nep-knm New Economics Papers
on Knowledge Management and Knowledge Economy
Issue of 2013‒01‒26
fifteen papers chosen by
Laura Stefanescu
European Research Centre of Managerial Studies in Business Administration

  1. Measuring Cultural Diversity and its Impact on Innovation: Longitudinal Evidence from Dutch firms By Ceren Ozgen; Peter Nijkamp; Jacques Poot
  2. Revisiting the Porter Hypothesis: An Empirical Analysis of Green Innovation for the Netherlands By George van Leeuwen; Pierre Mohnen
  3. Determinants of Greenfield Investment in Knowledge Intensive Business Services By Martin Falk
  4. R&D and productivity: In search of complementarity between research and development activities By Barge-Gil, Andrés; López, Alberto
  5. Innovation strategies of German firms: The effect of competition and intellectual property protection By Slivko, Olga
  6. How do judgmental overconfidence and overoptimism shape innovative activity? By Holger Herz; Daniel Schunk; Christian Zehnder
  7. Chinese Renewable Energy Technology Exports: The Role of Policy, Innovation and Markets By Jing Cao; Felix Groba
  8. Composite indicator ECAICI and positioning of Georgia’s innovative capacities in Europe-Central Asia Region By Gogodze, Joseph
  9. Composite indicator for regional innovative systems of the countries with developing and transitional economy By Gogodze, Joseph
  10. ETS and Technological Innovation: A Random Matching Model By Angelo Antoci; Simone Borghesi; Mauro Sodini
  11. Innovation and Power in Food Supply Chains: The Case of the Potato Sector in the UK By Revoredo-Giha, Cesar; Leat, Philip M.K.; Renwick, Alan W.; Lamprinopoulou-Kranis, Chrysa
  12. Knowledge integration of stakeholders into bio-physical process modelling for regional vulnerability assessment By Hermine Mitter; Mathias Kirchner; Erwin Schmid; Martin Schönhart
  13. Primitivization of the EU Periphery: The Loss of Relevant Knowledge By Erik S. Reinert
  14. Awareness and Attitudes towards Biotechnology Innovations among Farmers and Rural Population in the European Union By Toma, Luiza; Madureira, Livia Maria Costa; Hall, Clare; Barnes, Andrew P.; Renwick, Alan W.
  15. Youth Training Programs and their Impact on Career and Spell Duration of Professional Soccer Players By Marcel-Cristian Voia; Mihailo Radoman

  1. By: Ceren Ozgen (Department of Spatial Economics, VU University Amsterdam); Peter Nijkamp (Department of Spatial Economics, VU University Amsterdam); Jacques Poot (National Institute of Demographic and Economic Analysis, University of Waikato)
    Abstract: To investigate econometrically whether cultural diversity of a firm’s employees boosts innovation, we create a unique linked employer-employee dataset that combines data from two innovation surveys in The Netherlands with administrative and tax data. We calculate three distinct measures of diversity. We find that firms that employ fewer foreign workers are generally more innovative, but that diversity among a firm’s foreign workers is positively associated with innovation activity. The positive impact of diversity on product or process innovations is greater among firms in knowledge-intensive sectors and in internationally-oriented sectors. The impact is robust to accounting for endogeneity of foreign employment.
