nep-tid New Economics Papers
on Technology and Industrial Dynamics
Issue of 2007‒08‒18
six papers chosen by
Rui Baptista
Technical University of Lisbon

  1. Industrial structure, business demography and innovation By Svein Olav Nås
  2. Why don’t Small and Medium Enterprises Innovate More: Creating a Cooperative Learning Environment at Individual, Firm and Regional Level By Gupta Anil K.
  3. Technological Spillovers and Productivity in Italian Manufacturing Firms By Claudio A. Piga; Giuseppe Medda
  4. The technical-industrial research institutes in the Norwegian innovation system By Lars Nerdrum; Magnus Gulbrandsen
  5. FDI and Technology Spillovers in China By Sea Jin Chang; Jaiho Chung; Dean Xu
  6. Sequential innovations with unobservable follow-on investments By Stefano Comino; Fabio Manenti; Antonio Nicolò

  1. By: Svein Olav Nås (Norwegian Institute for Studies in Research and Education - Centre for Innovation Research)
    Abstract: The analysis addresses path dependency by studying development in industrial structure in Norway over time, and relates types of changes in firms to innovation activities in the firms as identified by the Norwegian innovation survey. A typology of changes is developed on the basis of matched employer-employee data allowing differentiating between events like entry and exit, take overs and spin-outs. Results show that despite a large degree of underlying turbulence the underlying industrial structure remains relatively stable over time - although with the well known reduction in primary industries and growth in service industries. Changes are more pronounced in terms of employment than in terms of value added which show a stable or increasing trend in virtually all industries. Combining with innovation data reveals that types of changes in firms vary with innovation modes. In particular, strategic innovators are found less frequently among unchanged organisations than is the case for other types of innovators. On the other hand a higher share of subsequent transformed establishments is found among strategic innovators.
    Date: 2007–08
  2. By: Gupta Anil K.
    Abstract: One would expect, that a large number of innovations linked to cycle, a common person’s means of transport, would be of great interest to the cycle industry. But, if the leaders of cycle industry do not evince much interest, there must be some serious reasons. It seems that if a company can manage growth with existing product range, why should it try to provide additional features or conveniences to the client. Indian small and medium scale industry appears to suffer from this limitation. I propose that cooperative model of learning is evolved to make each enterprise more competitive. Thus, cooperation in learning space and sometimes in market space may make Indian industry more competitive globally. There is a brief reference to the potential of intellectual property rights database as a source of learning. Why even in crops like psyllium, Indians have hardly five out of 878 patents is an issue that needs careful attention. Incidentally, psyllium is grown only in India.
    Date: 2007–08–08
  3. By: Claudio A. Piga (Dept of Economics, Loughborough University); Giuseppe Medda (DEIR, University of Sassari, Italy.)
    Abstract: We study whether a firm’s total factor productivity dynamics is positively influenced by its own R&D activity and by the technological spillovers generated at the intra- and inter-sectorial level. Our approach corrects simultaneously for the endogeneity and the selectivity biases introduced by the use of a firm’s own R&D as a regressor. A firm’s involvement in R&D activities accounts for significant productivity gains. Firms also benefit from spillovers originating from their own industries, as well as from innovative upstream sectors.
    Keywords: R&D, TFP, selectivity, treatment effect
    JEL: C21 C80 D24 O30
    Date: 2007–07
  4. By: Lars Nerdrum (Norwegian Institute for Studies in Research and Education - Centre for Innovation Research); Magnus Gulbrandsen (Norwegian Institute for Studies in Research and Education - Centre for Innovation Research)
    Abstract: This paper analyses the role of technical-industrial research institutes for industrial innovation in Norway. Using statistical data and a survey among firms, the paper shows that there are many different types of interaction between institutes and firms. In addition to R&D and technical services, the institutes are a significant source of skilled manpower for firms. We highlight three central roles for the institutes: they are a learning partner for industry, they help increase absorptive capacity, and they constitute a flexible repository in the innovation system by helping firms in peak periods and by reducing the pressure on universities through assisting in teaching and supervision.
    Date: 2007–08
  5. By: Sea Jin Chang; Jaiho Chung; Dean Xu
    Abstract: Using a database of Chinese firms, we examine the effects of technology spillovers not only between foreign entrants and local firms but also between “modernized” local firms to other local firms. Our results show that the increased presence of foreign multinationals within industries and in their upstream sectors positively affected the productivity of local firms. The positive intra-industry spillover effect from wholly owned subsidiaries becomes evident when the Chinese government’s restriction on foreign ownership was lifted. We also find strong spillover effects among local firms.
    Keywords: foreign direct investment, spillover effects, China
    JEL: F2 O2
    Date: 2007–07
  6. By: Stefano Comino (Università di Trento,); Fabio Manenti (Università di Padova,); Antonio Nicolò (Università di Padova,)
    Abstract: We consider a cumulative innovation process in which a follow-on innovator invests in R&D activities that influence both the expected commercial value as well as the novelty of its innovation. When the second innovator investments are not servable,licensing of the first innovation never occurs efficiently, and, at the equilibrium, the follow-on innovator either underinvests or overinvests. We show that a large patent breadth may be harmful for the first innovator too, and therefore Pareto-dominated;as long as the undervinvestment problem becomes more pronounced, the value generated by the follow-on innovator reduces, and so do the licensing revenues of the first inventor.
    Keywords: sequential innovation, patents, licensing, intellectual property
    JEL: K3 L5 O3
    Date: 2007–05

This nep-tid issue is ©2007 by Rui Baptista. 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.