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on Technology and Industrial Dynamics |
| By: | Fassio, Claudio (LUISS School of European Political Economy) |
| Abstract: | This study analyzes empirically whether the Sectoral Systems of Innovation or the Distanceto-the-Frontier perspective more accurately describe the patterns of innovation in medium technology sectors in Germany, Italy and Spain. While the Sectoral Systems of Innovation predicts the existence of technology-related similarities in innovative patterns in the same sectors across countries, the Distance-to-the Frontier suggests the existence of important differences related with the level of technological development of each national sector. Using Community Innovation Survey data and applying an econometric strategy specifically devised for innovations survey I am able to test a set of hypotheses directly related with each of the two theories. The results of the econometric analysis show that relevant differences across countries exist with respect to the intensity of R&D activities and the economic impact of different types of innovations, confirming the Distance-to-the-Frontier hypothesis, while great cross-country similarity emerges among the sources of knowledge used to develop new innovations, in line with the Sectoral Systems of Innovation framework. The results highlight the importance to take into account both frameworks for a useful analysis of innovation within sectors. |
| Keywords: | Sectoral Systems of innovation; Distance-to-the-Frontier; R&D and productivity |
| JEL: | L60 O31 |
| Date: | 2014–05–20 |
| URL: | http://d.repec.org/n?u=RePEc:ris:sepewp:2014_003&r=tid |
| By: | Yang, Jinrui |
| Abstract: | This paper focuses on innovation for new product with exogenously determined horizontal difference from initial product which is provided either by a monopolist or by competitive firms. The innovator, no matter initially under monopoly or competition, will be unique producer of new product and need decide quality of new product which is correlated with investment for innovation. The paper through a model shows that for horizontally similar new product, competition is superior to monopoly to innovate. However, for typical horizontally differentiated product, a monopolist would choose higher quality and invest more than a competitive innovator does if innovation is complex, but brings about lower endogenous quality than the innovator initially under competition does if innovation is easy. Monopoly can support sales of new product with higher price of initial product, but also hamper product innovation to avoid erosion of initial profit. If it is presumed that complexity of innovation is always huge at the beginning, monopoly is more likely to generate innovation for horizontally different product while competition for similar product, respectively compared to each other. |
| Keywords: | product innovation; horizontal difference; monopoly; competition; complexity of innovation |
| JEL: | D8 L1 O3 O31 |
| Date: | 2016–03–17 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:70094&r=tid |
| By: | Yagi, Michiyuki; Managi, Shunsuke |
| Abstract: | This study examines time-period and industry heterogeneity of innovation activity in Japan from 1964 to 2006 using patent data and non-consolidated firm data. This study focuses on the following three periods, based on changes of the Japanese patent system, in and non-manufacturing industries: I) before 1976; II) 1976–1987; and III) after 1988. Specifically, for each degree of patent protection in each industry, this study examines how innovation activities are affected by the following determinants found in the innovation literature: size, market competition, and search variety (depth and scope). Empirical results show that when using the entire sample from 1964 to 2006, the size effect on innovation is significantly positive. In addition, the effects of market competition and search variety on innovation are inverse-U. When considering time-period heterogeneity, the effects of size and search variety are similar to the entire period; however, the inverse-U effect of market competition is broken after 1988. On the other hand, when considering industry heterogeneity, the effects of size and search variety are similar to the entire sample, but differ between manufacturing and non-manufacturing industries. In addition, the effect of market competition is not statistically significant in either industry. |
| Keywords: | Patent; Inverse-U relationship; Competition; Search for variety |
| JEL: | L10 L40 O31 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:70207&r=tid |
| By: | Fulvio Castellacci (TIK Centre, University of Oslo); Magnus Gulbrandsen (TIK Centre, University of Oslo); Jarle Hildrum (Telenor Research); E. Martinkenaite (Telenor Research); Erlend Simensen (TIK Centre, University of Oslo); Vegard Tveito (TIK Centre, University of Oslo) |
| Abstract: | This paper investigates how innovation differs across a company’s business functions. We argue that employees working in different functions of a corporation (e.g. marketing, R&D, top management) differ in terms of the types of innovation they are engaged in, the strategies they adopt to organize their innovative activities, and the factors that spur or hamper their innovation performance. Little is known about this issue, however, which we investigate by making use of a rich novel dataset at the employee-level for the multinational company Telenor. We combine a large survey among nearly 16,000 Telenor employees with an extensive qualitative data collection through interviews in different business units and functions. The empirical results point out the relevance of climate and culture, quality-oriented tasks and external interactions as the key factors supporting employees’ innovation activities. The effects of these factors on innovation are substantially different across business functions of the company. |
