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on Innovation |
| By: | Luca Zamparelli (Department of Economic Theory, Sapienza University of Rome) |
| Abstract: | This paper presents a classical micro-founded growth model with endogenous direction and size of technical change. In a standard induced innovation model firms freely adopt productivity improvements from an innovation possibilities frontier describing the trade-off between increasing capital or labor productivity. The shape of the innovation possibility frontier uniquely determines the steady state distribution of income. The model proposed allows firms to choose not only the direction but also the size of innovation by making innovation a costly activity requiring R&D investment. Comparative dynamics analysis shows that income distribution is are sensitive to saving parameters and fiscal policy. In particular, an increase in the discount factor or in subsidy to R&D raises the labor share. |
| Keywords: | Induced innovation, endogenous growth, direction of technical change, classical growth. |
| JEL: | D33 O31 O33 O40 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:lui:celegw:1102&r=ino |
| By: | Antoine Dechezleprêtre (CERNA - Centre d'économie industrielle - Mines ParisTech, Grantham Research Institute on Climate Change and the Environment - London School of Economics and Political Science); Matthieu Glachant (CERNA - Centre d'économie industrielle - Mines ParisTech) |
| Abstract: | This paper examines the relative influence of domestic and foreign renewable energy policies on innovation activity in wind power using patent data from OECD countries from 1994 to 2005. We distinguish between the impact of demand-pull policies (e.g., guaranteed tariffs, investment and production tax credits), as reflected by wind power capacities installed annually, and technology-push policies (government support to R&D). We show that inventors respond to both domestic and foreign new capacities by increasing their innovation effort. However, the effect on innovation of the marginal wind turbine installed at home is 28 times stronger than that of the foreign marginal wind turbine. Unlike demandpull policies, public R&D expenditures only affect domestic inventors. A simple calculation suggests that the marginal million dollars spent on R&D support generates 0.82 new inventions, whereas the same amount spent on the deployment of wind turbines induces, at best, 0.06 new inventions (0.03 locally and 0.03 abroad). |
| Keywords: | innovation;public R&D;renewable energy policies;wind power |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-00574108&r=ino |
| By: | Guido de Blasio (Bank of Italy); Davide Fantino (Bank of Italy); Guido Pellegrini (Università degli Studi di Roma "La Sapienza") |
| Abstract: | To evaluate the effect of an R&D subsidy one needs to know what the subsidized firms would have done without the incentive. This paper studies an Italian programme of subsidies for the applied development of innovations, exploiting a discontinuity in programme financing due to an unexpected shortage of public money. To identify the effect of the programme, the study implements a regression discontinuity design and compares firms that applied for funding before and after the shortage occurred. The results indicate that the programme was not effective in stimulating innovative investment. |
| Keywords: | R&D, public policy, evaluation |
| JEL: | O32 O38 |
| Date: | 2011–02 |
| URL: | http://d.repec.org/n?u=RePEc:bdi:wptemi:td_792_11&r=ino |
| By: | Norbäck, Pehr-Johan; Persson, Lars; Svensson, Roger |
| Abstract: | We develop a theory of innovation for entry and sale into oligopoly, and show that an invention of higher quality is more likely to be sold (or licensed) to an incumbent due to strategic product market effects on the sales price. Preemptive acquisitions by incumbents are shown to stimulate the process of creative destruction by increasing the entrepreneurial effort allocated to high-quality invention projects. Using data on patents granted to small firms and individuals, we find evidence that high-quality inventions are sold under bidding competition. Asymmetric information problems are shown to be solved by verification through entry for sale. |
| Keywords: | Acquisitions; Entrepreneurship; Innovation; Ownership; Patent; Start-ups |
| JEL: | G24 L1 L2 M13 O3 |
| Date: | 2011–03 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:8281&r=ino |
| By: | Gerda Dewit (Department of Economics Finance and Accounting, National University of Ireland, Maynooth); Dermot Leahy (Department of Economics Finance and Accounting, National University of Ireland, Maynooth) |
| Abstract: | This paper examines how trade liberalisation affects innovation, profits and welfare when firms are engaging in strategic R&D investment. We show that there are multiple equilibria including an autarky equilibrium for a range of high but non-prohibitive trade costs. At lower trade costs, only the trading equilibrium survives. Welfare is U-shaped in the trade costs, so a small fall in trade costs can be welfare reducing. However we find a threshold level of the effectiveness of investment above which trade is always welfare superior to autarky |
| Keywords: | Reciprocal Markets, Strategic R&D Investment, Trade Costs, Trade Liberalisation, Effectiveness of R&D. |
| JEL: | F12 F13 F15 L13 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:may:mayecw:n216-11.pdf&r=ino |
| By: | Ale Ebrahim, Nader; Ahmed, Shamsuddin; Abdul Rashid, Salwa Hanim; Taha, Zahari |
