Publications
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PDF Key Enabling Technologies and Smart Specialization Strategies. European Regional Evidence from Patent Data
The paper aims at investigating whether Key Enabling Technologies (KETs) can have a role in facilitating regional Smart Specialization Strategies… Show more (S3). Drawing on the economic geography approach to S3, we formulate some hypotheses about the impact that KETs-related knowledge can have on the construction of new regional technological advantages (RTAs). By crossing regional data on patent applications, in KETs-mapped classes of the International Patent Classification (IPC), with a number of regional economic indicators, we test these hypotheses on a panel of 26 European countries over the period 1980-2010. KETs show a positive impact on the construction of new RTAs, pointing to a new 'enabling' role for them. KETs also exert a negative moderating role on the RTAs impact of the density of related pre-existing technologies, pointing to the KETs capacity of making the latter less binding in pursuing S3. Overall, the net-impact of KETs is positive, pointing to a new case for plugging KETs in the S3 policy tool-box. Show less
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PDF Patent Boxes Design, Patents Location and Local R&D
Patent boxes have been heavily debated for their role in corporate tax competition. This paper uses firm-level data for the… Show more period 2000-2011 for the top 2,000 corporate research and development (R&D) 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. We also exploit a new and original dataset on patent box features such as the conditionality on performing research in the country, and their scope. We find that patent boxes have a considerable effect on attracting patents, mostly because of their favourable tax treatment, especially for high-quality patents. Patent boxes with a large scope in terms of tax base definition also have stronger effects on the location of patents. The size of the tax advantage offered through patent box regimes is found to deter local innovative activities, whereas R&D development conditions tend to attenuate this adverse effect. Our simulations show that, on average, countries imposing such development conditions tend to grant a tax advantage that is slightly greater than optimal from a local R&D impact perspective. Show less
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PDF Employment Effect of Innovation
This paper estimates and decomposes the employment effect of innovation by R&D intensity levels. Our microeconometric analysis is based on… Show more a large international panel data set from the EU Industrial R&D Investment Scoreboard, and our proxy for innovation intensity is a measurable and continuous variable. Employing flexible semi-parametric methods - the generalised propensity score - allows us to recover the full functional relationship between R&D investment and firm employment, and to address important econometric issues, which is not possible in the standard estimation approach used in previous literature. Our results suggest that modest innovators do not create and may even destruct jobs by raising their R&D expenditures. Most of the jobs in the economy are created by innovation followers: increasing innovation by 1% may increase employment up to 0.7%. The job creation effect of innovation reaches its peak when R&D intensity is around 100% of the total capital expenditure, after which the positive employment effect declines and becomes statistically insignificant. Innovation leaders do not create jobs by further increasing their R&D expenditures, which are already very high. Show less
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PDF Top R&D investors and international knowledge seeking: the role of emerging technologies and technological proximity
This paper sheds new lights on the internationalization of technological activities of the top corporate R&D investors worldwide. In particular,… Show more we provide evidence on the technological factors determining their international R&D location strategies. The empirical analysis is based on the patenting activities of the top R&D investors, as reported by the EU Industrial R&D Investment Scoreboard, at the USPTO over the period 2010-2012. The technological proximity to the host country in which these companies seek for new knowledge is a key determinant for their R&D location decision. However, technological proximity has a non-linear effect on the companies' location strategies as they search for new technologies not too close to their knowledge base. Furthermore, top R&D investors worldwide target countries with comparative advantages in emerging technologies. Countries willing to attract high-value investments should create an environment conducive to the creation and development of brand new ideas with a high potential impact on the long term growth. Show less
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PDF Profits, R&D and Labour
A basis assumption in the economic literature is the one of diminishing marginal returns to labour. However, theoretical studies on… Show more knowledge and labour specialization assume that an increase in the knowledge investment embodied in the human capital of workers raises the marginal product of labour. In this paper, we propose a structural approach to test the hypothesis of non-diminishing returns to labour for a panel data set of R&D investing companies, and we explore how the marginal returns to labour vary with their level of knowledge capital (R&D) intensity. Our econometric analysis provides a number of results. First, we find that more knowledge intensive firms have non-diminishing returns to labour, while less knowledge intensive companies exhibit diminishing returns. Second, independently from the knowledge capital intensity, returns to labour increase with size. Relatively smaller firms have diminishing returns, while larger companies have non-diminishing to increasing returns to labour. However, we show that more knowledge intensive firms can attain the threshold of non-diminishing returns faster than their conterparts. Show less
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PDF On the R&D giants' shoulders: Do FDI help to stand on them?
