explicitly takes into account the potentially positive effects of patents: publication of patents participates to the building of a collective knowledge stock on which new innovations can rely, and dropped patents can provide a source of technological progress for firms that are lagging behind the leaders of the industry. These dimensions of the patent system are used to question the negative results of Vallée & Yildizoglu (2006). The main results of the new model show that these positive effects do not counterbalance the negative effects of a stronger patent system on social welfare and global technological progress, even if it is a source of better protection and higher profits for the firms. The model also considers the effect of patents on the survival of the newly founded industries and on their development.
    Keywords: Innovation, Technical progress, Patent system, Intellectual property rights (IPR), Technology policy
    JEL: O3 O34 L52
    Date: 2008
  9. By: Michael Fritsch (Friedrich-Schiller-University Jena, Faculty of Economics and Business Administration; Max Planck Institute of Economics, Jena, Germany); Viktor Slavtchev (Max Planck Institute of Economics, Jena, Germany)
    Abstract: This study analyzes the relationship between the specialization of a region in certain industries and the efficiency of the region in generating new knowledge. The efficiency measure is constructed by relating regional R&D input and output. An inversely u-shaped relationship is found between regional specialization and R&D efficiency, indicating the presence of externalities of both Marshall and Jacobs’ type. Further factors influencing efficiency are spillovers within the private sector as well as from public research institutions. The impact of both the specialization and the additional factors is, however, different for regions at different efficiency levels.
    Keywords: Efficiency, innovation, spillovers, patents, regional analysis.
    JEL: O31 O18 R12
    Date: 2008–07–17
  10. By: Aernoudts, R.H.R.M.; De Heer, M.A.
    Abstract: There is considerable academic interest for the interplay between strategy and management control systems (MCS). Strategic performance measurement systems (SPMS), such as Simons’ levers of control and Kaplan and Norton's balanced scorecard were introduced in the normative literature as vehicles for developing and implementing strategy. But there are also numerable case studies and surveys that investigate empirical evidence of the interplay between management control and strategy derived from management practices. This paper is a review of the extant literature aimed at identifying developments and gaps within this specific area of accounting research. To this end literature from six fields of research has been searched in a structured manner using exhaustive search algorithms. Studies are analysed using Mohr’s (1982) approaches to explanation and frameworks of Langfield-Smith (1997) and Keating (1995). The review by Langfield-Smith (1997) indicated that literature in this specific area of scholarly inquiry is characterized by a diversity of research designs and ambiguity in operationalization of - among other variables - strategy. Analysis of survey & case based research performed during the last decade reveals that operationalization of strategy is more than often based on one of the established strategy frameworks and is currently not as diverse as reported in Langfield-Smith (1997). Several scholars indicate that knowledge in this area is still rather limited, however comparison among studies provides insights that have not been made explicit.
    JEL: M41
    Date: 2008–04–23
  11. By: Nobuaki Hamaguchi (Research Institute for Economics and Business Administration, Kobe University); Yoshihiro Kameyama (The International Centre for the Study of East Asian Development (ICSEAD))
    Abstract: We examine the impact of research partnerships on a firm's own R&D capability along with the context of the importance of geographical proximity using original survey data obtained from small and medium-sized firms in Zhongguancun Science Park (ZSP). This study develops an analytical framework related to the impact of research partnerships on a firm's R&D capability. Results show that research cooperation with universities and research institutes and small and medium-sized firms enhances the R&D capability of individual firms when the partners are located nearby, although distance has no significant effect on cooperation with large firms.
    Keywords: research cooperation, spillovers, R&D capability
    JEL: O32 R12 R39
    Date: 2008–07
  12. By: Simkins, Scott P.; Maier, Mark H.
    Abstract: We believe that economists have much to learn from educational research practices and related pedagogical innovations in other disciplines, in particular physics education. In this paper we identify three key features of physics education research that distinguish it from economics education research - (1) the intentional grounding of physics education research in learning science principles, (2) a shared conceptual research framework focused on how students learn physics concepts, and (3) a cumulative process of knowledge-building in the discipline - and describe their influence on new teaching pedagogies, instructional activities, and curricular design in physics education. In addition, we highlight four specific examples of successful pedagogical innovations drawn from physics education - context-rich problems, concept tests, just-in-time teaching, and interactive lecture demonstrations - and illustrate how these practices can be adapted for economic education.
