nep-tid New Economics Papers
on Technology and Industrial Dynamics
Issue of 2006‒06‒17
nine papers chosen by
Roberto Fontana
Universita Bocconi

  1. Fragmented property rights and R&D competition By Derek J. Clark; Kai A. Konrad
  2. Determinants influencing the choice of a cooperation partner By Uwe Cantner; Andreas Meder
  3. Choosing intellectual protection : imitation, patent strength and licensing. By David Encaoua; Yassine Lefouili
  4. The impact of financial constraints on innovation : evidence from french manufacturing firms. By Frédérique Savignac
  5. Evaluating the market potential of innovations: A structured survey of diffusion models By Alexander Frenzel Baudisch; Hariolf Grupp
  6. Regional patterns and determinants of new firm formation and survival in western Germany By Brixy, Udo; Grotz, Reinhold
  7. The Industry Life Cycle and Acquisitions and Investment: Does Firm Organization Matter? By Vojislav Maksimovic; Gordon Phillips
  8. How fast do newly founded firms mature? : empirical analyses on job quality in start-ups By Brixy, Udo; Kohaut, Susanne; Schnabel, Claus
  9. Innovativity: A Comparison Across Seven European Countries By Pierre Mohnen; Jacques Mairesse; Marcel Dagenais

  1. By: Derek J. Clark (Department of Economics and Management, University of Tromsø, N-9037 Tromsø, Norway.; Kai A. Konrad (WZB, Reichpietschufer 50, D-10785 Berlin, Germany, and Free University of Berlin.
    Abstract: Where product innovation requires several complementary patents, fragmented property rights can be a factor that limits firms’ willingness to invest in the development and commercialization of new products. This paper studies multiple simultaneous R&D contests for complementary patents and how they interact with patent portfolios that firms may have acquired already. We also consider how this interaction and the intensity of the contests depends on the type of patent trade regimes and the product market equilibria that result from these regimes. We solve for the contest equilibria and show that the multiple patent product involves an important hold-up problem that considerably reduces the overall contest effort.
    Keywords: fragmented property rights, patents, contests, hold-up, R&D, patent pools, licensing
    JEL: D44
    Date: 2006–06
  2. By: Uwe Cantner (University of Jena, Faculty of Economics); Andreas Meder (University of Jena, Faculty of Economics)
    Abstract: This paper provides empirical tests of hypotheses of cooperative behavior provided by evolutionary approaches in the resource-based view of the firm. The influences of "technological proximity", individual incentives to cooperate and managerial tools to the choice of research partner are analyzed. Using German patent data we can show the positive influence of those three determinants. The results of this paper confirm theories dealing with the path-dependency of research activities.
    Keywords: innovation, resource-based view of the firm, cooperation, technological proximity, organizational know-how
    JEL: C30 L14 O32
    Date: 2006–06–10
  3. By: David Encaoua (Centre d'Economie de la Sorbonne); Yassine Lefouili (Centre d'Economie de la Sorbonne)
    Abstract: This paper investigates the choice of an intellectual protection regime for a process innovation. We set up a multi-stage model in which choosing between patent and trade secrecy is affected by three parameters : the patent strength defined as the probability that the right is upheld by the court, the cost of imitating a patented innovation relative to the cost of imitating a secret innovation, and the innovation size defined as the extent of the cost reduction. The choice of the protection regime is the result of two effects : the damage effect evaluated under the unjust enrichment doctrine and the effect of market competition that occurs under the shadow of infringement. We find that large innovations are likely to be kept secret whereas small innovations are always patented. Furthermore, medium innovations are patented only when patent strength is sufficiently high. Finally, we investigate a class of licensing agreements used to settle patent disputes between patent holders and their competitors.
    Keywords: Patent, trade secrecy, imitation, licensing.
    JEL: D45 L10 O32 O34
    Date: 2005–12
  4. By: Frédérique Savignac (CREST et Centre d'Economie de la Sorbonne)
    Abstract: This paper examines the impact of financial constraints on innovation for established firms. We make use of a qualitative indicator of the existence of financial constraints based on firms' own assessment obtained thanks to a French specific survey. Thus, the existence of financial constraints for innovation is measured by a direct indicator whereas previous studies rely on proxies (like the cash-flow sensitivity) subject to interpretation problems. The descriptive analysis of balance sheet structures reveals that innovative firms without financial constraints have the best profile in terms of economic performances, financing structure and risk whereas non innovative firms facing financial constraints have the poorest profile. From the econometric point of view, the probabilities of implementing innovative projects and of facing financial constraints are simultaneously estimated by a recursive bivariate probit model to account for the endogeneity of the financial constraint variable. We then find that firms having innovative projects face financial constraints that significantly reduce the likelihood that they implement their innovative investment. The probability of facing financing constraints is explained by firms' ex ante financing structure and economic performances, by industry sector and it decreases with firms' size.
    Keywords: Innovation, financing constraints, recursive bivariate probit.
    JEL: G31 C35 O31
    Date: 2006–04
  5. By: Alexander Frenzel Baudisch (Max-Planck-Institute for Economics, Evolutionary Economics Unit); Hariolf Grupp (Fraunhofer Institute for Systems and Innovation Research)
