Articles Articles

Castellani, D., Montresor, S., Schubert, T., & Vezzani, A. (2017). Multinationality, R&D and productivity: Evidence from the top R&D investors worldwide. International Business Review, 26(3), 405-416.

May 2017

This paper investigates the effects of multinationality on firm productivity, and contributes to the literature in two respects. First, we argue that multinationality affects productivity both directly and indirectly through higher incentives to invest in R&D. Second, we maintain that the multinational depth and breadth have different direct effects on productivity and R&D. Using data from the top R&D investors in the world, we propose an econometric model with an R&D and a productivity equation that both depend on multinationality. We find: i) multinational depth has a positive effect on productivity, while the effect of multinational breadth is negative; ii) multinationality (along both dimensions) has a positive effect on R&D intensity, translating into an indirect positive effect on productivity; iii) the positive indirect effect is however not large enough to compensate the negative direct effect of multinational breadth. Link

Amoroso S. & Müller B., (2017). The short-run effects of knowledge intensive greenfield FDI on new domestic entry. The Journal of Technology Transfer, DOI:10.1007/s10961-017-9575-y

April 2017

Existing evidence on the impact of foreign direct investment on domestic economies remains ambiguous. Positive technology spillovers of foreign investment may be outweighed by negative crowding out effect due to increased competition. In this paper, we employ a unique country/sector-level data set to investigate the impact of what is considered the ‘best' type of foreign investment—greenfield knowledge intensive FDI—on domestic entry. Our results suggest that, in the short run, this type of FDI is positively related to the entry rate in the host country, if the domestic sector is either dynamic, or highly R&D intensive. These sectors may be respectively characterized by lower entry costs, which encourage a ‘trial-and-error' learning business approach, and by a higher level of absorptive capacity which increases the chance of technology transfer... Link

Coad A., Amoroso S., Grassano N.,  (2017). Diversity in one dimension alongside greater similarity in others: evidence from FP7 cooperative research teams. The Journal of Technology Transfer, DOI: 10.1007/s10961-017-9563-2

February 2017

Although diversity between team members may bring benefits of new perspectives, nevertheless, what holds a team together is some degree of similarity. We theorise that diversity in one dimension is traded off against diversity in another. Our analysis of collaborative research teams that received FP7 funding presents robust results that indicators of diversity in several dimensions—diversity of organizational form (universities,
firms, etc.), diversity in nationality, and inequality in project funding share—are negatively correlated with each other.. Link

Dosso M. (2016). Trademark patterns of top R&D-driven innovators. World Trademark Review, Issue 60, April/May 2016, pp. 19-22

September 2016

Historically, studies seeking to map innovation levels at the corporate level have focused on the prevalence of patent rights and other indicators. In recent years, though, a growing number of studies in the field of economics of innovation have paid more attention to trademark-based indicators as a proxy for companies' innovative activities. There are many reasons for this, including trademarks' importance in the commercialisation phase of innovations, their wide use across different sizes of firms and types of industry, their direct links with products and the fact that they can be used to protect innovations that are not always patentable. This note considers trademark activity at industry and company levels and compares the trademarks and R&D activity of the top 20 R&D investors. Further research is needed but the findings confirms the role of trademarks as a key intangible asset in the corporate strategies of R&D-driven innovators. Link

Amoroso S., Moncada-Paterno-Castello P., Vezzani A., (2016). R&D profitability: the role of risk and Knightian uncertainty. Small Business Economics, DOI:10.1007/s11187-016-9776-z

25 July 2016

This paper provides the first empirical attempt of linking firms' profits and investment in R&D revisiting Knight's (Risk, uncertainty and profit, Hart, Schaffner & Marx, Boston, 1921) distinction between uncertainty and risk. Along with the risky profit-maximising scenario, identifying a second, off-setting, unpredictable bias that leads to heterogeneous returns to R&D investments is crucial to fully understand the drivers of corporate profits. Consistently with the Knightian theory that relates risk to profitability, we model the impact of risk and uncertainty on profits and provide a first empirical attempt to model the effect of ambiguity, a particular type of uncertainty, on R&D returns. Link

