Publications
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PDF Leading R&D Investors for the Dynamics of Innovation Ecosystems
This policy brief discusses the key role of large R&D investors in the dynamics of innovation ecosystems. In a context… Show more of accelerated technological change and increasing global competition, firms should develop complex innovative solutions requiring the interaction of multiple-players. Therefore, knowledge integration becomes a key strategic dimension to keep the edge in the global competition and ecosystems of innovation are privileged 'places' where it can be organised in a way that ensures the creation of a higher collective value. Evidence shows that leading R&D investors can play a pivotal role in the establishment and development of such ecosystems, by bringing the necessary assets (resources, knowledge, capabilities and leadership) to activate their dynamics (along the three dimensions of interdependence, integration and initiative). This brief identifies a number of policy interventions to support the functioning of such innovation ecosystems and calls to tailor the interventions in accordance to the stage of development of the given ecosystem. Show less
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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
The relationship between financing constraints, investments in research and development (R&D) and innovative performances has recently attracted renewed attention in… Show more 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. Show less
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PDF The capability of the EU R&D Scoreboard companies to develop Advanced Manufacturing Technologies
The aim of this study is to provide empirical evidence at the firm level about the role of Advanced Manufacturing… Show more Technologies (AMTs) and Key Enabling Technologies (KETS) and the impact of innovation in these technologies on the efficiency and productivity of companies across various industrial sectors using data from the EU Industrial R&D Investment Scoreboard (the Scoreboard). The principal aim of this report is to describe the profile of the patent portfolios of the companies in the Scoreboard, to link their innovation output to input in terms of R&D expenditures and to draw useful conclusions about the policy implications at the level of the EU Member States. The data source for the input is the 2013 edition of the Scoreboard and the outputs and patent applications and further patent-related indicators at the transnational level from the Worldwide Patent Statistical Database (PATSTAT). The focus is on the firm-level data and the basic questions addressed are as follows: What firms are responsible for most of the patent filings in AMTs and KETs and which are the main industrial sectors responsible for patent filings within the two technology fields? Where have the R&D activities taken place? Which countries and which sectors are most actively inventing AMTs and KETs? Among companies in the Scoreboard there is a correlation between R&D expenditure and investment in innovation and innovation output, as measured by KET- and AMT-related transnational patent filings. Show less
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PDF World Corporate Top R&D Investors: Innovation and IP bundles
This report presents original data and statistics on the innovation output of world top corporate R&D investors. Essentially descriptive in… Show more nature, it presents statistics about the technological profiles of companies, their trademark strategies for new products and services and about the extent to which these two forms of Intellectual Property Rights (IPR) are bundled to protect and appropriate the returns from investment in knowledge-based assets. The report provides interesting insights about the innovation strategies of this sample of world leading corporate R&D investors and opens the door to further research and analysis about companies' global strategies for knowledge development and exploitation. The main target audience of this report is the policy and research communities, as well as analysts with an interest in supporting evidence-based policy making in the area of innovation and industrial policies. This joint EC-OECD report builds on the efforts to collect up-to-date, reliable and comparable company data on the top corporate R&D investors worldwide carried-out by the European Commission since 2004 (the EU Industrial R&D Investment Scoreboard publication) and on the solid knowledge and experience of the OECD in developing and providing robust and state of the art indicators on science, technology and industry (see for example OECD's STI Scoreboard publications). To access the EC-JRC/OECD COR&DIP© database, v.0. 2015 (raw data provided in flat files), please fill in the on-line form at: Access to COR&DIP© Show less
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PDF R&D profitability: the role of risk and Knightian uncertainty
This paper provides the first empirical attempt of linking firms' profits and investment in R&D revisiting Knight's (1921) distinction between… Show more uncertainty and risk. Along with the risky profit-maximizing 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. Show less
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PDF The 2015 Survey on R&D Investment Business Trends
This tenth survey on industrial R&D investment trends is based on 162 responses of mainly large firms from a subsample… Show more of the 1000 EU-based companies in the 2014 EU Industrial R&D Investment Scoreboard. These 162 companies are responsible for €60 billion R&D investment, constituting around 36% of the total R&D investment by the 1000 EU Scoreboard companies. The main findings are as follows: The responding companies expect to increase their nominal R&D investment by 3.0% per year during 2015–17. This is a third less than the expected increases of last year's survey (4.2%) and slightly higher than the results of the one the year before (2.6%). Activities related to Key Enabling Technologies (KETs) are concentrated in environmental and social KETs. Patents filed as reported by the respondent firms are fairly distributed among the different kind of technologies surveyed. The 149 companies which provided information make one-fourth of their R&D outside the EU. Examining the distribution of the expected 3.0% R&D increases by world