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on Innovation |
| By: | Dany Bahar; Prithwiraj Choudhury; Hillel Rapoport |
| Abstract: | We investigate the relationship between the presence of migrant inventors and the dynamics of innovation in the migrants’ receiving countries. We find that countries are 25 to 50 percent more likely to gain advantage in patenting in certain technologies given a twofold increase in the number of foreign inventors from other nations that specialize in those same technologies. For the average country in our sample this number corresponds to only 25 inventors and a standard deviation of 135. We deal with endogeneity concerns by using historical migration networks to instrument for stocks of migrant inventors. Our results generalize the evidence of previous studies that show how migrant inventors “import” knowledge from their home countries which translate into higher patenting. We complement our results with micro-evidence showing that migrant inventors are more prevalent in the first bulk of patents of a country in a given technology, as compared to patents filed at later stages. We interpret these results as tangible evidence of migrants facilitating the technology-specific diffusion of knowledge across nations. |
| Keywords: | innovation, migration, patent, technology, knowledge |
| JEL: | O31 O33 F22 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_7690&r=all |
| By: | Jorge Nogueira de Paiva Britto (Universidade Federal Fluminense); Leonardo Costa Ribeiro (Cedeplar-UFMG); Lucas Teixeira Araújo (Universidade Federal Fluminense); Eduardo da Motta e Albuquerque (Cedeplar-UFMG) |
| Abstract: | The investigation comprises information about patent citations distributed by different technological domains, which are used to map knowledge flows and to correlate these flows with the evolution of countries' competences. Specifically, the analysis uses information about patent citations to track and discuss the evolution of knowledge flows to a set of selected countries involved in catching-up up processes.. The analysis comprises an analysis of patent citation data extracted from the USPTO database from the period 1982-2006, including information about citations extracted from patents granted by national companies of the selected countries, presented trough technological interaction matrices crossing information of different technological domains of the patents, correlating the technological domains of the patents citing other patents with the technological domains of the patents cited. The hypothesis is that the intensification and diversification of knowledge flows to a greater number of fields broadens the possibilities of identifying attractive opportunities for innovation, magnifying the possibilities of development and catching-up. The analysis tries to identify which technological fields concentrate the absorption and diffusion of knowledge in a given country along different periods, which tends to be connected to the possibilities of catching up processes. |
| Keywords: | Patent Citations; International Knowledge flows; Innovation Systems |
| Date: | 2019–06 |
| URL: | http://d.repec.org/n?u=RePEc:cdp:texdis:td606&r=all |
| By: | Jorge Nogueira de Paiva Britto (Universidade Federal Fluminense); Leonardo Costa Ribeiro (Cedeplar-UFMG); Eduardo da Motta e Albuquerque (Cedeplar-UFMG) |
| Abstract: | This paper investigates networks of cross-border patent citations - the patent assignee as a node and an international patent citation as a link. The data (patents and their international citations, selected years between 1991 and 2009) show a network growing over time - more institutions, more links and more countries - and preserving its scale-free properties, a self-organized system with changes in technological specialization. This firm-led network is compared to a network of international colaboration in science - a university-led network. The overlaping of those two international self-organized systems might be a source of an emerging international system of innovation. |
| Keywords: | Patent Citations; International Knowledge flows; Innovation Systems |
| Date: | 2019–06 |
| URL: | http://d.repec.org/n?u=RePEc:cdp:texdis:td605&r=all |
| By: | Thomas Sampson |
| Abstract: | This paper studies the origins and consequences of international technology gaps. I develop an endogenous growth model where R&D efficiency varies across countries and productivity differences emerge from firm-level technology investments. The theory characterizes how innovation and learning determine technology gaps, trade and global income inequality. Countries with higher R&D efficiency are richer and have comparative advantage in more innovation-dependent industries where the advantage of backwardness is lower and knowledge spillovers are more localized. I estimate R&D efficiency by country and innovation-dependence by industry from R&D and bilateral trade data. Calibrating the model implies technology gaps, due to cross-country differences in R&D efficiency, account for around one-quarter to one-third of nominal wage variation within the OECD. |
| Keywords: | technology gaps, trade, technology investment, Ricardian comparative advantage, international income inequality |
| JEL: | F11 F43 O14 O41 |
| Date: | 2019–06 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp1627&r=all |
| By: | Chu, Angus C.; Wang, Xilin |