| Abstract: | This paper presents the results of empirical research conducted during March to September 2009. The study focused on the influence of virtual research and development (R&D) teams within Malaysian manufacturing small and medium sized enterprises (SMEs). The specific objective of the study is better understanding of the application of collaborative technologies in business, to find the effective factors to assist SMEs to remain competitive in the future. The paper stresses to find an answer for a question “Is there any relationship between company size, Internet connection facility and virtuality?”. The survey data shows SMEs are now technologically capable of performing the virtual collaborative team, but the infrastructure usage is less. SMEs now have the necessary technology to begin the implementation process of collaboration tools to reduce research and development (R&D) time, costs and increase productivity. So, the manager of R&D should take the potentials of virtual teams into account. |
| Keywords: | Small and medium enterprises; Collaborative tools; Questionnaires; Virtual teams |
| JEL: | O32 O14 M11 O43 Z0 L23 L15 O31 M21 |
| Date: | 2010–11–11 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:29177&r=ino |
| By: | ARIKAWA Yasuhiro; KAWANISHI Takuya; MIYAJIMA Hideaki |
| Abstract: | Financial factors and ownership structure are both part of the determinants of corporate R&D investment. Considering listed firms in the R&D intensive industries during the 2000s, this paper examines whether financial factors and ownership structure explain R&D investment in Japan. Following the methodology of Brown et al. (2009), which extends the dynamic investment model of Bond and Maghir (1994) to R&D investment, we find that only small, young firms mainly listed on new emerging markets face financial constraints. We also find that large firms finance R&D investment partly from debt. For firms with relatively limited assets, however, higher leverage leads to lower R&D investment. Finally, we find no evidence that large shareholdings by foreign investors enforce myopic behavior on firms in R&D intensive industries. |
| Date: | 2011–03 |
| URL: | http://d.repec.org/n?u=RePEc:eti:dpaper:11013&r=ino |
| By: | Michele Cincera (Solvay Brussels School of Economics and Management, Université Libre de Bruxelles); Julien Ravet (Solvay Brussels School of Economics and Management, Université Libre de Bruxelles) |
| Abstract: | This paper aims to assess the impact of both geographic and industrial diversification of economic activities on the productivity performance of large European R&D Multinational Enterprises (MNEs). Based on the worldwide subsidiaries of these firms, we measure the performance of the firms according to their level of industrial diversification and globalisation that we proxy with the presence and importance of subsidiaries in the EU, North America and Asia-Pacific regions. The sample consists of large R&D firms that represent about 80% of total European R&D. In general, the results indicate a positive impact from globalisation on firms’ R&D productivity, especially in the US, while a negative impact for industrial diversification is found. |
| Keywords: | R&D; European MNEs; productivity; globalisation; industrial diversification |
| JEL: | O33 |
| Date: | 2011–03 |
| URL: | http://d.repec.org/n?u=RePEc:ipt:wpaper:201101&r=ino |
| By: | Mohieddine Rahmouni (GREThA, CNRS, UMR 5113); Murat Yildizoglu (GREQAM, CNRS, UMR 6579) |
| Abstract: | The aim of this paper is to present the theoretical literature dedicated to the analysis of the motivations and the determinants of firms\' technological innovations. To this end, we follow a strategy of presentation that starts with the simplest possible framework in which the innovation can occur (Robinson Crusoe economy), and that encompasses gradually richer economic contexts. The discussion is hence organized in a progressive logic, ranging from purely individual motivations and conditions of innovations (in the case of Robinson, alone on his island), towards the more complex case where the innovative activities take place in an international framework, under particular institutional configurations, depending on the considered countries. The intermediate stages successively introduce the following economic phenomena: demand, sectoral dimensions, competition, public authorities, and finally, international competition. |
| Keywords: | Technological innovation, Industrial economics, Evolutionary economics |
| JEL: | O12 O30 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:grt:wpegrt:2011-10&r=ino |
| By: | Raffaello Bronzini (Bank of Italy); Eleonora Iachini (Bank of Italy) |
| Abstract: | This paper contributes to the literature on the effectiveness of R&D incentives by evaluating a unique investment subsidy program implemented in northern Italy. Firms were invited to submit proposals for new projects and only those that scored above a certain threshold received the subsidy. We use a sharp regression discontinuity design to compare investment spending of subsidized firms just above the cut-off score with spending by firms just below the cut-off. For the sample as a whole we find no significant increase in investment as a result of the program. This overall effect, however, masks substantial heterogeneity in the program’s impact. On average, we estimate that small enterprises increased their investments by about the amount of the subsidy they received from the program, whereas for larger firms the subsidies appear to have had no additional effect. |
| Keywords: | research and development, investment incentives, crowding-out, regression discontinuity design |
| JEL: | R0 H2 L10 |
| Date: | 2011–02 |
| URL: | http://d.repec.org/n?u=RePEc:bdi:wptemi:td_791_11&r=ino |
| By: | Massimiliano Mazzanti; Valeria Costantini; Anna Montini |
