nep-tid New Economics Papers
on Technology and Industrial Dynamics
Issue of 2005‒04‒16
twenty-two papers chosen by
Francesco Lissoni
Universita degli Studi di Brescia

  1. Foreign Technology Transfer and Productivity: Evidence from a Matched Sample By Mahmut Yasar; Catherine J. Morrison Paul
  2. Understanding the role of entrepreneurship for economic growth By Martin Carree; Roy Thurik
  3. The Kyoto agreement and Technology Spillovers By Golombek, Rolf; Hoel, Michael
  4. Contributory Infringement Rule and Network By Langinier, Corinne; Marcoul, Philippe
  5. Edith Penrose and the Penrosians - or, why there is still so much to learn from The Theory of the Growth of the Firm. By Nicolai J. Foss
  6. The Knowledge-Based Approach: An Organizational Economics Perspective By Kirsten Foss; Nicolai Foss
  7. Intellectual property and the markets of ideas By Giovanni B. Ramello
  8. Diversity Indices of Technical Capability of 14 African Countries By Voxi Heinrich Amavilah
  9. Unified Growth Theory By Oded Galor
  10. Wants and Past Knowledge: Growth Cycles with Emerging Industries By Ryo Horii
  11. Moore's Law, Competition and Intel's Productivity in the 1990s By Ana Aizcorbe
  12. Joseph Schumpeter and Modern Nonlinear Dynamics By William Barnett; Morgan Rose
  13. Interactions in Innovation Process as a Factor of Innovativeness and Efficiency of Enterprises – Analysis Based on the Polish Innovation System. By El¿bieta Wojnicka
  14. Regional Innovation System in the Pomeranian Province of Poland By El¿bieta Wojnicka; Przemys³aw Rot; Piotr Tamowicz; Tomasz Brodzicki
  15. Does the Concept of “Community of Practice” Show New Trajectories for the Evolution of Industrial Districts? By Silvia Rita Sedita
  16. Analysis and Measurement of Interactions in Innovation Systems: A Corporative and Sectoral approach. By Jon Mikel Zabala Iturriagagoitia
  17. Analysis and measurement of interactions in European Innovation By Jon Mikel Zabala Iturriagagoitia
  18. POLICY INNOVATION IN FEDERAL SYSTEMS By Christos Kotsogiannis; Robert Schwager
  19. The effects of intellectual property protection on international knowledge contracting By Elif Bascavusoglu; Maria Pluvia Zuniga
  20. Les apports du GREMI à l’analyse territoriale de l’innovation ou 20 ans de recherche sur les milieux innovateurs By Muriel Tabariés
  21. Pathways to Innovation in Asia's Leading Electronics Exporting Countries: Drivers and Policy Implications By Dieter Ernst
  22. Internationalisation of Innovation: Why Chip Design Moving to Asia By Dieter Ernst

  1. By: Mahmut Yasar; Catherine J. Morrison Paul
    Abstract: This study examines the causal effects of alternative forms of foreign technology transfer on the productivity of manufacturing plants. We use propensity score matching techniques that limit implicit assumptions about plant homogeneity imbedded in standard estimates of such effects, and methods for estimating total factor productivity that accommodate simultaneity and selection biases. We find positive impacts of technology transfer through foreign direct investment and exporting on both total factor and labor productivity of these plants, and using both nearest neighbor and kernel matching methods. Technology transfer through importing, by contrast, impacts labor but not total factor productivity.
    Date: 2005–03
  2. By: Martin Carree; Roy Thurik
    Keywords: entrepreneurship, small firms, economic growth, economic development
    JEL: M13 O10
    Date: 2005–02
  3. By: Golombek, Rolf (The Ragnar Frisch Centre for Economic Research); Hoel, Michael (Dept. of Economics, University of Oslo)
    Abstract: A significant reduction in global greenhouse gas emissions will require development of new technologies if such reductions are to be achieved without excessive costs. An important question is whether an agreement of the Kyoto type, which does not include elements related to research and development (R&D) of new technologies, will give sufficient incentives to develop such new technologies. On the one hand, since greenhouse gas emissions will become costly for countries and private producers, countries and individual producers will have incentives to undertake effort and costs to develop new technologies. On the other hand, R&D in one country is not only advantageous for this country, but usually also for other countries. The reason for this is that producers in these countries in many cases will learn from the R&D project, for example, through(informal) networks, journals, and in some cases through the import of goods from the country where the new technology is developed. The purpose of the paper is to discuss properties of an international climate agreement of the Kyoto type when R&D investments undertaken in one country are beneficial also for other countries. We examine whether a Kyoto type of agreement can provide the correct social amount of aggregate emissions and R&D investments in new technologies. We argue that the outcome of a Kyoto type agreement will differ from the social optimum. In particular, for a given level of abatement a Kyoto type agreement provides too little R&D investments relative to the social optimum.
