nep-tid New Economics Papers
on Technology and Industrial Dynamics
Issue of 2006‒01‒24
eighteen papers chosen by
Roberto Fontana
Universita Bocconi

  1. Knowledge-based Entrepreneurship : The Organizational Side of Technology Commercialization By Ulrich Witt; Christian Zellner
  2. Growth and Entrepreneurship: An Empirical Assessment By Acs, Zoltán J; Audretsch, David B; Braunerhjelm, Pontus; Carlsson, Bo
  3. How Licensing Resolves Hold-Up: Evidence from a Dynamic Panel Data Model with Unobserved Heterogeneity By Siebert, Ralph; von Graevenitz, Georg
  4. Determinants of Knowledge and Technology Transfer Activities Between Firms and Science Institutions in Switzerland: An Analysis Based on Firm Data By Spyros Arvanitis; Ursina Kubli; Martin Woerter
  5. Organisation and location of academic sourcing at the firm level By Stéphane Lhuillery
  6. What are Firms? Evolution from Birth to Public Companies By Kaplan, Steven N.; Sensoy, Berk A.; Strömberg, Per
  7. Knowledge and Technology Transfer (KTT) Activities Between Universities and Firms in Switzerland: The Main Facts : An Empirical Analysis Based on Firm-level Data By Spyros Arvanitis; Ursina Kubli; Nora Sydow; Martin Woerter
  8. Growth of New Firms : Which Factors Influence Post-Entry Performance? An Empirical Analysis Based on Swiss Firm Data By David Marmet
  9. Is There Any Impact of University-Industry Knowledge Transfer on the Performance of Private Enterprises? – An Empirical Analysis Based¨on Swiss Firm Data By Spyros Arvanitis; Nora Sydow; Martin Woerter
  10. Product Quality Selection and Firm Survival. Evidence from the British Automobile Industry, 1895-1970. By Yuanyuan Peng
  11. Patents, Spillovers and Competition in Biotechnology By Austin, David
  12. The Impact of Academic Patenting on the Rate, Quality, and Direction of (Public) Research Output By Pierre Azoulay; Waverly Ding; Toby Stuart
  13. The Roles of Research at Universities and Public Labs in Economic Catch-up By Roberto Mazzoleni; Richard R. Nelson
  14. They invent (and patent?) like they breathe: what are their incentives to do so? Short tales and lessons from researchers in a public research organisation By Marc Isabelle
  15. Innovation and Incentives: Evidence from Corporate R&D By Josh Lerner; Julie Wulf
  16. Interactions between firms and universities in an immature system of innovation: a survey of industrial R&D-performers firms in Minas Gerais, Brazil By Eduardo da Motta e Albuquerque; Leandro Alves Silva; Márcia Siqueira Rapini; Sara Gonçalves Antunes de Souza
  17. Assessing the Effects of Mergers and Acquisitions on Firm Performance, Plant Productivity, and Workers: New Evidence from Matched Employer-Employee Data By Donald S. Siegel; Kenneth L. Simons
  18. Micro-Heterogeneity and Aggregate Productivity Development in the German Manufacturing Sector - Results from a Decomposition Exercise By Uwe Cantner; Jens J. Krüger

  1. By: Ulrich Witt (Max-Planck-Institute Jena, Evolutionary Economics group); Christian Zellner (Ecole Polytechnique Fédérale de Lausanne, Chaire en Economie et Management de l'Innovation)
    Abstract: New knowledge with commercial potential is continually created in academic institutions. How is it turned into economically valuable businesses? This paper argues that the transfer is an entrepreneurial process. To understand this, the actions and the constraints characteristic for the entrepreneurial reshaping of the division of labor must be recognized. In the case of knowledge-based entrepreneurship, specific constraints result from the peculiarities of scientific knowledge – epitomized by constrasting tacit and encoded knowledge. Scientifically trained labor is required for transferring both forms of knowledge. However, the mode of transfer differs crucially and shapes the organizational form of commercializing new scientific knowledge.
    Keywords: entrepreneurship, knowledge transfer, technology commercialization
    JEL: L23 M13 O31 O32
    Date: 2005–05
  2. By: Acs, Zoltán J; Audretsch, David B; Braunerhjelm, Pontus; Carlsson, Bo
    Abstract: This paper suggests that the spillover of knowledge may not occur automatically as has typically been assumed in models of endogenous growth. Rather, a mechanism is required that serves as a conduit for the spillover and commercialization of knowledge from the source creating it to the firm actually commercializing the new ideas. In this paper, entrepreneurship is identified as one such mechanism facilitating the spillover of knowledge. Using a panel of entrepreneurship data for 18 countries, empirical evidence is found that in addition to measures of R&D and human capital, entrepreneurial activity also serves to promote economic growth.
