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on Technology and Industrial Dynamics |
| By: | Böckerman, Petri; Eero , Lehto; Huovari, Janne |
| Abstract: | This paper examines, through the use of plant-level data, whether R&D’s productivity impact is contingent on the distance of a plant’s productivity from the industry’s technological frontier. R&D is specified as an accumulated stock from R&D investments. We analyse the productivity effect of a plant’s own R&D as well as the productivity impact of the plant’s parent firm’s and other firms’ proximity-weighted R&D stocks. The results show that a plant’s own and a parent firm’s R&D have a positive productivity impact and that the former impact decreases as the distance from the industry’s technological frontier increases. Furthermore, the productivity effect of other firms’ proximity-weighted R&D is, on average, positive, but this impact increases in the distance from the technological frontier. Another important finding is that all the plants tend to converge towards the industry’s technological frontier despite the size of external R&D spillovers. |
| Keywords: | productivity; efficiency; technological frontier; spillovers; convergence |
| JEL: | D24 L00 |
| Date: | 2008–05–12 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:8715&r=tid |
| By: | Norbäck, Pehr-Johan; Persson, Lars |
| Abstract: | We construct a model where an entrepreneur could either innovate for entry or for sale. It is shown that increased product competition tends to increase the relative profitability of innovation for sale relative to entry. Increased competition reduces entrants' and acquirers' profits in a similar fashion, but also reduces the profit of non-acquirers. Therefore, incumbents' valuations of innovations are less negatively affected by increased competition than entrants' profits. This, in turn, implies that the incentive for innovation for sale can increase with increased competition. Finally, we show that a stricter, but not too strict, merger policy tends to increase the incentive for innovations for sale by ensuring the bidding competition for the innovation, without reducing the total rents for innovations too much. |
| Keywords: | Antitrust; Competition; Competition Policy; Entrepreneurs; Innovations |
| JEL: | L13 L40 O31 |
| Date: | 2008–05 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:6823&r=tid |
| By: | Luca Colombo (DISCE, Università Cattolica); Herbert Dawid (Universität Bielefeld) |
| Abstract: | In this paper we examine in a game theoretic framework in how far market conditions facilitating start-up formation positively affect technical change and firms' profits. We consider a model in which R&D efforts of an incumbent firm generate technological know-how embodied in key R&D employees, who might use this know-how to form a start-up. Market conditions, in particular the availability of complementary assets, influence whether new firms are created and determine expected profits for start-up-founders. Easy availability of complementary assets has the direct effect that the generation of start-ups, which leads to the diffusion and duplication of know-how, is fostered. However, incentives of incumbent firms to invest in R&D might be reduced because of the increased danger of knowledge loss through spin-out formation. We fully characterize the effects of an increase in the availability of complementary assets, demonstrating that under certain market conditions the effects on innovative activities and industry profits can be negative. |
| Keywords: | Complementary Assets, Technical Change, R&D Effort, Startup |
| JEL: | L20 M13 O30 |
| Date: | 2008–04 |
| URL: | http://d.repec.org/n?u=RePEc:ctc:serie3:ief0080&r=tid |
| By: | Tetsuji Okazaki (Faculty of Economics, University of Tokyo) |
| Abstract: | This paper explores the relationship between patterns of productivity growth and the development stage of an industry, using firm-level data on the cotton spinning industry in Japan in the late nineteenth century. It is found that patterns of productivity growth depend on the development stage of the industry. In the earlier stage of industrial development, productivity growth of each firm, namely the within effect, was the sole major source of aggregate productivity growth. On the other hand, once the industry had matured, resource reallocation across firms became a major source of aggregate productivity growth, along with the within effect. This relationship between patterns of productivity growth and the development stage of an industry is considered to reflect the stage-dependent patterns of innovation and competition. |
| Date: | 2008–05 |
| URL: | http://d.repec.org/n?u=RePEc:tky:fseres:2008cf562&r=tid |