| Abstract: | This study explores the effects of R&D subsidies in a hybrid growth model in which the economy may exhibit semi-endogenous growth or fully endogenous growth. We consider two types of R&D subsidies on variety-expanding innovation and quality-improving innovation. R&D subsidies on quality-improving innovation only have effects in the fully-endogenous-growth regime, in which a higher subsidy rate leads to an earlier activation of quality-improving innovation and increases the transitional and steady-state growth rate. R&D subsidies on variety-expanding innovation have contrasting effects in the two regimes. In the semi-endogenous-growth regime, a higher subsidy rate on variety-expanding innovation increases transitional growth but has no effect on steady-state growth. In the fully-endogenous-growth regime, a higher subsidy rate on variety-expanding innovation continues to increase short-run growth but delays the activation of quality-improving innovation and reduces long-run growth. Increasing R&D subsidies on variety-expanding (quality-improving) innovation makes the semi-endogenous-growth (fully-endogenous-growth) regime more likely to emerge in equilibrium. |
| Keywords: | R&D subsidies; innovation; endogenous growth regimes |
| JEL: | O3 |
| Date: | 2019–06 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:94620&r=all |
| By: | Zahler, Andrés; Goya, Daniel; Caamaño, Matías |
| Abstract: | We study the effect of different types of barriers to innovation (financial, demand, knowledge, market, cooperation, and regulatory barriers) on firm level innovation inputs and outputs. Using a pooled sample of three Chilean innovation surveys, based on an instrumental variables approach, we find that the probability of generating innovation outcomes is signficantly reduced by demand and financial barriers. Regarding inputs for innovation, we find a clear negative relationship between financial and demand obstacles and the propensity to incur (non-R&D) innovation expenditures, but not with its intensity. We also provide evidence of heterogeneous effects across sectors, finding that knowledge obstacles are relevant for manufacturing and market structure obstacles for services, while demand and financial obstacles appear to matter across the board. |
| JEL: | O31 O32 D22 |
| Date: | 2019–06 |
| URL: | http://d.repec.org/n?u=RePEc:idb:brikps:73&r=all |
| By: | Dong HUO; Jiangwei DANG; MOTOHASHI Kazuyuki |
| Abstract: | Standard-setting organizations (SSOs) generally request that their participants commit to offering licenses ex ante to implementers on fair, reasonable, and non-discriminatory (FRAND or RAND) terms. To adjust for the RAND context, court judges adopt modified Georgia-Pacific rules to determine patent damages ex post in infringement lawsuits involving standard essential patents (SEPs). In this paper, we review the literature on intellectual property rights policy in SSOs and modified Georgia-Pacific rules from court practices and explore the determinants of licensing terms in the RAND context from both technical and legal aspects in accordance with the review. By employing a novel dataset that consists of over a thousand declared SEPs in the Internet Engineering Task Force (IETF), we find that, in general, technical and legal characteristics are significantly associated with reciprocal licensing terms, despite most of their associations with royalty-free (or royalty-bearing) terms being nonetheless trivial. |
| Date: | 2019–03 |
| URL: | http://d.repec.org/n?u=RePEc:eti:dpaper:19023&r=all |
| By: | Edward L. Glaeser; Naomi Hausman |
| Abstract: | American technological creativity is geographically concentrated in areas that are generally distant from the country’s most persistent pockets of joblessness. Could a more even spatial distribution of innovation reduce American joblessness? Could Federal policies disperse innovation without significant costs? If research funding is already maximizing knowledge production, then spatial reallocation of that funding will reduce America’s overall innovation unless that reallocation comes with greater spending. Without any spatial reallocation, the primarily inventive parts of innovation policy, such as N.I.H. grants, can potentially aid underperforming areas by targeting the problems of those areas, like widespread disability. The educational aspects of innovation policy, such as Pell Grants, work-study, vocational training, and Federal overhead reimbursement on grants, currently have multiple objective and could focus more on employability in distressed areas. Lifting the cap on H1B visas in poorer places could attract outside human capital to those places. Geographically targeted entrepreneurship policies, such as eliminating the barriers to new business formation near universities and in distressed places, could potentially enhance employment growth in those regions. Spatially targeted employment subsidies will increase the returns to labor-intensive innovation in depressed areas, but we know little about how much innovation will respond to such subsidies. |
| JEL: | O31 R11 |
| Date: | 2019–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:25913&r=all |
| By: | Herbert Dawid; Gerd Muehlheusser |
