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on Technology and Industrial Dynamics |
| By: | Joachim Wagner (University of Lueneburg and Max Planck Institute of Economics) |
| Abstract: | Using panel data from Spain Farinas and Ruano (IJIO 2005) test three hypotheses from a model by Hopenhayn (Econometrica 1992): (H1) Firms that exit in year t were in t-1 less productive than firms that continue to produce in t. (H2) Firms that enter in year t are less productive than incumbent firms in year t. (H3) Surviving firms from an entry cohort were more productive than non-surviving firms from this cohort in the start year. Results for Spain support all three hypotheses. This paper replicates the study using a unique newly available panel data sets for all manufacturing plants from Germany (1995 - 2002). Again, all three hypotheses are supported empirically. |
| Keywords: | entry, exit, productivity |
| JEL: | L11 L60 |
| Date: | 2007–09–12 |
| URL: | http://d.repec.org/n?u=RePEc:jrp:jrpwrp:2007-064&r=tid |
| By: | Joachim Wagner (University of Lueneburg; Max Planck Institute of Economics) |
| Abstract: | This paper contributes to the flourishing literature on exports and productivity by using a unique newly available panel of exporting establishments from the manufacturing sector of Germany from 1995 to 2004 to test three hypotheses derived from a theoretical model by Hopenhayn (Econometrica 1992): (H1) Firms that stop exporting in year t were in t-1 less productive than firms that continue to export in t. (H2) Firms that start to export in year t are less productive than firms that export both in year t-1 and in year t. (H3) Firms from a cohort of export starters that still export in the last year of the panel were more productive in the start year than firms from the same cohort that stopped to export in between. While results for West Germany support all three hypotheses, this is only the case for (H1) and (H2) in East Germany. |
| Keywords: | export entry, export exit, productivity |
| JEL: | F14 L60 |
| Date: | 2007–09–12 |
| URL: | http://d.repec.org/n?u=RePEc:jrp:jrpwrp:2007-062&r=tid |
| By: | Kilponen , Juha (Bank of Finland Research); Santavirta, Torsten (Helsinki School of Economics) |
| Abstract: | We show theoretically that a proportional R&D subsidy accelerates innovation activity at all degrees of competition in the modern Schumpeterian growth model, but less so at high degrees of competition. We then use company-level data on patenting activity, product market competition and R&D subsidies of Finnish firms during 1990–2001 to test the theoretical prediction. The empirical findings can be summarized as follows. Firstly, we find relatively strong evidence in favour of the inverted U-shape between competition and innovation. Secondly, we find some evidence that a direct R&D subsidy increases innovative activity at all but very high degrees of competition. This can be interpreted so mean that the R&D subsidy reinforces the Schumpeterian effect due to the negative cross-effect of R&D subsidy and competition. This is evident from the finding that an increase in the R&D subsidy steepens the inverted U relationship when competition is fierce. |
| Keywords: | competition; innovation; R&D subsidies; patents |
| JEL: | D40 H25 L10 O31 |
| Date: | 2007–09–12 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:bofrdp:2007_010&r=tid |
| By: | Nicholas Economides (Stern School of Business, New York University); William N. Hebert (Calvo & Clark LLP); |
| Abstract: | We examine the intersection of patents and antitrust where a patent holder uses the monopoly power it possesses in the market for a patented product to exclude competitors in an adjacent market and attempt to monopolize or monopolize the adjacent market. The present scheme for awarding patents cannot judge when the issuance of a patent will lead to the appropriate balance between innovation and efficiency. Where a patent holder’s invention uses an interface with adjacent products, the patent holder may be tempted to extend its patent monopoly into adjacent markets that depend upon the interface with the patented invention. Economic theory suggests that it is inappropriate to immunize a patent holder from antitrust liability when it attempts to extend its patent monopoly into adjacent markets, because it could decrease consumer surplus. Courts have expressed their reluctance to scrutinize a patent holder’s innovations and design changes, because of the potential benefits of the innovations and their reluctance to second-guess the marketplace. However, applying traditional antitrust principles, courts have found that monopolists could be liable for unlawfully extending their monopoly positions into adjacent markets in the areas of computer peripherals and software applications; aftermarkets for replacement parts, service and maintenance of durable goods; design changes to medical devices; and changes in drug formulas. While the patent laws provide a spur to innovation by granting limited monopoly rights, the antitrust laws curb the excessive reach of these monopoly rights by acting as a check on excessive expansion of the scope of the patent grant. |
| Keywords: | patents, antitrust, adjacent markets, complementarity, innovation, efficiency, aftermarkets |
| JEL: | K21 Q31 Q34 L42 L40 L12 |
| Date: | 2007–08 |
| URL: | http://d.repec.org/n?u=RePEc:net:wpaper:0707&r=tid |