nep-knm New Economics Papers
on Knowledge Management and Knowledge Economy
Issue of 2008‒09‒29
eighteen papers chosen by
Laura Stefanescu
European Research Centre of Managerial Studies in Business Administration

  1. Complexity and organizational change in the coordination of technological knowledge: evidence from the automobile cluster in Turin By Patrucco Pierpaolo
  2. Pecuniary Knowledge Externalities: Evidence from European Regions By Antonelli Cristiano; Patrucco Pierpaolo; Quatraro Francesco
  3. Venture capital as a mechanism for knowledge governance : new markets and innovation-led economic growth By Antonelli Cristiano; Teubal Morris
  4. The effects of biased technological change on total factor productivity.Empirical evidence from a sample of OECD countries By Quatraro Francesco; Antonelli Cristiano
  6. Science and technology-based regional entrepreneurship in the Netherlands: By Jolanda Hessels; Kashifa Suddle; Willem Hulsink
  7. Localized technological knowledge: Pecuniary knowledge externalities and appropriability By Antonelli Cristiano
  8. The Efficiency and Evolution of R&D Networks By Michael D. König; S. Battiston; M. Napoletano; F. Schweitzer
  9. One size does not fit all… An economic development perspective on the asymmetric impact of Patents on R&D By Alexandre Almeida; Aurora A.C. Teixeira
  10. Pecuniary externalities: the convergence of directed technological change and the emergence of innovation systems By Antonelli Cristiano
  11. Innovativeness of Small and Medium Size Enterprises in Regional Innovation System: Evidences from Turkey By Bahar C. Erbas; Ali Fýkýrkoca; Arcan Tuzcu
  12. The Multipliers and Key Sectors of Entrepreneurship Spillover: An input-output approach By Massón-Guerra, José Luis
  13. R&D offshoring and the domestic science base in India and China By Suma Athreye; Martha Prevezer
  14. Modeling technology and technological change in manufacturing: how do countries differ? By Eberhardt, Markus; Teal, Francis
  15. Innovation Capacity and Economic Development: China and India By Fan, Peilei
  16. A Global Vision over Benchmarking Process: Benchmarking Based Enterprises By Sitnikov, Catalina; Giurca Vasilescu, Laura
  17. Out of equilibrium profit and innovation By Antonelli Cristiano; Scellato Giuseppe
  18. Innovation on Demand: Can Public Procurement Drive Market Success of Innovations By Aschhoff, Birgit; Sofka, Wolfgang

  1. By: Patrucco Pierpaolo (University of Turin)
    Abstract: The paper adopts a complexity perspective to understand the transformations in the organizational forms that coordinate the generation and dissemination of technological knowledge within firms. Complexity theory provides the framework to understand the evolution and transformation of economic systems. These are seen as emergent processes brought about by changes in the structure of interactions among actors. Changes in those interactions are steered by the modification in the pattern of specialisation and differentiation in the capabilities and technological skill of economic actors. The paper illustrates these elements through the evidence of the automobile cluster in Piedmont, in North-western Italy. This is characterized by the emergence of a distributed innovation platform, which is seen as a major organizational innovation in the organization of diffused technological capabilities.
    Date: 2008–08
  2. By: Antonelli Cristiano (University of Turin); Patrucco Pierpaolo (University of Turin); Quatraro Francesco (University of Turin)
    Abstract: The paper investigates the effects of agglomeration and specialization of technological activities on regional productivity growth,applying the notion of pecuniary knowledge externalities. The latter are indirect interdependencies between firms mediated by the price system. Pecuniary knowledge externalities enable to appreciate both the positive and negative effects associated with the regional concentration of knowledge generating activities. Our analysis leads to specify the hypothesis of an inverted U-shaped relationship between the agglomeration of innovation activities and productivity growth. The empirical investigation, based upon 138 European regions in the years 1996 through 2003, supports the hypothesis that agglomeration yields diminishing positive net effects beyond a maximum. The homogeneity of knowledge generating activities however reduces absorption costs and hence rises the net benefits at each agglomeration level.