    Keywords: Climate policy; Kyoto; international environmental agreements; R&D; technology spillovers.
    JEL: P28 Q54
    Date: 2005–04–06
  4. By: Langinier, Corinne; Marcoul, Philippe
    Abstract: The contributory infringement rule assesses liability to a third party that contributes to the infringement of a patent. Not only are firms that directly infringe liable, those who indirectly contribute are also liable. In the e-commerce world, this rule takes on an important dimension because of the network structure of the Internet. We investigate how the contributory infringement rule affects the creation of a network of members (membership program) and whether this rule is harmful to consumers and firms. We find that the enforcement of the contributory infringement rule does not induce more trials in equilibrium. However, because of the threat of trial, it decreases the network size, and then reduces the social welfare. Surprisingly we find that if the compensation paid by the indirect infringers is high, the contributory infringement rule does not benefit the patentholder and does not give enough R&D incentives ex ante. It is even possible to find a direct compensation for the patentholder that is socially preferable (as it increases the network size).
    JEL: K0
    Date: 2005–04–11
  5. By: Nicolai J. Foss
    Keywords: firm growth; capabilities; firm strategy
    JEL: L21 L22 M2
  6. By: Kirsten Foss; Nicolai Foss
    Abstract: Proponents of the emerging knowledge-based (resource-based, competence-based, etc.) theory of the firm have subjected more traditional economics of organization theories to strong critiques. Rather than directly answering this critique, we examine key ideas of the knowledge-based approach, and argue that these are not necessarily in conflict with basic ideas from organizational economics (particularly ideas relating to the property rights approach), but are either complementary to or consistent with these. In fact, property rights economics and other organizational economics ideas may at least to some extent constitute a much needed micro-foundation for the knowledge-based perspective. The purpose of this exercise is 1) to facilitate dialogue, 2) to dispel false claims of insurmountable differences between the two approaches, and 3) to establish what is genuinely different in the knowledge-based approach.
    Keywords: economic organization; firm knowledge, governance
    JEL: M21 B49
  7. By: Giovanni B. Ramello (Cattaneo University (LIUC))
    Abstract: This paper attempts to systematise the law and economics theory as it relates to intellectual property rights, while at the same time suggesting new perspectives for analysis. The standard literature on IPRs relies essentially on the thesis of the incentive to create and/or disclose new ideas. However, although this argument doubtless remains valid in the general case, it fails to satisfactorily take into account various consequences arising from the new legal institutions and the specific technological context. One important such consequence is the dynamic effect of intellectual property rights on the market structure of the sectors involved, which can at times interfere with the original competitive processes, or even drastically alter them. An economic analysis based on these premises --though as yet fragmented and non systematic-- might reveal a different overall balance of welfare for the individual rights and therefore lead to different regulatory and policy indications
    Date: 2004–12
  8. By: Voxi Heinrich Amavilah (REEPS & Glendale College)
    Abstract: I outline four, and calculate two, broad indices of the diversity of technical capability of 14 African countries based on nine common descriptors of technical capability. I find technical capability to be heterogenous, and conclude that performance policies that ignore technical diversity of capability are potentially misleading, ineffective, and perhaps even damaging.
    Keywords: diversity indices, technical capability, diversity technical capability
    JEL: O55 O49 C63 P52
    Date: 2005–02–05
  9. By: Oded Galor (Brown University)
    Abstract: This chapter examines the process of development from an epoch of Malthusian stagnation to a state of sustained economic growth. The analysis focuses on recently advanced unified growth theories that capture the intricate evolution of income per capita, technology, and population over the entire course of human history. The inconsistency of non-unified growth models with the main characteristics of the process of development across most of human history induced growth theorists to advance an alternative theory that captures in a single unified framework the epoch of Malthusian stagnation, the modern era of sustained economic growth, and the recent transition between these distinct regimes. Unified growth theory reveals the underlying micro foundations that are consistent with the growth process over the entire history of the human species, enhancing the confidence in the viability of the theory, its predictions and its policy implications for the growth process of less developed economies.