| Abstract: | The achievement of positive Environmental Performance (EP) at national level could strongly depend on differences in regional features, namely economic specialization, regulation stringency and innovation capabilities of both public institutions and the private business sector. We apply both shift-share and econometric analysis on a new NAMEA available for the 20 Italian Regions, in order to provide evidence of the role played by sector innovation, technological spillovers and regional policies in shaping the geographical distribution of EP. The Italian North-South divide regarding industrial development and productive specialisation patterns seems to affect regional EP. Nonetheless, such pattern presents some interesting differences, revealing a more heterogeneous distribution of emissions, which may reflect the role of other driving forces. In particular, agglomerative effects seem to prevail over purely internal factors - environmental efficiency of neighbouring regions strongly influence the internal EP. This means that together with the clustering of specific sectors into restricted areas as a standard result in regional economics, there is also some convergence in the adoption of cleaner or dirtier production process techniques. Finally, regional technological spillovers seem to play a more effective role in improving environmental efficiency than "sector internal innovation", revealing that accounting for spatial features is crucial to understand the key drivers of EP. |
| Keywords: | Environmental Performance; Technological Innovation; Regional Spillovers; regional NAMEA |
| JEL: | Q53 Q55 Q56 R15 |
| Date: | 2011–01–05 |
| URL: | http://d.repec.org/n?u=RePEc:udf:wpaper:201103&r=ino |
| By: | Massimiliano Mazzanti; Sandro Montresor; Davide Antonioli; Annaflavia Bianchi; Paolo Pini |
| Abstract: | Several empirical works have shown the robust and positive relation between growth and innovation at macroeconomic level and between firm economic performance and innovation at microeconomic level. However, the economists have had less opportunities to study such linkages during severe global downturns of the economic cycle. Moreover, the present disruptive economic downturn has forced the firms to implement survival strategies. One of such strategic behaviour regards the way of intervention on product and process areas through innovative actions. Focusing the attention on the micro level, the present work provides an empirical analysis on the basis of more than 500 Italian manufacturing firms located in Emilia-Romagna region, with the aim of disentangling the relations between pre-crisis innovation strategies and firm economic performance during the crisis as well as the linkages between the innovative actions taken to react to the recession's challenges and the economic performance in the recession. The results suggest the existence of strong relationships between past innovative activities and the capacity to react to the challenges brought by the crisis through innovative actions along product, process and organization/HRM dimensions, although the role of complementarities among past innovative activities does not emerge robustly. When the dependent variables are performance indicators the impact of pre-crisis innovation strategies emerges as robust for technological and organizational spheres, while intense innovative activities before the crisis on spheres like ICT, training and environment are detrimental for performances in the crisis. It seems that when the crisis hits those firms in a process of quite radical transformation and change, then the negative economic consequences of the recession are worse than in the case of firms on a more stable, less dynamic path. |
| Keywords: | innovation strategies; economic crisis; firm performance |
| JEL: | L1 L23 L6 O33 |
| Date: | 2011–01–04 |
| URL: | http://d.repec.org/n?u=RePEc:udf:wpaper:201102&r=ino |
| By: | Kretschmer, Tobias; Miravete, Eugenio J; Pernías, Jose C |
| Abstract: | Liberalization of the European automobile distribution system in 2002 limits the ability of manufacturers to impose vertical restraints, leading to a substantial increase in competitive pressure among dealers. We estimate an equilibrium model of profit maximization to evaluate how dealers change their innovation adoption strategies following the elimination of exclusive territories. Using French data we evaluate the existence of complementarities between the adoption of software applications and the scale of production. Firms view these innovations as substitutes and concentrate their effort in one type of software as they expand their scale of production. Results are robust to the existence of unobserved heterogeneity. |
| Keywords: | Competitive Pressure; Complementarity; Product and Process Innovation |
| JEL: | C35 L86 O31 |
| Date: | 2011–03 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:8289&r=ino |
| By: | Noble, Chris |
| Abstract: | The internal knowledge capabilities of small and medium beef cattle farm enterprises are examined using information economics to gain an understanding of how these organisations approach innovation. Enterprises are viewed as being embedded in the wider industry and are subject to both external and internal influences. However the discussion here is focused on internal activities in order to consider how enterprise specific knowledge is constructed allowing innovation to occur. Innovation is an incremental and continuous process because of the endogenous origins of the internally developed knowledge used to enact it. Learning theory is incorporated into this analysis to elucidate this connection between production undertaken and the historical shaping of knowledge capabilities into enterprise specific knowledge. Routines are introduced as units of analysis to show how resources are internally organised according to the knowledge producers possess. Routines provide a method of looking at processes by explicitly considering the time dimension while including the complex farming environment as a physical and biologically conditioned system. Analysis of changing routines through learning theory shows there are internal motivations for innovation directly attributable to the internal productive nature of beef cattle farm enterprises. Data has been sourced from in-depth interviews and focus groups conducted with producers in the New England area of New South Wales. Results show that much innovative activity is informal and not recorded; producers develop extensive knowledge in accordance with the physical capital they possess; and individual innovations should be considered as collections of ongoing refinements. |
