nep-tid New Economics Papers
on Technology and Industrial Dynamics
Issue of 2014‒07‒21
four papers chosen by
Fulvio Castellacci
Norwegian Institute of International Affairs (NUPI)

  2. India as a destination of multinational’s R&D: Growingimportance and management strategy of local R&D centers By Motohashi, Kazuyuki
  3. Patent statistics: a good indicator for innovation in China? Assessment of impacts of patent subsidy programs on patent quality By Dang, Jangwei; Motohashi, Kazuyuki
  4. Networks and Manufacturing Firms in Africa: Results from a Randomized Field Experiment By Marcel Fafchamps; Simon Quinn

  1. By: Sunil Kanwar (Department of Economics, Delhi School of Economics, Delhi, India)
    Abstract: We revisit the relationship between market value and innovation in the context of manufacturing firms in India, using data for 2001-2010. In a milieu where most firms do not patent, the concern was whether ‘small’ innovations would be valued by the stock market. Interestingly, we find that the market places greater value on the relatively innovative firms, though the magnitude of this premium is much smaller than that for developed economies. Further, the market value-innovativeness relationship varies substantially across industry groups, surprisingly having the smallest magnitude for the science-based industries. This variation could be explained by the profit expectation and profit risk associated with the different industries.
    Date: 2014–05
  2. By: Motohashi, Kazuyuki
    Abstract: While R&D activities of multinational firms in India focus on offshore development, some companies are developing cutting-edge technologies. In addition, product development for the local market has increased with the expansion of the Indian market. India’s importance as an R&D center is predicted to increase, and multinationals in advanced countries must improve the competency creation mission of R&D entities in India. To do so, attracting exceptional talent and running highly autonomous organizations with reduced control from headquarters are critical. However, within a corporate-wide innovation strategy, fostering unity through social controls such as international personnel rotations and training, close communication, and permeation of the corporate culture are essential to having an effective local entity.
    Keywords: multinational R&D; India; division of innovative labor
    JEL: F23 O32
    Date: 2014–02
  3. By: Dang, Jangwei; Motohashi, Kazuyuki
    Abstract: This paper investigates whether patent subsidy programs aimed at promoting regional innovations have aroused a large number of low-quality applications in China and created biased patent statistics as an indicator for innovations. We found that patent filing fee subsidies encouraged filing of low-quality patent, resulting in a decreased grant rate. Though reward conditioned on grants increased patent grant rate, it also brought patents with narrow claim breadth. Our empirical results confirmed a general concern that patent subsidies have side effects in encouraging patent applications of low quality or low value. However, the patent subsidy programs does not affect the trend of granted patents, particularly for those applied by firms. Therefore, while the surge of patent applications has upward biases as an innovation indicator, increases in granted patents can be explained by uprising of technological capability at enterprise sector in China.
    Keywords: patent, subsidy, quality, China
    JEL: O34 O38
    Date: 2013–11
  4. By: Marcel Fafchamps; Simon Quinn
    Abstract: We run a novel field experiment to link managers of African manufacturing firms. The experiment features exogenous link formation, exogenous seeding of information and exogenous assignment to treatment and placebo. We study the impact of the experiment on firm business practices outside of the lab. We find that the experiment successfully created new variation in social networks. We find some limited evidence of diffusion of management practices, particularly in terms of firm formalisation and innovation. Such diffusion appears to be a combination of diffusion of innovation and simple imitation
    JEL: D22 L26 O33
    Date: 2014

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