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on Innovation |
| By: | Chu, Angus C.; Furukawa, Yuichi |
| Abstract: | A special characteristic of the patent system is that it features multiple patent-policy levers that can be employed by policymakers. In this study, we develop a quality-ladder model to analyze the optimal mix of patent instruments. Specifically, we consider (a) patent breadth and (b) the division of profit in research joint ventures. We analytically derive optimal patent policies and then calibrate the model to quantitatively evaluate the welfare gain from optimizing both patent instruments as compared to optimizing only one patent instrument. In summary, we find that the welfare gain can be substantial. |
| Keywords: | R&D; innovation; intellectual property rights |
| JEL: | O34 O31 |
| Date: | 2010–08 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:24039&r=ino |
| By: | Carlos D. Santos (Dpto. Fundamentos del Análisis Económico) |
| Abstract: | Competition has long been regarded as productivity enhancing. Understanding the mechanism by which competition affects innovation and productivity is therefore an important topic for economic policy. The main contribution of this paper is to disentangle the relationship between competition and two sides of innovation: product and process. I write down a model and discuss the conditions under which we can identify the causal mechanism. Overall I find that competition, measured by the number of competitors or market shares, has negative effects on product innovation and no effects on process innovation. The explanation is very simple. By shifting demand, competition directly changes the optimality condition for product but not for process innovation. Thus, competition has no direct effects on process innovations or, as a consequence, productivity. |
| Keywords: | competition, innovation, R&D, product innovation, process innovation |
| JEL: | L11 L60 O30 |
| Date: | 2010–07 |
| URL: | http://d.repec.org/n?u=RePEc:ivi:wpasad:2010-26&r=ino |
| By: | Russell Thomson (Melbourne Institute of Applied Economic and Social Research, and Intellectual Property Research Institute of Australia, The University of Melbourne); Paul H. Jensen (Melbourne Institute of Applied Economic and Social Research, and Intellectual Property Research Institute of Australia, The University of Melbourne) |
| Abstract: | Existing empirical evidence suggests that public subsidies and fiscal incentives have a positive effect on the amount of private R&D expenditure. However, most studies have failed to address the possibility at least some of this increase may simply reflect the fact that R&D workers are being paid higher wages. Such an omission may imply that past research has over-estimated the effectiveness of R&D tax concessions. In the absence of widely-available R&D deflators, we consider the impact of a range of public subsidies on the number of fulltime equivalent workers employed in R&D (i.e., researchers) in the business sector. Our findings strongly support the effectiveness of both direct subsidies and fiscal incentives. |
| Keywords: | innovation policy, R&D tax credits, R&D investment |
| JEL: | O38 H25 |
| Date: | 2010–07 |
| URL: | http://d.repec.org/n?u=RePEc:iae:iaewps:wp2010n11&r=ino |
| By: | Tseveen Gantumur; Andreas Stephan |
| Abstract: | To quickly adapt to technological change and developments, and thus remain competitive, firms increasingly resort to the use of external technology. This paper investigates whether and to what extent the acquisition of external disembodied technology affects the efficiency and productivity in innovation of technology acquiring firms. Using the stochastic frontier analysis combined with a difference-in-difference matching approach and firm-level panel from the German Innovation Survey for the period 1992-2004, we find that manufacturing firms that acquire disembodied technology experience more growth in innovative productivity than non-acquiring firms do. Thus, this study provides evidence on complementarity between internal and external R&D in innovation production, which is attributed by increasing returns to R&D scale and increasing technical efficiency. Moreover, we find that firm size significantly contributes to innovative efficiency and productivity of external technology acquirers. |
| Keywords: | Technology acquisition, innovative efficiency, innovative productivity, SFA, Difference-in-difference matching |
| JEL: | O30 L24 L25 L60 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwwpp:dp1035&r=ino |
| By: | Fabio Pammolli (IMT Lucca Institute for Advanced Studies); Massimo Riccaboni (University of Trento); Laura Magazzini (Department of Economics (University of Verona)) |
