nep-tid New Economics Papers
on Technology and Industrial Dynamics
Issue of 2005‒10‒04
ten papers chosen by
Roberto Fontana
Universita Bocconi

  1. Using multi-hub structures for international R&D: Organizational inertia and the challenges of implementation By Criscuolo,Paola; Narula,Rajneesh
  2. Mapping National Innovation Systems in the OECD Area By Markus Balzat; Andreas Pyka
  3. Will online bill payment spell the demise of paper checks? By James C. McGrath
  4. The Dragon vs the Elephant: Comparative analysis of innovation capability in the telecommunications equipment industry in China and India By Sunil Mani
  5. Comparing the Innovation Performance in Canadian, French and German Manufacturing Enterprises By Pierre Mohnen; Pierre Therrien
  6. Vertical Integration and Technology: Theory and Evidence By Acemoglu, Daron; Aghion, Philippe; Griffith, Rachel; Zilibotti, Fabrizio
  7. Disentangling Horizontal and Vertical Intra-Industry Trade By Lionel Fontagne; Michael Freudenberg; Guillaume Gaulier
  8. Public policy and the creation of active venture capital markets By Marco Da Rin; Giovanna Nicodano; Alessandro Sembenelli
  9. Innovation in Enterprise Clusters:Evidence from Dutch Manufacturing By Bert Diederen; Pierre Mohnen; Franz Palm; Wladimir Raymond; Sybrand Schim van der Loeff
  10. Technology spillovers from external investors in East Germany: no overall effects in favor of domestic firms By Harald Lehmann; Jutta Günther

  1. By: Criscuolo,Paola; Narula,Rajneesh (MERIT)
    Abstract: Over the last decade or so, multinational enterprises (MNEs) have shifted from centralised hub structures to multi-hub structures. While these new structures provide greater potential for cross-fertilization of technologies and access to locationspecific competences, promoting effective knowledge transfer within an MNE – especially in their R&D activities - presents significant managerial challenges. Using evidence collected on the R&D activities of MNEs in the pharmaceutical sector, this paper analyses the challenges associated with complexities of promoting and integrating knowledge flows in the face of inter-unit geographical, organizational and technological distance. MNEs are faced with organizational inertia that hinders efficient lateral communication and inter-unit knowledge transfer, and the evidence suggests that while socialization mechanisms help overcoming some of these bottlenecks, there remain a number of obstacles in optimising knowledge flows in physically and technologically dispersed R&D facilities.
    Keywords: economics of technology ;
    Date: 2005
  2. By: Markus Balzat (University of Augsburg, Department of Economics); Andreas Pyka (University of Augsburg, Department of Economics)
    Abstract: The purpose of this paper is to present new findings about the structure and the organization of innovative activities in selected OECD countries. By using the approach of national sys-tems of innovation as a conceptual framework and by applying multivariate data analysis techniques, this paper aims to add new insights into the specific structures of the eighteen national systems of innovation under study. A central result from this comparative study is a categorisation of national systems of innovation into different clusters, with each cluster rep-resenting distinctive cross-national structural similarities. By accounting for sectoral specif-ics, the commonly taken perspective on national innovation systems is extended. Thereby, a more precise picture of the structural composition of the analyzed national innovation sys-tems accrues. Also, a new linkage between the two approaches of national and sectoral inno-vation systems is created.
    Keywords: national innovation systems, comparative study, classification
    JEL: C33 O11 O31 P51
    Date: 2005–09
  3. By: James C. McGrath
    Abstract: Over the past several years, the emergence and adoption of electronic payment instruments have acutely affected check usage. This transition has been especially evident at the point of sale as debit and credit cards have become pervasive. Today, the rapid growth of online bill payment looks to threaten checks’ last redoubt. However, bill payment technology is still in its adolescence; the interplay of many stakeholders in the industry, including technology firms, banks, billers, payment cards, and customers, has led to rapid, unscripted innovation in just a few years. This paper quantifies some of the trends in the industry while addressing the interests and impact of the market’s prime movers in an effort to determine to what extent the displacement of checks will continue.
