nep-knm New Economics Papers
on Knowledge Management and Knowledge Economy
Issue of 2013‒01‒07
eighteen papers chosen by
Laura Stefanescu
European Research Centre of Managerial Studies in Business Administration

  1. The Study of Time-Space Dynamics of Knowledge with Innovation Biographies By Anna Butzin; Brigitta Widmaier
  2. R&D, Socio-Economic Conditions and Regional Innovation in the United States By Crescenzi, Riccardo; Rodríguez-Pose, Andrés
  3. Innovation Strategies and Productivity in the Polish Services Sector in the light of CIS 2008 By Wojciech Grabowski; Krzysztof Szczygielski
  4. Towards a Richer Specification of the Exploration/Exploitation Trade-off: Hidden Knowledge-based Aspects and Empirical Results for a Set of Large R&D-Performing Firms By Schubert, Torben; Neuhaeusler, Peter
  5. Does Co-Location Accelerate Knowledge Outflows from FDI? The Role of MNC Subsidiaries' Technology Sourcing Strategies By Alessandra Perri; Raffaele Oriani; Francesco Rullani
  6. Cross-country difference in R&D productivity Comparison of 11 European economies By Lööf, Hans; Savin, Maxim
  7. National innovation systems: Can they be copied? By Varblane, Urmas
  8. SAPPHO Revisited: Factors of Innovation Success in Knowledge-Intensive Enterprises in Central and Eastern Europe By Slavo Radosevic; Esin Yoruk
  9. Too Much of a Good Thing: The Role of Alliance Portfolio Diversity for Innovation Output in the Biotechnology Industry By Wilfried Zidorn; Marcus Wagner
  10. The Impact of R&D Collaboration Networks on the Performance of Firms and Regions: A Meta-Analysis of the Evidence By Gunnar Pippel
  11. Innovative capability and financing constraints for innovation: More money, more innovation? By Hottenrott, Hanna; Peters, Bettina
  12. Rural Innovation - Crucial, But Rarely Systemic By Freshwater, David
  13. Cost Innovation: Schumpeter and Equilibrium. Part 2: Innovation and the Money Supply By Martin Shubik; William D. Sudderth
  14. Competitiveness, innovation and regional development. The case of the Visegrad Group countries By Anna Golejewska
  15. Implementing Grassroots Innovation in a Large Firm: A Conceptual Framework and In-Depth Case Study By Betz, U.A.K.; Camacho, N.M.A.; Gerards, M.; Stremersch, S.
  16. ICT and occupation-based measures of organisational change: Firm and employee outcomes By Böckerman, Petri; Kauhanen, Antti; Maliranta, Mika
  17. Technology Adoption, Job Matching Frictions and Business Creation By Andrea Colciago; Federico Etro
  18. Retail Payment Systems: Competition, Innovation, and Implications By Wilko Bolt

  1. By: Anna Butzin (Institute for Work and Technology Germany); Brigitta Widmaier (Institute for Work and Technology Germany)
    Abstract: The paper presents the methodology of Innovation Biographies that has been designed to study the time-space dynamics of knowledge and ways of knowledge combination in innovation processes. Innovation Biographies allow capturing relationships, contextual settings and different kinds of knowledge and enable insights into the evolvement and development of innovations. By following the process of creation with specific interviewing methods and triangulation, the biography of an innovation is reconstructed including the evolution of related knowledge. Data collection is able to transcend sectoral as well as local, regional or national categories and sheds light on cross-sectoral knowledge combinations and its multi-scalar reach.
    Keywords: Innovation Biographies, knowledge dynamics, knowledge combinations, time-space paths, multi-level view
    JEL: D83 O12 O31 R11
    Date: 2012–12–19
  2. By: Crescenzi, Riccardo; Rodríguez-Pose, Andrés
    Abstract: This paper looks at the genesis of innovation in the United States from a territorial perspective. The analysis aims to disentangle the impact of local R&D expenditure from other contextual conditions supportive of the process of innovation. Particular emphasis is devoted to the role of socio-economic factors and systems of innovation conditions (‘social filter’ conditions) and to their impact on the returns of R&D expenditure in different territorial contexts. The empirical analysis is based on a Regional Knowledge Production Function approach, leading to an empirical model estimated by means of panel data analysis for the period between 1994 and 2007 at the US Bureau of Economic Analysis (BEA)-Economic Area level. The results unveil the complexity of the territorial dynamics of innovation of the US. Local R&D investments are important predictors for regional innovative performance and their impact is highly localized. However, social filter conditions are fundamental for the productivity of innovation efforts.