    Keywords: immigration, innovation, cultural diversity, knowledge spillovers, linked administrative and survey data
    JEL: D22 F22 O31
    Date: 2013–01
  2. By: George van Leeuwen; Pierre Mohnen
    Abstract: Almost all empirical research that has attempted to assess the validity of the Porter Hypothesis has started from reduced-form models, e.g. by using single-equation models for estimating the contribution of environmental regulation (ER) to productivity. This paper addresses the Porter Hypothesis within a structural approach that allows us to test what is known in the literature as the “weak” and the “strong” version of the Porter hypothesis. Our “Green Innovation” model includes three types of eco investments and non-eco R&D to explain differences in the incidence of innovation. Besides product and process innovations we recognize eco-innovation as a separate type of innovation output. We explicitly model the potential synergies of introducing the three types of innovations simultaneously and their synergy in affecting total factor productivity (TFP) performance. Using a comprehensive panel of firm-level data built from four surveys we aim to estimate the relative importance of energy price incentives as a market based type of ER and the direct effect of environmental regulation on eco investment and firms’ decisions regarding the introduction of several types of innovations. The results of our analysis show a strong corroboration of the weak version of the Porter hypothesis but not of the strong version of the PH, in this case on TFP performance. <P>Presque toutes les études empiriques qui se sont penchées sur l’hypothèse de Porter ont utilisé un modèle à forme réduite, en d’autres termes un modèle qui régresse la productivité sur la réglementation environnementale. Notre étude utilise un modèle à forme structurelle qui permet de tester les versions faible et forte de l’hypothèse de Porter. Notre modèle d’innovation verte comporte trois types d’investissement environnementaux en plus de la R-D non-environnementale, qui ensemble expliquent l’occurrence d’innovations, qui sont au nombre de trois : innovation de produit, de procédé et éco-innovation. Nous testons la présence de synergie dans l’introduction de ces trois types d’innovation et dans leurs effets sur la productivité totale des facteurs. À l’aide de données de firmes en panel provenant de quatre enquêtes différentes, nous estimons l’importance des prix de l’énergie et des réglementations environnementales sur les investissements verts et les différents types d’innovation. Nos résultats corroborant la version faible mais pas la version forte de l’hypothèse de Porter.
    Keywords: Porter Hypothesis, green innovation, environmental regulation, innovation complementarities, productivity,
    Date: 2013–01–01
  3. By: Martin Falk
    Abstract: This study investigates the determinants of bilateral Greenfield FDI projects and flows in knowledge intensive business services from OECD/BRIC countries to the EU countries for the period 2003-2010. Greenfield FDI projects are distinguished by type of activity: (i) business services, (ii) design, development and testing activities, (iii) headquarters activities and (iv) R&D services. Another aim of this study is to provide new empirical evidence on the patterns of Greenfield investments in knowledge intensive business services over time, source country and destination country. For Austria, the number of Greenfield investments in headquarter functions remains stable over time whereas Greenfield investments in R&D and related activities declined during the sample period. The same holds true for the number of jobs generated through greenfield investments. The results using panel count data models show that wage costs, tertiary education, corporate taxes, having a common border and sharing a common language all play a significant role in determining bilateral Greenfield FDI projects in knowledge intensive services. However, the impact of corporate taxation and labour costs differs widely across the functions and does not play a role in Greenfield investments in R&D and development, design and testing services.
    Keywords: Greenfield foreign direct investment, knowledge intensive business services, headquarter functions, R&D activities, gravity equation, panel data, FDI determinants
    JEL: F23
    Date: 2012–12
  4. By: Barge-Gil, Andrés; López, Alberto
    Abstract: The link between R&D and productivity has been widely analyzed. However, these innovation activities have been considered as a whole. This paper analyzes the differentiated effect of research and development on productivity and tests the existence of complementarity between these activities. We find evidence supporting the existence of a direct effect of both innovation activities. Most interesting, our results suggest that there is complementarity between research and development in determining productivity.
    Keywords: R&D; Productivity; Complementarity
    JEL: O33
    Date: 2013–01
  5. By: Slivko, Olga
    Abstract: This article analyzes how the perceived effectiveness of intellectual property protection and competitive pressure affect firms' innovation strategy choices, concretely, whether to abstain from innovation, to introduce products that are known in the market but new to the firm (imitation) or to introduce market novelties (innovation). Using a sample of 1253 German firms from manufacturing and services sectors I show that the perceived effectiveness of patent protection positively affects firms' propensity to imitate and to innovate. Having a small or a medium number of competitors positively affects firms' propensity to imitate and to innovate as compared to being a monopolist or having a large number of competitors. However, this effect varies with the perceived patent protection effectiveness. If the perceived patent protection effectiveness is low or medium, both innovation and imitation are enhanced, whereas if it is high, only innovation is enhanced. --
    Keywords: Innovation,imitation,competitive pressure,intellectual property protection
    JEL: C35 L13 O31 O34
    Date: 2012
  6. By: Holger Herz; Daniel Schunk; Christian Zehnder
    Abstract: Recent field evidence suggests a positive link between overconfidence and innovative activities. In this paper we argue that the connection between overconfidence and innovation is more complex than the previous literature suggests. In particular, we show theoretically and experimentally that different forms of overconfidence may have opposing effects on innovative activity. While overoptimism leads to an innovation enhancing effect, judgmental overconfidence inhibits innovation. Our results indicate that future research is well advised to take into account that the relationship between innovation and overconfidence may crucially depend on what type of overconfidence is most prevalent in a particular context.
