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on Technology and Industrial Dynamics |
| By: | Carlos D. Santos (Dpto. Fundamentos del Análisis Económico) |
| Abstract: | Competition has long been regarded as productivity enhancing. Understanding the mechanism by which competition affects innovation and productivity is therefore an important topic for economic policy. The main contribution of this paper is to disentangle the relationship between competition and two sides of innovation: product and process. I write down a model and discuss the conditions under which we can identify the causal mechanism. Overall I find that competition, measured by the number of competitors or market shares, has negative effects on product innovation and no effects on process innovation. The explanation is very simple. By shifting demand, competition directly changes the optimality condition for product but not for process innovation. Thus, competition has no direct effects on process innovations or, as a consequence, productivity. |
| Keywords: | competition, innovation, R&D, product innovation, process innovation |
| JEL: | L11 L60 O30 |
| Date: | 2010–07 |
| URL: | http://d.repec.org/n?u=RePEc:ivi:wpasad:2010-26&r=tid |
| By: | Tseveen Gantumur; Andreas Stephan |
| Abstract: | To quickly adapt to technological change and developments, and thus remain competitive, firms increasingly resort to the use of external technology. This paper investigates whether and to what extent the acquisition of external disembodied technology affects the efficiency and productivity in innovation of technology acquiring firms. Using the stochastic frontier analysis combined with a difference-in-difference matching approach and firm-level panel from the German Innovation Survey for the period 1992-2004, we find that manufacturing firms that acquire disembodied technology experience more growth in innovative productivity than non-acquiring firms do. Thus, this study provides evidence on complementarity between internal and external R&D in innovation production, which is attributed by increasing returns to R&D scale and increasing technical efficiency. Moreover, we find that firm size significantly contributes to innovative efficiency and productivity of external technology acquirers. |
| Keywords: | Technology acquisition, innovative efficiency, innovative productivity, SFA, Difference-in-difference matching |
| JEL: | O30 L24 L25 L60 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwwpp:dp1035&r=tid |
| By: | Fabio Pammolli (IMT Lucca Institute for Advanced Studies); Massimo Riccaboni (University of Trento); Laura Magazzini (Department of Economics (University of Verona)) |
| Abstract: | We analyze the decline of R&D productivity in pharmaceuticals and its determinants. Since the molecular biology revolution, science has dramatically expanded the set of plausible therapeutic targets. However, innovation has become more difficult to achieve, and attrition rates of R&D projects have increased, especially in late-phase clinical trials. We show that the R&D productivity slowdown is associated with a higher concentration of R&D investments in high-risk domains, corresponding to unsolved therapeutic needs and unexploited biological mechanisms. We compare the strategies of European and US companies, finding differences in the composition of R&D portfolios, but no evidence of any productivity gap. |
| Keywords: | R&D productivity, pharmaceutical industry |
| JEL: | O31 |
| Date: | 2010–04 |
| URL: | http://d.repec.org/n?u=RePEc:ver:wpaper:06/2010&r=tid |
| By: | Russell Thomson (Melbourne Institute of Applied Economic and Social Research, and Intellectual Property Research Institute of Australia, The University of Melbourne); Paul H. Jensen (Melbourne Institute of Applied Economic and Social Research, and Intellectual Property Research Institute of Australia, The University of Melbourne) |
| Abstract: | Existing empirical evidence suggests that public subsidies and fiscal incentives have a positive effect on the amount of private R&D expenditure. However, most studies have failed to address the possibility at least some of this increase may simply reflect the fact that R&D workers are being paid higher wages. Such an omission may imply that past research has over-estimated the effectiveness of R&D tax concessions. In the absence of widely-available R&D deflators, we consider the impact of a range of public subsidies on the number of fulltime equivalent workers employed in R&D (i.e., researchers) in the business sector. Our findings strongly support the effectiveness of both direct subsidies and fiscal incentives. |
| Keywords: | innovation policy, R&D tax credits, R&D investment |
| JEL: | O38 H25 |
| Date: | 2010–07 |
| URL: | http://d.repec.org/n?u=RePEc:iae:iaewps:wp2010n11&r=tid |
| By: | Chu, Angus C.; Furukawa, Yuichi |
| Abstract: | A special characteristic of the patent system is that it features multiple patent-policy levers that can be employed by policymakers. In this study, we develop a quality-ladder model to analyze the optimal mix of patent instruments. Specifically, we consider (a) patent breadth and (b) the division of profit in research joint ventures. We analytically derive optimal patent policies and then calibrate the model to quantitatively evaluate the welfare gain from optimizing both patent instruments as compared to optimizing only one patent instrument. In summary, we find that the welfare gain can be substantial. |
| Keywords: | R&D; innovation; intellectual property rights |
| JEL: | O34 O31 |
| Date: | 2010–08 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:24039&r=tid |
| By: | Pierluigi Murro (University of Bari) |
| Abstract: | Because of its importance in understanding and explaining growth, the topic of innovation has received a huge attention in the economic literature. However, our knowledge of the factors that inuence in- novation and its related activities is not as exhaustive as it could be. The present study aims at contributing to analyse the determinants of innovation, with a special focus on rm risk. Employing a rich sample of Italian manufacturing rms, we tested for the impact on innovation of the riskiness of the rm, as proxied by the probability of default. We found that riskiness of enterprise reduces the tendency to innovate for the rms. The main channel through which rm risk aects innovation capability appears to be that of innovation nancing. |
| Keywords: | Technological Change; Financial Risk and Risk Management |
| JEL: | O3 G32 |
| Date: | 2010–07 |
| URL: | http://d.repec.org/n?u=RePEc:bai:series:wp0032&r=tid |