    Keywords: Electronic funds transfers ; Checks ; Internet banking
    Date: 2005
  4. By: Sunil Mani (Centre for Development Studies)
    Abstract: China and India have one of the largest telecommunications equipment markets in the world. The paper employs a sectoral system of innovation framework towards understanding the differential outcomes in innovation capability building in the industry achieved by China and India. The countries have pursued widely diverging strategies for developing their domestic innovation capability. India followed a very rigid policy of indigenous development of domestic technologies by establishing a stand-alone public laboratory that developed state-of-the art switching technologies. These were then transferred to manufacturing enterprises in both public and private sectors. The enterprises themselves did not have any in-house R&D capability. The public laboratory was also not given any strategic direction, even though it was technologically speaking, very competent. Consequently the country, despite possessing good quality human resource was unable to keep pace with changes in the technology frontier and the equipment industry has now become essentially dominated by affiliates of MNCs. China, on the contrary, first depended on MNCs for her technology needs in this area. But subsequently encouraged the emergence of three national champions, two of which are erstwhile public laboratories. The country has built up considerable hardware capability in both fixed line and mobile communications technology and has also emerged as a major player in world markets. Although the sectoral system of innovation in both the countries were promoted and nurtured by the state through a variety of instruments, the quality of such interventionist strategy is found to be better in China. The final outcome proves this line of argument.
    Keywords: Innovation capability, China, India, Telecommunications industry, Digital switching systems, Mobile telephony
    JEL: L63 O31 O32 O38
    Date: 2005–07
  5. By: Pierre Mohnen; Pierre Therrien
    Abstract: This paper compares pairwise the innovation performance of Canada with France and Germany, respectively. The comparison is based on two ordered probit models with sample selection, one where innovation is measured by the introduction of new-to-the firm products and one where it is measured by the introduction of new-to-the market products. The econometric analysis attempts to explain part of the country differences as the result of the sectoral composition of output, and the effects of size, environment conditions (proximity to basic research and competition) and innovation activities (internal R&D, the number of innovation activities, cooperation and government support). The Canadian firms benefit from being larger and more numerous in receiving government support, but suffer from a lack of competition and internal R&D. These structural effects combined, while informative, are not enough to explain a lot of the basic pattern of innovation revealed by the raw data. If we take the stronger measure of first-to-market innovation as a yardstick of innovation, the observed pairwise country differences are less strong, and our model explains a little bit more of the observed differences. <P>Cette étude compare les performances d’innovation entre le Canada et la France d’une part, et entre le Canada et l’Allemagne d’autre part. La comparaison repose sur deux modèles de probit ordonné avec sélection. Le premier mesure l’innovation par l’introduction sur le marché de produits nouveaux pour la firme, le second par l’introduction de produits nouveaux pour le marché. L’analyse économétrique essaye d’expliquer une partie des différences nationales d’innovation par la composition sectorielle de la production, l’effet taille, les conditions environnementales (proximité de la recherche de base et concurrence) et les activités d’innovation (R-D interne, nombre d’activités innovantes, coopération et support gouvernemental). Les firmes canadiennes tirent avantage de leur plus grande taille et sont plus nombreuses à recevoir du support gouvernemental. Par contre, elles souffrent du manque de concurrence et de R-D interne. Au total, la prise en compte de ces effets structurels est certes révélatrice, mais n’explique qu’une faible partie des différences bilatérales dans les processus d’innovation. La mesure plus forte d’innovation par l’introduction de produits nouveaux pour le marché réduit les différences observées et les explique un peu mieux.
    Keywords: innovation, international comparisons, innovation, comparaison internationale
    JEL: O31 O51 O52
    Date: 2005–09–01
  6. By: Acemoglu, Daron; Aghion, Philippe; Griffith, Rachel; Zilibotti, Fabrizio
    Abstract: This paper investigates the determinants of vertical integration. We first derive a number of predictions regarding the relationship between technology intensity and vertical integration from a simple incomplete contracts model. Then, we investigate these predictions using plant-level data for the UK manufacturing sector. Most importantly, and consistent with theory, we find that the technology intensities of downstream (producer) and upstream (supplier) industries have opposite effects on the likelihood of vertical integration. Also consistent with theory, both these effects are stronger when the supplying industry accounts for a large fraction of the producer's costs. These results are generally robust and hold with alternative measures of technology intensity, with alternative estimation strategies, and with or without controlling for a number of firm and industry-level characteristics.