    Date: 2008–03
  3. By: Antonelli Cristiano (University of Turin); Teubal Morris
    Date: 2008–05
  4. By: Quatraro Francesco (University of Turin); Antonelli Cristiano (University of Turin)
    Abstract: Technological change is far from neutral. The empirical analysis of the rate and direction of technological change in a significant sample of 10 OECD countries in the years 1971-2001 confirms the strong bias of new technologies. The introduction of new and biased technologies affects the actual levels of total factor productivity when it matches the characteristics of local factor markets so that locally abundant inputs become more productive. In turn the matching between the bias of technological change and the relative abundance of production factors can be considered as the result of a path dependent process where the quality of the local knowledge infrastructure plays a central role in shaping the direction.
    Date: 2008–06
  5. By: Anneli Kaasa; Maaja Vadi
    Abstract: Culture is deemed to be a crucial basis for innovation in various respects. The aim of this paper is to explore the relationships between different cultural dimensions introduced by Hofstede (2001) and the capability of initiating innovation measured by the number of patent applications using the sample of European countries at the regional level. As a novel approach, instead of using Hofstede’s original index scores, the measures for the cultural dimensions are based on the European Social Survey (ESS). We have learned that to be successful in patenting, a region should have power distance, uncertainty avoidance, family-related collectivism (as opposed to friend-related and organisation-related collectivism) and lower than average masculinity. In addition, the negative relationships between these cultural dimensions and patenting are stronger when there is a higher patenting intensity. However, culture alone does not serve as a guarantee for a high level of patenting intensity.
    Keywords: innovation, culture, Europe
    Date: 2008
  6. By: Jolanda Hessels; Kashifa Suddle; Willem Hulsink
    Abstract: In this contribution we develop a theoretical framework derived from the national system of innovation literature and the subsequent criticisms voiced by regional scientists and industry/technology experts who emphasize the importance of the intermediate subnational and sectoral levels to analysing science- and technology-based regional entrepreneurship in the Netherlands. The national system of innovation of the Netherlands, and its specifics and peculiarities, and the country's general entrepreneurship policy, and the most important policy and support initiatives are subsequently discussed. Based on a desire to overcome the knowledge paradox between fundamental research and market needs and on the recognition that the Netherlands lags behind other countries when it comes to innovative entrepreneurship, various changes and initiatives were recently introduced in the Netherlands. The impresson is of an overambitious national government with numerous programmes, schemes and agencies involved, sometimes working with each other but at other times separately as well, and its effectiveness can be questioned. Serious paperwork and preparation is involved in the participation in most programes and, together with the complexity of these programmes and policies, small and young entrepreneurs are neither informed, ready or wellequipped; some of them are not even interested in participating in those schemes.
    Date: 2008–09–16
  7. By: Antonelli Cristiano (University of Turin)
    Abstract: Recent advances in the economics of knowledge highlight the key role of pecuniary knowledge externalities in explaining the system dynamics of total factor productivity growth. When nonexhaustible technological knowledge is an input both in the production of new goods and of further knowledge, and the acquisition of external knowledge, as a non-disposable input in the production of new knowledge, is not free, pecuniary externalities, as opposed to technological externalities, provide an important clue to understanding the key role of knowledge governance mechanisms in assessing the rate of growth of total factor productivity and economic systems at large. The negative effects upon appropriability limit the advantages of agglomeration.
    Date: 2008–09
  8. By: Michael D. König (Chair of Systems Design, ETH Zurich, Switzerland); S. Battiston (Chair of Systems Design, ETH Zurich, Switzerland); M. Napoletano (Chair of Systems Design, ETH Zurich and Observatoire Français des Conjonctures Economiques, Department for Research on Innovation and Competition, Valbonne, France); F. Schweitzer (Chair of Systems Design, ETH Zurich, Switzerland)
    Abstract: This work introduces a new model to investigate the efficiency and evolution of networks of firms exchanging knowledge in R&D partnerships. We first examine the efficiency of a given network structure in terms of the maximization of total profits in the industry. We show that the efficient network structure depends on the marginal cost of collaboration. When the marginal cost is low, the complete graph is efficient. However, a high marginal cost implies that the efficient network is sparser and has a core-periphery structure. Next, we examine the evolution of the network struc- ture when the decision on collaborating partners is decentralized. We show the existence of mul- tiple equilibrium structures which are in general inefficient. This is due to (i) the path dependent character of the partner selection process, (ii) the presence of knowledge externalities and (iii) the presence of severance costs involved in link deletion. Finally, we study the properties of the emerg- ing equilibrium networks and we show that they are coherent with the stylized facts of R&D net- works.
