nep-tid New Economics Papers
on Technology and Industrial Dynamics
Issue of 2015‒01‒19
five papers chosen by
Fulvio Castellacci
Universitetet i Oslo

  1. Differences in the rates of return to R&D for European and US young leading R&D firms By Michele Cincera; Reinhilde Veugelers
  2. How do new entrepreneurs innovate? By Gabriele Pellegrino; Mariacristina Piva; Marco Vivarelli
  3. Credit Constrained R&D Spending and Technological Change By Pascal Aßmuth
  4. International R&D spillovers and business service innovation By Foster-McGregor N.; Pöschl J.; Stehrer R.
  5. Does the mobility of R&D labor increase innovation? By Kaiser, Ulrich; Kongsted, Hans Christian; Rønde, Thomas

  1. By: Michele Cincera; Reinhilde Veugelers
    Abstract: This paper examines the sources of Europe's lagging business R&D performance relative to the US, particularly the role played by missing young leading innovators in high technology intensive sectors in Europe. It investigates through econometric analysis differences in the rates of return to R&D of European and US large R&D firms. It finds that, while in the US, young firms succeed in realizing significantly higher rates of return to R&D as compared to their older counterparts, including in high-tech sectors, European firms fail to generate significant rates of return, even if they are Yollies and even if they are in high-tech sectors. These findings can at least partly explain why Europe has less R&D intensive young leading innovators in high technology intensive sectors. © 2014 Elsevier B.V.
    Keywords: EU-US R&D gap; Rate of return to R&D; Young firms
    Date: 2014
  2. By: Gabriele Pellegrino (SPRU, University of Sussex); Mariacristina Piva (DISCE, Università Cattolica); Marco Vivarelli (DISCE, Università Cattolica - SPRU, University of Sussex - IZA, Bonn)
    Abstract: This paper analyses the determinants of product innovation in Italian young innovative companies (YICs) by looking at in-house and external R&D and at the acquisition of external technology in its embodied and disembodied components. A Tobit approach is applied to study jointly the occurrence of product innovation and the intensity of such innovation. Results provide evidence that in-house R&D is linked to product innovation both in mature firms and YICs; however, YICs turn out to be less in-house R&D-based and more dependent on external sources of knowledge. Moreover, other entrepreneurial attitudes such as the ability to cooperate with other firms in producing innovation or the capacity to develop significant organizational changes appear to be less important or even absent in Italian YICs. These results are somehow worrying, since they show that Italian innovative entrepreneurs are mostly driven by routinized rather than creative strategies.
    Keywords: YICs; entrepreneurship, R&D, product innovation
    JEL: L26 O31
    Date: 2014–11
  3. By: Pascal Aßmuth (Center for Mathematical Economics, Bielefeld University)
    Abstract: Firms often rely on external financing in order to conduct R&D. The question is to what extend discriminatory behaviour of the funds provider affects the industry evolution. The model is based on an evolutionary framework by Nelson and Winter. A firm chooses its R&D spending in an adaptive fashion where technological improvement is essential for survival in the competitive market. Firms can finance their activities by using retained profits or applying for credit. However, they have a clear hierarchy in choosing the source of funds and saved profits are always used up first. There is endogenous discriminatory lending as the banking sector provides credit according the firms' individual features. It compares profitability and market share across firms when assessing creditworthiness. The model is able to capture features of innovation and diffusion of technology. Results show that the availability of credit is crucial for technological change in a non-linear fashion and that the industry evolves faster if the bank values market share more in assessing creditworthiness.
    Keywords: Heterogeneous Agents Models, Innovation, Financial Constraints
    JEL: D92 G32
    Date: 2014–12
  4. By: Foster-McGregor N.; Pöschl J.; Stehrer R. (UNU-MERIT)
    Abstract: A major international transmission channel of productivity increases is trade in intermediate products and services. This paper analyses international spillovers at the industry level and for the first time investigates effects from the services sector in this framework. The analysis makes use of newly available data on international input-output linkages between industries. Our results using this novel approach indicate significant positive productivity effects from innovation in knowledge intensive, high technology business services and confirm the productivity effects from international manufacturing spillovers found in the recent literature.
    Keywords: Empirical Studies of Trade; Economic Growth of Open Economies; Innovation and Invention: Processes and Incentives; Institutions and Growth;
    JEL: F14 F43 O31 O43
    Date: 2014
  5. By: Kaiser, Ulrich; Kongsted, Hans Christian; Rønde, Thomas
    Abstract: We investigate the effect of mobility of R&D workers on the total patenting activity of their employers. Our study documents how mobile workers affect the patenting activity of the firm they join and the firm they leave. The effect of labor mobility is strongest if workers join from patent-active firms. We also find evidence of a positive feedback effect on the former employer's patenting from workers who have left for another patent-active firm. Summing up the effects of joining and leaving workers, we show that labor mobility increases the total innovative activity of the new and the old employer. Our study which is based on the population of R&D active Danish firms observed between 1999 and 2004 thus provides firm-level support for the notion that labor mobility stimulates overall innovation of a country or region due to knowledge transfer.
    Keywords: labor mobility,innovation,research and development,patenting
    JEL: J62 C26
    Date: 2014

This nep-tid issue is ©2015 by Fulvio Castellacci. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.