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on Technology and Industrial Dynamics |
| By: | Uppenberg, Kristian (European Investment Bank, Economic and Financial Studies) |
| Abstract: | The literature on economic growth has identified knowledge expansion as a key propellant. Early research derived this conclusion from the residual that remained after the growth contributions from capital and labour had been accounted for. Later modifications expanded the concept of fixed capital to include intangible capital. The underlying drivers of innovation have, meanwhile, been explored by the endogenous growth literature. Together, these efforts have reconfirmed the role of knowledge and innovation in growth. But they also point to the importance of competition and firm entry and exit as key motivators for firms to innovate. Policies aiming to boost growth must therefore look beyond the amounts invested in R&D and also provide for wellfunctioning labour, product and financial markets. |
| Keywords: | Research and development; innovation; neoclassical growth model; endogenous growth |
| JEL: | O30 O40 |
| Date: | 2009–12–23 |
| URL: | http://d.repec.org/n?u=RePEc:ris:eibpap:2009_001&r=tid |
| By: | Ken-Ichi Shimomura; Jacques-François Thisse (CREA, University of Luxembourg) |
| Abstract: | Armchair evidence shows that many industries are made of a few big commercial or manufacturing firms, which are able to affect the market outcome, and of a myriad of small family-run businesses with very few employees, each of which has a negligible impact on the market. Examples can be found in apparel, catering, publishers and bookstores, retailing, finance and insurances, and IT industries. We provide a new general equilibrium framework that encapsulates both market structures. Due to the higher toughness of the market, the entry of big firms leads them to sell more through a market expansion eect, which is generated by the exit of small firms. Furthermore, the level of social welfare increases with the number of oligopolistic firms because the procompetitive effect associated with the entry of a big rm dominates the resulting decrease in product variety. |
| JEL: | L13 L40 |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:luc:wpaper:09-18&r=tid |
| By: | EL ELJ, Moez |
| Abstract: | In the context of economic globalization and of the internationalization of R&D activity, innovation is becoming one of the most important assets for corporations in developed and emerging countries as well. The aim of this research is to analyze the main determinants of technological innovation of Tunisian firms on the basis of the innovation survey conducted by Tunisian Ministry of Scientific Research, Technology and Skills Development in 2005. Precisely, we analyze the effects of the external technological factors and In house R&D effort variables on innovation performances of Tunisian firms. We, then attempt to explore these relationships and see if they are affected by other moderator variables linked to exportation intensity and foreign capital share. In our estimation, we utilize the binomial logit model. Our preliminary results show that R&D activity is not the only explanatory factor of the innovation. In addition, Tunisian firms with high export ratio as well as firms with significant foreign capital participation are found to be not innovating since they depend primarily on the innovations conducted abroad. |
| Keywords: | Technological Innovation; Technological opportunities; R&D in Developing Countries; Logit Regression with Interactive variables |
| JEL: | O55 O33 O31 C25 |
| Date: | 2009–10–24 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:18128&r=tid |
| By: | Pedro Rui Mazeda Gil (CEF.UP and Faculdade de Economia, Universidade do Porto); Paulo Brito (Instituto Superior de Economia e Gestão and UECE, Universidade Técnica de Lisboa); Óscar Afonso (CEF.UP and Faculdade de Economia, Universidade do Porto) |
| Abstract: | This paper develops a tournament model of horizontal and vertical R&D under a lab-equipment specification. A key feature is that the overall growth rate is endogenous, as the splitting of the growth rate between the intensive and the extensive margin is itself endogenous. This setup gives rise to strong inter-R&D composition effects, while making economic growth and firm dynamics closely related, both along the balanced-growth path and transition. The model hence offers a (qualitative) explanation for the negative or insignificant empirical correlation between aggregate R&D intensity and both firm size and economic growth, a well-known puzzle in the growth literature. |
| Keywords: | endogenous growth, vertical and horizontal R&D, firm dynamics, transitional dynamics |
| JEL: | O41 D43 L16 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:por:fepwps:356&r=tid |
| By: | Cuihong Fan (Shanghai University of Finance and Economics); Byoung Heon Jun; Elmar Wolfstetter (Humboldt University at Berlin) |
| Abstract: | We consider a licensing mechanism for process innovations that combines a license auction with royalty contracts to those who lose the auction. Firms’ bids are dual signals of their cost reductions: the winning bid signals the own cost reduction to rival oligopolists, whereas the losing bid influences the beliefs of the innovator who uses that information to set the royalty rate. We derive conditions for existence of a separating equilibrium, explain why a sufficiently high reserve price is essential for such an equilibrium, and show that the innovator generally benefits from the proposed mechanism. |
| Keywords: | Patents, licensing, auctions, royalty, innovation, R&D, mechanism design. |
| JEL: | D21 D43 D44 D45 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:trf:wpaper:291&r=tid |
| By: | Cuihong Fan (Shanghai University of Finance and Economics); Byoung Heon Jun; Elmar Wolfstetter (Humboldt University at Berlin) |
| Abstract: | This paper reconsiders the licensing of a common value innovation to a downstream duopoly, assuming a dual licensing scheme that combines a first-price license auction with royalty contracts for losers. Prior to bidding firms observe imperfect signals of the expected cost reduction; after the auction the winning bid is made public. Bidders may signal strength to their rivals through aggressive bidding, which may however backfire and mislead the innovator to set an excessively high royalty rate. We provide sufficient conditions for existence of monotone bidding strategies and for the profitability of combining auctions and royalty contracts for losers. |
| Keywords: | Patents, licensing, auctions, royalty, innovation, R&D, mechanism design. |
| JEL: | D21 D43 D44 D45 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:trf:wpaper:292&r=tid |