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on Innovation |
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Issue of 2010‒03‒06
eleven papers chosen by Steffen Lippert Massey University Department of Commerce |
| By: | Bravo-Ortega, Claudio; Lederman, Daniel |
| Abstract: | Numerous studies predict that developing countries with low human capital may not benefit from the strengthening of intellectual property rights. The authors extend an influential theoretical framework to highlight the role of intellectual property rights in the process of innovation and structural change. The resulting theory is consistent with a stylized fact that appears in the data, namely that countries with poor intellectual-property protection may accumulate human capital without a corresponding increase in research and development investment as a share of national income. The model predicts that without minimum intellectual-property protection, additional education may result in more imitation rather than innovation. The preponderance of the econometric evidence presented in this paper suggests that interactions between human capital and intellectual property rights determine global patterns of research and development effort, and intellectual property rights tend to raise the effect of education on the incidence of research and development. |
| Keywords: | Economic Theory&Research,E-Business,Debt Markets,Labor Policies,Knowledge for Development |
| Date: | 2010–02–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:5217&r=ino |
| By: | Hall, Bronwyn H. (UNU-MERIT, Maastricht University, Institute of Fiscal Studies, University of California-Berkeley, and NBER) |
| Abstract: | Two court decisions in the 1990s are widely viewed as having opened the door to a flood of business method and financial patents at the US Patent and Trademark Office, and to have also impacted other patent offices around the world. A number of scholars, both legal and economic, have critiqued both the quality of these patents and the decisions themselves. This paper reviews the history of business method and financial patents briefly and then explores what economists know about the relationship between the patent system and innovation, in order to draw some tentative conclusions about their likely impact. It concludes by finding some consensus in the literature about the problems associated with this particular expansion of patentable subject matter, highlighting the remaining areas of disagreement, and reviewing the various policy recommendations. |
| Keywords: | intellectual property, State Street, software, internet, business methods, patents, innovation |
| JEL: | G28 K2 L86 O34 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:unumer:2010010&r=ino |
| By: | Hall, Bronwyn H. (UNU-MERIT, Maastricht University, Institute of Fiscal Studies, University of California-Berkeley, and NBER); Lerner, Josh (Harvard Business School, and NBER) |
| Abstract: | Evidence on the "funding gap" for investment innovation is surveyed. The focus is on financial market reasons for underinvestment that exist even when externality-induced underinvestment is absent. We conclude that while small and new innovative firms experience high costs of capital that are only partly mitigated by the presence of venture capital, the evidence for high costs of R&D capital for large firms is mixed. Neverthless, large established firms do appear to prefer internal funds for financing such investments and they manage their cash flow to ensure this. Evidence shows that there are limits to venture capital as a solution to the funding gap, especially in countries where public equity markets for VC exit are not highly developed. We conclude by suggesting areas for further research. |
| Keywords: | innovation, R&D, financing, liquidity constraints, venture capital, cash flow |
| JEL: | G24 G32 O32 O38 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:unumer:2010012&r=ino |
| By: | Haskel, Jonathan (Imperial College London); Wallis, Gavin (University College London) |
| Abstract: | Pressure on public finances has increased scrutiny of public support for innovation. We examine two particular issues. First, there have been many recent calls for the (relatively new) UK R&D subsidy to be extended to other “research” activities, such as software. Second, argument still rages about the efficacy of direct public spending on R&D via spending on academic research councils, universities, and government undertaken work on civil and military R&D. To evaluate these questions we use data on market sector productivity, R&D and non-R&D intangible assets, and public sector R&D spending. We look for evidence of market sector spillovers from intangible investment and from public R&D. We find (a) no evidence of spillover effects from intangible investment at the market sector level, including from R&D, (b) strong evidence of market sector spillovers from public R&D spend on research councils, and (c) no evidence of market sector spillovers from public spending on civil or defence R&D. Our findings tentatively suggest that for maximum market sector productivity impact government innovation policy should focus on direct spending on research councils. |
| Keywords: | intangible assets, productivity, R&D, spillovers |
| JEL: | O47 E22 |
| Date: | 2010–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp4772&r=ino |
| By: | Hall, Bronwyn H. (UNU-MERIT, Maastricht University, Institute of Fiscal Studies, University of California-Berkeley, and NBER); Thoma, Grid (CESPRI, Bocconi University, and University of Camerino); Torrisi, Salvatore (Department of Management, University of Bologna, and CESPRI, Bocconi University) |
| Abstract: | We take a first look at financial patents at the European Patent Office (EPO). As is the case at the US Patent and Trademark Office (USPTO), the number of financial patents in Europe has increased significantly in parallel with significant changes in payment and financial systems. Scholars have argued that financial patents, like other business methods patents, have low value and are owned for strategic reasons rather than for protecting real inventions. We find that established firms in non-financial sectors with diversified patent portfolios own a large share of financial patents at the EPO. However, new specialized technology providers in the financial area also hold a number of such patents. Decisions on the financial patent applications take longer and they are more likely to be refused by the patent office, suggesting greater uncertainty over validity than for other patents. They are also more likely to be opposed, which is consistent with the fact that their other economic value indicators are higher. |
| Keywords: | market valuation, intangible assets, patents, software, Europe |
| JEL: | G20 L86 O31 O34 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:unumer:2010011&r=ino |
| By: | Rogge, Karoline S.; Schneider, Malte; Hoffmann, Volker H. |
