nep-tid New Economics Papers
on Technology and Industrial Dynamics
Issue of 2016‒02‒23
seven papers chosen by
Fulvio Castellacci
Universitetet i Oslo

  1. The Bright Side of Patents By Farre-Mensa, Joan; Hegde, Deepak; Ljungqvist, Alexander P.
  2. Determinants of innovation in Croatian SMEs: Comparison of service and manufacturing firms By Bozic, Ljiljana; Mohnen, Pierre
  3. International Technology Diffusion of Joint and Cross-border Patents By Chang, C-L.; McAleer, M.J.; Tang, J-T.
  4. Labor Share and development By Paul Maarek; Elsa Orgiazzi
  5. R&D investments and spillovers under endogenous technological opportunity By Mário Alexandre Patrício Martins da Silva
  6. Replicator dynamics in value chains: explaining some puzzles of market selection. By Uwe Cantner; Ivan Savin; Simone Vannuccini
  7. A Case Study on Multinational Companies’ Global Innovation Networks and Global Production Networks: Toward a Theoretical Conceptualisation By Liu, Ju

  1. By: Farre-Mensa, Joan; Hegde, Deepak; Ljungqvist, Alexander P.
    Abstract: Motivated by concerns that the patent system is hindering innovation, particularly for small inventors, this study investigates the bright side of patents. We examine whether patents help startups grow and succeed using detailed micro data on all patent applications filed by startups at the U.S. Patent and Trademark Office (USPTO) since 2001 and approved or rejected before 2014. We leverage the fact that patent applications are assigned quasi-randomly to USPTO examiners and instrument for the probability that an application is approved with individual examiners’ historical approval rates. We find that patent approvals help startups create jobs, grow their sales, innovate, and reward their investors. Exogenous delays in the patent examination process significantly reduce firm growth, job creation, and innovation, even when a firm’s patent application is eventually approved. Our results suggest that patents act as a catalyst that sets startups on a growth path by facilitating their access to capital. Proposals for patent reform should consider these benefits of patents alongside their potential costs.
    Keywords: entrepreneurship; innovation; patents; R&D; venture capital
    JEL: D23 G24 L26 O34
    Date: 2016–02
  2. By: Bozic, Ljiljana (Institute of Economics, Zagreb); Mohnen, Pierre (UNU-MERIT, SBE, Maastricht University)
    Abstract: In this paper we focus on SMEs in Croatia operating in the manufacturing and services sectors and seek to compare them in terms of their involvement in innovation activities, the factors that determine their decision to innovate in general and in four types of innovations in particular: product/service, process, organisational and marketing innovations. The analysis relies on the Croatian Community Innovation Survey 2010 (CIS 2010) data. To find out whether innovations have a different pattern of drivers in manufacturing and in services, we estimate the probit and multivariate probit models separately on these two groups of firms. The findings reveal that despite some differences, service and manufacturing SMEs are not that different from one another when it comes to innovation activities. Service SMEs are somewhat less likely to introduce technological innovations, but manufacturing and service SMEs do not significantly differ from each other when it comes to non-technological innovations. One noteworthy difference between manufacturing and service SMEs is that the latter rely much more than the former on acquired knowledge.
    Keywords: Croatia, innovation, services, manufacturing, SME, multivariate probit
    JEL: O31 L80
    Date: 2016–02–16
  3. By: Chang, C-L.; McAleer, M.J.; Tang, J-T.
    Abstract: __Abstract__ With the advent of globalization, economic and financial interactions among countries have become widespread. Given technological advancements, the factors of production can no longer be considered to be just labor and capital. In the pursuit of economic growth, every country has sensibly invested in international cooperation, learning, innovation, technology diffusion and knowledge. In this paper, we use a panel data set of 40 countries from 1981 to 2008 and a negative binomial model, using a novel set of cross-border patents and joint patents as proxy variables for technology diffusion, in order to investigate such diffusion. The empirical results suggest that, if it is desired to shift from foreign to domestic technology, it is necessary to increase expenditure on R&D for business enterprises and higher education, exports and technology. If the focus is on increasing bilateral technology diffusion, it is necessary to increase expenditure on R&D for higher education and technology.
    Keywords: International Technology Diffusion, Exports, Imports, Joint Patent, Cross-border Patent, R&D, Negative Binomial Panel Data.
    JEL: F14 F21 O30 O57
    Date: 2015–05–15
  4. By: Paul Maarek (University of Cergy-Pontoise - THEMA UMR CNRS 8184, France); Elsa Orgiazzi (University of Rennes1 - CREM UMR CNRS 6211, France)