The paper investigates the extent to which outward FDI affect the MNC's capacity of entering (and remaining in) the club… Show more of top R&D world investors, benefiting from performance gains in both financial and economic markets. By merging the European Industrial Research and Innovation Scoreboard with the fDi Markets dataset, we find supporting evidence. Increasing the number of FDI projects helps firms overcome the discontinuities that, in the distribution of R&D expenditures, separate the group of the largest world R&D investors from the top of them. The same is true for the number of FDI projects in R&D, which are also more important than greater FDI portfolios in becoming a top R&D spender. Furthermore, unlike FDI in general, more FDI in R&D guarantee firms to remain in this top club of firms as it increases their capacity of resisting competition for a place among the top R&D spenders. Results at the extensive margin (i.e. the number of FDI projects) are confirmed with respect to the scale of FDI projects (i.e. at the intensive margin). However, increasing their size is not enough to become one of the higest ranking R&D firms. Policy implications about the support to R&D internationalisation are drawn accordingly. Show less
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PDF The hidden costs of R&D collaboration
Many European policy initiatives continue to promote R&D collaboration in view of its expected benefits. Despite the advantages of R&D… Show more cooperation, to benefit from it, firms must create a structure to support the efficient transfer of knowledge-based assets. In fact, the set-up and administration of common resources might be costly. This paper derives the distribution of the costs associated with R&D collaboration, as they could shape firms' R&D-related investments. To ascertain these costs, we model the expected benefits from R&D cooperation with a structural dynamic monopoly model. The modelling results show that the sunk costs of innovation are lower when collaborating with a research partner, and that a firm's probability of investing in R&D or innovation increases with the level of productivity increase expected from collaborating in R&D and innovation. We also find that the sunk costs of innovation are 1.5 to 3 times lower than the sunk costs of R&D. Additionally, it can be seen that the suggested structural framework of a firm's heterogeneity in cost functions used in our model can offer a straightforward extension to existing policy impact evaluation. Show less
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PDF Intangible investments and innovation propensity. Evidence from the Innobarometer 2013
This paper investigates the innovation impact of intangibles by considering the decision of firms to invest in a comprehensive set… Show more of them. By using a new survey on a large sample of firms in 28 EU (plus 8 non-EU) countries, we first identify the principal components of the resources firms invest in six kinds of intangibles. Their contribution to the firms' propensity to introduce new products and/or processes is then estimated with a two-step model, which addresses the endogeneity of the focal regressors through theoretically consistent instruments. A firm's innovativeness depends on its choice of using internal vs. external resources for its intangible investments more than on their actual amount, and on the kind of assets these investments are directed to. Intangibles need to be managed strategically in order to have an innovation impact and the policy support of this type of investment must take this strategic use into account. Show less
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PDF Innovation and Productivity in Services: Evidence from Germany, Ireland and the United Kingdom
This paper examines the links between innovation and productivity in service enterprises. For this purpose, we use micro data from… Show more the Community Innovation Survey 2008 in Germany, Ireland and the United Kingdom, and estimate an augmented structural model. Our results indicate that innovation in service enterprises is linked to higher productivity. In all three countries analysed, among the innovation types that we consider, the strongest link between innovation and productivity was found for marketing innovations. Our empirical evidence highlights the importance of internationalisation in the context of innovation outputs in all three countries. The determinants of innovation in service enterprises appear remarkably similar to the determinants of innovation in manufacturing enterprises. Show less
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PDF Do KIBS make manufacturing more innovative? An empirical investigation for four European countries
The paper aims at estimating the innovation impact of the vertical integration of knowledge intensive business services (KIBS) into manufacturing.… Show more By referring to the vertically integrated sectors of an economy, the innovative knowledge, which is transferred directly and indirectly from KIBS to manufacturing in an embodied way, is measured. Its impact on manufacturing innovation is then estimated. By merging OECD data on sectoral R&D and input-output tables with sectoral patent applications from the Pastat dataset, a panel of 18 manufacturing sectors is built up for the 4 largest European countries – France, Germany, Italy and UK – spanning from the mid-90s to the mid-00s. The more innovative sectors are actually those making more intensive and extensive use of R&D embodied into KIBS production flows. In policy terms, strengthening the bridge between KIBS and manufacturing appears as crucial as supporting KIBS activities and service innovations as such. Show less