    Keywords: Innovation; R&D; Socioeconomic conditions; Systems of innovation; United States
    JEL: O32 O33 R11 R12
    Date: 2012–12
  3. By: Wojciech Grabowski; Krzysztof Szczygielski
    Abstract: Industry - and firm-level research into both innovations and productivity has long been limited to manufacturing. With this paper, we aim to contribute to the stream of literature that aims at extending the scope of such investigations to the services industry. To this end we analyze the innovation strategies in several service sectors in Poland in 2008 and examine their relationship to productivity. Our results show that service firms differ considerably in their innovation strategies, but that most of those strategies lead to productivity gains.
    Keywords: Private sector development, innovation and knowledge-based economy, Europe, strategy of innovation, Poland
    JEL: L80 O31 L25
    Date: 2012–12
  4. By: Schubert, Torben (CIRCLE, Lund University); Neuhaeusler, Peter (ISI-Fraunhofer, Germany)
    Abstract: In this paper we describe a richer framework characterizing the trade-off between exploration and exploitation with respect firm performance. We devise a model that complements the notion of organizational learning as a process of inferential learning from the past with an explicit incorporation of a knowledge/information-related theory. Based on this and an international panel data set of large R&D performing firms, we can show empirically that a firm’s innovation activities affect its growth perspectives and its asset base differently, depending on the degree of exploitation/exploration. We also show that competitors’ R&D has important diverging effects on other firms which again depend on the degree of exploitation/exploration. Finally, we demonstrate the mediating role of environmental risk. We therefore argue that the trade-off between exploration and exploitation has (at least) three constituent dimensions: an internal dimension relating to performance in terms of increasing sales growth and preservation of the asset base, an external competitive dimension, and a contingency dimension relating to environmental factors such as risk. We conclude that the trade-off between exploration and exploitation can only be fully understood, if all three components are taken into account simultaneously.
    Keywords: Firm performance; exploration; exploitation; innovation; growth
    JEL: M00
    Date: 2012–04–10
  5. By: Alessandra Perri; Raffaele Oriani; Francesco Rullani
    Abstract: Despite the strategic importance of the knowledge outflows from FDI for local firms’ competitiveness, no study has focused on the speed at which this phenomenon takes place. However, this issue is crucial since the speed at which firms absorb external knowledge influences the time they need to carry out subsequent innovations, their ability to adapt to external changes and enter new markets, thus ultimately affecting their chances to achieve a competitive advantage. This paper tries to fill this gap, by investigating the temporal patterns of knowledge outflows between foreign subsidiaries and firms located in host-regions. Combining International Business literature with insights on Innovation Strategy, we provide evidence on the timing of this phenomenon, and discuss the role played by multinational firms’ technology sourcing strategies.
    JEL: O33
    Date: 2012
  6. By: Lööf, Hans (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology); Savin, Maxim (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology)
    Abstract: This paper examines differences in R&D productivity across a group of geographically adjacent economies. By distributing close to 355,000 patents across 18 industries in 11 countries, we find clear and systematic country patterns when taking into account differences in industrial structure, institutional arrangements and R&D intensity. This finding supports the argument that innovation systems are important for an industry’s capacity to generate new patentable knowledge.
    Keywords: Patent; R&D; Innovation; international comparison; panel data
    JEL: L60 O33 O50
    Date: 2012–12–19
  7. By: Varblane, Urmas
    Abstract: This chapter discusses the application of the national system approach in the catching up economies. It criticizes the assumption that there exists an optimal one-sizefits-all national innovation system model. The example is the Estonia-Finland case, in which Finland's national innovation system is being applied to Estonia. We argue that innovation is path dependent and that factors such as distance from the current technological frontier (latecomer or frontrunner) and different national knowledge bases must be considered when developing a national innovation system for a specific country. The aim of the chapter is thus two-fold: 1) we are interested in how the concept of innovation is presented and reproduced within the national context and 2) exploring the adverse effects of (re)producing National Innovations Systems in an uncritical and unreflexive manner. --
    Keywords: National Innovation System,Copy,Estonia
    Date: 2012
  8. By: Slavo Radosevic; Esin Yoruk
    Abstract: This research investigates the mutual and diverging factors for successful and less successful innovations in software and manufacturing of machine tools in Central and Eastern Europe (CEE). We apply univariate and multivariate analyses on 115 indicators by revisiting the seminal SAPPHO project based on the analysis of pairs of innovations and conducted at SPRU – Science and Technology Policy Research during the 1970s. We aim to identify principal factors influencing firm success in innovation in the context of CEE and compare our results to those of SAPPHO and see whether any changes took place during the last 40 years in this context after several decades of globalization. Our initial findings from a database of 90 innovations and 45 pairs of innovations – introduced onto the market during the period 2007-2010 - from 51 CEE enterprises demonstrate that, in particular, user and market-driven factors differentiate successful innovations from less successful ones. Our results fully confirm the continuing relevance of SAPPHO results and methodology. Successful innovators have stronger user orientation and better understanding of market demand. Although, CEECs are catching up economies, continuous and strategic R&D and innovation collaboration is essential to generation of greater commercial success from innovation activities. Given the catching-up character of the CEECs this is surprising result which may reflect knowledge-intensive nature of two sectors which form the basis of our sample. Results of this research clearly demonstrate that orientation of the CEEC innovation policies is inconsistent with the characteristics and behaviour of successful innovators.
