nep-knm New Economics Papers
on Knowledge Management and Knowledge Economy
Issue of 2008‒11‒25
fifteen papers chosen by
Laura Stefanescu
European Research Centre of Managerial Studies in Business Administration

  1. Formal and informal external linkages and firms’ innovative strategies. A cross-country comparison By Bodas Freitas, Isabel Maria; Tommy Clausen; Roberto Fontana; Bart Verspagen
  2. Why Powerful Buyers finance Suppliers’ R&D By Werner Bönte; Lars Wiethaus
  3. Knowledge Transfer in the Irish Food Innovation System: Industry and Researcher Perspectives By Kelly, D.; Henchion, M.; O'Reilly, P.
  4. The impacts of knowledge of the past on preferences for future landscape change By Colombo, Sergio; Hanley, Nick; Ready, Richard
  5. Monetary Policy Design under Imperfect Knowledge: An Open Economy Analysis By Yu-chin Chen; Pisut Kulthanavit
  6. Controlling Chaos Through Local Knowledge By Ahmad Naimzada; Fabio Tramontana
  7. The contribution of innovations in total factor productivity of organic olive enterprises By Karafillis, C.C.; Papanagiotou, E.
  8. Searching for innovations ? the technological determinants of acquisitions in the pharmaceutical industry. By Gautier Duflos; Etienne Pfister
  9. The Impact of Technological and Non-Technological Innovations on Firm Growth By Jyrki Ali-Yrkkö; Olli Martikainen
  10. Formal and informal external linkages and firms' innovative strategies: A cross-country comparison By Isabel Maria Bodas Freitas; Tommy Clausen; Roberto Fontana; Bart Verspagen
  11. The European Socio-Economic Models of a Knowledge-based society. \r\nMain findings and conclusion \r\n By Bruno AMABLE (Université Paris I and CEPREMAP); Yannick LUNG (GREThA UMR CNRS 5113 and GERPISA)
  12. Towards Regional Knowledge Economies: Routes and Policy Options By Franz Tödtling; Michaela Trippl; Lukas Lengauer
  13. Measures of Science & Technology in Ecuador By José Luis, Massón-Guerra
  14. Organizational capabilities and industry dynamics: a computational model. By Marco Corsino; Roberto Gabriele; Enrico Zaninotto
  15. Estimating the dynamics of R&D-based growth models By YATSENKO, Yuri; BOUCEKKINE, Raouf; HRITONENKO, Natali

  1. By: Bodas Freitas, Isabel Maria (Grenoble Ecole de Management, and DISPEA); Tommy Clausen (University of Oslo, and Nordland Research Institute); Roberto Fontana (University of Pavia, and CESPRI, Bocconi University); Bart Verspagen (Maastricht University, and UNU-MERIT)
    Abstract: Firms increasingly rely upon external actors for their innovation process. Interaction with these actors may occur formally (i.e. through a collaboration agreement) or informally (i.e. external actors acts as sources of knowledge). This paper analyses the reasons why firms consider it to be important to develop formal and informal external linkages in the innovation process by looking at the role played by firms’ innovative strategies and by taking into account that a complementarity or substitutive relationship might exist between formal and informal linkages. Data come from the Third Community Innovation Survey (CIS 3), where we have access to firm level micro-data from Norway, Sweden, the Netherlands and the UK.
    Keywords: External knowledge sources, Innovation strategy, Formal cooperation, Multinomial Probit
    JEL: O31 O33 O38
    Date: 2008
  2. By: Werner Bönte (Schumpeter School of Business and Economics, University of Wuppertal); Lars Wiethaus (ESMT Competition Analysis)
    Abstract: It is a common concern that pricing pressure by powerful buyers discourages suppliers' R&D investments. Employing a simple monopsonist - competitive upstream industry - framework, this paper qualifies this view in two respects. First, the monopsonist has an incentive to subsidize upstream R&D which yields more upstream R&D and higher profits in both industries than the monopsonist's commitment to higher prices. Secondly, in the presence of intra-industry R&D spillovers between upstream firms, the monopsonist has an even stronger incentive to finance upstream R&D. If the monopsonist finances more than fifty percent of suppliers R&D efforts, R&D investments in upstream industry will be higher than in the case of buyer competition.