    Keywords: entrepreneurship; growth
    JEL: M13 O40 R11
    Date: 2005–12
  3. By: Siebert, Ralph; von Graevenitz, Georg
    Abstract: This paper is a study of licensing in a patent thicket. In a patent thicket licensing allows firms to avoid hold-up. It will have different effects on firms' R&D incentives depending on whether firms license existing or future patents. Building on a model of a patent portfolio race, firms' choice between these types of licensing contracts is modelled. We find that firms' relationships in product markets and technology space jointly determine the type of licensing contract chosen. We derive several hypotheses and test these. Using data from the semiconductor industry a dynamic panel data model with unobserved heterogeneity and a lagged dependent variable is estimated. A new method suggested by Wooldridge (2005) is employed to estimate a random effects probit model using conditional ML. The hypotheses derived from the theory are confirmed. Based on our results we argue that licensing raises welfare in the patent thicket.
    Keywords: hold-up problem; innovation; licensing; patent race; patent thicket
    JEL: L13 L49 L63
    Date: 2005–12
  4. By: Spyros Arvanitis (Swiss Institute for Business Cycle Research (KOF), Swiss Federal Institute of Technology Zurich (ETH)); Ursina Kubli (Swiss Institute for Business Cycle Research (KOF), Swiss Federal Institute of Technology Zurich (ETH)); Martin Woerter (Swiss Institute for Business Cycle Research (KOF), Swiss Federal Institute of Technology Zurich (ETH))
    Abstract: This study explores the factors determining the propensity of Swiss firms to interact with public science institutions in Switzerland (universities and other research institution), i.e. to get involved in knowledge and technology transfer (KTT) activities in order to gain new tacit and/or codified scientific knowledge in research fields which are relevant for their own innovation activities. We are especially interested in the different forms of this interaction, not only through joint research projects but also through training, recruitment of qualified R&D personnel, jointly supervised master theses and PhDs, consulting and so on. The data used in this study were collected in the course of a survey among Swiss enterprises. The new elements that this paper adds to empirical literature are, first, the analysis of a wide spectrum of KTT activities covering not only research co-operation agreements between firms and science institutions but also general informational and educational activities (transfer of “tacit” knowledge), joint use of technical infrastructure and consulting. Although such additional activities seem to be an important part of KTT activities, they have been neglected in most studies. Second, a further important element is the explicit consideration of a series of relevant motives and obstacles as determinants of KTT which contribute significantly to the econometric explanation of firms’ propensity to overall KTT activities as well as to several forms of KTT activities. Third, some insights are gained with respect to the differences between manufacturing and service firms in transacting with science institutions. This is the first Swiss firm-level study on this matter.
    Keywords: knowledge and technology transfer, innovation activities, R&D activities
    JEL: O30
    Date: 2005–12
  5. By: Stéphane Lhuillery (Chaire en Economie et Management de l'Innovation, Ecole Polytechnique Fédérale de Lausanne)
    Abstract: Thanks to the second French Community Innovation Survey, a measurement of the importance of public research organisations as a useful source of innovation for manufacturing firms is available. We thus provide an exploratory econometric model where the internal R&D organisation and location of business units at the city level are both considered as explaining factors for the absorptive capacity dedicated to academic knowledge. Size, R&D intensity and organisation are found to be significant determinants of academic sourcing. The influence of local public research organisations on innovation is however found rather small and not restricted to urban areas.
    Keywords: R&D, geographic spillovers, universities, absorption
    JEL: O32 L21 C81
    Date: 2005–05
  6. By: Kaplan, Steven N. (University of Chicago); Sensoy, Berk A. (University of Chicago); Strömberg, Per (Swedish Institute for Financial Research)
    Abstract: We study how firm characteristics evolve from early business plan to initial public offering to public company for 49 venture capital financed companies. The average time elapsed is almost 6 years. We describe the financial performance, business idea, point(s) of differentiation, non-human capital assets, growth strategy, customers, competitors, alliances, top management, ownership structure, and the board of directors. Our analysis focuses on the nature and stability of those flrIn attributes. Firm business lines remain remarkably stable from business plan through public company. Within those business lines, non-human capital aspects of the businesses appear more stable than human capital aspects. In the cross-section, firms with more alienable assets have substantially more human capital turnover.