| Abstract: | This paper addresses the role of product liability for the emergence and development of smart products such as autonomous vehicles (AVs). We analyze how the liability regime affects innovative activities, as well as the timing of market introduction and market penetration of such smart products. We develop a dynamic model in which at each point in time, a potential (monopolistic) innovator decides on how much to invest in the safety stock of the smart product and on the product price, once it has been launched. Calibrating the model to the U.S. car market, our analysis reveals policy-relevant trade-offs when shifting more liability on the producers of AVs. First, while this improves the safety of AVs in the long run, the safety stock is accumulated more slowly. Second, it delays the market introduction of AVs, and also slows down market penetration, which hampers the innovator’s incentives for safety investments in the short- and intermediate term. As a result, the safety level of AVs at a given point in time decreases as the liability regime becomes more stringent. Furthermore, there is a threshold for the innovator’s burden of liability beyond which she forgoes to develop the AV altogether. Finally, we find that direct AV safety regulation is welfare-superior compared to a stringent liability regime, as it induces higher levels of AV safety in the short and intermediate term. |
| Keywords: | product innovation, liability, digital economy, autonomous vehicles, smart products, optimal investment dynamics |
| JEL: | O31 K13 L11 L62 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_7673&r=all |
| By: | Federico Etro |
| Abstract: | I study a merger between producers of complement inputs facing potential entry, with investment by the incumbents in deterministic cost reduction and by the entrants in probabilistic innovation, and then competition in prices. The merger solves Cournot complementarity problems in investment and pricing, which is what makes it profitable but also potentially anti-competitive. When the demand is inelastic the merger harms consumers by reducing R&D of the entrants if the incumbents are efficient enough (always when bundling is adopted). Instead, with a demand elastic enough, the merger increases consumer surplus (even with bundling). |
| Keywords: | Mergers, R&D, Cournot complementarity, bundling, antitrustin high-tech industries. |
| JEL: | L1 L4 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:frz:wpaper:wp2019_15.rdf&r=all |
| By: | Ufuk Akcigit (University of Chicago); Emin Dinlersoz (Bureau of the Census); Jeremy Greenwood (University of Pennsylvania); Veronika Penciakova (Federal Reserve Bank of Atlanta) |
| Abstract: | Venture capital and growth are examined both empirically and theoretically. Empirically, VC-backed startups have higher early growth rates and patenting levels than non-VC-backed ones. Venture capitalists increase a startup's likelihood of reaching the right tails of the firm size and innovation distributions. Furthermore, outcomes are better for startups matched with more experienced venture capitalists. An endogenous growth model, where venture capitalists provide both expertise and financing for business startups, is constructed to match these facts. The presence of venture capital, the degree of assortative matching between startups and financiers, and the taxation of VC-backed startups matter significantly for growth. |
| Keywords: | assortative matching, endogenous growth, IPO, management, mergers and acquisitions, research and development, selection effects, startups, synergies, taxation, treatment effects, venture capital |
| Date: | 2019–06 |
| URL: | http://d.repec.org/n?u=RePEc:eag:rereps:30&r=all |
| By: | ITO Keiko; IKEUCHI Kenta; Chiara CRISCUOLO; Jonathan TIMMIS; Antonin BERGEAUD |
| Abstract: | This paper explores how changes in both position and participation in Global Value Chain networks affect firm innovation. The analysis combines matched patent-firm data for Japan with measures of GVC network centrality and GVC participation utilizing the OECD Inter-Country Input-Output Tables for the period 1995 to 2011. We find that Japan's position in the GVCs has shifted from being at the core of Asian value chains towards the periphery relative to other countries in the network, i.e. becoming less "central". We use China's WTO accession as an instrumental variable for changes in Japanese centrality. Our analysis shows that increases in forward centrality – as a key supplier - tends to be positively associated with increasing firm patent applications. Firms in key hubs within GVCs, more specifically as key suppliers, appear to benefit from knowledge spillovers from various customers and downstream markets. |
| Date: | 2019–04 |
| URL: | http://d.repec.org/n?u=RePEc:eti:dpaper:19028&r=all |
| By: | KODAMA Naomi; Huiyu LI |
| Abstract: | Standard measurement often impute innovation from creative destruction and new varieties using surviving products. This can lead to an understatement of growth, if surviving products improve less than creatively destroyed products and new varieties. This paper estimates this bias for Japan using establishment-level data from the Japanese Census which covers all private businesses. We find that the correction increases Japan's productivity growth by 0.39 percentage points per year between 1997 and 2009 with most of the missing growth coming from non-manufacturing industries. As this bias is smaller than the bias found for the U.S., our results imply 0.23 percentage points per year bigger difference between productivity growth rates in the U.S. and Japan. The larger difference mostly stems from a larger difference in productivity growth rates for non-manufacturing industries. |
