"Towards evidence-based industrial research and innovation policy"; an introductory article for a Special Issue in Science and Public Policy journal, Oxford university press. No. 45-2, April 2018.
Dosso M., Martin, B. and Moncada-Paternò-Castello P. (2018)
Calls for better use of scientific evidence to inform policy decisions stem from the belief that enhanced outcomes for the society can be expected. Yet the introduction of evidence-based practices in innovation policy making has not come without criticism. This introductory article sets the scene for the short collection of papers that address specific issues regarding the prospect of better evidence-based policy in the area of industrial research and innovation (IRI). It identifies and discusses key challenges for the transition towards evidence-based industrial research and innovation policy. It then introduces the three papers, which build upon and depart from related assumptions or narratives reflecting the current state of practices in IRI policy. Link forthcoming
Specialisation in key enabling technologies and regional growth in Europe. Economics of Innovation and New Technology. 27(3), 273-289
Evangelista, R., Meliciani, V., & Vezzani, A. (2017)
This paper explores the specialisation of European Union (EU) regions in key enabling technologies (KETs) and assesses whether or not being specialised in these technological areas has an effect on regional growth. The evidence presented shows that regions specialised in KETs are concentrated in central Europe; however, over the period taken into account (1996–2011), less innovative and peripheral EU regions have been increasing their specialisation in these technological areas at the expense of the most advanced regions. There is also evidence that (spatial) diffusion of KETs often occurs across regions contiguous to each other. The results of the econometric estimations show that being specialised in KETs affects regional economic growth (per capita gross domestic product) and that this effect is stronger in the case of less innovative EU regions. Overall, these results hint at the pervasive nature and enabling role of KETs and demonstrate the importance for EU regions to target these technologies as part of their smart specialisation strategies. Link
Patent boxes design, patents location, and local R&D. Economic Policy, 33(93), 131-177.
Annette Alstadsæter, Salvador Barrios, Gaetan Nicodeme, Agnieszka Maria Skonieczna & Antonio Vezzani. (2018)
Patent boxes have been heavily debated for their role in corporate tax competition.This paper uses firm-level data for the period 2000–12 for the top 2,000 corporate research and development investors worldwide to consider the determinants of patent registration across a large sample of countries. Importantly, we disentangle the effects of corporate income taxation from the tax advantage of patent boxes and exploit a new and original dataset on patent box features such as the conditionality on performing research in the country or their coverage. We find that patent boxes have a considerable effect on attracting patents, mostly because of their favourable tax treatment. Patents with high earnings potential are particularly sensitive. Patent boxes with a large coverage also have stronger effects on the location of patents. We also analyse the impact of patent boxes and their tax advantages on local R&D activities and find that R&D development conditions tend to attenuate the dominant fiscal effect of patent boxes.
European R&D networks: a snapshot from the 7th EU Framework Programme. Economics of Innovation and New Technology, DOI: 10.1080/10438599.2017.1374037
Sara Amoroso, Alex Coad & Nicola Grassano. (2017)
Recent empirical studies have investigated the territorial impact of Europe's research policies, in particular the contribution of the European Framework Programmes to the integration of a European Research Area. This paper deepens the analysis on the integration and participation of peripheral regions, by focusing on the differences in intensity and determinants of inter-regional collaborations across three groups of collaborations. We consider collaborations among more developed regions, between more and less developed regions, and among less developed regions. Building on the recent spatial interaction literature, this paper investigates the effects of physical, institutional, social and technological proximity on the intensity of inter-regional research collaboration across heterogenous European regions. We find that the impact of disparities in human capital and technological proximity on regional R&D cooperation is relevant and differs across subgroups of collaborations. Moreover, despite the efforts of integrating marginal actors, peripheral regions have lower rates of collaborations. Link
Concerns about the consequences of patenting on scientometric research. Journal of the Association for Information Science and Technology, 68(9), 2293-2295.