    Keywords: Theory of the firm; Entrepreneurship; Venture capital; Firm life cycle
    JEL: G24 L20 M13
    Date: 2005–10–15
  7. By: Spyros Arvanitis (Swiss Institute for Business Cycle Research (KOF), Swiss Federal Institute of Technology Zurich (ETH)); Ursina Kubli (Swiss Institute for Business Cycle Research (KOF), Swiss Federal Institute of Technology Zurich (ETH)); Nora Sydow (Swiss Institute for Business Cycle Research (KOF), Swiss Federal Institute of Technology Zurich (ETH)); Martin Woerter (Swiss Institute for Business Cycle Research (KOF), Swiss Federal Institute of Technology Zurich (ETH))
    Abstract: This study is part of a large project aiming at the investigation of a) extent and b) economic relevance of knowledge and technology transfer (KTT) between science institutions (universities, universities of applied science and other public research institutions) and private corporations. Under knowledge and technology transfer we understand very broadly any activities targeted at transferring knowledge and technology that may help a company or a research institution – depending on the direction of the transfer – to further promote its activities. In this paper we report on the results of a large postal survey of Swiss enterprises based on a questionnaire on the exchange of knowledge and technology with Swiss universities and other research institutions. The survey was addressed to about 6000 firms from all sectors of the economy (with exception of hotels/catering, retail trade, transportation and personal services) and from different size classes. We received answers from 2582 firms, i.e. 45.4% of the firms in the underlying sample. In this paper we undertake a characterisation of KTT activities from a firm’s point of view: Which are the main characteristics of firms conducting KTT (e.g. size, industry, R&D activities, R&D budget, research areas etc.) Which forms does KTT take (e.g. joint research projects, joint teaching courses, allocation of thesis or doctoral projects in collaboration with firms etc.), what is the relative importance of such forms? Which are the most important transfer channels (publications, patents, licenses, spinoffs) and intermediating organisations (technology transfer offices, KTI, SNF etc.)? Which are the most relevant transfer partners among the universities and other research institutions? Which are the most important motives for KTT activities (e.g. financial motives, access to academic knowledge, institutional motives etc.) Which are the most important impediments of KTT activities (lack of information, lack of conditions necessary for know-how transfer, costs and risks etc.)
    Keywords: knowledge and technology transfer, innovation activities, R&D actvities
    JEL: O30
    Date: 2005–12
  8. By: David Marmet (Swiss Institute for Business Cycle Research (KOF), Swiss Federal Institute of Technology Zurich (ETH))
    Abstract: The aim of this study is to shed light on the factors which determine the post-entry performance of new firms. It is often argued that new firms are the driving force of structural changes and sometimes they are even characterized as an “engine” of economic growth. Nevertheless, the empirical evidence is mixed. Taking into account the high exit rate of new firms, a specific founding cohort does not contribute substantially to new jobs. In this paper, we analyse the contribution of new firms concerning the ability of creating jobs. Furthermore, we investigate the main determinants of post-entry performance, which we derive from existing theoretical concepts based on industrial economic approaches, learning models and founding characteristics. The endogenous variable is employment development. We test our model with data from the Swiss cohort of start-ups of 1996/1997. The results reveal that the important and robust factors determining the post-entry performance are changes in demand, innovation behaviour, human capital, self-financing, seed capital, consultancy and support, assets, legal form, and motives for founding a new firm, such as the possibility to implement own ideas coming from research at university or to escape from unemployment.
    Keywords: New firms, employment growth, performance
    JEL: L25 J23 D21
    Date: 2004–12
  9. By: Spyros Arvanitis (Swiss Institute for Business Cycle Research (KOF), Swiss Federal Institute of Technology Zurich (ETH)); Nora Sydow (Swiss Institute for Business Cycle Research (KOF), Swiss Federal Institute of Technology Zurich (ETH)); Martin Woerter (Swiss Institute for Business Cycle Research (KOF), Swiss Federal Institute of Technology Zurich (ETH))
    Abstract: This study investigates the impacts of a palette of Knowledge and Technology Transfer (KTT) activities (general information, educational and research activities, activities related with technical infrastructure, and consulting) (a) on several innovation indicators (a1) in the framework of an innovation equation with variables of endogenized KTT activities (overall activities, specific forms of activities) as additional determinants of innovation, and (a2) based on a matched-pairs analysis for several forms of KTT activities; (b) on labour productivity in the framework of a production function with endogenized KTT activities as an additional production factor. The data used in the study were collected by means of a survey of Swiss enterprises that took place at the beginning of 2005. We found that KTT activities improve the innovation performance of firms both in terms of R&D intensity and sales of innovative products. The positive effect of overall KTT activities can be traced back mainly to research and educational activities. This could be shown by several methods: the innovation equation approach with endogenized KTT variable as well as three matching methods. Further, KTT activities seem to exercise a positive influence on labour productivity both through a direct effect as well as through an indirect effect by raising the elasticity of R&D intensity with respect to labour productivity.