    JEL: O32
    Date: 2012
  9. By: Wilfried Zidorn; Marcus Wagner
    Abstract: The purpose of this paper is to show the impact of heterogeneous partners in a biotechnology firm’s alliance portfolio on innovation output. Previous literature has stressed that investments into the heterogeneity of partners in an alliance portfolio is more important than just engaging in multiple collaborative agreements. The analysis of a unique panel dataset of 20 biotechnology firms and their 8502 alliances suggests that engaging in many alliances in general has a positive influence on a firms innovation output. Furthermore, maintaining diverse alliance portfolios has an inverted U-shaped influence on a firm’s innovation output, as managerial costs and complexity levels become too high.
    Keywords: Alliances; alliance portfolio; biotechnology; innovation
    Date: 2012
  10. By: Gunnar Pippel
    Abstract: Innovation is the result of an interactive process. Knowledge-intensive interactions among different partners are associated with a variety of advantages and disadvantages for the actors involved. Therefore, a rich body of literature investigating the impact of R&D collaboration networks on the innovation performance of firms and regions has developed over the last two decades. Those studies come to different results. The aims of this paper are manifold. First, the paper summarizes the results of the relevant literature. Second, a brief overview of the established methods and approaches used in the literature to investigate this research question is given. The third objective is to answer the question whether the achieved results in the literature are predetermined by the employed methods. Finally, relevant gaps for further research are identified. To answer these questions a meta-analysis of the relevant literature is conducted. This study shows that knowledge-intensive interactions have a rather positive impact on the performance of firms and regions. There is also evidence that the employed methods and approaches used in the literature to investigate this research question predetermine the outcome of the research.
    Keywords: innovation, collaboration, network, performance, meta-analysis
    JEL: O32 O33 R10 R11
    Date: 2012–12
  11. By: Hottenrott, Hanna; Peters, Bettina
    Abstract: This study presents a novel empirical approach to identify financing constraints for innovation based on the concept of an ideal test (Hall 2008). Firms were offered a hypothetical payment and were asked to choose between alternatives of use. If they selected additional innovation projects, they must have had some unexploited investment opportunities that were not profitable using more costly external finance. We attribute constraints for innovation not only to lacking financing, but also to firms' innovative capability. Econometric results show that financial constraints do not depend on the availability of internal funds per se, but that they are driven by innovative capability. --
    Keywords: innovation,financing constraints,innovative capability,multivariate probit models
    JEL: O31 O32 C35
    Date: 2012
  12. By: Freshwater, David
    Abstract: Innovation is largely held to be unlikely in rural regions. This reflects the current emphasis on regional innovations systems that are driven by large expenditures on formal science based activity that results in patentable outcomes. From this metric the observation about rural innovation is largely true. However, a broader concept of innovation, which includes the actions of individual inventors/entrepreneurs opens the possibility of rural innovation. Not only do we see significant innovation in rural regions, some of these innovations have been globally disruptive and led to major changes in important industries. For rural regions innovation can be a key driver of productivity since the success of a single firm can play a major role in eh economic growth of the region. Fostering entrepreneurship provides a way for rural regions to also increase the level of innovation.
    Keywords: rural development, innovation, economic growth, entrepreneurship, productivity, Community/Rural/Urban Development, Production Economics, Productivity Analysis, L260.0310, R110, R120,
    Date: 2012
  13. By: Martin Shubik (Cowles Foundation, Yale University); William D. Sudderth (University of Minnesota)
    Abstract: The control structure over money and real assets is considered in the process of cost innovation. The work here contrasts with the first part of this paper where the emphasis was on the physical aspects of innovation. Here the emphasis is primarily on the money supply aspects of innovation. We conclude with observations on evaluation and the locus of control in the process of innovation.