    Keywords: Innovation, entrepreneurship, overconfidence, experiment
    JEL: C92 D83 D23
    Date: 2013–01
  7. By: Jing Cao; Felix Groba
    Abstract: Chinese companies have become major technology producers, with the largest share of their output exported. This paper examines the development of solar PV and wind energy technology component (WETC) exports from China and the competitive position of the country`s renewable energy industry. We also describe the government's renewable energy policy and its success in renewable electricity generation as well as increasing renewable energy innovation and foreign knowledge accumulation, which may drive export performance. We aim at empirically identifying determinants of Chinese solar PV and WETC exports. We estimate an augmented gravity trade model using maximum likelihood estimation. Besides controlling for standard variables derived from the gravity literature, we consider additional explanatory factors by accounting for market, policy and innovation effects steaming from both importing countries and China. We use a panel dataset representing annual bilateral trade flows of 43 countries from the developed and developing world that imported solar PV and WETCs from China between 1996 and 2008. The analysis shows that while the national market remained small for solar PV, the industry successfully entered foreign markets. The export performance of firms producing WETC increased but remained relatively small while the country developed a large home market. Empirical results indicate that high income countries, with a large renewable energy market and demand side policy support scheme, in terms of incentive tariffs, are increasingly importing solar PV components from China. We show that trade costs have a negative impact on exports of solar PV components but not WETC. Additionally, we find a positive impact of research and development (R&D) appropriation growth, especially from provincial governments in China, but no evidence that bilateral knowledge transfer and indigenous innovation affect exports.
    Keywords: China, Gravity model, Trade, Innovation, Policy, Renewable Energy Technologies
    JEL: C32 F14 O30 Q42 Q48 Q56
    Date: 2013
  8. By: Gogodze, Joseph
    Abstract: ECAICI indicator introduced in the present article enables to analyze innovative capacities dynamics of the ECA region (by The World Bank classification) countries in 1996-2010. Thorough research reveals four leading unobservable factors, affecting innovative processes in ECA region. These factors may be referred as Knowledge creation, Economy sophistication, Knowlege Absorption-Diffusion, Human Capital Production. We show that there is a close link between ECAICI indicator and other well-known innovation indicators and show also that there is a close link between ECAICI indicator and GDP per capita. Indicator ECAICI may be applied as an instrument for innovative capacities assessment and analysis. Presented brief analysis of current innovative capacities of Georgia, carried out by means of this indicator serves as illustration of the fact. ECAICI indicator may prove to be useful and interesting also for other post-USSR countries.
    Keywords: National innovation systems; Developing countries; Countries in transition; Composite indicator; Factor analysis
    JEL: C43 O30 C81
    Date: 2013–01–20
  9. By: Gogodze, Joseph
    Abstract: Present article introduces composite indicator for regional innovative systems of the countries with developing and transitional economy. Using the factor analysis technique it exposes four principal unobservable factors, which reflect basic aspects of regional innovative systems. Those factors are used as sub indicators to elaborate composite indicator of the regional innovative systems. This composite indicator may be used for measurement of the regions innovative lavel. Proposed composite indicator can be easily adapted for other countries with developing and transitional economy (e.g. for the post USSR space). By way of illustration here are provided calculations of sub indicators and the composite indicator for Georgian regions (GRIS-2010).