    Keywords: economic education; physics education research (PER); research-based teaching; preconceptions; metacognition; transfer; context-rich problems; peer instruction; just-in-time teaching; interactive lecture demonstration
    JEL: A2
    Date: 2008–06–27
  13. By: Diego Ponte (DISA, Faculty of Economics, Trento University); Alessandro Rossi (DISA, Faculty of Economics, Trento University); Marco Zamarian (DISA, Faculty of Economics, Trento University)
    Abstract: In this paper we aim at contributing to the ongoing debate on the relationship between artefacts and organizational structuration. Current literature emphasises the role of artefacts as mediators between interests of different categories of actors, namely between designers and users. Alternatively, it concentrates on the processes of learning and interacting between each actor and the artefacts themselves. We explore an arrangement which is not captured by these characterizations, and yet is becoming more and more common, that is situations in which complexity imposes an integration of different actors focusing on knowledge domains which are only partly overlapping. To explore these issues, we examine the dynamics surrounding the design of a complex artefact: an electronic metering system developed by a consortium of firms. The main results emerging from the case study are 1) the relevance of each actor's interests as the main rationale for explaining the technical features of the artefact; 2) the role of negotiation and consensus in determining the final shape of the artefact in term of its features; 3) the bundling/unbundling of features within the physical object as the cooperative effort rises/falls.
    Keywords: artefacts; interests; ambiguity; competencies
    Date: 2008–06
  14. By: Stefano Eusepi; Bruce Preston
    Abstract: This paper develops a theory of expectations-driven business cycles based on learning. Agents have incomplete knowledge about how market prices are determined and shifts in expectations of future prices affect dynamics. In a real business cycle model, the theoretical framework amplifies and propagates technology shocks. Improved correspondence with data arises from dynamics in beliefs being themselves persistent and because they generate strong intertemporal substitution effects in consumption and leisure. Output volatility is comparable with a rational expectations analysis with a standard deviation of technology shock that is 20 percent smaller, and has substantially more volatility in investment and hours. Persistence in these series is captured, unlike in standard models. Inherited from real business cycle theory, the benchmark model suffers a comovement problem between consumption, hours, output and investment. An augmented model that is consistent with expectations-driven business cycles, in the sense of Beaudry and Portier (2006), resolves these counterfactual predictions.
    JEL: E32 D83 D84
    Date: 2008–07
  15. By: Tebaldi, Edinaldo; Elmslie, Bruce
    Abstract: This article contributes to the growth literature by developing a formal growth model that provides the basis for studying institutions and technological innovation and examining how human capital and institutional constraints affect the transitional and steady state growth rates of output. The model developed in this article shows that the reason that growth models a-la-Romer (1990) generate endogenous growth is the use of a set of restrictive and unrealistic assumptions regarding the role of institutions in the economy. The baseline model developed in this article shows that the long-run growth of the economy is intrinsically linked to institutions and suggests that an economy with institutions that retard or prevent the utilization of newly invented inputs will experience low levels and low growth rates of output. The model also predicts that countries with institutional barriers that prevent or restrict the adoption of newly invented technologies will allocate a relative small share of human capital in the R&D sector. Moreover, both the baseline and the extended version of the model suggest that sustainable growth in human capital, not an increase in the stock of human capital, generates a growth effect.
    Keywords: Institutions; innovation; human capital; economic growth
    JEL: O43 O3
    Date: 2008–05–13
  16. By: Marco Corsino; Giuseppe Espa; Rocco Micciolo
    Abstract: This paper addresses a debated issue in the economics innovation literature, namely the existence of increasing return to R&D expenditures and firm size on innovation output. It further explores how structural characteristics of the firm as well as contextual factors affect the dynamics of product innovation over a relatively long period of time. Taking advantage of an original and unique database comprising innovation data recorded on a monthly base we show that: (i) a negative binomial distribution model is able to predict with great accuracy the probability of having a given number of product announcement sent out in a month; (ii) constant returns to size and R&D expenditure may reasonably characterize the innovation production function of sampled firms; (iii) vertically integrated manufacturers as well as producers operating a larger product portfolio exhibit a higher propensity to introduce new products than their specialized competitors.
    Date: 2008–06
  17. By: Marco Corsino; Giuseppe Espa; Rocco Micciolo
    Abstract: This paper addresses a debated issue in the economics innovation literature, namely the existence of increasing return to R&D expenditures and sirm size on innovation output. It further explores how structural characteristics of the sirm as well as contextual factors affect the dynamics of product innovation over a relatively long period of time. Taking advantage of an original and unique database comprising innovation data recorded on a monthly base we show that: (i) a negative binomial distribution model is able to predict with great accuracy the probability of having a given number of product announcement sent out in a month; (ii) constant returns to size and R&D expenditure may reasonably characterize the innovation production function of sampled sirms; (iii) vertically integrated manufacturers as well as producers operating a larger product portfolio exhibit a higher propensity to introduce new products than their specialized competitors.
