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on Technology and Industrial Dynamics |
| By: | Ashish Arora; Andrea Fosfuri; Thomas Roende |
| Abstract: | Over the last decade, companies have paid greater attention to the management of their intellectual assets. We build a model that helps understand how licensing activity should be organized within large corporations. More specifically, we compare decentralization—where the business unit using the technology makes licensing decisions—to centralized licensing. The business unit has superior information about licensing opportunities but may not have the appropriate incentives because its rewards depend upon product market performance. If licensing is decentralized, the business unit forgoes valuable licensing opportunities since the rewards for licensing are (optimally) weaker than those for product market profits. This distortion is stronger when production-based incentives are more powerful, making centralization more attractive. Growth of technology markets favors centralization and drives higher licensing rates. Our model conforms to the existing evidence that reports heterogeneity across firms in both licensing propensity and organization of licensing. |
| JEL: | L2 L24 O32 |
| Date: | 2012–07 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:18203&r=tid |
| By: | Luiz Flavio Andrade (Gate-Groupe d'analyse théorique et économique) |
| Abstract: | Pharmaceutical firms have been criticized for concentrating their efforts of R&D on the so called “me-too” or “follow-on” drugs. There have been many comments against and favourable to the dissemination of these incremental innovations but few papers have broached the subject from an empirical point of view, possibly because identification of “me-too” is not so obvious. This paper focuses on the impact of entry order on “follow-on” drugs competition in the French market between years 2001 and 2007. More precisely, this study examines the effects on market share of first entrants in the follow-on drug market and how this possible competitive advantage changes over time. Our results are coherent with theoretical microeconomic issues concerning the importance of being first. We find evidence that first movers in the follow on drug market have the ability to capture and maintain greater market share for a long period of time. The hierarchical market position of follow on drugs does not seem to be affected by generic drugs emergence. From a dynamic perspective, our analysis shows that market share is positively correlated with the ability of follow on drugs to set prices higher than the average follow-on drug price in a specific therapeutic class (ATC) which means that market power remains considerably important for first movers. Finally we found that the optimum level of innovation to maximize market share is the highest one. |
| Keywords: | Incremental innovation; Follow-on drugs; Entry timing; Market share. |
| JEL: | I18 I12 L65 L51 |
| Date: | 2012–06 |
| URL: | http://d.repec.org/n?u=RePEc:irh:wpaper:dt49&r=tid |
| By: | Herbert Dawid (Bielefeld University); Tim Hellmann (Institute of Mathematical Economics, Bielefeld University) |
| Abstract: | In this paper, we study a standard Cournot model where rms are able to form bilateral collaboration agreements which lower marginal cost. While a static analysis of such a model can be found in Goyal and Joshi [5], we introduce an evolutionary model. Stable networks (in the static sense) exhibit the dominant group architecture and can be characterized with respect to the size of the group. However, in contrast to Goyal and Joshi [5], we nd that the group size of connected rms in stochastically stable networks is generically unique and monotonically decreasing in cost of link formation. Further, there exists a lower bound on the group size of connected rms such that a non-empty network can be stochastically stable. |
| Date: | 2012–06 |
| URL: | http://d.repec.org/n?u=RePEc:bie:wpaper:467&r=tid |
| By: | Erika Badillo (Faculty of Economics, University of Barcelona); Rosina Moreno (Faculty of Economics, University of Barcelona) |
| Abstract: | In this paper we analyse the heterogeneity in firms’ decisions to engage in R&D cooperation, taking into account the type of partner (other companies from the same group, suppliers or customers, competitors, and research institutions) and the sector to which the firm belongs (industrial or services). We use information from the Technological Innovation Panel (PITEC) for the years 2006-2008 and estimate multivariate probit models corrected for endogeneity. We find that the determinants of R&D cooperation differ between sectors. In the industrial sector, the perception of risk as an obstacle to innovation reduces the likelihood of cooperating with companies in the same group and competitors, while in the service sector it reduces cooperation with suppliers or customers. For its part, the possibility of accessing additional human resources has a significantly positive effect on cooperation with all types of partner in the service sector, but not for manufactures.. |
| Keywords: | R&D cooperation; Choice of partners; Industrial sector; Service sector; Innovative Spanish firms. JEL classification: O30; O32; L24; L60; L80. |
| Date: | 2012–07 |
| URL: | http://d.repec.org/n?u=RePEc:ira:wpaper:201213&r=tid |
| By: | Abiodun A. Egbetokun (Friedrich-Schiller University, Graduate College "Economics of Innovative Change", and National Centre for Technology Management (Federal Ministry of Science and Technology), Obafemi Awolowo University, Nigeria) |
| Abstract: | Analysing the relationship between firms' openness to external knowledge and their innovation performance is nothing new. What is new is studying how this relationship fares in latecomer economic contexts such as Nigeria, and that is the focus of this paper. Using unique micro-level innovation data, it is shown, as the existing literature suggests, that firms are more likely to innovate when they access external knowledge either through formal or through informal interactions. However, innovative firms that exploit external knowledge do not necessarily enjoy greater innovation benefits than those that do not. Thus, while openness to external knowledge might help firms to become better at innovating, it does not assist them in reaping the benefits derivable from their innovation efforts. Moreover, different innovation types are essentially the same with respect to the effect that network resources have on them. Thus, it makes little sense to engage network partners selectively for certain innovation types at the expense of others. |
| Keywords: | innovation, networking, openness, collaboration, external knowledge, Nigeria, manufacturing industry |
| JEL: | O31 L14 L60 |
| Date: | 2012–07–09 |
| URL: | http://d.repec.org/n?u=RePEc:jrp:jrpwrp:2012-037&r=tid |
| By: | Rollin, Anne-Marie |
| Abstract: | This paper looks at annual changes in Canadian business sector employment from 2001 to 2009. This period encompasses an expansionary phase (2001 to 2008), followed by a recession (2008/2009). Firm-level data are used to decompose yearly net employment change into gross employment creation and destruction, which makes it possible to measure the size of total annual employment reallocation. These measures of employment turnover are compared across industries and firm size classes. |
| Keywords: | Business performance and ownership, Business adaptation and adjustment, Entry, exit, mergers and growth, Small and medium-sized businesses |
| Date: | 2012–06–27 |
| URL: | http://d.repec.org/n?u=RePEc:stc:stcp1e:2012024e&r=tid |