    Keywords: R&D networks, technology spillovers, network efficiency, network formation
    JEL: D85 L24 O33
    Date: 2008–09
  9. By: Alexandre Almeida (Faculdade de Economia, Universidade do Porto); Aurora A.C. Teixeira (INESC Porto, CEMPRE, Faculdade de Economia, Universidade do Porto)
    Abstract: Innovation is the building block of competitive advantages and thus economic policies are increasingly focused on creating stimulus to increase a country’s innovative performance and growth potential, namely through knowledge accumulation in general and R&D in particular. In this context, current policy trend seems to support the strengthening of Intellectual Property Rights (IPR), in particular, patent protection, with the argument that positive effects will emerge and would be extensive to all countries regardless their level of development. In this paper we question this “one size fits all” policy and assess how patent thicket affects knowledge productive investment taking into account countries’ development levels. Based on a panel of 95 countries over a ten-year period (1997-2006), our results show that patents have asymmetric impacts across countries development stages, evidencing pervious effects on technological leaders and positive ones on some laggards. Such evidence sustains that innovation policies be adjusted to countries development stages.
    Keywords: growth models; R&D; patents; economic development
    JEL: O41 O32
    Date: 2008–09
  10. By: Antonelli Cristiano (University of Turin)
    Abstract: The new understanding of the characteristics of knowledge indivisibility and knowledge appropriability makes it possible to appreciate the key role pecuniary externalities play both in the generation and in the exploitation of technological knowledge. Pecuniary externalities affect access to external knowledge and its localized appropriation, by the intensive use of idiosyncratic factors and the introduction of biased technological change. Their combined effect shapes the convergence of the directed features of the knowledge generated at the firm level and explains the path dependent emergence of local and technological innovation systems and the dynamics of innovation cascades.
    Date: 2008–07
  11. By: Bahar C. Erbas; Ali Fýkýrkoca; Arcan Tuzcu
    Date: 2008–09
  12. By: Massón-Guerra, José Luis
    Abstract: The Entrepreneurship Spillover evaluates the systemic effect of creating enterprises in different sectors and industries from a new firm created in a given sector. One way to estimate these Entrepreneurship Spillovers is doing an adaptation of the methodology applied by Dietzenbacher, (2002); Dietzenbacher and Los, (2002a,b) Diezenbacher and Volkerink (1998) that they used to determinate the Knowledge Spillover through R&D multipliers. In this regard, the objectives of this paper are: (a) to develop a methodology that allows calculating the concept of entrepreneurship spillover; (b) to identify the key sectors of entrepreneurship; and (c) to determinate the multipliers of business creation. With these aims, the methodological design is based on an adaptation of the model of input-output matrix (Leontief, 1936; Dietzenbacher and Los, 2002 a y b).
    Keywords: Entrepreneurship; Multipliers; Input-Ouput; Economic Growth
    JEL: O30 L26 O4 C67
    Date: 2008–06–14
  13. By: Suma Athreye; Martha Prevezer
    Abstract: This paper uses patent and publication data to assess the nature of technological advantages that are attracting R&D offshoring and outsourcing activities to India and China and the possible consequences of such R&D offshoring in increasing domestic innovative capability and building domestic research infrastructure. We find evidence that domestic patenting is concentrated in sectors that are different from sectors of R&D offshoring. Furthermore, whilst the domestic science base (as measured by publications data) in India and China shows strong complementarities in its specialisation profile to that in the US, our data also suggest that the location of international R&D activity in these economies from 1995 may not have strengthened the science base of these economies. Foreign patenting activities in India and China are also marked by a low attachment to the science base.
    Keywords: R&D offshoring/internationalisation, Science base, Emerging economies, India and China
    Date: 2008–09
  14. By: Eberhardt, Markus; Teal, Francis
    Abstract: In this paper we ask how technological differences in manufacturing across countries can best be modeled when using a standard production function approach. We show that it is important to allow for differences in technology as measured by differences in parameters. Of similar importance are time-series properties of the data and the role of dynamic processes, which can be thought of as aspects of technological change. Regarding the latter we identify both an element that is common across all countries and a part which is country-specific. The estimator we develop, which we term the Augmented Mean Group estimator (AMG), is closely related to the Mean Group version of the Pesaran (2006) Common Correlated Effects estimator. Once we allow for parameter heterogeneity and the underlying time-series properties of the data we are able to show that the parameter estimates from the production function are consistent with information on factor shares.
