Publications
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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 The impact of skill endowments and collective bargaining on knowledge-intensive greenfield FDI
This paper assesses the contribution of skilled employment and labour market conditions to the ability of attracting knowledge intensive and… Show more manufacturing greenfield FDI. We carry out our analysis by controlling for a wide range of labour market features, such as the collective bargaining coverage rate, the non-wage labour costs, and the occupational skills of employment. It departs from the existing literature in two respects. First, it deepens the analysis on the effect of labour market regulations and skill endowments on greenfield FDI inflows. Second, it investigates the extent to which labour market characteristics matter for discriminating among 'resource-seeking' and 'efficiency/strategic asset-seeking' greenfield FDI activities (e.g. manufacturing versus knowledge-intensive foreign investments, respectively). Our empirical analysis suggests that the quality of employment and the technological knowledge base have different impact on the location of knowledge-intensive and on low-cost labour-intensive manufacturing foreign investments. Further, associating the collective bargaining coverage of unions with the level of regulation in the labour market, our results can provide insights into the effectiveness of labour market policies that aim at attracting knowledge-intensive investments. 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 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 The 2015 EU Industrial R&D Investment Scoreboard
The 2015 EU R&D Scoreboard (the Scoreboard) reports economic and financial information on the world's top 2500 companies that invested… Show more €607.2 billion in R&D over the last fiscal year (2014). It comprises 608 companies based in the EU, 829 companies based in the US, 360 in Japan and 703 from the rest of the world. Show less
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PDF Innovation, competitiveness and growth without R&D? Analysis of corporate R&D investment - A country approach: Italy
The objective of this policy brief is to analyse the status of private R&D investment in Italy based on recent… Show more evidence and to indicate possible policy actions to boost private R&D investment. For our analysis, we rely on microdata from an unbalanced 10 years' panel data-set (2004-2013), built using several waves of the European Industrial R&D Investment Scoreboard. Moreover, we also take into consideration other sources of quantitative and qualitative information (e.g. OECD, ISTAT, EUROSTAT, ERAWATCH Country Report Italy 2013, State of the Innovation Union 2014), and recent academic literature on the topic. In this document we argue that: i) innovation in firms' without their engagement in R&D activities is not sustainable in the medium and long term; ii) the Italian R&D and innovation (and competitiveness) gap is due to 'systemic'/structural reasons and thus targeted high quality policies are needed to address these issues; iii) such policy interventions will have little positive impact without comprehensive reform aimed at improving the innovation environment as a whole. Careful design of an 'innovation strategy' that includes support for R&D is needed. This strategy should be fine-tuned to tackle the actual specificities of the Italian economic context and its R&D-led innovation difficulties. Show less
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PDF Boosting the EU Attractiveness to International R&D Investments: What matters? What works?
The Policy Brief discusses recent evidence on patterns and trends in the internationalisation of EU corporate R&D activities and the… Show more factors which drive location choices. This evidence suggests that boosting international investment in R&D activities requires a combination of policy measures aimed at enhancing the knowledge base of locations, and investment promotion policies tailored to investors from different countries. The policy mix should include measures aiming at improving the efficiency of national and regional innovation systems, particularly through: a) Increasing the quality of education systems and skills, to enable the emergence of centres of research excellence, b) Facilitating the clustering of R&D activities, given the importance of proximity for knowledge spillovers. Show less
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PDF How do companies 'perceive' their intangibles? New statistical evidence from the INNOBAROMETER 2013
The report provides a statistical analysis of the way European companies have shown to perceive their Intangibles in the recent… Show more Innobarometer 2013. The report is intended to complement the evidence presented in the FLASH EUROBAROMETER 369 ("Investing in Intangibles") with a deeper investigation of both the characteristics of the available micro-data and the regularities emerging from their statistical analysis. A special focus is placed on the extent to which companies perceive their intangibles as strategic and on that to which the relative investment interplay with their innovative projects. The role of context conditions vs. that of business incentives in motivating their intangible investments is also addressed. 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