nep-tid New Economics Papers
on Technology and Industrial Dynamics
Issue of 2006‒02‒05
thirteen papers chosen by
Roberto Fontana
Universita Bocconi

  2. Survival Chances of Start-Ups - do Regional Conditions Matter? By Oliver Falck
  3. A firm-level analysis of differences between adopters and non-adopters of ICT By José Alberto Bayo-Moriones; Gilberto Carvalho-Vasconcelos; Fernando Lera-López
  4. Innovation Capabilities and Returns to Scale. By Carine Peeters; Bruno Van Pottelsberghe
  5. Exploring the Knowledge Filter - How Entrepreneurship and University-Industry Relations Drive Economic Growth By Pamela Mueller
  6. The Value of Knowledge Spillovers By Deng, Yi
  7. Entrepreneurship, Innovation Activities and Regional Growth By Aikaterini Kokkinou
  8. Technology Incubators as Nodes in Knowledge Networks By Danny Soetanto; Marina Van Geenhuizen
  9. Insight into the patenting performance of Belgian universities By Eleftherios Sapsalis; Bruno Van Pottelsberghe
  10. The effect of organizational innovation and information technology on firm performance By Gu, Wulong; Gera, Surendra
  11. Innovation Capabilities and Firm Labor Productivity. By Carine Peeters; Bruno Van Pottelsberghe
  12. On the Patenting Performance of European Universities. By Eleftherios Sapsalis; Bart Van Looy; Bruno Van Pottelsberghe; Koen Debackere; Julie Callaert
  13. Open Source in Finnish Software Companies By Arto Seppä

  1. By: Raquel Ortega-Argilés; Rosina Moreno
    Abstract: This paper, based on the ideas of Jovanovic’s theory (1982), analyses the impact of the main strategies determining the competitive behaviour of firms on their survival rate. We consider those strategies related both to product and price differentiation. Among the former ones, one may think of the specific differentiation due to advertisement and patent expenses or the technological differentiation based on R&D expenses or new production processes. Among the strategies of the second group, some are based on capital accumulation, or advantages of fixed costs such as scale economies or absolute cost advantages thanks to production techniques introduced by experience of by process innovations. The use of these strategies in a set of Spanish manufacturing firms (1990-2001) is analyzed. Firstly, several non-parametric tests for equality of survival functions are computed to check the diversity of survival rates across different competitive characteristics of firms. Secondly, a duration model based on a hazard rate model is estimated to study the impact of the main competitive strategies on firm survival. We find that several aspects on the competitive advantage of the firms play an important role in the likelihood of firm survival. Finally, we also conclude that there exists a different competitive strategy having into account two different size groups of firms.
    Date: 2005–08
  2. By: Oliver Falck
    Abstract: This paper analyses the effect of industry, regional and firm level characteristics on the post entry performance of newly founded businesses by means of an econometric survival time model. First preference is given to an accelerated failure time model assuming a log-logistic distribution. The dataset involves a representative sample of establishments in the private sector provided by the Institute for Employment Research (IAB). The data relates to West German states during 1993-2002 period. A start-up’s The likelihood of failure tends to be relatively high in industries characterized by a high minimum efficient size and high numbers of entries. The regional dimension has a considerable impact upon improvements of estimation results. On the firm level, the size of the firm seems to be the best predictor for the likelihood of failure.
    Date: 2005–08
  3. By: José Alberto Bayo-Moriones; Gilberto Carvalho-Vasconcelos; Fernando Lera-López
    Abstract: Information and Communication Technologies investments have drastically modified the competitive markets due to the impact on firm performance and productivity. This paper aims to analyse the differences between ICT adopter firms and non-adopter firms. OLS regressions and ordered logit models provide the methodological approach. From data based on a questionnaire survey to 327 Spanish firms in 2002, the empirical results indicate the essential role played by some variables in the ICT adoption. The results confirm, for example, the influence of variables such as firm size. The role of human capital and competitive strategies based on product and service quality are relevant in ICT adoption. The paper is organised as follows. First, the section 1 introduces the paper. The section 2 provides the establishment and explanation of the theoretical hypotheses. This section is followed in the section 3 by the methodology adopted in this study, including both the model and the data sources employed in the estimations. Some basic statistics and the results of the model estimations are presented and interpreted in the penultimate section, before concluding the paper with some remarks on the findings and important implications in the ICT adoption
    Date: 2005–08
  4. By: Carine Peeters (Centre Emile Bernheim, Solvay Business School, Université Libre de Bruxelles, Brussels); Bruno Van Pottelsberghe (Centre Emile Bernheim, Solvay Business School, Université Libre de Bruxelles, Brussels)
    Abstract: Specific innovation capabilities enable large firms to depart from constant returns to scale and benefit from significant economies of scale. These capabilities improve the quality of the labor force organization and therefore positively impact labor productivity.
    Keywords: Innovation, firm capabilities, labor productivity, returns to scale.