    Keywords: knowledge and technology transfer, innovation activities, R&D activities
    JEL: O30
    Date: 2005–12
  10. By: Yuanyuan Peng (Department of Economics, Florida International University)
    Abstract: This paper proposes an additional determininant of firm survival. Based on a detailed examination of firm survival in the British automobile industry between 1895 and 1970, we conclude that firm’s selection of submarket-defined by quality level-influenced survival. In contrast to findings for the US automobile industry, there is no evidence of first-mover advantage in the market as a whole. However, we do find evidence of first-mover advantage after conditioning on submarket choice.
    Keywords: firm survival, product differentiation, submarket, product quality
    JEL: L11
    Date: 2006–01
  11. By: Austin, David
    Abstract: I perform an event study on 600+ patents awarded primarily to 20 leading biotechnology firms and find significant changes in market values at the time of the awards. Adjusting for partial anticipation of events, I estimate that core technology patents in highly contested research areas are expected to generate between $13 and $21 million of economic value. They also generate spillover benefits for the patentee’s rivals—presumably including knowledge transfers—valued at $3 to $6 million per firm. Awardees may appropriate only half of private benefits, although I observe negative spillovers for some high-profile awards. Most patents have no significant market impact.
  12. By: Pierre Azoulay; Waverly Ding; Toby Stuart
    Abstract: We examine the influence of faculty patenting activity on the rate, quality, and content of public research outputs in a panel dataset spanning the careers of 3,862 academic life scientists. Using inverse probability of treatment weights (IPTW) to account for the dynamics of self-selection into patenting, we find that patenting has a positive effect on the rate of publication of journal articles, but no effect on the quality of these publications. Using several measures of the "patentability" of the content of research papers, we also find that patenters may be shifting their research focus to questions of commercial interest. We conclude that the often-voiced concern that patenting in academe has a nefarious effect on public research output is, at least in its simplest form, misplaced.
    JEL: O31 O32 O34
    Date: 2006–01
  13. By: Roberto Mazzoleni; Richard R. Nelson
    Abstract: We draw upon historical evidence from several countries and contemporary studies of national innovation systems to argue that indigenous systems of academic training and public research have been in the past important elements of the institutional structures supporting a country’s economic catch up. Recent changes in the international economic environment, and the growing scientific basis for contemporary technologies, will make those systems even more important in the future. The contributions of universities and public labs to the development of indigenous technological capabilities have taken different forms in different countries and economic sectors. However, we note that, in contrast with current emphasis on university-based embryonic inventions and fundamental research, effective research programs have predominantly occurred in the application-oriented sciences and engineering, and have been oriented towards problem-solving, and the advancement of technologies of interest to a well-defined user-community.
    Keywords: Catch-up, Public Research, Indigenous Technological Capabilites
    Date: 2006–01–05
  14. By: Marc Isabelle (IMRI (Institut pour le Management de la Recherche et de l’Innovation), Université Paris-Dauphine)
    Abstract: Two major and complementary transformations have occurred in the world of public research organisations in the past two decades. Instruments of intellectual property (first and foremost the patent) have disseminated in many domains of research while collaborations with industrial firms have grown substantially. Strategies have been designed in PROs to accompany and stimulate the researchers in their new mission: the transfer of knowledge and technologies to firms. This paper investigates on an empirical basis the fact that researchers’ inventiveness could to a certain extent be independent from private economic incentives. It concludes by opening some analytical perspectives about the pros and cons of PROs’ knowledge and technology transfer strategies and by suggesting that the dominant model could well look inappropriate in some respects.
