nep-tid New Economics Papers
on Technology and Industrial Dynamics
Issue of 2006‒03‒05
nine papers chosen by
Roberto Fontana
Universita Bocconi

  1. The Structure and Evolution of Industrial Clusters: Transactions, Technology and Knowledge Spillovers By Simona Iammarino; Philip McCann
  2. Persistence of Innovation in Dutch Manufacturing: Is it Spurious? By Raymond Wladimir; Mohnen Pierre; Palm Franz; Schim van der Loeff Sybrand
  3. Labour Mobility of Academic Inventors. Career Decision and Knowledge Transfer By Gustavo A. Crespi; Aldo Geuna; Lionel J. J. Nesta
  4. Biotechnology Alliances in the European Pharmaceutical Industry: Past, Present and Future By Jacqueline Senker
  5. Patent Citations, the Value of Innovations and Path-Dependency By Bulat Sanditov
  6. The Dynamics of Firms' Entry and Diversification: A Bayesian Panel Probit Approach. A Cross-country analysis By Gianni Amisano; Maria Letizia Giorgetti
  7. The impact of corporate governance practices on R&D intensities of firms: An econometric study on French largest companies By Stéphane Lhuillery
  8. The limits of modularity in innovation and production By Leonardo Bargigli
  9. Start-up entry strategies: Employer vs. Nonemployer firms By Michele Moretto; Gianpaolo Rossini

