nep-knm New Economics Papers
on Knowledge Management and Knowledge Economy
Issue of 2010‒01‒16
nine papers chosen by
Laura Stefanescu
European Research Centre of Managerial Studies in Business Administration

  1. Knowledge Spillover on Complex Networks By KONNO Tomohiko
  2. Organizational Innovation in the Manufacturing Sector and the Knowledge Intensive Business Services By Makó, Csaba; Csizmadia, Péter; Illéssy, Miklós; Iwasaki, Ichiro; Szanyi, Miklós
  3. Sectoral Structural Change in a Knowledge Economy By Che, Natasha Xingyuan
  4. Re-estimating the Knowledge-Capital Model: Evidence from Japanese and US Multinational Enterprises By Kiyoyasu Tanaka
  5. Knowledge spillovers in U.S. patents: a dynamic patent intensity model with secret common innovation factors By Szabolcs Blazsek; ALvaro Escribano
  6. Knowledge, Capabilities and the Poverty Trap: The Complex Interplay Between Technological, Social and Geographical Factors By Jan Fagerberg; Martin Srholec
  7. Policies for the Development and Transfer of Eco-Innovations: Lessons from the Literature By David Popp
  8. R&D-intensive SMEs in Europe:What do we know about them? By Raquel Ortega-Argilés; Lesley Potters; Peter Voigt
  9. At Home and Abroad: An Empirical Analysis of Innovation and Diffusion in Energy-Efficient Technologies By Elena Verdolini; Marzio Galeotti

  1. By: KONNO Tomohiko
    Abstract: Most growth theories have focused on R&D activities. Although R&D significantly influences economic growth, the spillover effect also has a considerable influence. In this paper, we study knowledge spillover among agents by representing it as network structures. The objective of this study is to construct a framework to treat knowledge spillover as a network. We introduce a knowledge spillover equation, solve it analytically to find a workable solution. It has mainly three properties: (1) the growth rate is common for all the agents only if they are linked to the entire network regardless of degrees, (2) the TFP level is proportional to degree, and (3) the growth rate is determined by the underlying network structure. We compare growth rate among representative networks: regular, random, and scale-free networks, and find the growth rate is the greatest in scale-free network. We apply this framework, i.e., knowledge spill over equation, to the problem of firms forming a network endogenously and show how distance and region size affect the economic growth. We also apply the framework to network formation mechanism. The aim of our paper is not just showing results, but in constructing a framework to study spillover by network.
    Date: 2010–01
  2. By: Makó, Csaba; Csizmadia, Péter; Illéssy, Miklós; Iwasaki, Ichiro; Szanyi, Miklós
    Date: 2009–10
  3. By: Che, Natasha Xingyuan
    Abstract: The sectoral composition of the US economy has shifted dramatically in the recent decades. At the same time, knowledge and information capital has become increasingly important in modern production processes. This paper argues that a ready explanation for the recent sectoral structural change lies in the difference of intangible capital accumulation across sectors. In the two-sector model of the paper, as the importance of intangible capital increases, labor is shifted from direct goods production to creating sector-specific intangible capital. In the process, the real output and employment shares of the high-intangible sector increase. The model generates sectoral composition change and labor productivity trend that reasonably match the data. It also shows that conventional labor productivity calculation understates the "true" productivity in sectoral goods production. The underestimation is greater for the growing sector. The empirical regressions of the paper indicate a positive and significant association between intangible capital investment intensity and firms' future output and employment growth. The correlation is higher for firms in the growing sector. At the industry level, controlling for industry human capital intensity, physical capital intensity and IT investment level, intangible capital intensity is positively correlated with future industry real output and employment share growth. These findings are consistent with the implications of the model. The paper also presents evidence suggesting that most growing service industries are intangible capital intensive. Thus the theory developed here can also help to reconcile the expansion of the service sector and the seemingly low productivity of the sector.
    Keywords: Intangible Capital; Structural Change; Knowledge Economy; Firm Investment;
    JEL: E22 E17 E23
    Date: 2009–12–29
  4. By: Kiyoyasu Tanaka
    Abstract: This paper re-estimates the knowledge-capital model by James Markusen (2002) to study market access and factor endowment explanations of foreign direct investment (FDI). I add to the literature by combining consistent datasets on Japanese and U.S. multinational enterprises (MNE) in the period 1989-2002. To reduce potential bias, the prior specification of the knowledge-capital model is augmented with a number of additional control variables and estimated with a system GMM estimator. In the pooled sample, I find that both market access and relative skill endowments matter for the pattern of foreign affiliate sales. When separately estimating Japanese and US samples, the evidence shows that Japanese MNEs are encouraged by relative unskilled-labor abundance in a host country, consistent with a vertical motive of FDI. In contrast, U.S. MNEs concentrate on skill abundant countries, which is in favor of horizontal FDI. These findings imply that combining datasets on multinational activities with heterogeneous motives of FDI is critical for finding evidence of the knowledge-capital model.
