nep-tid New Economics Papers
on Technology and Industrial Dynamics
Issue of 2015‒02‒22
four papers chosen by
Fulvio Castellacci
Universitetet i Oslo

  1. On the Failure of R&D Projects By Link, Albert; Wright, Mike
  2. Innovation and corporate employment growth revisited By Herstad , Sverre J.; Sandven , Tore
  3. The Global Effects of R&D Tax Incentives: Evidence from Micro-Data By Knoll, Bodo; Baumann, Martina; Riedel, Nadine
  4. Structural modernization and development traps : an empirical approach By Lavopa A.; Szirmai A.

  1. By: Link, Albert (University of North Carolina at Greensboro, Department of Economics); Wright, Mike (Imperial College and University of Ghent)
    Abstract: There is an extensive literature on the success/failure of firm-funded R&D projects but growing policy interest focuses on publicly-funded R&D projects. Using data from 1,878 Phase II R&D projects funded through the U.S. Small Business Innovation Research (SBIR) program, of which 624 had been discontinued prior to technical completion, we provide for the first time findings on the success/failure of publicly-funded firm-performed R&D projects. We find that prior R&D experience with the technology being funded by SBIR projects, the amount of the SBIR award, and having a female PI, other factors held constant, is negatively related to the probability of project failure. In contrast, firm size is positively associated with project failure. We discuss the implications of these findings for practice, policy, and further research.
    Keywords: R&D; project failure; innovation; SBIR; public sector
    JEL: L26 O31 O32 O33
    Date: 2015–02–16
  2. By: Herstad , Sverre J. (NIFU Nordic Institute for Studies in Innovation, Research and Education, Oslo); Sandven , Tore (NIFU Nordic Institute for Studies in Innovation, Research and Education, Oslo)
    Abstract: Using Norwegian Community Innovation Survey (CIS) data linked to public employment registers covering the years 2004 - 2010, this paper investigates the relationship between employment growth prior to the event of innovation, innovation output, and growth performance after the event. Positive growth ex ante generally strengthens growth ex post. Moreover, it increases the likelihood that innovations are introduced during the intermediate period that strengthen employment performances further. This effect is present for all levels of growth only when new products, production processes and support functions are introduced in tandem. Standalone improvements of products, by contrast, influence only the probability of survival, whereas standalone improvements of production processes and support functions support ex post growth specifically in the upper tail of the distribution. Our findings challenge the common view that product innovations are more important to growth than process innovations, and reveal interdependencies between multi-faceted organizational capabilities, innovation output and employment performance.
    Keywords: Capabilities; innovation; employment growth; Norway
    JEL: J23 J24 O15 O33
    Date: 2015–02–08
  3. By: Knoll, Bodo; Baumann, Martina; Riedel, Nadine
    Abstract: Recent years have seen an unprecedented increase in the provision of R&D tax incentives. A growing empirical literature suggests that R&D tax incentives are instrumental in raising domestic R&D activity. In policy debates this fi nding is often interpreted to lend support to the notion that R&D tax incentives increase national welfare by internalizing knowledge spillovers to other agents in the economy and raising ineffi ciently low R&D levels. Our paper stresses that much of the observed increase in R&D activities in response to R&D tax incentives is in fact related to R&D activities that are attracted from abroad. Using unique panel data on R&D activities of European multinational fi rms, we test for a potential impact of both, R&D tax incentives in the affi liate's host country and R&D tax incentives at other locations of the multinational group. In line with theoretical predictions, we fi nd a positive impact of domestic R&D subsidies and a negative one for foreign subsidies provided at other group locations. Quantitatively, the fi ndings suggest that around 80% of the observed increase in R&D activities is related to relocations of R&D across country borders.
    JEL: H25 H71 D62
    Date: 2014
  4. By: Lavopa A.; Szirmai A. (UNU-MERIT)
    Abstract: In this paper we analyse economic development through the lenses of a newly developed index the structural modernization index. This index combines two dimensions that have been widely invoked as prime drivers of economic development namely, structural change and technological catch up. For each country, the index calculates the productivity gap with respect to the world frontier in activities that typically represent the modern part of the economy, and weighs this relative productivity by the employment share of those activities in the total labour force. In doing so, it combines a technological dimension relative productivity and a structural dimension the size of the modern sector thus providing a concise measure of the degree of modernity of an economy. The index is calculated for a large sample of countries over a long time span. Significant efforts have been made to put together a dataset with international comparable data on value added and employment disaggregated by sectors for 100 countries covering the period 1950-2009. The estimates are used to explore the relationship between structural modernization and the so-called poverty and middle-income traps. In analysing this relationship, the interactive nature of structural change and technological catch up is stressed. Important insights are obtained regarding the nature of low and middle-income development traps. Finally, the usefulness of this new index is illustrated when studying the diverse structural trajectories of a set of countries that can be taken as examples of success and failure in the process of economic development.
    Keywords: Macroeconomic Analyses of Economic Development; Industrialization; Manufacturing and Service Industries; Choice of Technology; Technological Change; Research and Development; Intellectual Property Rights: General; Measurement of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence; Economywide Country Studies: General;
    JEL: O11 O14 O30 O47 O50
    Date: 2014

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