    Keywords: Manufacturing Production; Parameter Heterogeneity; Nonstationary Panel Econometrics; Cross-section Dependence
    JEL: O47 C33 O14
    Date: 2008–04
  15. By: Fan, Peilei
    Abstract: Both China and India, the emerging giants in Asia, have achieved significant economic development in recent years. China has enjoyed a high annual GDP growth rate of 10 per cent and India has achieved an annual GDP growth rate of 6 per cent since 1981. Decomposing China and India?s GDP growth from 1981 to 2004 into the three factors? contribution reveals that technology has contributed significantly to both countries? GDP growth, especially in the 1990s. R&D outputs (high-tech exports, service exports, and certified patents from USPTO) and inputs (R&D expenditure and human resources) further indicate that both countries have been very committed to R&D and their output is quite efficient. Both governments have played an essential role in transforming their national innovation systems so that they can be more adaptable to economic development. The main focus of their reforms has been to link the science sector with the business sector and to provide incentives for innovation activities. Balancing import of technology and indigenous R&D effort is another major theme. Innovation capability development has become more and more critical to the success of biofirms in India and China. Institutional factors have great influence on choice of innovation at the firm level, i.e., the decision at firm level in terms of indigenous R&D or import of technology. Nevertheless, limited financial resources and insufficiently qualified human resources remain two major challenges for domestic companies in both countries.
    Keywords: China, India, innovation capability, domestic companies, ICT, biotech
    Date: 2008
  16. By: Sitnikov, Catalina; Giurca Vasilescu, Laura
    Abstract: Benchmarking uses the knowledge and the experience of others to improve the enterprise. Starting from the analysis of the performance and underlying the strengths and weaknesses of the enterprise it should be assessed what must be done in order to improve its activity. Using benchmarking techniques, an enterprise looks at how processes in the value chain are performed. The approach based on the vision “from the whole towards the parts” (a fragmented image of the enterprise’s value chain) reduces the focus of the benchmarking process of the enterprise. This is the reason why we introduce a new concept: “benchmarking based enterprises” (BBE). Accordingly to this, the enterprises, particularly corporations, gather common features, accept their industry leaders, adapt to their specific features and accept a new vision of benchmarking shifted “from part to the whole”.
    Keywords: benchmarking based enterprises; value chain; corporation; SME
    JEL: L1 M21
    Date: 2008–06–07
  17. By: Antonelli Cristiano (University of Turin); Scellato Giuseppe
    Abstract: Innovation is the result of intentional decision-making that takes place in out-of-equilibrium conditions. The farther is profitability from the average and the deeper the out-of-equilibrium conditions. The farther away is the firm from equilibrium and the stronger the likelihood for innovation to take place. The hypothesis of a U-relationship between levels of profitability and innovative activity, as measured by the rates of increase of total factor productivity, is articulated and tested. The evidence of a large sample of 7000 Italian firms in the years 1996-2005 confirms that a strong causal relation holds between the quadratic specification of profitability and the growth rates of total factor productivity. The results are robust to different approaches to evaluate productivity growth rates.
    Date: 2008–04
  18. By: Aschhoff, Birgit; Sofka, Wolfgang
    Abstract: Public procurement has been at the centre of recent discussions on innovation policy on both European and national levels (e.g., Aho-Report, Barcelona Strategy). It has a large potential to stimulate innovation since it accounts for 16% of combined EU-15 GDP. We embed public procurement for innovation into the broader framework of public policies to stimulate innovation: regulations, R&D subsidies and knowledge infrastructure (i.e. basic research at universities). We synthesize the characteristics of all four instruments based on existing literature and quantitatively compare their effects on innovation success. Our empirical investigation rests upon a survey of more than 1,100 innovative firms in Germany. Our survey puts us in the position to trace all sources of valuable innovation impulses, namely public customers, law and regulations, universities and public funding for R&D. We relate these sources back to innovation success. We find that (non-defense related) public procurement and knowledge spillovers from universities propel innovation success equally. In a second step, we explore whether these effects vary across firms (e.g. size, location, industry). The benefits of university knowledge apply uniformly to all firms. However, public procurement is especially effective for smaller firms in regions under economic stress as well as in distributive and technological services. Based on these findings targeted policy recommendations can be developed.
    Keywords: Innovation policy, public procurement, comparison of instruments, innovation success
    JEL: C34 H32 O38
    Date: 2008

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