    Abstract: This paper provides a systematic methodology to identify general innovation diffusion patterns in a given case study: First, an analytical framework is introduced which structures a review of innovation diffusion research. This framework may be used to structure the analysis of a case study. Second, a classification of innovation diffusion models is developed by focusing on the analytical hypotheses and stylized facts, which they assume. This categorization allows selecting appropriate models for a given case study based on the matching of the model's hypotheses and case study's characteristics. This provides an structured approach to allow innovators to evaluate ex-ante the market potential and the diffusion process, i.e. commercial success of their new product or practice. The paper concludes with critical recommendations on the use of innovation diffusion models. Based on the systematic approach to survey diffusion models, future research opportunities are outlined.
    Keywords: Innovation diffusion model, case study methodology, taxonomy, forecasting
    Date: 2006–06–11
  6. By: Brixy, Udo (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]); Grotz, Reinhold
    Abstract: "There is a large body of literature on the determinants of regional variation in new firm formation. In contrast there are few articles on the spatial differences in new firm survival. Using panel data we analyse both items for 74 western German regions over a ten-year period. The positive relationship between entry and exit which is often stated suggests a negative correlation between entry and survival. On the other hand, however, it seems convincing that regions with high birth rates should also have high survival rates, because a favourable environment for the founding of new firms should also be encouraging for the development of these firms. However, an analysis of both rates for 74 western German regions over a ten-year period reveals the existence of a negative relationship in general. This means that the survival rates are below average in regions with high birth rates. Despite this overall correlation, however, it is shown that the spatial pattern of a combination of both rates is complex, and all types of possible relationships exist. With a multivariate panel analysis we study the factors that influence regional birth and survival rates using the same set of independent variables. It is shown that in the service sector most variables literally work in opposite directions in the birth and survival rates models. But this does not hold for the manufacturing sector. This can be rated as evidence for the 'supportive environment thesis'. The reason for this is a completely different outcome of the estimated birth rates models for both industry sectors, whereas there are only minor differences in the estimated survival rate models. We can therefore deduce firstly that the two industries have different requirements for their 'seed bed' but not for their further successful development; and secondly, that the spatial structures which increase the number of newly founded businesses in the service sector are detrimental to the survival rates of newly founded firms." (author's abstract, IAB-Doku) ((en))
    Keywords: Unternehmensgründung, regionale Disparität, Unternehmenserfolg, Wirtschaftszweige, Westdeutschland, Bundesrepublik Deutschland
    JEL: R11 J23 L25 M13
    Date: 2006–04–27
  7. By: Vojislav Maksimovic; Gordon Phillips
    Abstract: We examine the effect of financial dependence on acquisition and investment within existing industries by single-segment and conglomerate firms for industries undergoing different long run changes in industry conditions. Conglomerates and single-segment firms differ more in rates of within-industry acquisitions than in capital expenditure rates, which are similar across organizational type. In particular, 36 percent of within-industry growth by conglomerate firms in growth industries is from intra-industry acquisitions, compared to nine percent for single segment firms. Financial dependence, a deficit in a segment’s internal financing, decreases the likelihood of within-industry acquisitions and opening new plants, especially for single-segment firms. These effects are mitigated for conglomerates in growth industries. The findings persist after controlling for firm size and segment productivity. Acquisitions lead to increased efficiency as plants acquired by conglomerate firms in growth industries increase in productivity post acquisition. The results are consistent with the comparative advantages of different firm organizations differing across long-run industry conditions.
    JEL: G0 G2 G3
    Date: 2006–06
  8. By: Brixy, Udo (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]); Kohaut, Susanne (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]); Schnabel, Claus
    Abstract: "Using a linked employer-employee data set for Germany, this paper analyzes labour fluctuation and wage setting in a cohort of newly founded and other establishments from 1997 to 2001. We show empirically that start-ups tend to have higher labour turnover rates, ceteris paribus. Moreover, bargaining coverage rates and wages in new firms are lower than in similar incumbent firms. Both the excess labour fluctuation and the wage differential are shown to decline and become insignificant over time as the newly founded firms mature. Our results imply that it takes a new firm only a few years to become an incumbent firm." (author's abstract, IAB-Doku) ((en))
    Keywords: Unternehmensgründung, Unternehmensentwicklung
    JEL: D21 J30 J63
    Date: 2005–01–13
  9. By: Pierre Mohnen; Jacques Mairesse; Marcel Dagenais
    Abstract: This paper proposes a framework to account for innovation similar to the usual accounting framework in production analysis and a measure of innovativity comparable to that of total factor productivity. This innovation accounting framework is illustrated using micro-aggregated firm data from the first Community Innovation Surveys (CIS1) for seven European countries: Belgium, Denmark, Ireland, Germany, the Netherlands, Norway and Italy for the year 1992. Based on the estimation of a generalized Tobit model and measuring innovation as the share of total sales due to improved or new products, it compares the propensity to innovate, and the innovation intensity conditional and unconditional on being innovative, across the seven countries and low- and high-tech manufacturing sectors. Even with relatively few explanatory variables our innovation framework already accounts for sizeable differences in country innovation intensity. It also shows that differences in innovativity across countries can be nonetheless very large.
    JEL: C35 L60 O31 O33
    Date: 2006–06

This nep-tid issue is ©2006 by Roberto Fontana. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.