region, expectations for the EU are slightly lower than the average (2.6% per year over the next three years). Much higher growth is expected in the non-EU world regions: India (15.8%); China (6.9%); the United States and Canada (5.8%); and the rest of the world (3.8%). Expectations for Japan and other European countries have become slightly negative (-0.8% and -1.3%, respectively) and apply to rather small R&D investment amounts. The responding companies' expectations for R&D investment for the next three years show the ongoing participation of European companies in the global economy. While maintaining the focus of their R&D investment in the EU, they reap opportunities for growth in emerging economies. Two out of three of the responding EU-based companies consider their home country the most attractive location for R&D. The United States, Germany, China and India are the most attractive locations mentioned outside the home country. Knowledge-sharing and collaboration (with universities and public research organisations), proximity (to other company sites and technology poles & incubators) and R&D personnel in the labour market (quality, quantity and labour costs) are the criteria that make countries attractive for R&D activity. Quality and quantity of R&D personnel in the labour market clearly rank ahead of labour costs, which are seen as a neutral factor. In a separate comparison of attractiveness factors among R&D sites within the EU, quality of R&D personnel, knowledge-sharing opportunities with universities and public organisations and proximity to other company sites are by far the most frequently stated in the top three. Comparing R&D attractiveness factors within the EU with those for the United States for 33 actual cases, the respondents point to proximity factors, knowledge-sharing opportunities and quality and quantity of R&D personnel as the leading factors for both world regions. Comparing R&D attractiveness factors within the EU with those for China and India, the 11 respondents reveal significant differences between the two world areas. Concerning EU initiatives for structural reforms to boost industrial R&D activity, the highest potential was deemed for making it lighter, simpler and less costly to comply with EU and national laws. This is followed by the improvement of framework conditions and reducing tax complexity. Show less
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PDF Determinants of R&D offshoring
We analyse determinants of an enterprise's decision to offshore R&D activities using a novel data set for enterprises in Ireland… Show more over the period 2001-2006. Our results suggest that, on average, other things equal, enterprises integrated in international production and innovation networks, and enterprises which used information and communication technologies (ICT) more intensively were more likely to offshore R&D. Furthermore, characteristics of the import source region had an important influence on enterprise offshoring behaviour, with offshoring to regions outside of the advanced European Union's economies being less likely. Show less
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PDF Macro-economic Models for R&D and Innovation Policies
This report compares R&D modelling approaches in four macroeconomic models used by the European Commission for ex-ante policy impact assessment:… Show more one Dynamic Stochastic General Equilibrium (DSGE) model - QUEST; one Spatial Computable General Equilibrium (SCGE) model - RHOMOLO; one Computable General Equilibrium (CGE) model - GEM-E3; and one macro-economic model - NEMESIS. The report critically compares particularly those parts of the four models that are relevant to R&D transmission mechanisms and interfaces for implementing policy shocks. Given than R&D investment decisions are inherently dynamic, QUEST appears to be the most suitable model for assessing the impact of R&D and innovation policies over time, as it is the only model with inter-temporal optimisation of economic agents. In order to addess questions related to geographic concentration of innovative activities and spatial knowledge spillovers, RHOMOLO has a comparative advantage, as it is the only one which models regional economies and spatial interactions between them explicitly. Due to its detailed treatment of energy sectors and environmental issues, GEM-E3 appears to be the most suitable model for assessing the impact of innovation in clean energy. For a more detailed modelling of different types of innovation measures, NEMESIS can provide valuable insights thanks to its richness in estimating and accounting for specific channels of innovation. We also identify avenues for future research, which in our view could improve the modelling of R&D and innovation policites both from a conceptual and empirical perspective. 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 Multinationality, R&D and Productivity Evidence from the top R&D investors worldwide
The paper investigates the impact that the multinational scope of firms' activities can have on their productivity. First, we argue… Show more that such an impact is both direct and indirect, and that the latter is channelled through higher incentives to invest in R&D. Second, we posit that the composition of these direct and indirect effects is different if multinationality is measured at the intensive margin (higher share of multinational on total activities) rather than at the extensive margin (greater geographical dispersion of multinational activities). Using a large sample of top R&D investors in the world, we propose an econometric model based on an R&D and a productivity equation, which are both allowed to depend on multinationality. With this model we can disentangle the direct and indirect effects of multinationality on productivity appropriately. We find i) a positive direct impact of multinational intensity on productivity, while the geographical dispersion of multinationality is negatively correlated with productivity; ii) multinationality (along both dimensions) has a positive indirect impact through higher investments in R&D; iii) this positive indirect effect is however not large enough to compensate the negative direct one at the extensive margin. Results are largely consistent with a theoretical approach that combines transaction cost theory with an economic analysis of how incentives to invest in R&D depend on multinationality. Show less