    Abstract: We highlight a U-shaped relationship between development and the labor share of in- come. We exploit the within dimension of a panel dataset for the wage bill and value added in the manufacturing sector for developing countries. Data is available at the aggregate man- ufacturing level and also at the disaggregate level for 28 manufacturing subsectors. We show that the U-shaped pattern of the labor share that we observe at the aggregate level is also observed at the subsector level suggesting it does not correspond to reallocation forces across sectors that occur during the development process. Our theory emphasizes the role of firms’ monopsony power when labor market has frictions in a dual labor market in which modern, high productivity firms coexist with traditional, low productivity firms. At earlier stages of development, productivity gains are not compensated by wage increases, as most of workers’ outside opportunities depend on the low productivity traditional sector. At later stages, the labor share increases as a result of wage competition in the modern sector.
    Keywords: Development, Labor Share, Matching frictions
    JEL: E25 J42 O17
    Date: 2014–06
  5. By: Mário Alexandre Patrício Martins da Silva (Faculdade de Economia do Porto)
    Abstract: In this paper, we focus on endogenous technological opportunity and its effects upon R&D outcomes in the independent and cooperative cases. In light of the importance of spillovers in economic analysis of R&D incentives, we examine the relationship between R&D appropriability and R&D investment in the presence of an endogenous technological opportunity. In order to do this, we develop a three-stage game in which firms first choose their R&D orientations, then how much to invest in R&D, and finally their Cournot outputs. Contrary to the usual assumption made in oligopoly models that technological opportunity is external to the industry where firms operate, we fully endogenize technological possibilities through the firms’ choices of their R&D approaches. We find that competing firms invest more in R&D as spillovers increase (and R&D appropriability diminishes) but still less than cooperating firms no matter the degree of exogenous spillovers. This is a reversal of well-known results established in the literature on R&D and spillovers.
    Keywords: Technological opportunity, R&D spillovers, R&D investment, absorptive capacity
    JEL: O30
    Date: 2016–02
  6. By: Uwe Cantner; Ivan Savin; Simone Vannuccini
    Abstract: The pure model of replicator dynamics though providing important insights in the evolution of markets has not found much of empirical support. This paper extends the model to the case of firms vertically integrated in value chains. We show that i) by taking value chains into account, the replicator dynamics may revert its effect. In these regressive developments of market selection, firms with low fitness expand because of being integrated with highly fit partners, and the other way around; ii) allowing partner’s switching within a value chain illustrates that periods of instability in the early stage of industry life-cycle may be the result of an ’optimization’ of partners within a value chain providing a novel and simple explanation to the evidence discussed by Mazzucato (1998); iii) there are distinct differences in the contribution to market selection between the layers of a value chain, causing strategic advantages to firms in partnering.
    Keywords: innovation, replicator dynamics, returns to scale, value chain.
    JEL: C63 D24 L14 O32
    Date: 2016
  7. By: Liu, Ju (CIRCLE, Lund University)
    Abstract: The recent wave of globalisation has been characterised not only by an increased number of cross-border production networks of multinational companies (MNCs) but also by an increasing number of their cross-border innovation networks. However, the differences, commonalities, and interaction between a MNC’s global innovation network (GIN) and global production network (GPN) have not been theoretically and empirically clarified. Using case study and social network analysis, this paper simultaneously captures the network characteristics of the case MNCs’ GINs and GPNs. It finds that the case MNCs’ GINs and GPNs 1) interact; 2) are different in terms of network composition and network centralisation; 3) are similar in terms of pattern of ties; nevertheless, 4) the interaction, the differences and the commonality clearly present firm or industrial differences. The paper argues that theoretically considering GIN and GPN as two different but interwoven layers of a MNC’s global value creation network may provide better conceptual clarity for reality interpretation and theoretical development. It suggests knowledge base perspective in future research for better understanding the dynamics of MNCs’ GINs and GPNs.
    Keywords: global innovation network; global production network; multinational companies; Social network analysis
    JEL: M16 O32
    Date: 2015–12–02

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