nep-tid New Economics Papers
on Technology and Industrial Dynamics
Issue of 2016‒03‒29
ten papers chosen by
Fulvio Castellacci
Universitetet i Oslo

  1. Path creation through branching and transfer of complementary resources: the role of established industries for new renewable energy technologies By Jens Hanson; Markus Steen; Tyson Weaver; Håkon E. Normann; Gard H. Hansen
  2. Innovation in Green Energy Technologies and the Economic Performance of Firms By Kruse, Juergen
  3. Innovation in Clean Coal Technologies: Empirical Evidence from Firm-Level Patent Data By Kruse, Jürgen; Wetzel, Heike
  4. Sharing R&D Investments in Breakthrough Technologies to Control Climate Change By Rubio, Santiago J.
  5. The Bright Side of Patents By Joan Farre-Mensa; Deepak Hegde; Alexander Ljungqvist
  6. Financing innovation By Kerr, William R.; Nanda, Ramana
  7. Agglomeration and innovation By Carlino, Gerald; Kerr, William R.
  8. The structure of global inter-firm networks By Mizuno, Takayuki; Ohnishi, Takaaki; Watanabe, Tsutomu
  9. Choosing the Right Partner: R&D Cooperations and Innovation Success By Sandra M. Leitner
  10. Global Value Chain Upgrading By Ylömäki, Tobias