| Date: | 2019–04 |
| URL: | http://d.repec.org/n?u=RePEc:eti:dpaper:19026&r=all |
| By: | Ashish Arora; Sharon Belenzon; Andrea Patacconi; Jungkyu Suh |
| Abstract: | A defining feature of modern economic growth is the systematic application of science to advance technology. However, despite sustained progress in scientific knowledge, recent productivity growth in the U.S. has been disappointing. We review major changes in the American innovation ecosystem over the past century. The past three decades have been marked by a growing division of labor between universities focusing on research and large corporations focusing on development. Knowledge produced by universities is not often in a form that can be readily digested and turned into new goods and services. Small firms and university technology transfer offices cannot fully substitute for corporate research, which had integrated multiple disciplines at the scale required to solve significant technical problems. Therefore, whereas the division of innovative labor may have raised the volume of science by universities, it has also slowed, at least for a period of time, the transformation of that knowledge into novel products and processes. |
| JEL: | O3 |
| Date: | 2019–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:25893&r=all |
| By: | Kancs, d'Artis (European Commission – JRC); Siliverstovs, Boriss (KOF Swiss Economic Institute) |
| Abstract: | We provide a novel evidence about the innovation-employment nexus by decomposing it by R&D intensity in a continuous setup and relaxing the linearity assumption. Using a large international firm-level panel data set for OECD countries and employing a flexible semi-parametric method – the generalised propensity score – allows us to recover the full functional relationship between the R&D-driven innovation and firm employment as well as address important econometric issues, which is not possible in the standard estimation approach used in the previous literature. Our results confirm that the relationship between innovation and employment entails important non-linearities responsible for significant differences in employment response to innovation at different R&D intensity levels. |
| Keywords: | R&D investment, employment, propensity score, firm-level data |
| JEL: | C14 C21 F23 J20 J23 O30 O32 O33 |
| Date: | 2019–04 |
| URL: | http://d.repec.org/n?u=RePEc:jrs:wpaper:201902&r=all |
| By: | de Ridder, Maarten |
| Abstract: | Productivity growth has stagnated over the past decade. This paper argues that the rise of intangible inputs (such as information technology) can cause a slowdown of growth through the effect it has on production and competition. I hypothesize that intangibles cause a shift from variable costs to endogenous fixed costs, and use a new measure to show that the share of fixed costs in total costs rises when firms increase ICT and software investments. I then develop a quantitative framework in which intangibles reduce marginal costs and endogenously raise fixed costs, which gives firms with low adoption costs a competitive advantage. This advantage can be used to deter other firms from entering new markets and from developing higher quality products. Paradoxically, the presence of firms with high levels of intangibles can therefore reduce the rate of creative destruction and innovation. I calibrate the model using administrative data on the universe of French firms and find that, after initially boosting productivity, the rise of intangibles causes a 0.6 percentage point decline in long-term productivity growth. The model further predicts a decline in business dynamism, a fall in the labor share and an increase in markups, though markups overstate the increase in firm profits. |
| Keywords: | Business Dynamism; Growth; Intangibles; Productivity; Market Power |
| JEL: | J1 |
| Date: | 2019–03–29 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:100946&r=all |
| By: | Dosi, G.; Piva, M.; Virgillito, M. E.; Vivarelli, M. |
| Abstract: | This paper addresses, both theoretically and empirically, the sectoral patterns of job creation and job destruction in order to distinguish the alternative effects of embodied vs disembodied technological change operating into a vertically connected economy. Disembodied technological change turns out to positively affect employment dynamics in the “upstream’’ sectors, while expansionary investment does so in the “downstream’’ industries. Conversely, the replacement of obsolete capital vintages tends to exert a negative impact on labour demand, although this effect turns out to be statistically less robust. |
| Keywords: | Innovation,disembodied and capital-embodied technological change,employment,jobcreation,job-destruction,sectoral interdependencies |
| JEL: | O14 O31 O33 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:glodps:355&r=all |
| By: | Avenyo, Elvis (UNU-MERIT); Konte, Maty (UNU-MERIT); Mohnen, Pierre (UNU-MERIT) |