    Keywords: Vertical Relationships, Monopsony, Buyer Power, R&D, Knowledge Spillovers
    JEL: O31 O32 L13 L20
    Date: 2008–10
  3. By: Kelly, D.; Henchion, M.; O'Reilly, P.
    Abstract: The new EU Animal Health Strategy suggests a shift in emphasis away from control towards prevention and surveillance activities for the management of threats to animal health. The optimal combination of these actions will differ among diseases and depend on largely unknown and uncertain costs and benefits. This paper reports an empirical investigation of this issue for the case of Avian Influenza. The results suggest that the optimal combination of actions will be dependent on the objective of the decision maker and that conflict exists between an optimal strategy which minimises costs to the government and one which maximises producer profits or minimises negative effects on human health. From the perspective of minimising the effects on human health, prevention appears preferable to cure but the case is less clear for other objectives.
    Keywords: Knowledge transfer, technology transfer, Irish food sector, Research and Development/Tech Change/Emerging Technologies,
    Date: 2008
  4. By: Colombo, Sergio; Hanley, Nick; Ready, Richard
    Abstract: In this paper, we investigate whether people€ٳ knowledge of the past influences their preferences and values towards future landscape change. €܋nowledge of the past€ݠis one aspect of the information set held by individuals, and a well-established finding in stated preference work is that changes in information can change preferences and values. The case studies used here relate to prospective changes in woodland cover in a UK national park the Lock Lomond and Trossachs. We find that people who are made aware that the landscape has changed over time are more likely to favour changes to the current landscape. Knowledge of the past therefore seems to have an impact on preferences for future landscapes.
    Keywords: environmental economics, landscape valuation, national parks, Environmental Economics and Policy,
    Date: 2008
  5. By: Yu-chin Chen (University of Washington); Pisut Kulthanavit (University of Washington)
    Abstract: This paper incorporates adaptive learning into a standard New-Keynesian open economy dynamic stochastic general equilibrium (DSGE) model and analyze under what conditions policymakers should target domestic producer price inflation (DI) versus consumer price inflation (CI). Our goal is to examine how monetary policy rules should adjust when agents’ information sets deviate from those assumed under the rational expectation paradigm. When agents form expectations using an adaptive learning mechanism, even though the central bank has no informational advantage, monetary policy can nonetheless facilitate the learning process and thus mitigate distortions associated with imperfect knowledge. We assume the policy-maker follows a forwardlooking Taylor rule and focus on analyzing the interplay between the source of the dominant shock and the extent of knowledge imperfection. We find that when agents have very limited knowledge and have to learn the dynamics governing both the relevant economic indicators and the underlying structural shocks, a DI targeting rule introduces fewer forecast errors and is better at stabilizing the economy. However, when agents can observe contemporaneous shocks and need only learn how key economic variables evolve (a situation akin to a post-structural-shift economy), targeting away from the dominant shocks helps anchor expectations and improve welfare. A CI target can then become the preferred policy rule when the economy is subject to large domestic shocks.
    Date: 2008–05
  6. By: Ahmad Naimzada (Department of Quantitative Methods, University Bicocca, Milan, Italy); Fabio Tramontana (Università Politecnica delle Marche & Dipartimento di Economia e Metodi Quantitativi, Università di Urbino)
    Abstract: We propose an duopoly game where quantity-setting fi…rms have incomplete information about the demand function. In each time step, they solve a profi…t maximization problem assuming a linear local approximation of the demand function. In particular, we construct an example using the well known duopoly Puu's model with isoelastic demand function and constant marginal costs. An explicit form of the dynamical system that describes the time evolution of the duopoly game with boundedly rational players is given. The main result is the global stability of the system.
    Keywords: Cournot duopoly, incomplete information, isoelastic demand function, time evolution, boundedly rational players.
