nep-tid New Economics Papers
on Technology and Industrial Dynamics
Issue of 2011‒02‒26
five papers chosen by
Rui Baptista
Technical University of Lisbon

  2. R&D Portfolios and Pharmaceutical Licensing By Junichi Nishimura; Yosuke Okada
  3. Innovation and demand in industry dynamics. By Francesco Bogliacino; Mario Pianta
  4. Cycles and innovation. By Matteo Lucchese; Mario Pianta
  5. How to select Instruments supporting R&D and Innovation by Industry By Marcel J.L. de Heide; Amit Kothiyal

  1. By: Marco Capasso; Elena Cefis; Koen Frenken
    Abstract: We compare the industrial dynamics in the core, semi-periphery and periphery in The Netherlands in terms of firm entry-exit, size, growth and sectoral location patterns. The contribution of our work is to provide the first comprehensive study on spatial differentiation in industrial dynamics for all firm sizes and all sectors, including services. We find that at the aggregate level the spatial pattern of industrial dynamics is consistent with the spatial product lifecycle thesis: entry and exit rates are highest in the core and lowest in the periphery, while the share of persistently growing firms is higher in the periphery than in the core. Disaggregating the analysis to the sectoral level following the Pavitt-Miozzo-Soete taxonomy, findings are less robust. Finally, sectoral location patterns are largely consistent with the spatial product lifecycle model: Fordist sectors are over-represented in the periphery, while sectors associated with the ICT paradigm are over-represented in the core, with the notable exception of science-based manufacturing.
    Keywords: Entry, exit, spatial product lifecycle, Fordist paradigm, ICT paradigm
    JEL: L25 L26 L60 L80 O18 O33 R10
    Date: 2011–01
  2. By: Junichi Nishimura; Yosuke Okada
    Abstract: We examine how R&D portfolios of drug pipelines affect pharmaceutical licensing, controlling firm size, diversity, and competitors in R&D and product markets. The data collected comprises 329 license-outs and 434 license-ins closed by 54 Japanese pharmaceutical companies between 1997 and 2007. We pay special attention to stage-specific licensing by dividing the innovation process into an early stage and a late stage. Estimates from the fixed-effect GMM model reveal that drug pipelines significantly affect stage-specific licensing. Particularly, the state of drug pipelines is leveled off by license-outs at the early stage and license-ins at the late stage. Theoretical implications are also discussed.
    Keywords: R&D portfolios, licensing, pharmaceutical industry, drug pipelines
    JEL: C13 L24 L65
    Date: 2010–11
  3. By: Francesco Bogliacino (European Commission); Mario Pianta (Department of Economics, Università di Urbino "Carlo Bo")
    Abstract: The links between three interconnected elements of the Schumpeterian sources of economic change are explored, conceptually and empirically, in this paper: the commitment of industries to invest profits in cumulative R&D efforts; the ability of industries’ R&D to lead to successful innovations; the impact of new products and processes on high entrepreneurial profits. We consider the nature and variety of innovative efforts – distinguishing in particular between strategies of technological and cost competiveness – and we introduce the role of demand in pulling technological change and supporting profits. We develop a simultaneous three-equation model and we test it at industry level – for 38 manufacturing and service sectors – on eight European countries over two time periods from 1994 to 2006. The results show that the model effectively accounts for the dynamics of European industries and highlights the interconnections between the different factors contributing to growth.
    Keywords: R&D, Innovation, Profits, Demand, System Three Stages Least Squares.
    JEL: L6 L8 O31 O33 O52
    Date: 2011
  4. By: Matteo Lucchese (Università di Urbino "Carlo Bo"); Mario Pianta (Department of Economics, Università di Urbino "Carlo Bo")
    Abstract: This paper explores the way economic cycles influence the relationship between innovation and growth. A large literature has investigated this link in the long waves of development,focusing on the emergence of radical innovations and new technological paradigms; a parallel stream of research has examined differences in sectoral patterns of innovation and in industries’ technological regimes, emphasising their stability and persistence over time. We build on these approaches and we investigate whether the ups and downs of cycles, with changes in demand dynamics, alter the possibility to exploit the technological opportunities of sectors. Within industries’ innovative efforts, we identify on the one hand efforts based on R&D expenditure, focusing on new products and aiming at technological competitiveness and, on the other hand, investment in innovative machinery focusing on new processes and aiming at cost competitiveness.A model that explains sectoral growth in value added by combining technological and demand factors is proposed. The empirical test is based on data for six major European countries Germany, France, Italy, the UK, the Netherlands and Spain - at the level of 20 manufacturing sectors. Two upswings are considered - 1996-2000 and 2003-2007 – and their patterns are contrasted with that emerging from the downswing of 2000-2003. Results show that in upswings faster economic (and productivity) growth in industries is sustained by efforts to develop new products, while in downswings, due to a shortage of demand, process innovations aiming at restructuring result more relevant in supporting the increase in value added (or in containing its fall).
    Keywords: Innovation, Cycles, Growth, Demand.
    JEL: L6 L8 O31 O33 O52
    Date: 2011
  5. By: Marcel J.L. de Heide (Erasmus University Rotterdam); Amit Kothiyal (Erasmus University Rotterdam)
    Abstract: We present a theoretical framework which allows for the comparison of the effectiveness of tax measures, loans and funding, in supporting industry-oriented research. We estimate for each of the instruments the exact contribution required by a firm to decide on investing in R&D, given the costs and probability of success of the project, and the foreseen change in profit following successful implementation of the research results. We apply Prospect Theory to analyse the risk attitude of the firm. By comparing the contribution required, we identify the instrument which is most effective, and therefore preferred by a government. Our analysis indicates that there exists a critical value for the probability of success of the project for which the modality of the most effective instruments changes. For a probability of success smaller than the critical value, a tax measures offering support only in case of successful completion of the project is preferred. For a probability higher than the critical value, a loan is most effective. The value of the critical probability depends on the perception of risk and loss aversion of the firm involved in the research.
    Keywords: R&D; innovation; firms; public policy
    JEL: D81 O38
    Date: 2011–02–03

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