    Keywords: Growth, Technological Progress, Demographic Transition, Income Distribution, Human Capital, Evolution, Natural Selection, Malthusian Stagnation, Class Structure.
    JEL: O11 O14 O33 O40 J11 J13
    Date: 2005–04–01
  10. By: Ryo Horii (Osaka University)
    Abstract: This paper develops a demand-pull theory of growth cycles based on variety-expansion models of endogenous growth. In the process of economic growth, cycles are generated by the interaction between consumers' desire to satisfy an indefinite range of wants and firms' incentive to utilize knowledge from past production experiences. Accumulated knowledge induces firms to agglomerate with each other in the technology space, but when the demand for unsatisfied wants reaches a threshold, firms start to adopt new technologies, causing sporadic emergence of new industries. Although emerging industries temporarily decelerates economic growth, they are indispensable parts of sustained long-term growth.
    Keywords: demand-pull growth, growth cycles, wants, knowledge, emergence of industries.
    JEL: O31 O33 O41
    Date: 2005–04–13
  11. By: Ana Aizcorbe (Bureau of Economic Analysis)
    Abstract: In the mid-1990s, a pickup in measured productivity growth for the semiconductor industry coincided with an economy-wide acceleration in labor productivity growth. The pickup in semiconductor markets reflected an increase in the growth of real output that was generated by what Dale Jorgenson (2001) called an “inflection point” in the price indexes for the semiconductor industry. Jorgenson hypothesized that the inflection point reflected increases in the rate of product innovation made possible by an increase in Moore’s Law, a stylized description of technology that currently states that the number of electrical components on a chip will double every eighteen months. Within semiconductors, microprocessors (MPUs) produced by Intel—the world’s largest producer of the chips that serve as a computer’s central processing unit—were the primary contributor to the inflection point in the semiconductor index. The inflection point in the price index coincided with two changes in the price contours for Intel’s chips. First, price contours for Intel’s chips became steeper around 1995. Because most price index formulae boil down to functions of weighted averages of price change, steeper price contours translate directly into more rapidly declining price indexes. At the same time, the product lifecycle for MPUs—the length of time chips are sold in the market—shortened and Intel began to introduce chips more frequently. What caused these changes in pricing and product cycles? This paper provides a simple framework to help gain some intuition on these issues. The model provides a set of conditions under which an increase in Moore’s Law is consistent with both of these stylized facts. In the model, an increase in Moore’s Law raises the quality of future chips relative to today’s chips. If consumers view these chips as substitutes, then increases in the quality of tomorrow’s chips push down the prices for today’s chips and can, under certain conditions, generate an inflection point in the price index. However, the framework also suggests that changes in the attributes of contemporaneous substitutes can have the same effects. Thus, the model suggests that increases in the quality of competitor’s chips can generate an inflection point through the same channel. This is an important possibility to consider because Intel faced increasing competition from AMD beginning in the mid-1990s, about when the inflection point occurred.
    Keywords: Semiconductor Industry, Price Measurement,product cycles
    JEL: L
    Date: 2005–02–08
  12. By: William Barnett (University of Kansas); Morgan Rose (Washington University)
    Abstract: This paper explores the conceptual links between Joseph Schumpeter’s theory of instability under capitalism and both theoretical and empirical research that has been done over the past fifteen years in nonlinear dynamics. Recent work related to chaos and bifurcation theory is shown to be consistent with Schumpeter’s view that instability is an inherent feature of capitalism, and that there is a positive, though difficult, role for stabilization policy as a result. The strong claim that modern research has proven Schumpeter correct is not made, but rather that existing recent research is not inconsistent with his views.
    Keywords: Schumpeter, Austrian Economics, unstable dynamics, nonlinear dynamics
    JEL: D5
    Date: 2005–04–11
  13. By: El¿bieta Wojnicka (University of Information Technology & Management in Rzeszów)
    Abstract: According to the concept of an innovation system, an innovation system consists of institutions and interactions between them. Thanks to them a given economy is an efficient mechanism of distribution of knowledge for its further recombination. The concept shows how the linear and network- based character of innovation process affects the functioning of an economy, which for growth depends on innovations. The analysis of the impact of the more intense interactions of the Polish enterprises in the innovation process on their innovativeness and competitiveness proves the concept of innovation system to be right. Analysis performed through different methods confirmed the validity of the hypothesis that there is a positive relationship between an interactive way of innovation activity and the effectiveness of innovation process and hence success of firms.