    Date: 2008–05
  18. By: Erik H. Schlie (ESMT European School of Management and Technology); Jaideep C. Prabhu (Tanaka Business School, Imperial College London); Rajesh K. Chandy (Carlson School of Management, University of Minnesota)
    Abstract: How do firms cope with the challenges of disruptive change in their industry? Numerous studies have highlighted that success with any prior technology creates a negative legacy effect for the next radical technological shift. We question the overly pessimistic view of such legacy effects and ask how quickly firms embrace technological breakthroughs by radically innovating and who wins in the longer term? In this paper, we argue that legacy is a multi-faceted construct whose diverse aspects could simultaneously have different effects on innovation speed and market performance. We identify three main types of legacy related to technology, organizational, and country-level influences. Previous research tends to focus on technological or market effects in isolation, whereas we seek to study the effects of both firm and country legacy simultaneously on speed to radical innovation and market performance over time. Based on a conceptual framework we develop six hypotheses concerning the legacy effects on initial speed radical innovation and subsequent market performance. We chose the European retail banking industry and the focal innovation of transactional Internet banking as a suitable empirical context to employ quantitative hypothesis testing. Detailed and longitudinal (1996-2001) data were collected for a sample of 123 banks from six European countries: United Kingdom, Germany, France, Sweden, Finland, and Denmark. We specified a model and used threestage least squares (3SLS) as a method to estimate simultaneous regression equations due to endogeneity of a key variable. We show that the prevailing negative view of legacies is likely to be overstated.
    Keywords: innovation, legacy, internet banking, europe
    JEL: M31
    Date: 2008–06–12
  19. By: David Galenson
    Abstract: A survey of textbooks reveals that Le Corbusier was the greatest architect of the twentieth century, followed by Frank Lloyd Wright and Ludwig Mies van der Rohe. The same evidence shows that the greatest architects alive today are Frank Gehry and Renzo Piano. Scholars have long been aware of the differing approaches of architects who have embraced geometry and those who have been inspired by nature, but they have never compared the life cycles of these two groups. The present study demonstrates that, as in other arts, conceptual architects have made their greatest innovations early in their careers, whereas experimental architects have done their most important work late in their lives. Remarkably, the experimentalists Le Corbusier and Frank Gehry designed their greatest buildings after the age of 60, and Frank Lloyd Wright designed his after 70.
    JEL: J01
    Date: 2008–07
  20. By: Christian Corsi
    Date: 2008–07
  21. By: Benoit Dostie; Rajshri Jayaraman
    Abstract: Using a large longitudinal, nationally representative workplace-level dataset, we explore the productivity gains associated with computer use and organizational redesign. The empirical strategy involves the estimation of a production function, augmented to account for technology use and organizational design, correcting for unobserved heterogeneity. We find large returns associated with computer use. We also find that computer use and organizational redesign may be complements or substitutes in production, and that the productivity gains associated with organizational redesign are industry-specific.
    Keywords: Productivity, information technologies, linked employer-employee data, workplace practices, complementarities
    JEL: D20 L20 M54 O33
    Date: 2008
  22. By: Guncavdi, Oner; Kucukcifci, Suat
    Abstract: The Turkish economy has undergone drastic structural changes since 1980. While the effects of the Turkish adjustment programme have drawn considerable attention, a few studies have investigated its employment impacts. Unlike neoclassical expectation behind the structural adjustment programme, some studies for Turkey have showed that this policy change in 1980 caused a decline in employment. Results show that the Turkish industrialisation strategy cannot be regarded as export-led industrialisation strategy. Extra output created by exports has been very limited during the post-liberalisation period. However domestic final demand has continued to be the most dominant determinant of output growth. A Surprising result of the paper appears for the period of 1985-1990 when import substitution in final demand created output growth particularly in technology-intensive manufacturing and other manufacturing sectors. However import penetration in final and intermediate goods overwhelmingly important factors creating de-industrialisation in the period of 1990-1996. This paper, however, examines the sources of changes in employment. Despite neoclassical expectations, the reform period after 1982 witnessed large factor substitution against labour, even in the tradable goods sector. Additionally, labour demand also appears to response to output growth less in the post-liberalisation period than before.
    Keywords: Structural changes; employment; input-output; trade reform; Turkey
    JEL: D57 O16 F14 R15
    Date: 2008–07–07

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