    Keywords: Multinational firm, foreign direct investment, market access, factor endowment
    JEL: F21 F23
    Date: 2009–09
  5. By: Szabolcs Blazsek; ALvaro Escribano
    Abstract: During the past two decades, innovations protected by patents have played a key role in business strategies. This fact enhanced studies of the determinants of patents and the impact of patents on innovation and competitive advantage. Sustaining competitive advantages is as important as creating them. Patents help sustaining competivite advantages by increasing the production cost of competitors, by signaling a better quality of products and by serving as barriers to entry. If patents are rewards for innovation, more R&D should be reflected in more patents applications but this is not the end of the story. There is empirical evidence showing that patents through time are becoming easier to get and more valuable to the firm due to increasing damage awards from infringers. These facts question the constant and static nature of the relationship between R&D and patents. Furthermore, innovation creates important knowledge spillovers due to its imperfect appropriability. Our paper investigates these dynamic effects using U.S. patent data from 1979 to 2000 with alternative model specifications for patent counts. We introduce a general dynamic count panel data model with dynamic observable and unobservable spillovers, which encompasses previous models, is able to control for the endogeneity of R&D and therefore can be consistently estimated by maximum likelihood. Apart from allowing for firm specific fixed and random effects, we introduce a common unobserved component, or secret stock of knowledge, that affects differently the propensity to patent of each firm across sectors due to their different absorptive capacity.
    Keywords: Point process, Conditional intensity, Latent factor, R&D spillovers, Patents, Secret innovations
    JEL: C15 C31 C32 C33 C41
    Date: 2009–12
  6. By: Jan Fagerberg; Martin Srholec
    Abstract: This paper explores the possibility that technological capabilities, to lead to development, need to be accompanied by a broader set of “social capabilities”, reflecting not only the quality of governance but also the spread of values, beliefs and institutions that encourage members of society to actively contribute to the development process. To investigate this issue, a set of empirical indicators, reflecting the capabilities that have been emphazised in the literature as being important for development, was identified. We also take into account the possibility that these capabilities (and their impact) may be conditioned by historically given factors (related to, for example, geography, demography and history). The paper uses factor analysis to analyse the question of how these indicators interrelate and explores their relationship with economic development. We find that technological and social capabilities are indeed strongly related and, moreover, strongly correlated with economic development. The same does not apply for the second factor suggested by the analysis, which mainly reflects the character of countries’ political systems. Thus it is more important economically what countries do than how they decide on it. A strong negative relationship with development was found for the third factor, reflecting the combined effect of high fertility rates, low education and high frequency of serious disease. Arguably, this contributes to a “vicious circle” that makes it difficult for some very poor countries, especially in the tropics, to escape from poverty.
    Date: 2009–12
  7. By: David Popp
    Abstract: Along with the recent success of economic growth in the developing world comes more pollution. Reducing these emissions while still enabling these countries to grow requires the use of new technologies in these countries. In most cases, these technologies are first created in high-income countries. Thus, the challenge for environmental policy is to encourage the transfer of these environmentally-friendly technologies to the developing world. This paper reviews the economic literature on both the creation and transfer of environmental technologies, with an emphasis on how the development of new technologies in leading economies can lead to environmental improvements in developing countries. I begin by discussing the incentives for environmentally-friendly innovation, which occurs primarily in developed countries. I then review the literature on the transfer of these technologies to the developing world. A key point is that technology diffusion is gradual. Early adoption of policy by developed countries leads to the development of new technologies that make it easier for developing countries to reduce pollution as well. Globalization also plays an important role in moving clean technologies to developing countries. Since clean technologies are first developed in the world’s leading economies, international trade and foreign investments provide access to these technologies. Finally, the absorptive capacity of nations is important. The technological skills of the local workforce enable a country to learn from, and build upon, technologies brought in from abroad. I conclude by discussing the implication of these lessons for policy, focusing on three examples pertaining to climate change: the Clean Development Mechanism, the role of intellectual property, and government-sponsored R&D.<BR>La croissance économique récente dans les pays en développement s’accompagne d’un accroissement de la pollution. Pour réduire ces émissions tout en se développant, ces pays devront utiliser de nouvelles technologies. Le plus souvent, ces technologies émaneront de pays développés. Ainsi, un défi des politiques environnementales est d’encourager le transfert de technologies propres vers les pays en développement. Cet article passe en revue la littérature économique sur la création et le transfert des technologies environnementales. Il met l’accent sur les liens entre le développement de ces technologies dans les pays développés et l’amélioration de la performance environnementale des pays en développement. Je commence par discuter les incitations à l’innovation favorable à l’environnement, qui se situe essentiellement dans les pays développés. Ensuite, j’analyse la littérature qui traite du transfert de ces technologies vers les pays en développement. Un résultat majeur est que la diffusion de ces technologies est graduelle. Lorsque les pays développés adoptent une politique environnementale, cela peut induire le développement de nouvelles technologies qui vont rendre plus facile la réduction des pollutions dans les pays en développement. La mondialisation joue un rôle important dans le transfert de technologies vers les pays en développement. Dans la mesure où les technologies propres émanent d’abord des pays développés, le commerce international et les investissements internationaux donnent accès à ces technologies. Enfin, la capacité d’une économie à absorber le progrès technique est un facteur important. Les compétences technologiques de la main-d’œuvre locale permettent à un pays d’apprendre et d’exploiter des technologies importées de l’étranger. En guise de conclusion, je discute les conséquences de ces résultats pour les politiques publiques, en me focalisant sur trois exemples dans le domaine de la lutte contre le changement climatique : le mécanisme de développement propre, le rôle de la propriété intellectuelle et l’aide publique à la R&D.