Vezzani, A., Coad, A., & Gkotsis, P. (2017)
Our concerns about the practice of patenting scientometric techniques began with an electronic notification alerting one of us to a patent titled "Scientometric Methods for Identifying Emerging Technologies" (Abercrombie, Schlicher, & Sheldon, 2015).1, 2 This came to our attention after we had already embarked on a research program to apply scientometric methods for the identification of emerging technologies here at the JRC. We were at a loss how to respond. This seemed to run counter to the spirit of openness and public science that has characterized the bibliometric community from the start. We got in contact with former colleagues Ben Martin and Daniele Rotolo, authors of a bibliometric study entitled "What is an emerging technology?" (together with Diana Hicks, published in Research Policy, 2015). Even though we were experts and professionals in innovation studies (although not all specifically on IP), we were not entirely sure of the patent's wider implications. Could it threaten to shut down our research? Could it rule out any research funding or consultancy opportunities? What ensued was a series of fruitful exchanges between us authors, with some of us not sure how to interpret this patent, and others disappointed (even outraged) that the patent had been granted on grounds of "non-obviousness." Opinions were divided whether a patent like this could have any impact at all. It took us a long time to grasp the (possible) implications of this patent, but other researchers in other circumstances might not have been as fortunate. Link
Multinationality, R&D and productivity: Evidence from the top R&D investors worldwide. International Business Review, 26(3), 405-416.
Castellani, D., Montresor, S., Schubert, T., & Vezzani, A. (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
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
Amoroso S. & Müller B., (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
R&D profitability: the role of risk and Knightian uncertainty. Small Business Economics, DOI:10.1007/s11187-016-9776-z
Amoroso S., Moncada-Paterno-Castello P., Vezzani A., (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
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
Coad A., Amoroso S., Grassano N., (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
Trademark patterns of top R&D-driven innovators. World Trademark Review, Issue 60, April/May 2016, pp. 19-22
Dosso M. (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
My First Employee: An Empirical Investigation. Small Business Economics, forthcoming. DOI:10.1007/s11187-016-9748-3
Coad A., Nielsen K., Timmermans B., (2016)
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
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.
Montresor S., Vezzani A. (2016)
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
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
Coad A., Segarra A., Teruel M., (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
Multilevel heterogeneity of R&D cooperation and innovation determinants Eurasian Business Review. DOI:10.1007/s40821-015-0041-1
Amoroso, S., (2016)
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
Innovation and job creation: a sustainable relation? Eurasian Business Review, Vol. 6, Issue 2, pp. 189–213 DOI:10.1007/s40821-015-0031-3.
Ciriaci, D., Moncada-Paternò-Castello, P., Voigt, P. (2016)
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
Quantitative Analysis of Technology Futures: A Review of Techniques, Uses and Characteristics. Science and Public Policy, forthcoming. DOI:10.1093/scipol/scv059
Ciarli T., Coad A., Rafols I., (2016)
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
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
Coad A., Pellegrino G., Savona M., (2016)
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
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
Hall B., Moncada-Paternò-Castello P., Montresor S., Vezzani A., (2016)
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
On the R&D giants' shoulders: do FDI help to stand on them?. Economia e Politica Industriale, 42(1), 33-60.
Montresor, S., & Vezzani, A. (2015)
We investigate the impact of outward Foreign Direct Investments (FDI) on the Multinational Corporations technological leadership, meant as the capacity of entering and remaining among the top Research & Development (R&D) world investors. The research hypotheses are formulated by distinguishing FDI in R&D from FDI in other economic activities. The findings support our hypotheses with respect to the top R&D circles of the European Industrial Research and Innovation Scoreboard. Increasing the number of FDI projects in R&D makes the entrance in these circles more probable. The same holds true for non-R&D FDI, but with a lower impact. The number of R&D–FDI also reduces the probability of exiting from the circles, while that of non-R&D ones does not. These results are robust when the value of FDI projects in R&D is considered, apart from their impact on the exit from the circles, which appears to vanish. Although with caveats, the policy support to R&D internationalization provides companies with a sustainable competitive advantage in the race for the most substantial R&D investments and for the entailed economic and financial benefits. Link
The production function of top R&D investors: Accounting for size and sector heterogeneity with quantile estimations. Research Policy, 44(2), 381-393.
Montresor, S., & Vezzani, A. (2015)
This paper aims at showing how quantile estimations can make the analysis of the firm's productionfunction better able to deal with the innovation implications of production. In order to do this, we provideevidence of how top world R&D investors differ in the production impact of their inputs and in theirrate of technical change. We use the EU Industrial R&D Investment Scoreboard and carry out a quantileestimation of an augmented Cobb–Douglas production function for a panel of more than 1000 companies,covering the 2002–2010 period. The results of the pooled sample are contrasted with those obtained fromthe estimates for different groups of economic sectors. Returns to scale are bounded by the size of thefirm, but to an extent that decreases with the technological intensity of the sector. The output return ofknowledge capital is the largest, irrespective of firm size, but in high-tech sectors only. Elsewhere, physicalcapital is the pivotal factor, although with size variations. The investigated firms also appear differentin their technical progress: embodied in mid-high and low/mid-low tech sectors, and disembodied inhigh-tech sectors. Link