    Keywords: Regional innovation systems; Developing countries; Countries in transition; Composite indicator; Factor analysis
    JEL: O18 C43 O30 C81
    Date: 2013–01–15
  10. By: Angelo Antoci (University of Sassari); Simone Borghesi (University of Siena); Mauro Sodini (University of Pisa)
    Abstract: The present paper investigates the functioning of an Emission Trading System (ETS) and its impact on the diffusion of environmental-friendly technological innovation in the presence of firms’ strategic behaviours and sanctions to non-compliant firms. For this purpose, we study an evolutionary game model with random matching, namely, a context in which a population of firms interact through pairwise random matchings. We assume that each firm has to decide whether to adopt a new clean technology or keep on using the old technology that requires pollution permits to operate and that the strategy whose expected payoff is greater than the average payoff spreads within the population at the expense of the alternative strategy (the so-called replicator dynamics). We investigate the technological dynamics and the stationary states that emerge from the model. From the analysis of the model, we show that by properly modifying the penalty on non-compliant firms, it is possible to shift from one dynamic regime to another and that an increase in permits trade can promote the diffusion of innovative pollution-free technologies.
    Keywords: Emissions Trading, Technological Innovation, Random Matching, Evolutionary Game, Penalty System, Strategic Behaviour
    JEL: C62 C63 C73 C78 O33 Q55 Q58
    Date: 2012–10
  11. By: Revoredo-Giha, Cesar; Leat, Philip M.K.; Renwick, Alan W.; Lamprinopoulou-Kranis, Chrysa
    Abstract: This paper deals with innovation in supply chains and discusses the effects that its organisation (e.g., bargaining power along the chain) might bring on innovation and ultimately to the sustainability of the chain. The analysis was carried out considering the case of the UK potato sector and by comparing three case studies: the first two consider the situation of a supply chain that sells fresh potatoes to retailers (one in South England and another in Scotland), whilst the third one consists of a supply chain that produces potatoes to be further processed. The results indicate that the supply chain leader plays an important role in both in the organisation of the chain and in the initialisation, management and success of the innovation
    Keywords: Innovation, agri-food supply chains, potato sector, UK agriculture, Agricultural and Food Policy, Food Consumption/Nutrition/Food Safety,
    Date: 2012–09
  12. By: Hermine Mitter (Institute for Sustainable Economic Development, Department of Economics and Social Sciences, University of Natural Resources and Applied Life Sciences, Vienna); Mathias Kirchner (Institute for Sustainable Economic Development, Department of Economics and Social Sciences, University of Natural Resources and Applied Life Sciences, Vienna); Erwin Schmid (Institute for Sustainable Economic Development, Department of Economics and Social Sciences, University of Natural Resources and Applied Life Sciences, Vienna); Martin Schönhart (Institute for Sustainable Economic Development, Department of Economics and Social Sciences, University of Natural Resources and Applied Life Sciences, Vienna)
    Abstract: Climate change affects agriculture differently due to the heterogeneity in bio-physical and economic conditions in Austria. Therefore, stakeholder and expert knowledge is required in regional vulnerability assessments to address region specific challenges and develop compatible adaptation strategies. In a transdisciplinary research project, a working group consisting of regional stakeholders and agricultural experts identified the effects of uncertain future precipitation on soil water erosion as well as the effectiveness of selected soil conservation measures as the most crucial knowledge gap. Consequently, potential sediment losses on cropland have been simulated with the RUSLE (Revised Universal Soil Loss Equation) methodology for several climate change scenarios using the bio-physical process model EPIC (Environmental Policy Integrated Climate) in an Austrian alpine foreland region. The model predicts an increase in sediment yield with higher precipitation sums for 2040 on average. However, reduced tillage and cultivating winter cover crops have been identified as effective adaptation options. The stakeholders have provided local knowledge in crop management and validated the model results according to their clarity, comprehensiveness, and meaningfulness. They confirmed its usefulness to inform farmers and support the public debate on regional climate change adaptation in agriculture.