| Date: | 2016–03 |
| URL: | http://d.repec.org/n?u=RePEc:tik:inowpp:20160321&r=tid |
| By: | Inoue, Hiroyasu; Nakajima, Kentaro; Saito, Yukiko Umeno |
| Abstract: | This study empirically investigates the determinants of the productivity of knowledge creation by collaboration. By using the Japanese patent database, we extracted establishment-level patent co-invention information, and found the following results. First, we find an inverse U-shaped pattern in the relationship between the similarity of knowledge stocks and the quality of patents. That is, moderate diversity in knowledge stocks between establishments rather than extreme similarity or extreme diversity is important for knowledge creation. Second, focusing on the differences in technology class, we find inverse U-shaped pattern only in the high-technology class. This implies that the common knowledge between establishments is important in the invention of high technology patents. Third, we find that the physical distance between collaborating establishments has a negative effect on the quality of patents. |
| Keywords: | Diversity, Knowledge creation |
| JEL: | O31 R11 D23 |
| Date: | 2016–03 |
| URL: | http://d.repec.org/n?u=RePEc:hit:remfce:48&r=tid |
| By: | Severin Frank (University of Marburg); Wolfgang Kerber (University of Marburg) |
| Abstract: | Patent settlements between originator and generic firms in the pharmaceutical industry have been challenged by antitrust and competition authorities in the U.S. and the EU. Particularly settlements with large "reverse payments" to generic firms raise the concern of collusive behaviour for protecting weak patents and delaying price competition through generic entry and therefore harming consumers. However, it is still heavily disputed under what conditions such patent settlements are anticompetitive and violate antitrust rules. This article scrutinizes critically what economic analysis has so far contributed to our knowledge about the effects of these patent settlements and the possible rules for their antitrust treatment. An important claim of this paper is that the problem of patent settlements can only be understood, if we analyze it not only from a narrow antitrust perspective but also take into account its deep interrelationship with the problems (and the economics) of the patent system. Therefore we identify three different channels of effects, how patent settlements can influence consumer welfare: (1) price effects, (2) innovation incentive effects, and (3) effects via the incentives to challenge weak patents. The paper critically analyzes the existing economic studies and identifies a number of research gaps, especially also in regard to trade offs between different effects. It also suggests that policy solutions for these patent settlements should also be sought in combination with patent law solutions. |
| Keywords: | Patent settlements, probabilistic patents, weak patents, pharmaceutical industry, generic competition |
| JEL: | K40 L40 O34 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:mar:magkse:201601&r=tid |
| By: | Daniel P. Gross (Harvard Business School, Strategy Unit) |
| Abstract: | Though fundamental to innovation and essential to many industries and occupations, the creative act has received limited attention as an economic behavior and has historically proven difficult to study. This paper studies the incentive effects of competition on individuals' creative production. Using a sample of commercial logo design competitions, and a novel, content-based measure of originality, I find that competition has an inverted-U effect on creativity: some competition is necessary to induce agents to produce radically novel, untested ideas over incrementally tweaking their earlier work, but heavy competition drives them to stop investing altogether. The results are consistent with economic theory and reconcile conflicting evidence from an extensive literature on the effects of competition on innovation, with implications for R&D policy, competition policy, and organizations in creative or research industries. |
| Keywords: | Creativity; Incentives; Tournaments; Competition; Radical vs. incremental innovation |
| JEL: | D81 D82 D83 L4 M52 M55 O31 O32 |
| Date: | 2016–03 |
| URL: | http://d.repec.org/n?u=RePEc:hbs:wpaper:16-109&r=tid |
| By: | Kuusi, Tero; Pajarinen, Mika; Rouvinen, Petri; Valkonen, Tarmo |
| Abstract: | In this report, we analyze the Finnish R&D tax incentive scheme of the years 2013 and 2014. Under the scheme, firms were eligible for double corporate tax deduction incentive on labor expenses incurred for undertaking R&D activities. Our report consists of a literature review, an empirical analysis of the Finnish register data, and an internet survey. We find that the scheme failed to reach its anticipated impact. The deduction was claimed far less than expected, the actual tax loss being only 8 % of the expected tax loss. Furthermore, our analysis suggests that the R&D tax incentive failed to reach clear, blind spots in the current Finnish, mainly direct-subsidy-based innovation system. Although the scheme’s design does not allow an unambiguous analysis of its impact on the R&D expenditure, our tentative results suggests that its impact remained rather small. The previous, international literature shows that the R&D tax incentives have an increasing effect on the R&D expenditures, but the impact tends not to exceed the amount of the tax subsidy. Based on our results it is unlikely that even a better-designed R&D tax deduction scheme would bring great value-added to the current, Finnish innovation system. |
| Keywords: | R&D, tax credits |
| JEL: | O38 H25 |
| Date: | 2016–03–11 |
| URL: | http://d.repec.org/n?u=RePEc:rif:report:51&r=tid |