| Abstract: | We analyze the decline of R&D productivity in pharmaceuticals and its determinants. Since the molecular biology revolution, science has dramatically expanded the set of plausible therapeutic targets. However, innovation has become more difficult to achieve, and attrition rates of R&D projects have increased, especially in late-phase clinical trials. We show that the R&D productivity slowdown is associated with a higher concentration of R&D investments in high-risk domains, corresponding to unsolved therapeutic needs and unexploited biological mechanisms. We compare the strategies of European and US companies, finding differences in the composition of R&D portfolios, but no evidence of any productivity gap. |
| Keywords: | R&D productivity, pharmaceutical industry |
| JEL: | O31 |
| Date: | 2010–04 |
| URL: | http://d.repec.org/n?u=RePEc:ver:wpaper:06/2010&r=ino |
| By: | Amit Shovon Ray; Sabyasachi Saha |
| Abstract: | The question of protecting intellectual property rights by academic inventors was never seriously contemplated until the introduction of the Bayh-Dole Act in 1980 in the US. The Act allowed universities to retain patent rights over inventions arising out of federally-funded research and to license those patents exclusively or non-exclusively at their discretion. This particular legislation was a response to the growing concern over the fact that federally funded inventions in the US were not reaching the market place. In this paper a critical review of the US experience after the Bayh-Dole Act is presented and argues that the evidence is far from being unambiguous. [Working Paper No. 244] |
| Keywords: | intellectual property, academic inventors, federally-funded, research,US, Bayh-Dole Act |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:ess:wpaper:id:2719&r=ino |
| By: | Fier, Heide; Pyka, Andreas |
| Abstract: | This study aims at analyzing the differences in the factors that influence the probability of knowledge transfer within industry and from industry to science in the biotechnology sector. In order to model these knowledge flows a citation analysis on the basis of patent data was conducted and a weighted bivariate probit model was estimated on the citation probability of industry and science on the basis of a combined sample of citing and cited patent pairs and an equal number of control patent pairs. The empirical results suggest that there are considerable differences in the citation probability. Cultural closeness for instance has a positive effect on the citation probability from industry to industry while the citation probability of scientific institutions is not affected by cultural distance. -- |
| Keywords: | Technology transfer,patent citation analysis,biotechnology industry |
| JEL: | J61 O33 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:10048&r=ino |
| By: | Michael Peneder (WIFO) |
| Abstract: | Proposing a novel research design for firm-level impact studies, I investigate the effects of venture capital financing on corporate performance by applying a two-stage propensity score matching on Austrian micro-data. Controlling for differences in industry, location, legal status, size, age, credit rating, export and innovation behaviour, the findings (i) assert the financing function of venture capital, showing that recipients lacked access to satisfactory alternative sources of capital; (ii) identify selection effects, where venture capital is invested in firms with high performance potential; and finally (iii) confirm the value adding function in terms of a genuine causal impact of venture capital on firm growth, yet not on innovation output. |
| Keywords: | venture capital, entrepreneurship, firm growth, propensity score matching |
| Date: | 2010–04–20 |
| URL: | http://d.repec.org/n?u=RePEc:wfo:wpaper:y:2010:i:363&r=ino |
| By: | Pierluigi Murro (University of Bari) |
| Abstract: | Because of its importance in understanding and explaining growth, the topic of innovation has received a huge attention in the economic literature. However, our knowledge of the factors that inuence in- novation and its related activities is not as exhaustive as it could be. The present study aims at contributing to analyse the determinants of innovation, with a special focus on rm risk. Employing a rich sample of Italian manufacturing rms, we tested for the impact on innovation of the riskiness of the rm, as proxied by the probability of default. We found that riskiness of enterprise reduces the tendency to innovate for the rms. The main channel through which rm risk aects innovation capability appears to be that of innovation nancing. |
| Keywords: | Technological Change; Financial Risk and Risk Management |
| JEL: | O3 G32 |
| Date: | 2010–07 |
| URL: | http://d.repec.org/n?u=RePEc:bai:series:wp0032&r=ino |
| By: | Yanrui Wu (UWA Business School, The University of Western Australia) |
