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on Innovation |
| By: | Bing Guo; Dennis C. Hutschenreiter; David Pérez-Castrillo; Anna Toldrà-Simats |
| Abstract: | Institutional investors’ ownership in public firms has become increasingly concentrated in the last decades. We study the heterogeneous effects of large versus more dispersed institutional owners on firms’ innovation strategies and their innovation output. We find that large institutional investors induce managers to increase spending in internal R&D by reducing short-term pressure. However, to avoid empire building and dilution, large institutional investors prevent acquisitions, which reduces firms’ investment in external innovation. The overall effect on firms’ future patents and citations is negative. By acquiring less innovation from external sources, firms reduce the returns of their investment in internal R&D, jeopardizing their total innovation output. We use the mergers of financial institutions as exogenous shocks on firms’ institutional ownership concentration. Our findings complement the previously found positive effects of institutional ownership on firm innovation and indicate that the effects become negative when institutional investors become large owners. |
| Keywords: | institutional ownership, blockholders, innovation, acquisitions |
| JEL: | G32 G24 O31 |
| Date: | 2023–04 |
| URL: | https://d.repec.org/n?u=RePEc:bge:wpaper:1390&r=ino |
| By: | Danzer, Alexander M. (Catholic University of Eichstätt-Ingolstadt); Danzer, Natalia (Free University of Berlin); Feuerbaum, Carsten (Catholic University of Eichstätt-Ingolstadt) |
| Abstract: | We provide quantitative evidence on the relationship between military spending and innovation in the 19th century. Combining innovation data from world fairs and historical military data across Europe, we show that national military spending is associated with national innovation towards war logistics such as food processing, but less towards war technology such as guns. This pattern reflects differences in the historical markets for war supplies. European patent data of 1990-2015 suggest a long-term correlation between historical and con- temporaneous innovation patterns. |
| Keywords: | military spending, innovation, war logistics, food processing, military supply, 19th century |
| JEL: | H56 O31 O14 N43 |
| Date: | 2023–03 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp16034&r=ino |
| By: | Ana Cinta González Cabral; Pierce O’Reilly; Silvia Appelt; Fernando Galindo-Rueda; Tibor Hanappi |
| Abstract: | Tax incentives that provide preferential tax treatment to the incomes arising from research and development (R&D) and innovation activities, such as intellectual property regimes, have become widespread in recent years. This paper describes the key design features of tax incentives available in 49 member countries of the Inclusive Framework on BEPS (IF), covering all OECD countries and EU countries. It outlines differences in the design of such incentives that may translate into differences in the tax benefits offered. The information collected and reported in this paper is a first step towards a more systematic comparison of tax support policies for R&D and Innovation. |
| Date: | 2023–04–20 |
| URL: | https://d.repec.org/n?u=RePEc:oec:ctpaaa:60-en&r=ino |
| By: | Alberto Corsini (Université Côte d'Azur, France; CNRS, GREDEG); Michele Pezzoni (Université Côte d'Azur, France; CNRS, GREDEG) |
| Abstract: | Over the last fifteen years, European countries have increasingly relied on competitive grants to allocate research funding, replacing the more traditional block funding model. Policymakers are interested in assessing the effectiveness of the grant funding model in producing impactful research. However, the literature aiming to quantify the effect of grants on the resulting research's impact is scant. In the French context, we compare the impact of scientific articles resulting from the support of competitive grants from the main national funding agency with the impact of articles not supported by grants. We rely on publication acknowledgments to retrieve funding information and on citation data to assess the articles' impact. We find that articles supported by competitive grants receive more citations than articles not supported by grants in the long run, while the difference is not statistically significant in the short run. We find heterogeneity in the effect of grant funding on citations across fields. |
| Date: | 2022–10 |
| URL: | https://d.repec.org/n?u=RePEc:gre:wpaper:2022-37&r=ino |
| By: | Silvia Appelt; Ana Cinta González Cabral; Tibor Hanappi; Fernando Galindo-Rueda; Pierce O’Reilly |
| Abstract: | Despite the increasing adoption of income-based tax incentives for R&D and innovation in the OECD area and beyond, evidence on the availability, design, generosity and actual cost of these incentives remains scarce. This report helps fill this gap by documenting government efforts to provide preferential tax treatment of economic outputs of innovation activities. Drawing on the responses of national contact points to the OECD KNOWINTAX surveys carried out in 2020 and 2021, it presents new evidence on the cost (foregone tax revenues) and uptake of income-based-tax incentives by businesses in 2019, and tracks their distribution by firm size and industry and their evolution over the 2000-2019 period. |
| Keywords: | innovation, research and development, tax incentives |
| JEL: | O34 O38 H25 |
| Date: | 2023–04–20 |
| URL: | https://d.repec.org/n?u=RePEc:oec:stiaaa:2023/03-en&r=ino |
| By: | Ufuk Akcigit; Nathan Goldschlag |