Coad A., Nielsen K., Timmermans B., (2016). My First Employee: An Empirical Investigation. Small Business Economics, forthcoming. DOI:10.1007/s11187-016-9748-3

30 June 2016

The challenge for solo entrepreneurs to add their first employee is arguably the single biggest growth event facing any growing firm. To understand how this event affects performance, and the antecedents of hiring, we analyse Danish matched employer–employee data. Those who hire enjoy superior sales outcomes in subsequent years, while the dispersion in profits increases. Furthermore, those that hire enjoy faster sales growth in the previous year, suggesting that sales growth precedes the first hire. Finally, we show that founders with a stronger profile in terms of education and previous income are more likely to increase profits, while the characteristics of the employee are less important. The latter finding is important from a job creation perspective, in light of the suggested sorting of more marginalized employees into new and established firms. Link

Montresor S., Vezzani A. (2016). Intangible investments and innovation propensity: Evidence from the Innobarometer 2013. Industry and Innovation Journal. Vol. 23, 2016 Issue 4 , pp 331-352. DOI: 10.1080/13662716.2016.1151770.

24 March 2016

This paper investigates the innovation impact of intangible investments. Drawing on the resource-based view of the firm, we argue that through intangible investments, companies acquire knowledge assets that increase their innovativeness. However, a greater innovation impact is expected from investing more in technological intangibles rather than in intangibles overall, and a greater one from using internal versus external resources. Through a new survey on a large sample of firms in 36 countries, accounting for different intangibles and addressing their endogeneity through proper instruments, these hypotheses are partially confirmed. Developing intangibles internally is actually the most innovation-impacting aspect, but not in manufacturing. Instead, by controlling for this choice and for that of investing in technological intangibles, the intensity of intangible resources is significant for innovation in manufacturing only. Policy/strategic implications about the need of readdressing the boost to intangible investments for the sake of innovation in Europe are drawn accordingly.  Link

Coad A., Segarra A., Teruel M., (2016). Innovation and firm growth: Does firm age play a role? Research Policy, Vol. 45, pp. 387– 400. DOI:10.1016/j.respol.2015.10.015

March 2016

This paper explores the relationship between innovation and firm growth for firms of different ages. We hypothesize that young firms undertake riskier innovation activities which may have greater performance benefits (if successful), or greater losses (if unsuccessful). Using an extensive Spanish Community Innovation Survey sample for the period 2004–2012, we apply panel quantile regressions to study the effect of R&D activities on firm growth (i.e. sales growth, productivity growth and employment growth). Our results show that young firms face larger performance benefits from R&D at the upper quantiles of the growth rate distribution, but face larger decline at the lower quantiles. R&D investment by young firms therefore appears to significantly riskier than R&D investment by more mature firms, which suggests some policy implications. Link

Amoroso, S., (2016). Multilevel heterogeneity of R&D cooperation and innovation determinants Eurasian Business Review. DOI:10.1007/s40821-015-0041-1

10 February 2016

Assessing the impact of public support to innovation on R&D collaboration may require a more complex multilevel design, that describes the likely correlation present among firms characteristics within a particular sector. Using data from the 2006 edition of the Community Innovation Survey (CIS) for the Netherlands, we propose a methodology to study the effect of firm-level characteristics on the propensity to undertake a research collaborative agreement. In particular, we show that controlling for a richer variance structure yields a different picture with respect to simpler regression frameworks adopted in the literature of R&D cooperation determinants. Moreover, such a hierarchical framework can be generalized allowing for clustering at higher levels, such as sectors or geographical areas. Besides the link between public funding and R&D collaboration, our results confirm the findings of the literature: technological spillovers, risk and cost sharing rationales, firm's size, and type of innovative activity are related to the decision of engaging in different sorts of research alliances. Link

Ciriaci, D., Moncada-Paternò-Castello, P., Voigt, P. (2016) Innovation and job creation: a sustainable relation? Eurasian Business Review, Vol. 6, Issue 2, pp. 189–213 DOI:10.1007/s40821-015-0031-3.