    Keywords: public research organisations, invention, patent, knowledge and technology transfer, science and technology policy
    JEL: D83 H4 L3 O3
    Date: 2004–04
  15. By: Josh Lerner; Julie Wulf
    Abstract: Beginning in the late 1980s, American corporations began increasingly linking the compensation of central research personnel to the economic objectives of the corporation. This paper examines the impact of the shifting compensation of the heads of corporate research and development. Among firms with centralized R&D organizations, a clear relationship emerges: more long-term incentives (e.g. stock options and restricted stock) are associated with more heavily cited patents. These incentives also appear to be somewhat associated with more patent filings and patents of greater generality. We address endogeniety concerns in a variety of ways, including examining the impact of compensation for other key managers and utilizing an instrument based on spawning activity in the region. While we cannot determine whether the effect is due to better project selection or better people selection, the results continue to be consistent with our interpretation that performance pay of corporate R&D heads is associated with more innovative firms.
    JEL: O3 J3
    Date: 2006–01
  16. By: Eduardo da Motta e Albuquerque (Cedeplar-UFMG); Leandro Alves Silva (Cedeplar-UFMG); Márcia Siqueira Rapini (IEL-Fiemg); Sara Gonçalves Antunes de Souza (Unimontes)
    Abstract: This paper presents preliminary results from a survey of R&D-performer industrial firms located in the state of Minas Gerais, Brazil. The inspiration for this research comes from the Yale Survey (Klevorick et all, 1995) and from the Carnegie Mellon Survey (Cohen et all, 2002), for these Surveys are groundwork for the study of interactions between universities and firms. The objective of this Minas Gerais Survey (MG Survey, henceforth) is the investigation of specific characteristics of the interaction between universities and firms in an 'immature national system of innovation'. The first section summarizes the theoretical questions putted forward by this investigation, specially the role of universities in immature NSIs. The second section investigates the Brazilian NSI using data from the IBGE’s PINTEC, focusing the R&D performer firms in Brazil and the importance of universities and public research institutes as source of knowledge for industrial innovation. This second section presents data that highlight the position of Minas Gerais in the Brazilian NSI and helps to define the MG Survey research universe. The third section summarizes the issues involved in the adaptation of the Yale and the Carnegie Mellon questionnaires to the Brazilian reality and in the identification of the R&D-performer firms in Minas Gerais. The fourth section presents the MG Survey results. The fifth section concludes the paper.
    Keywords: systems of innovations, interactions between science and technologies
    JEL: H50 O00 O30
    Date: 2005–12
  17. By: Donald S. Siegel (Department of Economics, Rensselaer Polytechnic Institute, Troy, NY 12180-3590, USA); Kenneth L. Simons (Department of Economics, Rensselaer Polytechnic Institute, Troy, NY 12180-3590, USA)
    Abstract: Studies of the effects of mergers and acquisitions focus on a single unit of analysis: firms, plants, or workers. In contrast, we model these events as transactions that simultaneously have cross-levels effects. Based on the theory of human capital, we generate a set of predictions regarding the antecedents and consequences of firm, plant, and worker turnover. Our empirical analysis is based on longitudinal, linked employer-employee data for virtually the entire population of Swedish manufacturing firms and employees for the period 1985-1998. These data allow us to assess the effects of mergers and acquisitions on firm performance, plant productivity, levels of employment, and compensation. Consistent with human capital theory, we find that mergers and acquisitions lead to improvements in firm performance and plant productivity, although they also result in the downsizing of establishments and firms. These transactions also appear to enhance the careers of workers because they provide a mechanism for improving the sorting and matching or workers and managers to firms and industries that best suit their skills.
    JEL: G34 D24 C81
    Date: 2006–01
  18. By: Uwe Cantner (University of Jena, Faculty of Economics); Jens J. Krüger (University of Jena, Faculty of Economics)
    Abstract: In this paper different formulae for the decomposition of aggregate productivity levels and changes are applied to a sample of German manufacturing firms that pertain to 11 different industries at a roughly two-digit level observed over the period 1981-1998. Productivity is measured by a nonparametric frontier function approach. The decompositions of productivity allow for an explanation of the aggregate outcomes by the quantification of the effect of structural change as well as the contributions from entering and exiting firms. Our results show that these forces drive aggregate productivity dynamics to a considerable extent. Especially the period after the German reunification is characterized by large productivity improvements, mostly driven by structural change.
    Keywords: productivity, structural change, manufacturin
    JEL: D24 O12 L60
    Date: 2006–01–06

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