  1. By: Jens Hanson (TIK Centre, University of Oslo); Markus Steen (Norwegian University of Science and Technology, Trondheim and SINTEF Technology & Society, Trondheim); Tyson Weaver (Norwegian University of Science and Technology, Trondheim); Håkon E. Normann (TIK Centre, University of Oslo); Gard H. Hansen (Norwegian University of Science and Technology, Trondheim)
    Abstract: Building industrial capacity for new renewable energy technologies (RETs) is a central challenge in transitioning to a low-carbon economy. This article analyses how resources from established industries can contribute to new industrial path creation for RETs, by processes of path branching. We develop a theoretical framework that explores pressures and drivers of path branching and how complementary resources are mobilized from established to emerging paths. The framework is confronted with two cases in Norway that illustrate how old and new industrial paths are interlinked: (1) the energy intensive process industry and solar photovoltaics and (2) oil & gas and offshore wind power. We find that multiple resources are transferred, including knowledge, infrastructures and financial and human capital. We further suggest that processes of resource transfer are driven by the simultaneous presence of selection pressures and branching opportunities. Our findings have implications for policy making as well as theorizing sustainability transitions with regards to how established industries can provide key foundations for and inputs to emergence of new ones.
    Date: 2016–03
  2. By: Kruse, Juergen (Energiewirtschaftliches Institut an der Universitaet zu Koeln (EWI))
    Abstract: In this article, I empirically analyze and compare the impact of innovation in green and non-green energy technologies on the economic performance of firms. My analysis is conducted on a panel of 8,619 patenting firms including 968 green energy patenters from 22 European countries over the period 2003 to 2010. I measure economic firm performance in terms of productivity and use a panel data model based on an extended Cobb-Douglas production function. My results show that green energy innovation has a statistically significant negative impact on economic firm performance. In contrast, non-green energy innovation is shown to have a statistically significant positive impact on economic firm performance. These findings suggest that private economic returns in terms of productivity are lower for green energy than for non-green energy innovation.
    Keywords: green energy technologies; innovation; performance; patents; technological change
    JEL: C33 L25 O31 Q40 Q55
    Date: 2016–02–24
  3. By: Kruse, Jürgen (Energiewirtschaftliches Institut an der Universitaet zu Koeln (EWI)); Wetzel, Heike (Energiewirtschaftliches Institut an der Universitaet zu Koeln (EWI))
    Abstract: This article empirically analyzes supply-side and demand-side factors expected to affect innovation in clean coal technologies. Patent data from 93 national and international patent o ces is used to construct new firm-level panel data on 3,648 clean coal innovators over the time period 1978 to 2009. The results indicate that on the supply-side a firm's history in clean coal patenting and overall propensity to patent positively a↵ects clean coal innovation. On the demand-side we find strong evidence that environmental regulation of emissions, that is CO2, NOx and SO2, induces innovation in both e ciency improving combustion and after pollution control technologies.
    Keywords: clean coal technologies; innovation; patents; technological change
    JEL: C33 O31 Q40 Q55
    Date: 2016–02–01
  4. By: Rubio, Santiago J.
    Abstract: This paper examines international cooperation on technological development as an alternative to international cooperation on GHG emission reductions. In order to analyze the scope of cooperation, a three-stage technology agreement formation game is solved. First, countries decide whether or not to sign up to the agreement. Then, in the second stage, the signatories (playing together) and the non-signatories (playing individually) select their investment in R&D. In this stage, it is assumed that the signatories not only coordinate their levels of R&D investment but also pool their R&D efforts to fully internalize the spillovers of their investment in innovation. Finally, in the third stage, each country decides non-cooperatively upon its level of energy production. Emissions depend on the decisions made regarding investment and production. If a country decides to develop a breakthrough technology in the second stage, its emissions will be zero in the third stage. For linear environmental damages and quadratic investment costs, the grand coalition is stable if marginal damages are large enough to justify the development of a breakthrough technology that eliminates emissions completely, and if technology spillovers are not very important.
    Keywords: International Environmental Agreements, R&D Investment, Technology Spillovers, Breakthrough Technologies, Environmental Economics and Policy, D74, F53, H41, Q54, Q55,
    Date: 2016–02–29
  5. By: Joan Farre-Mensa; Deepak Hegde; Alexander Ljungqvist
    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.
    JEL: D23 G24 L26 O34
    Date: 2016–02
  6. By: Kerr, William R.; Nanda, Ramana
    Abstract: We review the recent literature on the financing of innovation, inclusive of large companies and new startups. This research strand has been very active over the past five years, generating important new findings, questioning some long-held beliefs, and creating its own puzzles. Our review outlines the growing body of work that documents a role for debt financing related to innovation. We highlight the new literature on learning and experimentation across multi-stage innovation projects and how this impacts optimal financing design. We further highlight the strong interaction between financing choices for innovation and changing external conditions, especially reduced experimentation costs.
    Keywords: finance, innovation, entrepreneurship, banks, venture capital, experimentation
    JEL: G21 G24 L26 M13 O31 O32
    Date: 2015–12–11
  7. By: Carlino, Gerald; Kerr, William R.
    Abstract: This paper reviews academic research on the connections between agglomeration and innovation. We first describe the conceptual distinctions between invention and innovation. We then discuss how these factors are frequently measured in the data and note some resulting empirical regularities. Innovative activity tends to be more concentrated than industrial activity, and we discuss important findings from the literature about why this is so. We highlight the traits of cities (e.g., size, industrial diversity) that theoretical and empirical work link to innovation, and we discuss factors that help sustain these features (e.g., the localization of entrepreneurial finance).
    Keywords: agglomeration, clusters, innovation, invention, entrepreneurship
    JEL: J2 J6 L1 L2 L6 O3 R1 R3
    Date: 2015–12–10
  8. By: Mizuno, Takayuki; Ohnishi, Takaaki; Watanabe, Tsutomu
    Abstract: We investigate the structure of global inter-firm relationships using a unique dataset containing information on customers, suppliers, licensors, licensees and strategic alliances for each of 412,814 major incorporated non-financial firms in the world. We focus on three different networks: customer-supplier network, licensee-licensor network, and strategic alliance network. In/out-degree distribution of these networks follows a Pareto distribution with an exponent of 1.5. The shortest path length on the networks for any pair of firms is around six links. The networks have a scale-free property.
    Keywords: Inter-firm relationship, Scale-free network
    Date: 2016–02
  9. By: Sandra M. Leitner (The Vienna Institute for International Economic Studies, wiiw)
    Abstract: Abstract Generally, establishments can choose among different cooperation partners for innovation. However, the choice of a particular partner is pivotal to the success of any cooperative arrangement for innovation and therefore not an easy one. The ensuing analysis uses a comprehensive firm-level dataset of Central, East and Southeast European (CESEE) and Former Soviet Union (FSU) countries to shed light on the role of different cooperative arrangements – cooperations with domestic suppliers, domestic client firms, foreign suppliers, foreign client firms and with external academic or research institutes – for a product innovators’ success, captured in terms of either annual average sales per new or significantly improved product or, alternatively, the probability of applying for a patent. It demonstrates that the choice of cooperation partner is essential Innovators profit greatly from innovation partnerships with foreign suppliers only in terms of higher sales from novel or improved products but, in turn, are less likely to apply for patents if engaged in cooperative arrangements with foreign suppliers or client firms, indicating that patenting is probably predominantly undertaken by foreign cooperation partners. Furthermore, it highlights that establishment size, ownership structure, trading status or absorptive capacity greatly matter and that the institutional environment is essential for an innovator’s commercial success, which assigns a decisive role to policy-makers in building an environment that helps innovators extract returns to innovations to the fullest extent possible.
    Keywords: product innovators, types of R&D cooperations, innovation success, Central, East and Southeast Europe
    JEL: O30 O32 O34
    Date: 2016–02
  10. By: Ylömäki, Tobias
    Abstract: Global value chain (GVC) upgrading is a key factor in country-level economic performance. Therefore it is important to study its fundamental, firm-level origins. What are the main attributes that drive firms toward GVC upgrading? How do upgrading trajectories differ? The previous literature has largely concentrated on developing countries and firms producing low value-added goods and services. Are there any fundamental differences between these and firms in a highly developed country that mainly operate in sectors other than pure manufacturing? I answer these questions by analyzing a 2015 survey that consists of thousands of Finnish firms from a variety of industries and size cohorts. From the survey, it is possible to determine firms’ ex ante propensity for GVC upgrading. I found that innovativeness, the young age of the firm and outsourcing positively affect upgrading. I also found that firms do not plan their upgrading via any specific trajectory.
    Keywords: Global value chain upgrading, firm-level survey analysis, innovativeness, outsourcing
    Date: 2016–03–11

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