    Keywords: innovation process, innovation system, enterprises, networks and interactions
    JEL: P Q Z
    Date: 2005–03–11
  14. By: El¿bieta Wojnicka (The Gdañsk Institute for Market Economics); Przemys³aw Rot (The Gdañsk Institute for Market Economics); Piotr Tamowicz (The Gdañsk Institute for Market Economics); Tomasz Brodzicki (The Gdañsk Institute for Market Economics)
    Abstract: The concept of an innovation system stresses the role of interaction and co-operation between different agents creating and distributing knowledge and innovation. In the post-communist countries like Poland, most of the institutions similar to those of mature market economies are already established. However they not yet embedded in the economy. That is one of the reasons why co-operation between agents in the Polish innovation system is very weak, which results in a very low level of innovation throughout the entire economy. In 2001, The Gdansk Institute for Market Economy undertook research into the regional innovation system of one of the Polish regions – the Pomeranian Region. The results of the research showed that the majority of firms in the region do not co-operate in the innovation process, especially on the regional level. Horizontal linkages between firms almost do not exist. Firms perceive other firms mainly as competitors and are afraid of co-operation. They believe co-operation leads to the theft of their ideas and precious workers. If co-operation occurs, it concerns only less risky and costly phases of the innovation process like joint development, joint conferences and exhibitions as well as joint marketing strategy. The Pomeranian firms also have very weak linkages to the public scientific sector. They very rarely co-operate with scientific research institutions or technology transfer institutions. The weak interaction between firms, both among themselves and with those in academia, results in a very low overall and especially business R&D expenditure. The Pomeranian region, similar to the entire country, is mainly a user, not a producer of technology. The majority of the firms’ capital is imported from foreign countries. To sustain the long-run competitiveness of industry it is crucial to enhance the R&D activity of Polish firms, preferably basing this on co-operation with other agents of the innovation system. A policy stimulating interactions in the innovation process could be cheaper than a policy establishing new institutions as co-operation steers resources into a single effort and it has multiple effects. An important source of new knowledge might be the exchange of information and ideas during conferences, exhibitions, co-operation of firms in chambers of commerce, etc. However, the majority of Pomeranian firms belong to different firms’ associations on the domestic level. As co-operation on the regional level might be more effective, regional authorities should induce dialogue between firms and other regional agents. In the Strategy of Development of the Region originating in the year 2000, one of the main priorities is building an effective regional innovation system. However, it is important that all the actions undertaken are based on their usefulness for enterprises, which are the most important agents in the RIS.
    Keywords: regional innovation systems, enterprises
    JEL: P Q Z
    Date: 2005–03–11
  15. By: Silvia Rita Sedita
    Abstract: The aim of this paper is to find a framework that could be useful to evaluate the utility of the concept of “Community of Practice” (CoP) for understanding the dynamics of knowledge creation and sharing in Industrial Districts (IDs). The CoP concept stems from the managerial experience of large corporations, which have found in it a kind of “living repository” of knowledge. The source of the concept of agglomeration of firms in ID is completely different. Anyway, many similarities can be found between the concepts of ID and CoP, as well then some differences. The paper proceeds as follows. First, it explains the three main concepts useful for understanding further argumentations: knowledge, ID, CoP. Next, it offers a framework to put in comparison the two concepts of ID and CoP. In the end, an example of how the applications of tools, coming from the CoP concept, can be useful to formulate some hypotheses on the evolutionary behaviour of IDs is shown.
    Keywords: Community of Practice, Industrial District, Knowledge, Learning
    JEL: D83 R12
    Date: 2005–02–02
  16. By: Jon Mikel Zabala Iturriagagoitia (Institute of Innovation & Knowledge Management, INGENIO, CSIC-UPV)
    Abstract: Innovation Systems constitute an analysis framework, which allows comprehending the socio-economic structure of a territory. In this context, and due to the importance of interactions, the present research intends to contribute a methodology and a set of indicators which help to increase the knowledge about these interactions, and their impact on the innovative capacity of the territories. The methodology developed will be tested in a multisectoral industrial sector, the Mondragón Cooperative Corporation (MCC) located in the Basque Country. This way, not only the measures defined but also the differences among the Networks that constitute its different sectors will be observed.