| Abstract: | China has enjoyed high economic growth for three decades since the initiative of economic reform in 1978. This growth has however been driven mainly by labour-intensive, export-oriented manufacturing activities. Has innovation played a role in China’s economic growth? What are the determinants of innovation in the Chinese economy? These are some of the questions which are to be explored in this study. Answers to these questions have important policy implications for China’s economic development in the future as innovation is vital for the transformation of the country’s growth model. |
| Keywords: | Innovation, economic growth, Chinese economy |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:uwa:wpaper:10-10&r=ino |
| By: | Ayyagari, Meghana; Demirguc-Kunt, Asli; Maksimovic, Vojislav |
| Abstract: | This paper investigates corruption and tax evasion and their firm-level determinants across 25,000 firms in 57 countries, a large fraction of which are small and medium enterprises in developing countries. Firms that pay more bribes also evade more taxes. Corruption acts as a tax on innovation, particularly that of small and young firms. Innovating firms pay a larger percentage of their revenues in bribes to government officials than non-innovating firms. They do not, however, pay more protection money to private parties than other firms. Comparing the magnitudes of bribes and taxes evaded, innovating firms and firms that use formal finance are more likely to be net victims. The findings point to the challenges facing innovators in developing countries and the role of banks in curbing corruption and tax evasion. |
| Keywords: | Access to Finance,Taxation&Subsidies,Public Sector Corruption&Anticorruption Measures,Debt Markets,Public Sector Economics |
| Date: | 2010–07–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:5389&r=ino |
| By: | Dahlan, Rolan Mauludy; Situngkir, Hokky |
| Abstract: | The integration process between evolutionary approach and conventional economic analysis is very essential for the next development of economic studies, especially in the fundamental concepts of modern economics: supply and demand analysis. In this presentation, we use the concept of meme to explore evolution of demand. This study offers an evolutionary model of demand, which views utility as a function of the distance between the two types of sequences of memes (memeplex), which represent economic product and consumer preference. It is very different from the conventional approach of demand, which only views utility as a function of quantity. This modification provides an opportunity to see innovation and transformation of consumer preferences in the demand perspective. Innovation is seen as a change in sequence of memes in economic products, while the transformation of consumer behavior is defined as a change in the aligning memes of consumer preference. Demand quantity is the result of the selection process. This model produces some interesting characteristics, such as: (i) quantitative and qualitative properties of evolution of demand, (ii) relationship between consumer behavior and properties of evolution of demand that occurred and (iii) power law on the distribution of product lifetime. At the end we show the improvement of utility function, in the concept of meme, might create a new landscape for the further development of economics. |
| Keywords: | Evolutionary economics; memetics; demand; evolution; innovation; transformation of consumer behavior |
| JEL: | D11 D91 D40 O33 L16 E11 L15 O31 E20 |
| Date: | 2010–07–29 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:24159&r=ino |
| By: | Maria Arbatskaya; Hugo Mialon |
| Abstract: | In many contests, players can influence the outcome through efforts in multiple activities, several of which can be chosen before others. In this paper, we develop a model of dynamic multi-activity contests. Players simultaneously choose efforts in long-run activities, observe each other’s efforts in these activities, and then simultaneously choose efforts in short-run activities. A player’s long-run and short-run efforts complement each other in determining the player’s probability of winning. We compare the outcomes of this two-stage model to those of the corresponding model in which players do not observe each other’s first-stage efforts before the second stage and thus effectively choose efforts in all activities simultaneously. Interestingly, effort expenditures are always lower in the sequential multi-activity contest than in the simultaneous multi-activity contest. The implications of this result for the organization of military, litigation, innovation, academic, and sporting contests are highlighted. |
| Date: | 2010–07 |
| URL: | http://d.repec.org/n?u=RePEc:emo:wp2003:1005&r=ino |
| By: | William Latham (Department of Economics,University of Delaware); Christian Le Bas (Department of Economics,University Lumière Lyon 2) |