| Keywords: | Farm Management, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aare11:101227&r=ino |
| By: | Davide Antonioli; Alberto Marzucchi |
| Abstract: | The concept of additionality, when public interventions are considered, can be synthesised as the net effects that would not have occurred in the absence of the intervention of the public actor. The present paper reviews the body of literature dealing with the concept of additionality, devoting particular attention to its behavioural dimension (i.e. changes in beneficiaries' behaviours resulting from the policy intervention). In the first sections it is stressed that the behavioural additionality, though not yet clearly defined and still characterised by some drawbacks, complement the input and output dimensions of the concept of additionality and can be used to evaluate innovation policies according to the evolutionary and system perspectives. In the subsequent sections we present a review of the recent econometric and quantitative studies focused on the behavioural additionality in order to present a state of the art of the methods, with their limits and thei strengthens, that can be used in this kind of evaluation. |
| Keywords: | evaluation; additionality; innovation policy; behavioural additionality |
| Date: | 2010–10–01 |
| URL: | http://d.repec.org/n?u=RePEc:udf:wpaper:201010&r=ino |
| By: | Giulio Cainelli; Massimiliano Mazzanti; Roberto Zoboli |
| Abstract: | This paper exploits a rich, new innovation based dataset of 555 industrial firms, located in the Emilia Romagna region in 2006-2008, to analyse complementarity in factors related to eco-innovation (EI) and to test the role of firm cooperation and internationally oriented strategies. EI is providing additional competitive advantage and is relevant to all EU industries. Results show that the degree of complementarity between various correlated EI factors is quite high, with networking and corporate social responsibility (CSR) playing dominant roles. It would seem that EIs do not undermine economic performance, either in the short run or in the context of the global financial crisis. Econometric analyses highlight that international characteristics, especially foreign ownership, and networking with other firms and institutions are important for EI adoption, while general research and development is less so. Over and above the structural features of firms, strategic relationships within regions and at the international level are relevant and differentiate innovative performance. Spots of a green dawn seem appearing from the historical 'brown' and polluting industrial setting of the region. Its brilliant economic performances could decouple if this improvement continues. This study provides and in depth regional investigation which could complement the information gathered in the last wave of the Community Innovation Survey which included questions on EI. |
| Keywords: | Eco-innovation; complementarity; local industrial systems; networking; international strategies |
| JEL: | C21 L60 O13 O30 Q20 Q58 |
| Date: | 2011–02–01 |
| URL: | http://d.repec.org/n?u=RePEc:udf:wpaper:201104&r=ino |
| By: | Davide Antonioli; Paolo Pini; Rocco Manzalini |
| Abstract: | The shifting of labour demand towards relatively more skilled workers has been a hot issue in the economic field for many years. A consolidated explanation for the upskilling phenomenon is that technological-organisational changes have driven the labour demand with detrimental consequences for less skilled workers (skill-biased technological-organisational change). In order to upgrade the skill workforce the firm has at least two main channels at its disposal: the external labour market strategy, mainly based on hiring and firing mechanisms; the internal labour market strategies, which improve the skill base of the employees through training activities. The main objective of the present work is to verify the relations between innovative strategies and both the workforce composition and the training activities, within an integrated framework that also leads us to consider the role of specific aspects of the industrial relations system. The firm level analysis is based on original datasets which include data on manufacturing firms for two Italian local production systems, located in the Emilia-Romagna region. The results suggest that the firms use both the two channels to improve their skill base, which is actually related to the innovation activities, although there is weak supporting evidence of the use of external labour markets to upgrade the workforce skills: the upskilling phenomenon seems to be associated to specific innovative activities in the technological sphere, while specific organisational aspects emerge as detrimental for blue collars. On the side of internal labour market strategies the evidence supports the hypothesis that innovation intensity induce the firms to implement internal procedures in order to upskill the workforce, confirming the importance of internal labour market strategies. Moreover, we have recognized the important role of firm level industrial relations in determining the training activities for the blue collar workers. |
| Keywords: | technological change; organisational change; industrial relations; skills |
| JEL: | J24 J53 L23 L6 O33 |
| Date: | 2011–02–03 |
| URL: | http://d.repec.org/n?u=RePEc:udf:wpaper:201106&r=ino |