    JEL: L13 D83 C61 C62
    Date: 2008
  7. By: Karafillis, C.C.; Papanagiotou, E.
    Abstract: This paper measures the contribution of innovations in total factor productivity(TFP) of organic olive farmers. By constructing an innovation variable instead of the use of a time trend, technical change is replaced by technical difference and TFP growth becomes TFP difference. Primary cross section data on organic olive enterprises from a Greek region is used in the application of the restricted frontier profit function. Farmers are classified into groups according to their innovative €ذrofile€ٮ TFP difference among consecutive innovation groups is decomposed into technical difference and adjustment in innovativeness effects. Furthermore, efficiency differences among innovation groups are estimated. Results indicate that more innovative farmers perform better than less innovative ones regarding TFP and efficiency scores. Adoption of innovations has a positive contribution in the reduction of inefficiency and profit-loss. The rate of technical difference is always positive in the formulation of TFP difference whereas the adjustment in innovativeness effects varies among the innovation groups. Finally, high-tech capital is more or less under-utilized, regardless of the innovation group.
    Keywords: Innovations, total factor productivity, profit efficiency, organic farming, Greece, Productivity Analysis,
    Date: 2008
  8. By: Gautier Duflos (Centre d'Economie de la Sorbonne - Paris School of Economics); Etienne Pfister (BETA-Règles - Université de Nancy II)
    Abstract: This article analyzes the individual determinants of acquisition activity and target choices in the pharmaceutical industry over the period 1978-2002. The "innovation gap" hypothesis states that acquiring firms lack promising drug compounds and acquire firms with more promising drug prospects. A duration model implemented over a panel of more than 400 firms relates the probabilities of being an purchaser or a target to financial, R&D ant patent data to investigate this explanation more deeply. Results show that purchasers are firms with a lower Tobin's Q and decreasing sales, which could indicate that acquisitions are used to compensate for low internal growth prospects. Firms with a higher proportion of radical patents in their portfolio, especially in pharmaceutical and biothechnological patent classes, face a higher probability of being targeted, indicating that acquiring firms are indeed searching for innovative competencies. However, acquiring firms also present a significant absorptive capacity : their R&D investment increases in the year preceding the operation and their patent stock is larger and more diversified than for non-acquiring firms. Finally, we observe that over the last ten years of the sample period, firms have paid a greater attention to the size of the target's portfolio.
    Keywords: M&A, pharmaceutical, innovations, patent citations.
    JEL: G34 L15 L21 O3
    Date: 2008–09
  9. By: Jyrki Ali-Yrkkö; Olli Martikainen
    Abstract: ABSTRACT : This study investigates the relationship between innovations and firm growth, based on the data of Finnish firms operating in the software industry. We find that in terms of turnover and employment, firms with only technological innovations do not grow more rapidly than other firms. However, firm growth is positively associated with the combination of technological and non-technological innovations.
    Keywords: innovation, technological, non-technological, R&D, firm, development, employment, growth, Finland
    JEL: O3 O33 L2
    Date: 2008–11–13
  10. By: Isabel Maria Bodas Freitas (Grenoble Ecole de Management); Tommy Clausen (Centre for Technology, Innovation and Culture, University of Oslo); Roberto Fontana (Department of Economics, University of Pavia); Bart Verspagen (Centre for Technology, Innovation and Culture, University of Oslo)
    Abstract: Firms increasingly rely upon external actors for their innovation process. Interaction with these actors may occur formally (i.e. through a collaboration agreement) or informally (i.e. external actors acts as sources of knowledge). This paper analyses the reasons why firms consider it to be important to develop formal and informal external linkages in the innovation process by looking at the role played by firms’ innovative strategies and by taking into account that a complementarity or substitutive relationship might exist between formal and informal linkages. Data come from the Third Community Innovation Survey (CIS 3), where we have access to firm level micro-data from Norway, Sweden, the Netherlands and the UK.
    Keywords: External knowledge sources, Innovation strategy, Formal cooperation, Multinomial Probit.