    Keywords: Cost innovation, Financial control, Circular flow
    JEL: D24 G32
    Date: 2012–01
  14. By: Anna Golejewska (Faculty of Economics, University of Gdansk)
    Abstract: The paper relates to factors determining regional competitiveness in Poland, the Czech Republic, Hungary and Slovakia - the Visegrad Group. The study starts from a comprehensive survey of the literature on regional competitiveness and the potential effects of innovation. The theoretical section is supplemented by empirical one. The aim of the empirical analysis is to investigate the regional diversity of innovativeness and competitiveness in the group of 35 regions (NUTS 2 level) over the period 2001-2008. It is based on one data source: Eurostat Regional Statistics. I applied two classical methods of cluster analysis. The results of non-hierarchical k-means clustering algorithm were compared with the results of hierarchical Ward’s method. The results for the Visegrad Group show faster development of capital regions and diversity of regional competitiveness and innovativeness. According to the results, one can suppose that innovative inputs were transformed in innovative outputs and that innovations had a positive and growing impact on regional competitiveness in the Visegrad Group, however further research is still needed. The major conclusion of the cluster analysis is that the development of regions in the Visegrad Group depends on their nationality – regions cluster within borders. Analysing the results, one should not forget that they are based on selected variables, which are a resultant of –in some measure- random choice and data accessibility.
    Keywords: regional competitiveness, regional growth, innovation, cluster analysis, Central and Eastern European Countries
    JEL: R11 C38 P25
    Date: 2012–12
  15. By: Betz, U.A.K.; Camacho, N.M.A.; Gerards, M.; Stremersch, S.
    Abstract: In order to promote the generation of market breakthroughs and disruptive innovation, organizations increasingly promote grassroots innovation, i.e. the emergence of innovative ideas from their whole employee base. Despite this surge in interest in grassroots innovation, there is a lack of guidance on how organizations should design and implement grassroots innovation programs. A key challenge faced by organizations promoting grassroots innovation is how to motivate the right employees to submit their best ideas and persist in their quest to transform such ideas in successful new businesses. In this paper, we draw on self-determination theory (SDT) to propose a conceptual framework that organizations can use to design effective grassroots innovation programs. We offer an in-depth understanding of how top-management support and the mechanisms behind grassroots innovation programs (e.g., idea sourcing, team formation, team/idea selection and training/coaching) influence employees’ motivation to submit their best ideas and, consequently, the success of grassroots innovation programs. We argue, in line with SDT, that successful grassroots innovation programs need to promote employees’ intrinsic motivation for innovation by satisfying three innate human needs: competence, autonomy and relatedness. Through an in-depth case study (the Innospire program at Merck), we provide evidence that support our propositions and discuss how organizations can successfully implement the proposed framework.
    Keywords: corporate entrepreneurship;self-determination theory;grassroots innovation;in-depth case study
    Date: 2012–12–21
  16. By: Böckerman, Petri; Kauhanen, Antti; Maliranta, Mika
    Abstract: To examine the productivity, employment and wage effects of ICT, we apply novel occupationbased measures of organisational change within firms. With these measures, we directly address the complementarities between ICT and organisational changes. Our results support the view that organisational change complements ICT investments in a productivity-enhancing manner. In particular, the ICT-driven productivity gains are associated with the destruction of routine and noninteractive tasks in an organisation. Furthermore, using longitudinal aspects of our linked employeremployee data, we find that whereas ICT does not affect the probability of an employee becoming unemployed, it has a positive impact on the wage growth of retained employees.
    Keywords: ICT; innovation; organisational change; restructuring; productivity; performance; wages
    JEL: J31 L23 J24 M51
    Date: 2012–12–17
  17. By: Andrea Colciago (Department of Economics, University Of Milan, Bicocca and Dutch National Bank); Federico Etro (Department of Economics, University Of Venice Cà Foscari)
    Abstract: We study the impact of a General Purpose Technology that changes the cost structure turning fixed costs into variable ones in most sectors. A major recent example is cloud computing, whose adoption allows firms to avoid large up-front costs in IT and to rent computing capability online. We study the macroeconomic impact of the adoption of such an innovation in a DSGE model with endogenous market structures in the goods market and search and matching frictions in the labor market. To start a business, firms need to hire workers from the pool of unemployed agents and set up a stock of IT capital: the new technology allows them to rent computing capabilities reducing entry costs. Such an innovation can have a substantial impact on business and job creation.
    Keywords: Endogenous entry, General purpose technology, Job creation, Search frictions, Cloud computing
    JEL: L1 J6 O3
    Date: 2012
  18. By: Wilko Bolt
    Abstract: Efficient payment services underpin the smooth operation of the economy. Competition and innovation are key drivers for payment market efficiency in both the short and long run. This paper gives an overview and tries to assess the key determinants that affect pricing, competition and the incentives to innovate in the payment market. While the payment landscape is changing rapidly, it is not yet clear what business model will survive.
    Keywords: Payments; pricing; competition; innovation
    JEL: L11 G21 C21
    Date: 2012–12

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