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on Technology and Industrial Dynamics |
| By: | Chen, Yongmin; Pan, Shiyuan; Zhang, Tianle |
| Abstract: | Under continual innovation, greater patent strength expands innovating firms’ profit against imitation, but also shifts profit from current to past innovators. We show how the impact of patents on innovation, as determined by these two opposing effects, varies with industry characteristics. When the discount factor is sufficiently high, the negative profit division effect is negligible, and innovation monotonically increases in patent strength; otherwise, innovation has an inverted-U relationship with patent strength, and stronger patents are more likely to increase innovation when the discount factor or the fixed innovation cost is higher. We also show how the impact of patents on innovation may change with firms’ innovation capability and with the intensity of competition from imitators. |
| Keywords: | Continual innovation; patents; patent strength; profit expansion; profit division |
| JEL: | O3 L1 |
| Date: | 2012–08–25 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:40874&r=tid |
| By: | Erik Stam; Ron Martin |
| Abstract: | This paper analyses mechanisms of decline and renewal in high-tech regions, illustrated with empirical evidence on the Cambridgeshire high-tech region in the UK. The paper contributes to ecological ('carrying capacity') and evolutionary (path dependence) theories of regional development. It provides a longitudinal, multilevel analysis of invention, firm, and industry dynamics and change in the supply and costs of resources in order to explain the decline of high-tech regions. While expansion of the Cambridgeshire high-tech region has been sustained over time, recently forces of decline have been stronger than those of renewal. Decline in employment has been most marked in the local telecommunications and biotech sectors, while the creation of variety by new firms has fallen off most strongly in the local IT software & services industry. Increasing diseconomies of agglomeration are in evidence, together with a contraction of finance that may have been a harbinger of financial stringency to come. |
| Keywords: | high-tech regions, industrial dynamics, innovation, entrepreneurship, cluster decline |
| JEL: | L22 M13 O31 R11 |
| Date: | 2012–08 |
| URL: | http://d.repec.org/n?u=RePEc:use:tkiwps:1210&r=tid |