| Abstract: | This paper provides a comprehensive analysis of how the European Emission Trading System (EU ETS) as the core climate policy instrument of the European Union has impacted innovation. Towards this end, we investigate the impact of the EU ETS on research, development, and demonstration (RD&D), adoption, and organizational change. In doing so, we pay particular attention to the rela-tive influences of context factors (policy mix, market factors, public acceptance) as well as firm characteristics (value chain position, technology portfolio, size, vision). Empirically, our analysis is based on multiple case studies with 19 power generators, technology providers, and project developers in the German power sector which we conducted from June 2008 until June 2009. We find that the innovation impact of the EU ETS has remained limited so far because of the scheme’s initial lack in stringency and predictability and the relatively greater importance of context factors. Additionally, the impact varies tremendously across technologies, firms, and innovation dimensions, and is most pronounced for RD&D on carbon capture technologies and corporate procedural change. Our analysis suggests that the EU ETS by itself may not provide sufficient incentives for fundamental changes in corporate climate innovation activities at a level adequate for reaching political long-term targets. Based on the study’s findings, we derive a set of policy and research recommendations. -- |
| Keywords: | EU ETS,emission trading,innovation,technological change,adoption,diffusion,organizational change,power sector |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:fisisi:s22010&r=ino |
| By: | Jaan Masso; Tõnu Roolaht; Urmas Varblane |
| Abstract: | A growing literature is trying to analyse the productivity gap between domestic and foreign firms with differences in innovation indicators. In our paper we analyse the relationship between inward and outward FDI at either company or industry level and the innovation behaviour of companies in Estonia. We use company-level data from three waves of the Community Innovation Surveys, which are combined with financial data from the Estonian Business Register and FDI data from the balance of payments statistics. For the analysis we apply a structural model involving equations on innovation expenditure, innovation outcome and productivity, and also innovation accounting and propensity score matching approaches. Our results show that the higher innovation output of foreign owned companies vanishes after various company characteristics are controlled for, but there were significant differences in innovation inputs such as the higher use of knowledge sourcing and the lower importance of various impeding factors. Outward investment has a positive influence on innovativeness among both domestic and foreign owned companies. |
| Keywords: | innovation, internationalisation, foreign direct investments, catching-up countries |
| JEL: | F10 F23 O30 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:mtk:febawb:67&r=ino |
| By: | Yao, Shuntian; Gan, Lydia |
| Abstract: | In this paper we study the welfare effect of a monopoly innovation. Unlike many partial equilibrium models carried out in previous studies, general equilibrium models with non-price-taking behavior are constructed and analyzed in greater detail. We discover that technical innovation carried out by a monopolist could significantly increase the social welfare. We conclude that, in general, the criticism against monopoly innovation based on its increased deadweight loss is less accurate than previously postulated by many studies. -- |
| Keywords: | Monopoly,social welfare,technical innovation,general equilibrium |
| JEL: | D50 D60 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ifwedp:201010&r=ino |
| By: | William R. Kerr; William F. Lincoln |
| Abstract: | This study evaluates the impact of high-skilled immigrants on US technology formation. We use reduced-form specifications that exploit large changes in the H-1B visa program. Higher H-1B admissions increase immigrant science and engineering (SE) employment and patenting by inventors with Indian and Chinese names in cities and firms dependent upon the program relative to their peers. Most specifications find limited effects for native SE employment or patenting. We are able to rule out displacement effects, and small crowding-in effects may exist. Total SE employment and invention increases with higher admissions primarily through direct contributions of immigrants. |
| JEL: | F15 F22 J44 J61 O31 |
| Date: | 2010–02 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:15768&r=ino |
| By: | Robert G. Fichman; Nigel P. Melville |
| Abstract: | Prior work on information technology (IT) adoption and economic impacts typically employs an instrumental logic in which firms lead with innovation when they possess characteristics that make it economically beneficial to do so and lag when they do not. However, firms may deviate from this idealized picture when they possess characteristics of an innovation laggard but exhibit the behavior of an innovation leader (or vice versa), with implications for the returns to IT investment. This study develops a conceptual framework and hypotheses regarding the implications of such deviations, which we call innovation misfits. Using a data set comprising measures of the adoption of electronic networking technologies (ENT) in over 25,000 U.S. manufacturing plants, productivity regression estimation reveals a consistent pattern that the association between IT and productivity is diminished in the presence of innovation misfit. We discuss the implications of innovation misfit for scholarship and management practice, which are numerous. |
| Date: | 2010–02 |
| URL: | http://d.repec.org/n?u=RePEc:cen:wpaper:10-03&r=ino |
| By: | Sterlacchini, Alessandro |
| Abstract: | The last two decades have witnessed a staggering decline of R&D investment in the fields of energy and electricity. This paper contends that this widespread phenomenon is mainly ascribable to the processes of liberalisation and privatisation of electricity markets which have induced electric utilities to dramatically reduce R&D expenditures. However, a closer inspection to recent data concerned with ten major electric companies of the world shows that not all of them behaved in the same way. The drop of research expenditures was particularly strong among the private or newly-privatised companies, while those that remained under public control did not reduce R&D efforts. Moreover, the choice of maintaining an adequate level of R&D was not at odds with the goal of increasing company profits. According to these findings and to the widely recognised need of a surge of energy R&D, radical policy measures seem necessary. Along with an R&D obligation for private electric utilities, also an extension of public ownership or the introduction of public-private partnerships should be seriously taken into account. |
| Keywords: | Energy R&D; Electric utilities; Public and private enterprises |
| JEL: | O30 L94 L33 |
| Date: | 2010–02–25 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:20972&r=ino |