  1. By: Simona Iammarino (SPRU, University of Sussex); Philip McCann (University of Reading)
    Abstract: In this paper we investigate the relationship between location patterns, innovation processes and industrial clusters. In order to do this we extend a transactions costs-based classification of industrial clusters into a knowledge-based taxonomy of clusters, along the lines suggested by a critical revision of the main assumptions underlying most of the existing literature on spatially defined clusters. Our arguments show that the transactions costs approach and the innovation and technological change framework are broadly consistent, and that real insights into the microfoundations, nature, and evolution of clusters can be provided by these classification systems.
    Keywords: industrial clusters, firm location, innovation processes, cluster classification
    JEL: O31 O33 R3 D8
    Date: 2006–02–27
  2. By: Raymond Wladimir; Mohnen Pierre; Palm Franz; Schim van der Loeff Sybrand (METEOR)
    Abstract: This paper studies the persistence of innovation and the dynamics of innovation output in Dutch manufacturing using firm data from three waves of the Community Innovation Surveys (CIS), pertaining to the periods 1994-1996, 1996-1998, and 1998-2000. We estimate by maximum likelihood a dynamic panel data type 2 tobit model accounting for individual effects and handling the initial conditions problem. We find that there is no evidence of true persistence in achieving technological product or process innovations, while past shares of innovative sales condition, albeit to a small extent, current shares of innovative sales.
    Keywords: Economics ;
    Date: 2006
  3. By: Gustavo A. Crespi (SPRU, University of Sussex); Aldo Geuna (SPRU, University of Sussex); Lionel J. J. Nesta (Observatoire Francais des Conjonctures Economiques (OFCE))
    Abstract: This paper focuses on university inventors mobility in the EU countries. It is the first quantitative assessment of this phenomenon and is the basis for a set of econometric models that try to explain how different factors affect the mobility of academics and their choices: to stay, to move to the private sector, to move to a different public research organisation (including another university). Mobility away from academia is a significant phenomenon, at least for the sub-sample of university researchers that hold patents from the European Patent Office. Among other results, the econometric models provide some evidence that the more valuable the patent the higher the probability of a move to a company. We found that the younger researchers (with less experience and less seniority) are more likely to move, and tend to move soon after the application or the granting of a patent . Also, the more cumulative (or incremental) the knowledge, the higher the probability of moving to a company. Finally, in all models developed scientific and technological output and scientific quality seem not to have any impact (neither positive nor negative) on the mobility of academic inventors. These results are interpreted in the framework that combines aspects of career mobility and technology transfer.
    Keywords: university patenting, labour mobility, technology transfer, tacit knowledge, European universities
    JEL: O3 I28 J6
    Date: 2006–02–27
  4. By: Jacqueline Senker (SPRU, University of Sussex)
    Abstract: This paper reviews how research collaborations between dedicated biotechnology firms and multinational pharmaceutical companies have changed over the past 25 years. A discussion of the impact that developments in the biotechnology have had on the process of pharmaceutical R&D will set the context for reviewing the various theoretical approaches used to analyse and understand these alliances, identifying changes in the nature of alliances over time and indicating the future in store for dedicated biotechnology firms.
    Keywords: biotechnology, dedicated biotechnology firms, pharmaceuticals sector, post-genome era, research alliances
    JEL: O33 I10 D85
    Date: 2006–02–27
  5. By: Bulat Sanditov (CESPRI and MERIT, Bocconi University, Milano,Italy and Universiteit Maastricht.)
    Abstract: This paper examines how the framework of path-dependency and technological trajectories can be applied to explain the observed distribution of patent values as it is revealed in the distribution of patent citations. A very simple model of based on generalized Polya urn processes is proposed to describe evolution of patent values. It is shown that the model fits empirical distribution of patent citations (USPTO and EPO data) surprisingly well.
    Keywords: Size of Innovation, Patent Citations, Path-Dependency in Technical Change
    JEL: O31 O33
    Date: 2005–11
  6. By: Gianni Amisano; Maria Letizia Giorgetti
    Abstract: In this paper we analyze entry dynamics in new submarkets of pharmaceutical companies. In particular we study entry decisions at time t in a new submarket, conditioned on the entrance in a new submarket at time t-1. This model allows us to connect with the flourishing literature about the prominent role of submarkets, (Klepper and Thompson, 2002, Mitchell, 2000 and Sutton,1998) in explaining diversification and entry choices. Our analysis is based on a Bayesian approach which allows us to properly account for heterogeneity among firms. We try to manage the inclusion among regressors of non strictly exogenous variables, which can be correlated with unobserved heterogeneity,(Honoré and Kyriazidou, 2000, Honoré and Lewbel, 2002, Arellano and Carrasco,2003, Wooldridge, 2003).
  7. By: Stéphane Lhuillery (Chaire en Economie et Management de l'Innovation, Ecole Polytechnique Fédérale de Lausanne)
    Abstract: Surveyed empirical studies on the influence of corporate governance on innovation tend to focus on specific dimensions of shareholders or boards. Their findings are mixed and inconclusive. We thus present a very recent number of papers that depart from board or shareholders’ characteristics, to focus on governance practices. Our empirical contribution uses a set of ratings given by experts and focuses on corporate governance practices with a sample of 6623 firms belonging to 110 large French groups. The relation between governance practices and R&D intensity, implementing different indexes and methods in order to improve the robustness of our results, is investigated in cross-section. We find that firms with governance practices that are shaped in order to defend shareholders’ rights are more R&D intensive. The highest the shareholder is taken into consideration by managers, the highest the R&D intensity will be. A second result suggests more surprisingly that the effect is non linear: whether the firms take care of their shareholders seriously or moderately has no differentiated impact on R&D expenditure. However, firms with fewer democratic practices are more likely to be less R&D intensive. This paper also investigates so called deficiencies in shareholder protection in Continental European systems compared to Anglo-Saxon systems. A significant difference in R&D intensity is found between French group listed only in France and French groups listed in New-York or London. The last result suggests that the impact of national systems of corporate governance on R&D and innovation may be strong; reinforcing the impact on R&D of the different applied governance practices. Further investigations show, however, that it is very difficult to identify what the best governance practices are, regarding the R&D expenditures. Provisions implemented at the board level are however found positively related to R&D intensity. Finally, our results also suggest that sample selection matters in this kind of empirical literature.
    Keywords: Corporate governance, R&D, innovation, provisions
    JEL: O31 O32 G31 G32
    Date: 2006–01
  8. By: Leonardo Bargigli (Department of Economc Sciences, Florence University, Italy)
    Abstract: Modularity has gained recently a growing attention in the management literature as a key to explain the contemporary trends of industrial dynamics, according to which external «market-based» economies have become predominant over internal «bureaucracy-based» economies. Nowadays global supply-networks play a key role for a large share of material and immaterial inputs in many sectors, and the diffusion of modular architectures for products, in connection with flexible production systems, is often indicated by the literature as the main driver for this change. In order to analyze better this connection, in this paper a model is presented which tries to focus on the factors that influence the competitive performance of internal versus outsourced production when the two options are subject to a trade-off with respect to the kind of innovation strategies they can use. In particular through a set of exploratory agent-based simulations we verify two hypotheses. The first one is the existence of a trade-off between decentralized search and complexity, as suggested by a recent strand of literature which has modeled innovation as a discovery process on complex fitness landscapes. The second one is a comparative advantage of centralized search, which occurs, for all levels of complexity, when the returns of innovation are lower. When the conditions just described occur in a competitive context, the limits of modularity become apparent.
    Keywords: Modular design, Product innovation, Networks
    JEL: L22 L15 C63
    Date: 2005–09
  9. By: Michele Moretto; Gianpaolo Rossini
    Abstract: From 1997 to 2001 we observe in the Usa a faster growth in the number of Nonemploye firms (NF) vis à vis Employer firms (EF). The diverse speed of net entry may be due to particular internal organisation of the two types of firms and the effect that this has on the reactions to market uncertainty. However, the set of internal organizations of firms is larger than that made up simply by EFs and NFs, in particular among newborn firms, since we observe corporate start-ups with employees, firms owned and managed by their founders who are simultaneously the employees and, finally, non corporate enterprises. The second class of firms mostly belongs to the category of NFs, according to US nomenclature, while non corporate firms may belong to either category. Our curiosity is attracted by different entry patterns of NFs and EFs and our aim is to interpret them. According to recent literature, firms carry out an irreversible investment, such as entry, only if market prices are strictly larger than average total costs (Marshallian point). However, the trigger price that makes firms become active is affected by institutional rules, the existence of profit sharing, efficiency wages, exit options - i.e. partial reversibility - financial constraints. Then, the internal organization of a newborn firm may make the difference. In a continuous time stochastic environment, where firms bear a sunk cost, we model entry as a growth option. On the trace of distinct objective functions we show that NFs and EFs have specific entry patterns in terms of output price and/or size. Why? Simply because they react in diverse fashions to market price volatility. In this sense we are able to show that, in most cases, the NF is locally less risky. This makes the NF better suited to enter under conditions of higher volatility. This exactly corresponds to what happened during the years between 1997-2001.

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