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on Technology and Industrial Dynamics |
| By: | Klaus Schmidt (University of Munich) |
| Abstract: | Many high technology goods are based on standards that require several essential patents owned by different IP holders. This gives rise to a complements and a double mark-up problem. We compare the welfare effects of two different business strategies dealing with these problems. Vertical integration of an IP holder and a downstream producer solves the double mark-up problem between these firms. Nevertheless, it may raise royalty rates and reduce output as compared to non-integration. Horizontal integration of IP holders solves the complements problem but not the double mark-up problem. Vertical integration discourages entry and reduces innovation incentives, while horizontal integration always benefits from entry and innovation |
| Keywords: | IP rights, complementary patents, standards, licensing, patent pool, vertical integration |
| JEL: | L1 L4 |
| Date: | 2009–08 |
| URL: | http://d.repec.org/n?u=RePEc:trf:wpaper:273&r=tid |
| By: | Tatiana Plotnikova (DFG Research Training Program "The Economics of Innovative Change", Friedrich-Schiller-University Jena) |
| Abstract: | This paper empirically investigates the determinants of R&D diversification strategies in the drug industry. It enriches the existing literature by proposing to look at diversification factors, which reflect market and technological proximity of an R&D project towards other projects within a firm's portfolio as well as R&D competition factors. Additionally, the characteristics of R&D in the market where a new potential product is developed affiect future product choice. The analysis is performed for products-in-development data, merged with firms' patents, which allows us to separate project proximity in market niches from technological proximity. The results of empirical estimation support an idea that R&D diversification is governed by the economies of scope as well as the escape competition motive. Moreover, it is found that competition rather than spillovers in the niche where an R&D project is developed defines firms' decisions to diversify. |
| Keywords: | diversification, technological diversity, relatedness, competition, R&D |
| JEL: | O32 L25 L65 |
| Date: | 2009–09–29 |
| URL: | http://d.repec.org/n?u=RePEc:jrp:jrpwrp:2009-078&r=tid |
| By: | María Callejón (Facultat d'Economia i Empresa, Avda. Diagonal 690, 08034 Barcelona, Spain); Vicente Ortún (Department of Economics and Business, Universitat Pompeu Fabra, Barcelona, Spain) |
| Abstract: | Research in business dynamics has been advancing rapidly in the last years but the translation of the new knowledge to industrial policy design is slow. One striking aspect in the policy area is that although research and analysis do not identify the existence of an specific optimal rate of business creation and business exit, governments everywhere have adopted business start-up support programs with the implicit principle that the more the better. The purpose of this article is to contribute to understand the implications of the available research for policy design. Economic analysis has identified firm heterogeneity as being the most salient characteristic of industrial dynamics, and so a better knowledge of the different types of entrepreneur, their behavior and their specific contribution to innovation and growth would enable us to see into the ‘black box’ of business dynamics and improve the design of appropriate public policies. The empirical analysis performed here shows that not all new business have the same impact on relevant economic variables, and that self-employment is of quite a different economic nature to that of firms with employees. It is argued that public programs should not promote indiscriminate entry but rather give priority to able entrants with survival capacities. Survival of entrants is positively related to their size at birth. Innovation and investment improve the likelihood of survival of new manufacturing start-ups. Investment in R&D increases the risk of failure in new firms, although it improves the competitiveness of incumbents. |
| Keywords: | Industrial dynamics, industrial policy, creative destruction, business demography. |
| JEL: | D21 L16 L52 M13 O25 |
| Date: | 2009–09 |
| URL: | http://d.repec.org/n?u=RePEc:xrp:wpaper:xreap2009-7&r=tid |
| By: | Giulio Bottazzi; Giovanni Dosi; Nadia Jacoby; Angelo Secchi; Federico Tamagni |
| Abstract: | Diverse theories of industry dynamics predict heterogeneity in production efficiency to be the driver of firms' growth, survival and industrial change, either through a direct link between efficiency and growth, or through an indirect effect via profitabilities, as more productive firms can enjoy higher profit margins which, under imperfect capital markets, allow them to invest and grow more. Does the empirical evidence bear such predictions? This paper explores the dynamics of selection and reallocation through an investigation of the productivity-profitability-growth relations at the firm level. Exploiting large panels of Italian and French industrial firms, we find that heterogeneity in efficiencies primarily yield persistent profitability differentials, whereas the relationships of corporate growth with either productivity or profitability appear much weaker, if at all existent. This suggests that selection forces are much less strong than usually assumed. Rather, the links between efficiency and corporate growth seem profoundly mediated by large degrees of behavioural freedom. The results robustly applies across different industrial sectors and across the two countries. |
| Keywords: | firms heterogeneity, corporate growth, productivity, profitability, market selection, cross-country comparisons |
| JEL: | C14 D20 L10 L20 O47 |
| Date: | 2009–09–29 |
| URL: | http://d.repec.org/n?u=RePEc:ssa:lemwps:2009/13&r=tid |