nep-tid New Economics Papers
on Technology and Industrial Dynamics
Issue of 2010‒01‒10
three papers chosen by
Rui Baptista
Technical University of Lisbon

  1. Industry Dynamics and Productivity Research By Jeong-Dong Lee
  2. Royalty Licensing. By Marta San Martin; Ana I. Saracho
  3. From Knowledge to Added Value: A Comparative, Panel-data Analysis of the Innovation Value Chain in Irish and Swiss Manufacturing Firms By Stephen Roper; Spyros Arvanitis

  1. By: Jeong-Dong Lee (Technology Management, Economics and Policy Program(TEMEP), Seoul National University)
    Abstract: Firms experience birth (entry), growth and death (exit) as all living things do in any biological system. However, not all firms will show the same rate of growth and the same hazard rate of exit. Industry dynamics is a field of research that analyzes the dynamic patterns of entry, growth and exit of firms, and investigates the sources of those changes.On the other hand, productivity research has focused on the performance measurement of individual economic entities?such as firm, industry and country?and also on the examination of the sources. This paper reviews the past contribution of productivity research on industry dynamics and tries to specify the important future research areas that connect the two fields of research. For the past contribution, the paper emphasizes the following three issues: productivity as a measure of heterogeneity of firm population; productivity as an important source of the event in industry dynamics; source decomposition of industry-level productivity change. For the future work, the paper suggests the three areas of research: theoretical modeling that associates productivity with industry dynamics; accommodation of recent methodological developments of productivity analysis; rigorous study on the causal relationships among factors that affect the productivity change and industry dynamics. It is expected to better understand the logic behind pervasive yet complex behaviors of firms and industries, if the two research areas?productivity analysis and industry dynamics?interact more intensively
    Keywords: Industry Dynamics, Entry and Exit, Productivity, Survival Analysis, Firm Population
    JEL: D21 D24 L60 O30 C61
    Date: 2009–11
  2. By: Marta San Martin (UPV/EHU); Ana I. Saracho (UPV/EHU)
    Abstract: A patent provides its holder the monopolist´s right to sell licenses that allow the use of new technology. Empirically, most of the patent licensing agreements that are observed include royalties, in particular per unit or ad valorem royalties. The theoretical literature, however, has focused most of its attention to attempt to explain the presence of royalties by considering per-unit royalties. In this paper, we show that an internal patentee may prefer licensing by means of ad valorem royalties rather than per-unit royalties and other licensing mechanism traditionally considered in the literature. The reason is that by including an ad valorem royalty in the licensing contract the patentee can commit strategically to be less aggressive since its licensing revenues become increasing in the price of output. As a result, licensing hurts consumers.
    Keywords: Patent Licening; Royalty; Cournot Duooly
    JEL: D45
    Date: 2009–12–16
  3. By: Stephen Roper (Centre for Small and Medium Enterprises, Warwick Business School, University of Warwick, Coventry,UK); Spyros Arvanitis (KOF Swiss Economic Institute, ETH Zurich, Switzerland)
    Abstract: The innovation value chain (IVC) divides the innovation process into three separate links or activities: knowledge gathering, knowledge transformation and knowledge exploitation. Here, we report a comparative panel data analysis of the IVC in Ireland and Switzerland. Both economies are small, very open and depend significantly on innovation to maintain competitive advantage. In recent years, however, R&D and innovation growth in Ireland has been markedly stronger than that in Switzerland. We investigate these differences through the ‘lens’ of the IVC. We identify significant similarities between the determinants of firms’ knowledge gathering behaviours in each country although firms are responding differently to financial and legal constraints. Strong complementarities emerge between external knowledge sources and between firms’ internal and external knowledge. In terms of knowledge transformation – the development of new products or processes – we again find strong similarities between the two countries in terms of the determinants of the probability of innovation. The determinants of innovation intensity vary more, however, with external ownership significantly more important in Ireland. Finally, we consider the link between innovation and productivity which involves significant endogeneity issues. Two-stage estimation procedures do not suggest any significant links between innovation and productivity as we might expect from the macro-economic evidence.
    Keywords: Innovation, value chain, Switzerland, Ireland
    JEL: O3 O5 P5
    Date: 2009–11

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