    Keywords: Innovation Systems, Interactions, Innovation Networks, Measures, Mondragón Cooperative Corporation.
    JEL: O31 O32 R11
    Date: 2005–03–11
  17. By: Jon Mikel Zabala Iturriagagoitia (Institute of Innovation & Knowledge Management. INGENIO, CSIC-UPV)
    Abstract: Innovation Systems constitute an analysis framework, which allows comprehending the socio-economic structure of a territory. It consists of analyzing the existence of actors such as government institutions, clusters, universities, industries… their main competences, and the interactions into Innovation Networks among them. Thus, authorities (regional, national, local…) are endowed of a tool that allows the creation and development of competitive and efficient Innovation Systems. In this context, and due to the importance of interactions inside Innovation Systems, the present research intends to contribute a methodology which helps us to analyze and measure these interactions produced within Innovation Networks. The methodology developed will be tested in a sector which is present in several European Territories. This way, not only the measures defined but also the differences among the Networks analyzed will be observed and tested.
    Keywords: Innovation Systems, Interactions, Innovation Networks, Measures.
    JEL: R
    Date: 2005–03–11
  18. By: Christos Kotsogiannis (University of Exeter); Robert Schwager (Georg-August-Universitat Gottingen)
    Abstract: Conventional wisdom has it that policy innovation is better promoted in a federal rather than in a unitary system. Recent research, however, has provided theoretical evidence to the contrary: a multi-jurisdictional system is characterized---due to the existence of a horizontal information externality---by under-provision of policy innovation. This paper presents a simple model that introduces political competition for federal office. Under such competition political actors use the innovative policies in order to signal ability to the electorate. In the equilibrium analyzed policy innovation occurs more frequently than in a unitary system. It is thus shown that, once electoral motives are accounted for, the conventional wisdom is validated.
    Keywords: Fiscal federalism; policy innovation; policy experimentation.
    JEL: H77 R59
    Date: 2005–04–04
  19. By: Elif Bascavusoglu (TEAM); Maria Pluvia Zuniga (TEAM)
    Abstract: Developing countries, and particularly, those with a growing technological capacity, expect foreign technology transfers to increase when strengthening their intellectual property protection (IPR) rights. This paper evaluates empirically the impact of IPR on disembodied knowledge trade. It presents an exploration on Bilateral French Technology Receipts at the industry level for the period 1994-2000. Two main findings stem from our analysis. First, it is found that IPR affects positively international knowledge contracting. Nevertheless, our findings show that the impact of IPR protection differs according to countries' income level and technological capacity. Stronger IPR rights can deter technology contracting in developing economies. Second, the effects of IPR protection are found to differ across industries. Stronger protection is found to be irrelevant to attract knowledge contracting in R&D-intensive industries, contrarily to middle R&D-intensive industries. Lastly, our findings on industries' sensitivity to foreign IPR protection differ from the results reported by survey studies (Mansfield et alii, 1968; Levin et alii, 1987; Cohen et alii, 2000) concerning the relative importance of IPR protection across industries to appropriate innovation.
    Keywords: Intellectual property rights, international technology transfer, patent protection.
    JEL: O34 K42 F14 O31
    Date: 2005–01
  20. By: Muriel Tabariés (MATISSE)
    Abstract: This paper deals with the last research decades about the concept of milieu innovateur as it has been created and utilized by a European research network, the GREMI, working on the territorial aspects of innovation and development. From the early typologies of territories innovation trajectoires and the analyses of relationship between milieux and innovation networks, to structural and organisational characteristics of milieux and long term evolution trajectories, to interrelations between the milieu and the city, the objective is to show the richness of a concept that allows to understand the rearrangements that occurred since thirty years within firms and territories.
    Keywords: Territory, innovation, milieu innovateur, trajectories, collective learning
    JEL: O18
    Date: 2005–02
  21. By: Dieter Ernst (Economics Study Area, East-West Center)
    Abstract: This paper was prepared for the Democratic Pacific Assembly 2003 Conference, "Common Future of the 21st Century Pacific," September 18-21, 2003, in Taipei, Taiwan.
    Date: 2003–11
  22. By: Dieter Ernst (Economics Study Area, East-West Center)
    Abstract: This paper will appear in International Journal of Innovation Management, special issue in honor of Keith Pavitt, (Peter Augsdoerfer, Jonathan Sapsed, and James Utterback, guest editors), forthcoming...
    Date: 2003–11

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