    Keywords: hold-up; incomplete contracts; internal organisation of the firm; investment; R&D; residual rights of control; technology; UK manufacturing; vertical integration
    JEL: L22 L23 L24
    Date: 2005–09
  7. By: Lionel Fontagne; Michael Freudenberg; Guillaume Gaulier
    Abstract: Intra-Industry Trade has been repeatedly attested since the 1960s and justified on the grounds of the new approaches to international trade based on imperfect competition and differentiated products. Up to now however, scholars were relying on partial assessments of this phenomenon. We provide here a systematic decomposition of world trade using harmonised bilateral flows for some 5,000 products, into three trade types: inter-industry, intra-industry in horizontally versus vertically differentiated products, over the period 1989-2002. We show that the increase in IIT at the world level is due to two-way trade of vertically differentiated products. However inter-industry trade has recently recovered, due to the increasing participation of emerging economies in world trade.
    Keywords: Intra-Industry Trade; International Trade
    JEL: F14 F15
    Date: 2005–07
  8. By: Marco Da Rin (Department of Economics and Finance, Turin University); Giovanna Nicodano (Department of Economics and Finance, Turin University); Alessandro Sembenelli (Department of Economics and Finance, Turin University)
    Abstract: We study how public policy can contribute to increase the share of early stage and high-tech venture capital investments, thus helping the development of active venture capital markets. A simple extension of the seminal model by Holmstrom and Tirole (1997) provides a theoretical base for our analysis. We then explore a unique panel of data for 14 European countries between 1988 and 2001. We have several novel findings. First, the opening of stock markets targeted at entrepreneurial companies positively affects the shares of early stage and high-tech venture capital investments; reductions in capital gains tax rates have a similar, albeit weaker, effect. Second, a reduction in labor regulation creases the share of high-tech investments. Finally, we find no evidence of a shortage of supply of venture capital funds, and no evidence of an effect of increased public R&D spending on the share of high-tech or early stage venture capital investments.
    Keywords: Venture Capital; Capital Gains Tax; Public R&D Expenditure; Barriers to Entrepreneurship; Stock Markets; Public Policy
    JEL: G10 G24 H20 O30
    Date: 2005–01
  9. By: Bert Diederen; Pierre Mohnen; Franz Palm; Wladimir Raymond; Sybrand Schim van der Loeff
    Abstract: This paper explores the aggregation problem and illustrates its relevance using data for the Netherlands from the third Community Innovation Survey (CIS3), and production and financial statistics. It compares the results of an innovation output equation that was estimated using data on enterprises (bedrijfseenheid), domestic enterprise clusters (onderneming), and those enterprise clusters with foreign inward or outward investments. <P>Cette étude aborde et illustre un problème d’agrégation qui peut se poser dans les études d’innovation. Les données utilisées sont celles de la troisième enquête innovation aux Pays-Bas, qui sont jumelées aux statistiques de la production et aux données financières des sociétés. Nous comparons les résultats de l’estimation d’une équation d’innovation, obtenus tour à tour à partir de données au niveau des entreprises (bedrijfseenheid), des grappes d’entreprises domestiques (onderneming), et des grappes d’entreprises ayant des filiales à l’étranger ou contenant des filiales de firmes étrangères installées aux Pays-Bas.
    Keywords: innovation, aggregation, innovation, agrégation
    JEL: D21 O33 O52
    Date: 2005–09–01
  10. By: Harald Lehmann; Jutta Günther
    Abstract: Die Studie setzt sich mit der Frage auseinander, ob externe (ausländische und westdeutsche) Investoren in Ostdeutschland Technologie-Spillovers zugunsten einheimischer Unternehmen induzieren. Die Untersuchung knüpft an eine Reihe ökonometrischer Spilloverstudien an, vor allem an solche für Transformationsländer, die bisher sehr uneinheitliche Ergebnisse liefern. Anders als die vorliegenden Studien verwendet diese Untersuchung eine regionale Aufgliederung bis hin zu Raumordnungsregionen. Ferner wird eine Branchenklassifizierung vorgenommen, die Vorleistungs- und Investitionsgüterverknüpfungen explizit berücksichtigt. Die Regressionsergebnisse zeigen jedoch keinen positiven Zusammenhang zwischen der Anwesenheit externer Investoren und der Produktivität einheimischer Unternehmen, unabhängig davon, welche regionale Betrachtungsebene gewählt wird (Ostdeutschland insgesamt, Bundesländer oder Raumordnungsregionen). Technologie-Spillovers, die in Einzelfällen möglicherweise existieren, sind offensichtlich nicht stark genug, um die Produktivität einheimischer Unternehmen insgesamt zu stärken.
    Date: 2004–12

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