nep-knm New Economics Papers
on Knowledge Management and Knowledge Economy
Issue of 2010‒07‒17
six papers chosen by
Laura Stefanescu
European Research Centre of Managerial Studies in Business Administration

  1. Innovation and Diversity in a Dynamic Knowledge Network By Tamás Sebestyén
  3. Product, process and organizational innovation: drivers, complementarity, and productivity effects By Polder, Michael; Van Leeuwen, George; Mohnen, Pierre; Raymond, Wladimir
  4. Costly Investment, Complementarities, International Technological-Knowledge Diffusion and the Skill Premium By Óscar Afonso; Pedro Neves; Maria João Ribeiro Thompson
  5. Innovation, competition and incentives for R&D By Wörter, Martin; Rammer, Christian; Arvanitis, Spyros
  6. Competition and innovation: does the distance to the technology frontier matter? By Simon Alder

  1. By: Tamás Sebestyén (Department of Economics and Regional Studies, University of Pécs)
    Abstract: In this paper we examine the evolution of network formation. We present a model in which companies in an industry can innovate alone or in alliance with others. Alliance formation is based on the cognitive distance of companies. If two companies form an alliance, their probability of success in innovation depends on their proximity in knowledge space, that is, their cognitive distance. Knowledge, on the other hand, is modelled in two dimensions: breadth and depth. The main results of our analysis are that in the present setting heterogeneity decreases among companies whilst innovation can increase and decrease also, depending on the initial parameters of the industry's knowledge endowment. The model also reveales the importance of external shocks in maintaining heterogeneity and concludes with a possible typology of cluster evolution among the dimensions of heterogeneity and innovativeness.
    Keywords: knowledge network, innovation, knowledge heterogeneity, alliance formation, cluster evolution
    JEL: I23 O18 O33 R11
    Date: 2010–03
  2. By: Anne Reino; Maaja Vadi
    Abstract: The objective of the present paper is to outline the regularities in the formation of organizational values. New organizational values measurement tool – Organizational Values Questionnaire was developed by author of the paper. A study of organizational values in Estonian organizations took place in the period 2004–2008. Values were analyzed in terms of the Competing Values Framework, according to which organizational values could be qualified into four broad categories (Open System, Rational Goal, Internal Processes and Human Relations). A binary logit regression analysis was applied in order to test the impact of industry, organizational size and age on organizational values. The findings of the study demonstrate that both contextual and organizational determinants are significant predictors of organizational values; however, different factors do not have equal power in explaining organizational values. It became evident that the impact that industry had on organizational values was the greatest, but size of organization is also a significant predictor of values. Although arguments about organizational age as a determinant of organizational values have been given in the literature, our study showed that organizational age does not predict organizational values in Estonia. This finding may be explained by the path dependency of the country because the processes that have taken place in a society certainly have an influence on organizations. The findings of the present study reveal some regularities about the influence of contextual and organizational factors on organizational values, but they also encourage organizations to discover the potential for shaping their values in order to ensure the survival of the organization in complicated times and its development in that particular environment.
    Keywords: organizational values, determinants of values, Competing Values Framework, Estonia
    JEL: M14
    Date: 2010
  3. By: Polder, Michael; Van Leeuwen, George; Mohnen, Pierre; Raymond, Wladimir
    Abstract: We propose a model where both R&D and ICT investment feed into a system of three innovation output equations (product, process and organizational innovation), which ultimately feeds into a productivity equation. We find that ICT investment and usage are important drivers of innovation in both manufacturing and services. Doing more R&D has a positive effect on product innovation in manufacturing. The strongest productivity effects are derived from organizational innovation. We find positive effects of product and process innovation when combined with an organizational innovation. There is evidence that organizational innovation is complementary to process innovation.
    Keywords: Innovation; ICT; R&D; productivity
    JEL: L25 O30 O32 O33 O31
    Date: 2010–06
  4. By: Óscar Afonso (Universidade do Porto); Pedro Neves (Universidade do Porto); Maria João Ribeiro Thompson (Universidade do Minho)
    Abstract: We examine the behaviour of the skill premium in a two-country general equilibrium growth model assuming (i) technological-knowledge diffusion; (ii) internal costly investment in both physical capital and R&D; and (iii) complementarities between intermediate goods in production. We find that these three economic features affect the steady-state growth rate in both countries. However, only in the imitator country do they influence the skill premium. We also find that the steady-state skill premium in the innovator country is affected by its relative labor productivity rather than by its relative labor endowments. This result contrasts with most skill-biased technological change models and suggests that the sustained increase in the skill premium observed in several developed countries over the last three decades may have been due to increases in the relative productive advantage of skilled labor.
    Keywords: technological-knowledge bias, skill premium, complementarities, costly investment, technological-knowledge diffusion
    JEL: F43 J31 O31 O33 O47
    Date: 2010
  5. By: Wörter, Martin; Rammer, Christian; Arvanitis, Spyros
    Abstract: This paper analyses the relationship between past innovation output, competition, and future innovation input in a dynamic econometric setting. We distinguish two dimensions of competition that correspond to the concepts of product substitutability and entry barriers due to fixed costs. Based on firm-level panel data for Germany and Switzerland we obtain consistent results for both countries. Innovation output in t-1 as measured by the sales share of innovative products is positively related to the degree of product obsolescence in t, and negatively to the degree of substitutability in t in both countries. Further, we find that rapid product obsolescence provides positive incentives for higher - primarily product-oriented - R&D investments in t+1, while high substitutability exerts negative incentives for future R&D investment. --
    Keywords: Innovation,R&D,Competition
    JEL: O3
    Date: 2010
  6. By: Simon Alder
    Abstract: This paper provides new evidence on the relationship between innovation, competition and distance to the technology frontier, using enterprise surveys from 40 developing and transition countries. Different from previous empirical studies, the distance to frontier is measured by a firm's technology level relative to its main competitor. This self-reported comparison allows to capture a crucial determinant of a firm's business strategy and its response to competition. The findings from the empirical analysis are as follows. Firstly, firms with more advanced technology compared to their main competitors have more product innovations. Secondly, there is evidence that innovation and competition are more positively correlated at low levels of competition than at high levels. With some measures of competition, the correlation is highest at intermediate levels of competition, which suggests an inverted-U relationship. Thirdly, in certain specifications, competition is most positively correlated with product innovation when a firm is more advanced than its main competitor. In other cases, this correlation is strongest for firms that are at the same technology level as their competitors. However, the differences in the correlations between more and less advanced firms are not always significant.
    Keywords: Market structure, competition, innovation, technology adaption, growth
    JEL: O16 O31 O33 O38 O40 L16
    Date: 2010–07

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.