    Keywords: transdisciplinary regional vulnerability assessment, soil water erosion, EPIC, soil conservation measures, Austria
    JEL: Q18
    Date: 2013–01
  13. By: Erik S. Reinert
    Abstract: The European periphery . from Greece to Spain and the Baltic States . is hard hit by economic crises in the form of unemployment and falling real wages. The immediate reasons for these crises, .the straw that broke the nationsÿ backÿ so to say, are not the same. The countries in crisis may have had irresponsible budget deficits or irresponsible housing and prop-erty booms, but . as this article argues . the present underlying problems in the European Union can partly be attributed to ignoring previously well-understood economic insights and wisdom based on the interplay between geography, technology, and economic structure. This ignored knowledge abounds in the German-speaking literature, in this chapter represented by three economists: Heinrich von Thünen, Friedrich List, and Joseph Schumpeter, whose collective lives span from 1783 to 1950. Although all three worked in the periphery of what is normally referred to as The German Historical School of Economics, they all centered their analysis on a qualitative understanding of economic phenomena which disappeared from ruling economic theory, and consequently also from the understanding of politicians.
    Date: 2013–01
  14. By: Toma, Luiza; Madureira, Livia Maria Costa; Hall, Clare; Barnes, Andrew P.; Renwick, Alan W.
    Abstract: The paper analyses the impact that European Union (EU) farmers’ and rural population’s awareness of biotechnology innovations and access to/trust in information on these issues (amongst other a priori determinants) have on their perceptions of risks and benefits of the applications of biotechnology innovations, and attitudes towards their implementation in practice. We employ structural equation models (SEM) with observed and latent variables. SEM is a statistical technique for testing and estimating relationships amongst variables, using a combination of statistical data and qualitative causal assumptions. We use an Eurobarometer dataset (2010) about awareness/acceptance of biotechnology innovations and run SEM models for ten EU countries, which include older and newer Member States. The variables included are socio-demographics, access to biotechnology information, trust in information sources on biotechnology innovations, attitudes towards the importance and impact of science and technology on society, perceptions of the risks and benefits of the applications of biotechnology innovations and attitudes towards their implementation in practice. Results between the different EU countries are comparable and, alongside other determinants, trust in information sources will significantly impact perceptions of risks and benefits of the applications of biotechnology innovations, and attitudes towards their implementation in practice. This underlines the importance of information and knowledge to acceptance of biotechnology innovations, which should be a key point on policy-makers’ agenda of developing the economic and environmental efficiency in the agricultural sector and rural sustainability in Europe. Increasing awareness of biotechnology innovations that safeguard people and the environment in order to enable informed debate and decisions will help enhance sustainability of rural areas.
    Keywords: biotechnology innovations, farmers and rural population, European Union, information and knowledge, biotechnology attitudes, structural equation models, Farm Management, Research and Development/Tech Change/Emerging Technologies,
    Date: 2012–09
  15. By: Marcel-Cristian Voia (Department of Economics, Carleton University); Mihailo Radoman (Department of Economics, Carleton University)
    Abstract: A unique data set of post-war English trained soccer players that signed professionally with their parent club when they turned 18 is used to study the impact of their stay with the home team and their total career duration. The home team (first) spell and career durations of these soccer players in a top European leagues is modeled using robust hazard models. The results of the analysis show that players that start their professional careers after acquiring training in competitive youth academy/programs have different outcomes on their career and first spell duration depending on the clubs they start their training. The first spell duration analysis is performed to estimate the bond or loyalty factor established by clubs with their youth trainees. The spell analysis outlines the nature of the competitive environment in which smaller clubs have a chance to keep up with the larger ones in terms of producing and holding on to home-grown talent. This would be a necessary condition for them to remain competitive in light of their lagging financial resources that limit their activity and ability to attract top talent in the soccer transfer market. The analysis of career duration in the top European leagues will show the success of a specifc academy's training programs in producing players competitive in top soccer leagues. Finally, the results of both analyses were tested for endogeneity bias using a split sample test.
    Keywords: career duration of soccer players, youth training programs, duration models, model evaluation
    JEL: C14 C41 C52 J24 J44
    Date: 2013–01–08

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