    JEL: O31 O33 O38
    Date: 2008–11
  11. By: Bruno AMABLE (Université Paris I and CEPREMAP); Yannick LUNG (GREThA UMR CNRS 5113 and GERPISA)
    Abstract: The paper presents the main results and conclusion of the European project ESEMK (FP6, Priority 7) discussing the variety of capitalism within the European Union (2004-08). In Part 1 is abstracted the methodological framework, articulating the macro levels (diversity of socio-economic models or forms of capitalism), the micro level of firms (productive models) and the meso level (industry or sector). Part 2 analyses the main institutional changes occurring in Europe regarding product market regulation, wage-labour relationships and financialisation. Part 3 concludes that the Lisbon process which will not contribute to the emergence of a European model.
    Keywords: variety of capitalism, European Union, European model, product market regulation, wage labour nexus, financialisation, sectorial analysis
    JEL: B52 G10 J60 L22 L52 L62 L65 L66
    Date: 2008
  12. By: Franz Tödtling; Michaela Trippl; Lukas Lengauer
    Date: 2008
  13. By: José Luis, Massón-Guerra
    Abstract: One of the structural problems in Latin-American has been the lower innovative capacity and lower generation of economically exploitable knowledge. This phenomenon has been produced by the absence of government’s incentives and strategies in order to be competitive inside the Knowledge Based Economy. More concretely, political, institutional and social factors have contributed negatively within this reality. As a consequence, the knowledge generation in this region is insufficient not only to satisfy its necessities but also to be competitive in the global context. At difference, the developing regions have recognized the significance impact of Science and Technology (S&T) and Education in their sustainable growth. In the Latin-American context, this analysis requires robust indicators that help to evidence the causes of this problematic. In this respect, the absence of harmonized politics and common variables that allows studying the evolution of S&T in the Latin-American region is the main limitation for this analysis. Based on that, this report brings an exploratory analysis that allows identifying the critical factors and the possible solutions of this S&T problematic. In parallel, the case of the National Innovation System implanted in Ecuador is presented and evaluated.
    Keywords: Science; Technology; Entrepreneurship; Innovation
    JEL: Q55 O32 L26 M13 O31
    Date: 2008–05–02
  14. By: Marco Corsino; Roberto Gabriele; Enrico Zaninotto (DISA, Faculty of Economics, Trento University)
    Abstract: In this paper we propose a model of bounded rational organizations that addresses the role of organizational capabilities in shaping firm size, growth rates and profitability. Our approach aims at reconciling the logic behind stochastic models of firm growth with the notion of organizational capabilities as drivers of economic performance. We extend the stochastic framework by incorporating behavioural assumptions on: (a) the interactions between the firm and the business environment; and (b) the mechanism by which firms sense and seize business opportunities. In our perspective, the degree of concurrence between the substance and organization of the firm and the context in which it operates will directly influence its profitability and indirectly (through costly mutations of the organizational structure) drive its growth. Despite its simple nature the model is able to capture well known regularities about industry dynamics. It generates firm size distributions that are skewed and heterogeneous across different scenarios. Moreover, our results suggest that the higher the selective power of the firm's organizational capabilities, the more the steady state distribution deviates from a log normal. Besides, the distribution of growth rates has a tent-shaped form which is consistent with the pattern described in empirical studies. The distribution of opportunities per firm is also skewed suggesting that a very few entities account for a large fraction of business opportunities arising throughout the simulation period. Finally, the interaction between the external environment and the internal structure of the firms also influences the heterogeneity in the value of the opportunities they capture.
    Keywords: organizational capabilities; firm size distribution; growth rates; simulation model
    Date: 2008–11
  15. By: YATSENKO, Yuri; BOUCEKKINE, Raouf (Université catholique de Louvain (UCL). Center for Operations Research and Econometrics (CORE)); HRITONENKO, Natali
    Abstract: Several R&D-based models of endogenous economic growth are investigated under the Solow-like assumption of fixed allocation of resources across activities. We identify model parameters that lead to explosive dynamics and analyze various economic techniques to avoid it. The techniques include adding stricter constraints on model trajectories and limiting factors in technology equation. In particular, we demonstrate that our vintage version of the well known R&D-based model of economic growth (Jones, 1995) exhibits the same balanced dynamics as the original model.
    Keywords: vintage capital models, endogenous technological change, R&D investment, explosive dynamics, nonlinear Volterra integral equations.
    JEL: E20 O40 C60
    Date: 2008–09

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