nep-tid New Economics Papers
on Technology and Industrial Dynamics
Issue of 2011‒06‒18
four papers chosen by
Rui Baptista
Technical University of Lisbon

  1. Do financial constraints threat the innovation process? Evidence from Portuguese firms By Filipe Silva; Carlos Carreira
  2. Open Innovation in a Dynamic Cournot Duopoly By I. Hasnas; L. Lambertini; A. Palestini
  3. Mitigating "Anticommons" Harms to Science and Technology Research By Paul A. David
  4. Beyond Additionality: Are Innovation Subsidies Counterproductive? By Catozzella, Alessandra; Vivarelli, Marco

  1. By: Filipe Silva (Faculdade de Economia/GEMF, Universidade de Coimbra); Carlos Carreira (Faculdade de Economia/GEMF, Universidade de Coimbra)
    Abstract: This paper investigates the extent to which R&D investment and innovation are financially constrained. For that purpose, we resort to the estimation of a selection model of R&D investment, a simultaneous equations probit model of innovation and constraints and cash to cash-flow sensitivities upon an unique and newly assembled dataset that comprises information on firms' characteristics, balance sheet information and data on firms' innovation activity. Our findings suggest that firms that do not invest in R&D and those that do not receive public funding are financially constrained. Finally, controlling for endogeneity, financial constraints severely reduce the amounts invested in R&D and seriously hamper innovation.
    Keywords: Innovation; R&D investment; Financial constraints; Firm-level studies; Portugal.
    JEL: O30 D92 G32 L00 L2
    Date: 2011–05
  2. By: I. Hasnas; L. Lambertini; A. Palestini
    Abstract: We analyze an Open Innovation process in a Cournot duopoly using a differential game approach where knowledge spillovers are endogenously determined via the R&D process. The game produces multiple steady states, allowing for an asymmetric solution where a firm may trade off the R&D investment against information absorption from the rival.
    JEL: C73 L13 O31
    Date: 2011–05
  3. By: Paul A. David (Department of Economics, Stanford University)
    Abstract: There are three analytically distinct layers of the phenomenon that has been labeled “the anticommons” and indicted as a potential impediment to innovation resulting from patenting and enforcement of IPR obtained on academic research results. This paper distinguishes among “search costs”, “transactions costs”, and “multiple marginalization” effects in the pricing of licenses for commercial use of IP, and examines the distinctive resource allocation problems arising from each when exclusion rights over research inputs are distributed among independent owners. Where information use-rights are gross complements (either in production or consumption), multiple marginalization—seen here to be the core of the “anticommons” – is likely to result in extreme forms of “royalty stacking” that can pose serious impediments to R&D projects. The practical consequences, particularly for exploratory scientific research (contrasted with commercially-oriented R&D) are seen from a heuristic analysis of the effects of distributed ownership of scientific and technical database rights. A case is presented for the contractual construction of “research resource commons” designed as efficient IPR pools, as the preferable response to the anticommons. Creation Date: 2011-05 Revision Date:
    Keywords: law and economics, IPR, licensing, anticommons, patent hold-ups, royalty stacking, database rights, contractual commons, efficient pools
    JEL: L24 O31 O34 O38
  4. By: Catozzella, Alessandra (University of Pavia); Vivarelli, Marco (Università Cattolica del Sacro Cuore)
    Abstract: Building on a standard policy evaluation literature mainly aimed at estimating the additional effect of subsidies on either firms' innovative expenditures or innovative outputs only, this paper tries to move one step further, combining the two (input and output) dimensions of innovation into a unique efficiency perspective. To this aim, the impact of public funding on the ratio between innovative sales and innovative expenditures (innovative productivity) is estimated using a sample of firm-level data drawn from the third Italian Community Innovation Survey (CIS). A bivariate endogenous switching model has been developed in order to free the analysis of any ex ante sources of sample selection and firm heterogeneity, at the same time getting rid of the two sources of endogeneity potentially affecting the results, i.e. the possible simultaneity between subsidy allocation and the qualitative composition of the innovative output, as well as the endogeneity of public support with respect to innovative performance. Results show that innovative productivity is negatively affected by the innovation subsidy; far from 'doing better' as a result of government intervention, supported firms appear to exhaust their advantage through merely increasing their innovative expenditures.
    Keywords: bivariate endogenous switching model, product innovation, policy evaluation, innovation subsidy
    JEL: O32 O38
    Date: 2011–05

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