    JEL: O32 O33 L25 M21
    Date: 2005–02
  5. By: Pamela Mueller
    Abstract: Why do regions post different growth rates and differences in technological progress? Knowledge creation and knowledge spillovers are an important element in stimulating economic development. Recent empirical studies have shown that knowledge spillovers positively affect technological change and economic growth. Other studies have shown that knowledge spillovers do not occur automatically, hence, it is less clear which mechanisms facilitate and foster knowledge flows. This paper focuses on the exploitation of opportunities and commercialization of knowledge, namely the transformation of knowledge into products, processes and organizations, and their contribution to regional economic growth. The degree of knowledge exploitation may differ across regions because the level of research and development activities varies, incumbent firms might not exploit new opportunities to the full extent, and new knowledge generated in research institutions and universities is hardly translated into new products or services . It may be argued that a knowledge filter exists limiting the total conversion of knowledge into new products, processes and organizations (for details, see Acs, Audretsch, Braunerhjelm & Carlsson, 2003). This paper introduces entrepreneurship and university-industry relations as mechanisms for knowledge spillovers and determinants of economic growth. Entrepreneurial activity can be assumed as a mechanism by which knowledge spillover occurs. Many radical innovations have been introduced by new firms rather than by incumbents, because the set-up of one’s own business might be the most promising possibility to commercialize knowledge (Audretsch, 1995). University-industry relations may be another mechanism facilitating the exploitation of knowledge and the flow of ideas (Mansfield, 1991, 1998). If the generated knowledge at universities is transferred via research partnerships it may accelerate technology transfer and enable firms to develop new products and process (Cohen, Nelsen & Walsh, 2002, Mansfield 1991 and 1998). The empirical modeling framework develops a regional model of economic growth and analyzes if the region’s absorptive capacity, entrepreneurship and university-industry relations drive economic growth. The results of the empirical analysis suggest that new ventures and partnerships between university and industry amplify the permeability of the knowledge filter and thus spur economic growth. The paper also gives an outlook and discusses implications for public policy to stimulate entrepreneurship and university-industry relations.
    Date: 2005–08
  6. By: Deng, Yi (Department of Economics, Southern Methodist University)
    Abstract: This paper aims at quantifying the economic value of knowledge spillovers by exploring information contained in patent citations. We estimate a market valuation equation for semiconductor firms during the 1980s and 1990s, and find an average value in the amount of $0.6 to 1.2 million "R&D-equivalent" dollars for the knowledge spillovers as embodied in one patent citation. For an average semiconductor firm, such an estimate implies that the total value of knowledge spillovers the firm received furing the sample period could be as high as half of its actual total R&D expenditures in the same period. This provides a direct measure of the economic values of the social returns or externalities of relevant technological innovations. We also find that the value of knowledge spillovers declines as the size of the firm's patent portfolio increases, and that self citations are more valuable than external citations, indicating a significant amount of tacit knowledge or know-how spillovers that occur within the firm.
    Keywords: Knowledge Spillovers, Patent Citation, R&D Expenditure, Tobin's Q
    JEL: O33 O34
    Date: 2005–11
  7. By: Aikaterini Kokkinou
    Abstract: There is a huge literature for the role and the implications of entrepreneurship on innovation activities and economic growth, through ‘regional systems of innovation’. This paper attempts to define the main determinant factors of entrepreneurial and innovation activities. In particular, the paper attempts to analyze, using an econometric approach, the effects of entrepreneurship on innovation activities and furthermore to clarify the implication on regional system of innovation, competitiveness, modernization process and regional growth.
    Date: 2005–08
  8. By: Danny Soetanto; Marina Van Geenhuizen
    Abstract: It is widely accepted that new knowledge underpinned innovation and growth influences economic activities. Economic agents rely not only on their own knowledge but also knowledge from others, whether it be codified and ’transferred via ICT’ or in tacit form. Moreover, it has long been argued that the acquisition of latter type of knowledge is influenced by geographic proximity. Based on this argument, it follows that the part firms’ supply of knowledge depends on how close, in terms of physical distance, to other firms, suppliers, customers, and research institutions, they are located. They are all can be categorize as a pool of knowledge that important for the firms’ growth and innovation capacity. Today, we witness many initiatives from policy makers around the world to compete in an increasingly technology- driven global economy through the establishing of technology incubators. Technology incubators can be conceived as organizations and/or facilities to enhance high-technology firm establishment and survival. Mostly they are located near the university or research center. There are many success stories on the contribution of incubators to the regional growth. At the same time, technology incubators have been widely criticized in the academic literature when judged in terms of regional innovation and knowledge development. The critics include the relying on an outdated, linear, model of innovation, which assumes that knowledge can be transferred directly from university to firms. However, innovation is now widely recognized as a complex non-linear process involving feedback loops and the creation of synergies through a diverse range of knowledge networks. Therefore, our understanding about knowledge spillover processes connected with incubator is yet poor. Very little is known about the mechanisms of knowledge exchange and spillover initiated by incubator and their role in supporting the growth of the firm. In this study we draw on the current body of literature, mainly agglomeration theories, and use the concepts of tacit knowledge and context to understand how knowledge spillovers actually take place. Our objective is to build a conceptual framework that describes how technology incubators operate as a mediator of knowledge for their tenants. In addition, based on empirical data of high-technology start-ups at TU Delft (The Netherlands), this study tests the proposition that not only geographic proximity to the university, but also that relations with other firms, particularly customers and suppliers matters. We also consider the function of ICT in shaping the new role of technology incubators in providing knowledge support. By explicitly analyzing the knowledge spillovers and mediation role offered by technology incubators, we seek to open up the ‘black box’ of the incubation process as a source of learning and gaining knowledge resources. We conclude the paper with a few recommendations for policymaking and further research.