    Keywords: Clean Development Mechanism, climate change, eco-innovation, environment & development, government policy, green technologies, intellectual property, changement climatique, éco-innovation, environnement et développement, mécanisme de développement propre, politiques publiques, propriété intellectuelle, technologies propres
    Date: 2009–12–17
  8. By: Raquel Ortega-Argilés (JRC-IPTS); Lesley Potters (JRC-IPTS); Peter Voigt (JRC-IPTS)
    Abstract: The importance of SMEs in Europe’s innovation process can be seen in both the academic and the political arena. Adopted in June 2008, the ‘Small Business Act’ for Europe reflects the Commission’s political will to recognise the central role of SMEs in the EU economy and was the first to put in place a comprehensive SME policy framework for the EU and its Member States. One of its main aims is to promote growth among SMEs by helping them to tackle problems that hamper their development. This kind of policy calls for a more in-depth look into the nature of the SME population in Europe. Several attempts have been made in recent years to draw taxonomies of firms, but mostly they do not control for size effects within the defined groups of firms. The purpose of this paper is to typify different groups of R&D-intensive SMEs distinguished according to their inputs into the innovation process. In particular, we draw attention to SMEs that contribute the most to the industrial R&D investment in the EU. To do so, we run a cluster analysis on a sample of top European R&D SME investors based on a unique dataset made up of the different waves of the European R&D Investment Scoreboard. The results show that several clusters of R&D-intensive SMEs can be defined by certain characteristics, but that the diversity between clusters calls for a more careful understanding before developing measures to support European R&D-intensive SMEs. For companies labelled as ‘corporate laboratories’ according to the cluster analysis, it would be legitimate to question support for R&D, as these firms do not seem to have significant problems in finding investors that believe in their business model. On the other hand, e.g. the ‘Gazelles’ do in fact grow, but struggle with the high capital investment needed to become and remain large. In this case, it seems it would be more effective to focus on the weaknesses (physical expansion) of these firms rather than supporting their strengths (knowledge, R&D).
    Keywords: SMEs; innovation inputs; cluster analysis
    JEL: O33
    Date: 2009–12
  9. By: Elena Verdolini (Fondazione Eni Enrico Mattei and Catholic University of Milan); Marzio Galeotti (University of Milan and IEFE-Bocconi)
    Abstract: This paper contributes to the induced innovation literature by extending the analysis of supply and demand determinants of innovation in energy-efficient technologies to account for international knowledge flows and spillovers. In the first part of the paper we select a sample of 38 innovating countries and we study how knowledge related to energy-efficient technologies flows across geographical and technological space. We demonstrate that higher geographical and technological distances are associated with a lower probability of knowledge flow. In the second part of the paper, we use our previous estimates to construct stocks of internal and external knowledge for a panel of 17 countries and present an econometric analysis of the supply and demand determinants of innovation accounting for international knowledge spillovers. Our results confirm the role of demand-pull effects, as proxied by energy prices, as well as that of technological opportunity, as proxied by the knowledge stocks. In particular, this paper provides evidence that spillovers between countries have a significant positive impact on further innovation in energy-efficient technologies.
    Keywords: Innovation, Technology Diffusion, Knowledge Spillovers, Energy-Efficient Technologies
    JEL: O33 Q55 C13
    Date: 2009–12

This nep-knm issue is ©2010 by Laura Stefanescu. 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.