| Abstract: | We provide a framework for understanding the causes and consequences of the observed shapes of the distributions of individual inventors' productivities. We review a literature that begins with Lotka's (1926) "law" regarding the persistence of variability in scientific productivity at any point in time and also over time. We discuss use of the "power law" and the Pareto distribution to describe and explain the empirical distributions. We focus on the upper parts of the frequency distributions for inventors exploring the processes underlying knowledge accumulation at the individual level, including its features, characteristics, and structural trends. Finally we explore the specific processes by which these individuals create, maintain, and increase knowledge accumulation as their careers evolve. |
| Keywords: | patents, inventors, prolific, lotka |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:dlw:wpaper:10-02.&r=ino |
| By: | David F Hendry (Economics Department, University of Oxford) |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:uwa:wpaper:10-01&r=ino |
| By: | Stefan AMBEC; Mark A. COHEN; Stewart ELGIE; Paul LANOIE (IEA, HEC Montréal) |
| Abstract: | Twenty years ago, Harvard Business School economist and strategy professor Michael Porter stood conventional wisdom about the impact of environmental regulation on business on its head by declaring that well designed regulation could actually enhance competitiveness. The traditional view of environmental regulation held by virtually all economists until that time was that requiring firms to reduce an externality like pollution necessarily restricted their options and thus by definition reduced their profits. After all, if there are profitable opportunities to reduce pollution, profit maximizing firms would already be taking advantage of those opportunities. Over the past 20 years, much has been written about what has since become known simply as the Porter Hypothesis (“PH”). Yet, even today, there is conflicting evidence, alternative theories that might explain the PH, and oftentimes a misunderstanding of what the PH does and does not say. This paper provides an overview of the key theoretical and empirical insights on the PH to date, draw policy implications from these insights, and sketches out major research themes going forward. |
| Keywords: | Porter Hypothesis, environmental policy, innovation, performance. |
| Date: | 2010–07 |
| URL: | http://d.repec.org/n?u=RePEc:iea:carech:1002&r=ino |
| By: | Cyrille Schwellnus |
| Abstract: | Productivity growth has declined since the late 1990s, slowing the catching-up process. Structural reforms to strengthen competition, entrepreneurship and innovation would go a long way toward enhancing it. Recent competition policy reforms that strengthen enforcement of cartel law must now be implemented effectively. The National Economic Prosecutor should receive sufficient resources and the ceiling on fines against cartels, which has recently been raised, may need to be reviewed again. Entrepreneurship should be strengthened by reducing regulatory “red tape” for start-ups and simplifying bankruptcy procedures. Recent reforms to the innovation policy framework are welcome but the focus on sectoral priority clusters will need to be accompanied by appropriate monitoring procedures and sunset clauses for public support. This Working Paper relates to the 2010 Economic Survey of Chile (www.oecd.org/eco/surveys/Chile).<P>Chili : Augmenter la croissance de la productivité par le renforcement de la concurrence, l'entrepreneuriat et l'innovation<BR>Le déclin de la croissance de la productivité observé depuis la fin des années 90 ralentit le processus de rattrapage. Des réformes structurelles visant à renforcer la concurrence, l’entrepreneuriat et l’innovation ouvriraient largement la voie à un raffermissement de cette croissance. Il convient désormais de mettre concrètement en oeuvre les récentes réformes de la politique de la concurrence visant à consolider l’application de la législation sur les ententes. Il faut doter le Procureur économique national de ressources suffisantes et revoir éventuellement le plafond – déjà relevé il y a peu – des amendes frappant les auteurs d’ententes. L’entrepreneuriat doit être renforcé grâce à l’allègement de la réglementation qui pèse sur la création d’entreprise et à la simplification des procédures de faillite. Les toutes dernières réformes du cadre de la politique de l’innovation vont dans le bon sens mais il faudra assortir les pôles sectoriels prioritaires de procédures de suivi adaptées et de clauses de caducité du soutien de l’État. Ce document de travail se rapporte à l’Étude économique de l’OCDE du Chili 2010 (www.oecd.org/eco/etudes/Chili). |
| Keywords: | growth, productivity, competition, innovation, regulation, Chile, productivité, croissance, réglementation, innovation, concurrence, Chili |
| JEL: | F43 L16 L5 O3 O4 O54 |
| Date: | 2010–06–16 |
| URL: | http://d.repec.org/n?u=RePEc:oec:ecoaaa:785-en&r=ino |