29 October 2015

This study compared the employment growth patterns of innovative and non-innovative firms, focusing on whether or not there are systematic differences between these two categories in the persistence of the jobs they create. To this end, a unique longitudinal dataset of 3304 Spanish firms over the period 2002–2009 and a semi-parametric quantile regression approach was used. The empirical results indicate that, ceteris paribus, innovative, smaller and younger firms are more likely to experience high employment growth episodes than non-innovative firms. More interestingly, among those firms that contribute more to yearly job creation (e.g. high-growth firms), only innovative companies are able to sustain high growth over time (in contrast to non-innovative firms). In addition, among declining firms, non-innovators tend to deteriorate faster in terms of economic performance than innovators. Link

Ciarli T., Coad A., Rafols I., (2016). Quantitative Analysis of Technology Futures: A Review of Techniques, Uses and Characteristics. Science and Public Policy, forthcoming. DOI:10.1093/scipol/scv059

27 October 2015

A variety of quantitative techniques have been used in the past in future-oriented technology analysis (FTA). In recent years, increased computational power and data availability have led to the emergence of new techniques that are potentially useful for foresight and forecasting. As a result, there are now many techniques that might be used in FTA exercises. This paper reviews and qualifies quantitative methods for FTA in order to help users to make choices among alternative techniques, including new techniques that have not yet been integrated into the FTA literature and practice. We first provide a working definition of FTA and discuss its role, uses and popularity over recent decades. Second, we select the most important quantitative FTA techniques, discuss their main contexts and uses, and classify them into groups with common characteristics, positioning them along key dimensions: descriptive/prescriptive, extrapolative/normative, data gathering/inference, and forecasting/foresight. Link

Coad A., Pellegrino G., Savona M., (2016). Barriers to innovation and firm productivity. Economics of Innovation and New Technology, Vol. 25, Issue 3, pp. 321-334. DOI:10.1080/10438599.2015.1076193

16 September 2015

The paper analyzes the effect of financial, knowledge, demand, market structure and regulation barriers to innovation on firms' economic performance. It contributes to the literature on barriers to innovation by accounting for the heterogeneous effects that each barrier has on firms across the productivity distribution. We do so by employing both quantile regression techniques and matching estimators on this UK CIS panel 2002–2010 merged with the Business Structure Database. While we find evidence that both the cost and also the availability of finance negatively affect productivity across the whole distribution, the lack of qualified personnel mostly hinders high productivity firms. Moreover, quantile regression reveals some interesting variation in effect sizes across the (conditional) productivity distribution. Link

Hall B., Moncada-Paternò-Castello P., Montresor S., Vezzani A., (2016). Financing constraints, R&D investments and innovative performances: new empirical evidence at the firm level for Europe. Economic of Innovation and New Technology. Vol. 25, issue 3, pp. 183-196. DOI: 10.1080/10438599.2015.1076194

1 September 2015

The relationship between financing constraints, investments in research and development (R&D) and innovative performances has recently attracted renewed attention in the aftermath of a financial crisis that has led to problems of access to the credit on which innovation activities crucially rely. In spite of past developments in the theoretical analysis and in the data and methodologies for empirical investigation, some issues have remained unexplored to date. In this introduction to the special issue, we examine the contribution of the papers it contains, which provide new conceptualisations and empirical evidence at the firm level for Europe. Most previous research results, which were mainly based on extending models of financing constraints and physical investments to R&D investments, are confirmed, while new insights about this relationship are uncovered, in terms of the structural characteristics of the constrained firms, of the industries in which they operate, of their innovative activities and of the innovation outcomes they achieve. Link