| Abstract: | Innovation has become a key interest in sub-Saharan Africa (SSA), as it is argued to be pervasive, and play eminent role in generating employment. There is, however, a dearth of empirical evidence assessing the impact of innovation on firm employment for SSA. This paper investigates the impact of product innovations on job creation using data from the recent waves of the Enterprise Survey merged with Innovation Follow-Up Survey for SSA countries for which both surveys are available. We apply the Dose Response Model under continuous and heterogeneous responses to treatment. The results reveal a positive impact of product innovations on total employment. This result is, however, found to hold only at specific intervals of product innovation intensities. Our analyses also show that product innovations tend to create both temporary and permanent jobs as well as skilled and unskilled jobs. However, the positive impact of product innovations on temporary and unskilled employment tends to outweigh that of permanent and skilled employment, raising questions about the security and quality of the new jobs generated by product innovations. |
| Keywords: | Employment, Product Innovations, Dose Response Model, sub-Saharan Africa |
| JEL: | J23 J3 O31 O33 L10 |
| Date: | 2019–06–04 |
| URL: | http://d.repec.org/n?u=RePEc:unm:unumer:2019019&r=all |
| By: | Dosi, Giovanni (Institute of Economics, Scuola Superiore Sant’Anna, Pisa); Piva, Mariacristina (Department of Economic Policy, Università Cattolica del Sacro Cuore, Piacenza); Virgillito, Maria Enrica (Department of Economic Policy, Università Cattolica del Sacro Cuore, Milano); Vivarelli, Marco (UNU-MERIT, Department of Economic Policy, Università Cattolica del Sacro Cuore, Milano, and IZA, Bonn) |
| Abstract: | This paper addresses, both theoretically and empirically, the sectoral patterns of job creation and job destruction in order to distinguish the alternative effects of embodied vs disembodied technological change operating into a vertically connected economy. Disembodied technological change turns out to positively affect employment dynamics in the "upstream'' sectors, while expansionary investment does so in the "downstream'' industries. Conversely, the replacement of obsolete capital vintages tends to exert a negative impact on labour demand, although this effect turns out to be statistically less robust. |
| Keywords: | Innovation, disembodied and capital-embodied technological change, employment, job-creation, job-destruction, sectoral interdependencies |
| JEL: | O14 O31 O33 |
| Date: | 2019–06–04 |
| URL: | http://d.repec.org/n?u=RePEc:unm:unumer:2019020&r=all |
| By: | Boudreaux, Christopher; Caudill, Steven |
| Abstract: | This study questions the assumption that entrepreneurship unequivocally leads to economic growth. Using insights from institutional theory and development economics, we reevaluate entrepreneurship’s contribution towards economic growth. Our study uses Global Entrepreneurship Monitor (GEM) data for a panel of 83 countries from 2002 to 2014 and highlights several important findings. First, our evidence suggests that entrepreneurship encourages economic growth but not in developing countries. Second, we find that a country’s institutional environment—measured by GEM’s Entrepreneurial Framework Conditions (EFCs)—contributes to economic growth in more developed countries but not in developing countries. Lastly, we find that opportunity-motivated entrepreneurship encourages economic growth in developed countries, while necessity-motivated entrepreneurship discourages economic growth in developing countries. These findings have important policy implications. Namely, our evidence contradicts policy proposals that suggest entrepreneurship and the adoption of pro-market institutions that support it will encourage economic growth in developing countries. Our evidence suggests these policy proposals are unlikely to generate the desired economic growth. |
| Keywords: | Entrepreneurship, Institutions, Economic Growth, Policy, Global Entrepreneurship Monitor, Developing Countries |
| JEL: | L26 L53 M13 O43 O47 |
| Date: | 2019–06–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:94244&r=all |
| By: | Geoffrey T. Sanzenbacher; Gal Wettstein |
| Abstract: | Medicare Part D was established to expand outpatient prescription drug coverage to all seniors. An obvious effect of Part D was to improve the well-being of those who gained coverage by reducing their exposure to drug costs. But, the law also boosted demand for drugs used by those ages 65 and over, and extended the bargaining power enjoyed by commercial plans vis a vis drug manufacturers to the Part D market. Both these changes could give branded drug manufacturers extra incentive to protect their products’ monopoly status through so-called “evergreening,” with unforeseen impacts on the generic drug market and ultimately on prices. While work to date has generally found that Part D decreased prices through increased insurer bargaining power, that literature focused on the few years after Part D launched, a time before the effect of increased evergreening or decreased generic entry could be felt. This paper takes a longer view of how Part D has affected evergreening, generic entry, and ultimately drug prices in a difference-in differences design that compares these outcomes for drugs used frequently by those ages 65 and over to those used infrequently by this population. The results show that Part D increased evergreening and reduced generic entry, and suggest that these effects are associated with higher prices. However, Part D’s overall effect on drug prices is still negative, as the impact of insurer bargaining power apparently more than offsets the effect of more limited supply-side competition. |
| Date: | 2019–05 |
| URL: | http://d.repec.org/n?u=RePEc:crr:crrwps:wp2019-8&r=all |