Publications
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PDF Knowledge Search versus Knowledge Deployment:How Foreignness can be both an Asset and a Liability for Firms
Many modern firms compete globally. However, research into whether foreignness is an asset or a liability in competition with domestic… Show more firms is inconclusive. We argue that foreign MNC subsidiaries are not per se advantaged or disadvantaged. We suggest that the distinction originates from the nature of the subsidiary's activity in the host country. We focus on two activities: knowledge search and knowledge deployment. We predict theoretically that domestic firms have advantages when they search for knowledge due to their embeddedness in the host country. However, this increased embeddedness reduces the degree of novelty of their knowledge pool. Foreign MNC subsidiaries therefore have advantages in knowledge deployment because they draw from a richer, international knowledge pool. However, these advantages accrue to both foreign and domestic MNCs. We test and support these predictions for a longitudinal dataset of 2900 firm observations in Spain. We develop recommendations for research and practice based on these findings. Show less
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PDF The production function of top R&D investors: Accounting for size and sector heterogeneity with quantile estimations
This paper investigates how top R&D investors differ in the production impact of their inputs and in their rate of… Show more technical change. We use the EU Industrial R&D Investment Scoreboard and perform a quantile estimation of an augmented Cobb-Douglass production function for a panel of more than 1,000 companies, covering the period 2002-2010. The results for the pooled sample are contrasted with those obtained from the estimates for different groups of economic sectors. Returns to scale are bounded by the initial size of the firm, but to an extent that decreases with the technological intensity of the sector. The output return of knowledge capital is the most important, irrespective of firm size, but in high-tech sectors only. Elsewehere, physical capital is the pivotal factor, although with size variations. The investigated firms appear different also in their technical progress: embodied in mid-high and low/mid-low tech sectors, and disembodied in high-tech sectors. Show less
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PDF Innovation and Job Creation. A sustainable relation?
This study compares the employment growth patterns of innovative and non-innovative firms focusing on whether there are systematic differences in… Show more the persistence of the jobs created. Using data from a unique longitudinal dataset of 3,300 Spanish firms over the years 2002-2009, obtained by matching different waves of the "Encuesta sobre Innovación en las Empresas españolas" and adopting a semiparametric quantile regression approach, we examine employment serial correlation. The empirical results of the study indicate that the jobs created by innovative firms generally appear to be rather persistent over time whereas those created by non-innovative firms do not. Among declining firms, non-innovators tend to deteriorate faster in terms of economic performance. In addition, among those firms experiencing high organic employment growth, smaller and younger innovative firms grow more on average than larger innovative firms. Overall, evidence suggests that being innovative supports and stabilises a firm's organic employment growth pattern and being smaller and younger seems to be a sufficient condition to experience high employment growth, i.e. - with regard to the latter - it is not necessary to have a comparably high R&D spending / being an R&D intensive company. Show less
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PDF Projection of R&D Intensive Enterprises' Growth to the year 2020: Implications for EU policy?
The paper investigates how sector composition and magnitude of R&D investments in the EU may differ in year 2020 if… Show more top R&D-investing SMEs were assumed to be on a fast growth track while the top R&D-investing large companies continued to grow as before. Background is the emerging focus on SMEs - and in particular the fast growing among them - with regard to the "Europe 2020" policy strategy. Show less
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PDF To what extent are knowledge-intensive business services contributing to manufacturing? A subsystem analysis
The rise of knowledge-intensive business services (KIBS) may be considered as one of the decisive trends of economic evolution of… Show more industrialised countries in recent decades. This paper uses the concept of vertical integrated sectors and the subsystem approach to input-output matrix analysis to study the vertical integration of knowledge-based business services into manufacturing sectors. The study covers Germany, France, Italy and the United Kingdom over the period 1995-2005. Results decisively support both the existence of structural differences among the countries considered, and a significant heterogeneity to the extent to which manufacturing outsources to knowledge-intensive business services. Show less
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PDF Does size or age of innovative firms affect their growth persistence? Evidence from a panel of innovative Spanish firms
This study examines serial correlation in employment, sales and innovative sales growth rates in a balanced panel of 3,300 Spanish… Show more firms over the years 2002-2009, obtained by matching different waves of the Spanish Encuesta sobre Innovacion en las Empresas, the Spanish innovation survey conducted annually by the Spanish National Statistics Institute (INE). The main objective is to verify whether the changes (increase/decrease) in these figures are persistent over time, whether such persistence (if any) differs between SMEs and larger firms, and if it is affected by a firm's age. To do so, we adopted a semi-parametric quantile regression approach. This methodology is well suited to cases where outliers (high-growth firms) are the subject of investigation and/or when they have to be assumed as being very heterogeneous. Empirical results indicate that among those innovative firms experiencing high employment growth, the smaller and younger grow faster than larger firms, but the jobs they create are not persistent over time. However, while being smaller and younger helps growing more in terms of employment and sales, it is not an advantage when innovative sales growth is considered: in this case larger firms experience faster growth. Show less
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PDF Research cooperation within and across regional boundaries. Does innovation policy add anything?
