nep-tid New Economics Papers
on Technology and Industrial Dynamics
Issue of 2010‒10‒09
four papers chosen by
Rui Baptista
Technical University of Lisbon

  1. Outsourcing and R&D Investment with Costly Patent Protection By Che, XiaoGang; Yang, Yibai; Zhang, Haoyu
  2. Firm Strategy, Location and MNE-networks By Lööf, Hans; Johansson, Borje
  3. On R&D Information Sharing and Merger By Uday Bhanu Sinha
  4. Patent Portfolio Races in Concentrated Markets for Technology By Florian Jell; Joachim Henkel

  1. By: Che, XiaoGang; Yang, Yibai; Zhang, Haoyu
    Abstract: We analyse decisions of firms on outsourcing of intermediate goods and R&D investment. If firms choose in-house production, a high profit discount is incurred due to the inefficiency of producing the intermediate goods, whereas if firms search for and outsource to specialists, the production costs decrease, but an imitation risk arises by specialists, who may become competitors in the final-good market. Accordingly, patents are used to mitigate this possibility, which are costly. We show that in outsourcing, all firms outsource to the same specialist to minimise the possibility of successful imitation in equilibrium. Moreover, firms still invest in R\&D activities and outsource their intermediate goods with some patent protection even though the selected specialist put effort into imitation.
    Keywords: Patents; Outsourcing; Imitation.
    JEL: D21 D23
    Date: 2010–09–28
  2. By: Lööf, Hans (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology); Johansson, Borje (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology)
    Abstract: This paper asks three explicit questions, where the first one concerns the impact of a firm’s choice of innovation strategy and knowledge resources. The study aims at confirming that firms with a strategy with R&D persistency have a markedly higher productivity, profitability and wage level than other firms. The second question is focused on the location of firms, with a distinction between firms dwelling in a metropolitan region and other firms. The hypothesis is that a metropolitan knowledge milieu may augment the performance of firms. The third question concerns knowledge exchange in regional and global networks that pertain to multinational affiliates. Applying Swedish data on individual firms and their location, the paper shows that firm performance is significantly higher when the three factors R&D persistency, metropolitan location and affiliation to a multinational group are combined.
    Keywords: R&D; knowledge; productivity; profitability; regional milieu
    JEL: F23 L25 O31 O33 R11
    Date: 2010–09–28
  3. By: Uday Bhanu Sinha
    Abstract: The paper deals with the issue of information sharing in a Cournot duopoly by an innovating firm in the face of a merger with its rival. The innovating firm would share information about the cost realization with its rival provided the market size is relatively small or, the R&D technology is relatively more efficient in a medium market size. However, in a large market, or in a medium market size with less efficient R&D technology, the innovating firm does not share information with its rival. They also show that the social welfare may be higher under incomplete information regime. [Working Paper No. 145]
    Keywords: Information sharing, market size, R&D, merger and welfare
    Date: 2010
  4. By: Florian Jell; Joachim Henkel
    Abstract: Patent application numbers grow exponentially in many industries, a phenomenon that has been linked to high fragmentation of patent ownership. Contradicting these findings and theoretical arguments, we show that such fragmentation is not a precondition for sudden and strong increases in patenting. We describe and analyze a patent portfolio race in an industry with highly concentrated patent ownership, namely the newspaper printing machines oligopoly. Triangulating data from patent analysis, interviews, and document research, we find that patent strategy change by one player triggered a patent portfolio race with its main competitor. Implications for managers are that increasing patent output may yield temporary advantages but, as in a price war, implies the risk of a prisoner’s dilemma-type outcome with potentially severe implications for effectiveness and efficiency of the innovation process.
    Keywords: Patent Strategy; Motives to Patent; Intellectual Property; Patent Thickets
    Date: 2010

This nep-tid issue is ©2010 by Rui Baptista. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
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