| Abstract: | How are inventors allocated in the US economy and does that allocation affect innovative capacity? To answer these questions, we first build a model of creative destruction where an inventor with a new idea has the possibility to work for an entrant or incumbent firm. If the inventor works for the entrant the innovation is implemented and the entrant displaces the incumbent firm. Strategic considerations encourage the incumbent to hire the inventor, offering higher wages, and then not implement the inventor's idea. To test this prediction, we combine data on the employment history of over 760 thousand U.S. inventors with information on jobs from the Longitudinal Employer-Household Dynamics (LEHD) Program at the U.S. Census Bureau. Our results show that (i) inventors are increasingly concentrated in large incumbents, less likely to work for young firms, and less likely to become entrepreneurs, and (ii) when an inventor is hired by an incumbent, compared to a young firm, their earnings increases by 12.6 percent and their innovative output declines by 6 to 11 percent. We also show that these patterns are robust and not driven by life cycle effects or occupational composition effects. |
| JEL: | O3 O4 |
| Date: | 2023–03 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:31085&r=ino |
| By: | Sanjit Dhami |
| Abstract: | We consider technology choices between green and brown technologies by firms. We use insights from complexity theory and also take account of true uncertainty in designing public policy. The green technology offers relatively higher returns to scale from adoption, and there are type-contingent differences among firms in their suitability for the green technology. We show that the long-run outcome is unpredictable despite there being no fundamental uncertainty in the model; small accidents of history can lead to large effects; and the final outcome is an ‘emergent property’ of the system. We describe the role of taxes and subsidies in facilitating adoption of the green technology. We also consider issues of the conflict between optimal Pigouvian taxes and green technology adoption; optimal temporal profile of subsidies; and the desirability of an international fund to provide technology assistance to poorer countries. Despite the simplicity of the framework, several novel results are demonstrated that typically do not arise in the standard analysis of the problem. |
| Keywords: | technology choice, climate change, complexity, lock-in effects, increasing returns, green subsidies, public policy, Pigouvian taxes, stochastic dynamics |
| JEL: | D01 D21 D90 H32 |
| Date: | 2023 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_10364&r=ino |
| By: | Marialuisa Divella (Department of Political Sciences, Universita' degli Studi di Bari); Alessia Lo Turco (Department of Economics and Social Sciences, Universita' Politecnica delle Marche (UNIVPM)); Alessandro Sterlacchini (Department of Economics and Social Sciences, Universita' Politecnica delle Marche (UNIVPM)) |
| Abstract: | In this paper we adopt a task approach to measure the local pool of capabilities which can more effectively spur innovation. By focusing on the core activities that workers undertake in their jobs, we build an abstract task intensity measure of occupations to proxy the ability in analysing and solving complex problems, as well as in coordinating and integrating people with different knowledge endowments, that should be especially relevant for the process of invention and innovation. We thus estimate the relationship between the local abstract intensity and the inventive performance, proxied by granted patents, of US Commuting Zones during the period 2000-2015. The evidence provided, robust to a wide array of sensitivity checks, points to the extent of workers’ engagement in abstract tasks across Commuting Zones as a crucial determinant of the local inventive activity. |
| Keywords: | human capital, labour tasks, local abstract intensity, patents, US Commuting Zones |
| JEL: | R10 R12 O31 O33 |
| Date: | 2023–04 |
| URL: | https://d.repec.org/n?u=RePEc:anc:wpaper:476&r=ino |
| By: | Ufuk Akcigit; Nathan Goldschlag |
| Abstract: | Innovation is a key driver of long run economic growth. Studying innovation requires a clear view of the characteristics and behavior of the individuals that create new ideas. A general lack of rich, large-scale data has constrained such analyses. We address this by introducing a new dataset linking patent inventors to survey, census, and administrative microdata at the U.S. Census Bureau. We use this data to provide a first look at the demographic characteristics, employer characteristics, earnings, and employment dynamics of inventors. These linkages, which will be available to researchers with approved access, dramatically increases the scope of what can be learned about inventors and innovative activity. |
| JEL: | O3 O4 |
| Date: | 2023–03 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:31086&r=ino |
| By: | Marco Sforza (Department of Economics, Roma Tre University) |
| Abstract: | The paper explores the relationship between the industry-level diffusion of digital technologies and the regionalisation of trade in value added. Theoretical literature underlines two potential effects of these technologies. They may facilitate coordination, favouring higher fragmentation, but also redefine comparative advantages, pushing toward relocation. The aim of the paper is to provide empirical evidence on the relationship between digital technologies and trade regionalisation, for a panel of selected European countries and sectors over the period 2005-2018. I build a dataset combining data from TiVA-OECD, EU-KLEMS and Eurostat SBS. I define two regionalisation measures, comparing intra-EU against extra-EU trade flows, to capture the relative importance of the two regions for input sourcing and output destination. The econometric analyses show a differentiated effect on the two measures: digital capital reduces regionalisation of the input sourcing, while positively correlating with the regionalisation of the intermediate output. Finally, a differentiated effect is also found in magnitude between technologies, namely, physical ICT and software. |
| Keywords: | Digital technologies; Global Value Chains; Trade regionalisation |
| JEL: | O33 F10 F15 |
| Date: | 2023–04 |
| URL: | https://d.repec.org/n?u=RePEc:rtr:wpaper:0275&r=ino |