    Date: 2005–08
  9. By: Eleftherios Sapsalis (Centre Emile Bernheim, Solvay Business School, Université Libre de Bruxelles, Brussels); Bruno Van Pottelsberghe (Centre Emile Bernheim, Solvay Business School, Université Libre de Bruxelles, Brussels)
    Abstract: The objective of this paper is to provide an in-depth analysis of the patenting performances of six Belgian universities over the period 1985-1999. Beside the evolution of the number of patent families, we provide insights about the potential value of these patents (through forward patent citations analysis), about the institutional sources of the knowledge (through non patent citations and backward patent citations), about their international patenting strategy, and the type of co-assignee. The results show that KUL is by far the most productive university in Belgium (both in terms of the number of patent applications and the number of forward citations per patent). This is due to a size effect, a longer history of patenting academic inventions, to a focus on bio-tech patents and to a very productive collaboration with the Institute of Organic Chemistry of the Academy of Sciences of the Czech Republic. There is however a clear indication that a catching up process by other universities is taking place, in terms of both the quantity of patent applications and their quality.
    Keywords: Patent value, Academic patents, Knowledge sources.
    JEL: O33 O34 L33
    Date: 2004–03
  10. By: Gu, Wulong; Gera, Surendra
    Abstract: This paper examines the issue of whether investment in information and communication technologies, combined with organizational changes and worker skills, contribute to better performance in Canadian firms.
    Keywords: Labour, Science and technology, Business enterprises, Employees, Innovation, Business conditions
    Date: 2004–11–12
  11. By: Carine Peeters (Centre Emile Bernheim, Solvay Business School, Université Libre de Bruxelles, Brussels); Bruno Van Pottelsberghe (Centre Emile Bernheim, Solvay Business School, Université Libre de Bruxelles, Brussels)
    Abstract: This study relies on a Cobb-Douglas production function to assess the relationship between the development of innovation capabilities by firms and their labor productivity. Intra-organizational capabilities relate to firms’ corporate culture and work organization, generation of innovative ideas and selection of projects, and innovation funding sources. Inter-organizational capabilities relate to the use of external information from vertical partners, competitors, and consultants, and to R&D partnerships with scientific institutions. In addition to the traditional effect of a growth in the ratio of physical capital per employee, both types of innovation capabilities are found to significantly increase labor productivity.
    Keywords: Innovation, organizational capabilities, performance, labor productivity.
    JEL: O32 O33 L25 M21
    Date: 2004–04
  12. By: Eleftherios Sapsalis (Centre Emile Bernheim, Solvay Business School, Université Libre de Bruxelles, Brussels); Bart Van Looy (Research Division INCENTIM, KUL, Leuven); Bruno Van Pottelsberghe (Centre Emile Bernheim, Solvay Business School, Université Libre de Bruxelles, Brussels); Koen Debackere (Onderzoeksgroep Bedrijfseconomie, strategie en innovatie (MSI), KUL, Leuven); Julie Callaert (Research Division INCENTIM, KUL, Leuven)
    Abstract: the objective of this paper is to analyse the determinants of 87 European universities’ patenting activities. The findings reveal that size of universities and the presence of disciplines (medicine and engineering) are positively associated with the size of the patent portfolio. There is no significant relationship between the R&D intensity of the regional business environment and the amount of patent activity while scientific capabilities do coincide with higher levels of patent activity. Higher levels of patent activity are observed within universities adopting simultaneously a scientific and entrepreneurial orientation. Finally, an additional interaction effect signals the combined, positive, effect of the presence of an entrepreneurial orientation and higher levels of participation of academic staff in valorisation activities.
    Keywords: academic patenting.
    JEL: O32 O34 O52
    Date: 2005–04
  13. By: Arto Seppä
    Abstract: This paper explores survey data focusing on open source software supply collected from 170 Finnish software firms using descriptive statistical analysis. The first half of the report contains general data about software companies and the differences between proprietary and open source firms. The second half focuses on open source firms. A subject of analysis are copyrights, products and services supply, the firms’ relationships with the open source community, and their views on opportunities and obstacles in business. OSS firms tend to be younger and are generally smaller in terms of revenue and personnel than non-OSS firms. In addition, they display more negative attitudes towards patenting. Licensing has much less impact on their sales as compared to non-OSS firms. The majority of open source products are released under the copyleft license. Network effects are seen as biggest obstacles for successful business in the open source field.
    Keywords: software industry, open source software, licensing, Finland
    JEL: L86 O33 O34
    Date: 2006–01–25

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