The paper aims to show how policy makers can stimulate firms' cooperation with research organisations in innovation. We argue that… Show more the administration of an R&D subsidy can be effective. Furthermore, this should be more so for extra-regional than intra-regional cooperation. The firms' propensity to extend cooperation across the region is assumed to increase with the amount of support. However, the support must overcome a threshold, for firms to cover the fixed costs of distant interactions. These research hypotheses are tested with respect to a sample of firms in a region of Italy. Propensity score matching is applied to identify the impact of the subsidy receipt. A generalised propensity score technique is employed to investigate the effect of an increasing amount of support. All the hypotheses are not rejected. Firms' cooperation is policy sensitive, but the size of the support is crucial for its effects. Show less
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PDF Absorptive capacity, innovation cooperation and human-capital. Evidence from 3 European countries
The paper aims at extending the analysis of the firm's absorptive capacity (AC) by taking stock of its manifold nature.… Show more Innovation cooperation is recognised as one of its antecedents, along with R&D, but with different possible outcomes, depending on the kind of partner. Human capital is claimed to be as important as other organisational mechanisms for the AC impact on innovation. The empirical application, carried out on about 10,500 firms located in 3 EU countries (i.e. Germany, Italy and Spain), confirms the role of these factors. Interacting with research organisations, for example, increases the firm's AC providing it occurs within the national boundaries. The transformation of AC into actual innovation is favoured by the human capital of the firm, while it is actually hampered by socialisation mechanisms of an organisational nature. Show less
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PDF R&D and Non-linear Productivity Growth in Heterogeneous Firms
The paper studies the relationship between R&D investment and firm productivity growth by explicitly accounting for non-linearities in the R&D-productivity… Show more relationship and inter-sectoral firm heterogeneity. In order to address these issues, we employ a two step estimation approach, and match two firm-level panel data sets for the OECD countries, which allows us to relax both the linearity and homogeneity assumptions of the canonical Griliches (1979) knowledge capital model. Our results suggest that: (i) R&D investment increases firm productivity with an average elasticity of 0.15; (ii) the impact of R&D investment on firm productivity is differential at different levels of R&D intensity – the productivity elasticity ranges from -0.02 for low levels of R&D intensity to 0.33 for high levels of R&D intensity; (iii) the relationship between R&D expenditures and productivity growth is non-linear, and only after a certain critical mass of R&D is reached, the productivity growth is significantly positive; (iv) there are important intersectoral differences with respect to R&D investment and firm productivity – high-tech sectors' firms not only invest more in R&D, but also achieve more in terms of productivity gains connected with research activities. Show less
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PDF Job Creation Effects of R&D Expenditures: Are High-tech Sectors the Key?
The objective of this paper is to assess the job creation effect of R&D expenditures, using a unique longitudinal database… Show more of 677 European companies over the period 1990-2008. A dynamic labour demand specification using a Least Squares Dummy Variable Corrected (LSDVC) technique is estimated. The labour-friendly nature of R&D emerges from the empirical analysis on the overall sample. However, this positive significant effect corresponds to the high-tech sector and services, while the effect is not significant for traditional manufacturing. The results support the policy agenda of promoting structural change in European economies. Show less