Publications
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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 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 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 The 2012 Survey on R&D Investment Business Trends
The report contains the main findings of the seventh survey on R&D investment business trends based on 187 responses of… Show more mainly large companies from the 1000 EU-based companies in the 2011 EU Industrial R&D Investment Scoreboard. These 187 companies are responsible for R&D investment worth almost €56 billion, constituting around 40% of the total R&D investment of the 1000 EU Scoreboard companies. The main findings are as follows: Companies expect to maintain robust R&D investment increases (average 4% p.a.) over the next three years. These expectations indicate a positive and stable trend for R&D investment growth as observed before the 2008 economic and financial crises. The responding companies report significant shares of sales coming from innovative products and services introduced in the past three years: from 33% to 10% in high and low R&D intensity sectors respectively.The average share of sales coming from new innovative products and services was 18%. Almost half of the respondents named themselves as the innovation leader in the sector. R&D within the company is the most important component of innovation, followed by market research related activities for new product introduction. Collaboration agreements were a more important way of knowledge sharing than licencing. For the impact of factors and policies on the company's innovation activities, national public support had the most positive effect. Labour costs and conditions of Intellectual Property Rights (enforcement, time and costs) continue to be perceived as negative factors for company innovations. This underlines the importance of an efficient IPR regime for the support of company innovations. The majority of R&D collaboration agreements with other companies are with customers or suppliers (vertical agreements), while less than 10% are made with competitors. More than one fifth of the respondents preferred Germany as the most attractive location for outsourcing R&D, mostly because of a very high share of statements from the home country, followed closely by the US. The US is the most attractive source of Intellectual Property Rights, followed by Germany. Among the types of Intellectual Property Rights (IPRs) licencing, licencing-in ranges before licencing-out. Favourable tax treatment of licencing revenue would encourage more licencing activity. High R&D intensive companies report the highest licencing-in expenditure and licencing-out revenues. Show less
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PDF The 2012 EU Industrial R&D Investment Scoreboard
The 2012 "EU Industrial R&D Scoreboard" contains economic and financial data of the world's top 1500 companies ranked by their… Show more investments in research and development (R&D). The sample consists of 405 companies based in the EU and 1095 companies based elsewhere. The Scoreboard data are drawn from the latest available company accounts, i.e. fiscal year 2011 for most companies. Show less
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PDF The growth of companies in the EU: the case for a more sophisticated research and innovation policy
This policy brief presents a literature review on the economics of research, innovation and competitiveness, focusing on the evidence available… Show more regarding the determinants for company creation and growth and the role played by Research, Development (R&D) and innovation. Furthermore, based on this, it draws a number of policy implications to design future research and innovation support instruments targeting innovative company growth in Europe. Show less
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PDF Is Smart Growth employment friendly?
This policy brief presents recent results from JRC-IPTS scientific analysis on the nexus between R&D driven innovation and employment. The… Show more new evidence drawn from this analysis confirms the labour friendly nature of R&D and points to some relevant policy implications to be considered when designing and implementing concrete measures under the new research and innovation agenda (Innovation Union flagship initiative of the Europe 2020 strategy). IRI is carrying on additional work on data gathering and analysis to further characterize the impact to keep into account additional factors. Show less
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PDF The relevance of marketing in the success of innovations
This paper focuses on marketing expenditures and their relation with R&D investments and innovative sales. A higher investment in R&D… Show more is associated with the production of a higher quality or faster innovation, with a positive impact on sales and in a macro sense, an increase of GDP. This paper raises the issue that good innovation need a strong marketing effort in order for this innovation to have an impact on sales, it needs to be desired by consumers. This paper finds empirical evidence that marketing expenditures explain a lot of the success of the innovation 0.5 to 0.7% (measured in terms of the elasticity of this effort to innovative sales), even more than the flow of investment in R&D(which counts for 0.3 %). In fact, the size of the coefficient for marketing doubles those found for R&D, a quite surprising result taking into consideration the little importance that marketing has in innovation studies. The paper uses Community Innovation Survey data, the third wave (CIS 3) and set up a system of simultaneous equations like in Crepon et al. (1998). Show less
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PDF Evolution of globalised business R&D: Features, drivers, impacts
This paper provides an overview of the evolution of globalised business R&D activities. An outline of business R&D investment trends… Show more is provided with quantitative information in the first part of the document. Then, in the light of recent empirical observations, the paper points out what are the drivers and the impacts - with a particular focus on the effects on competitiveness and employment - of the globalization of the business research. The possible policy implications from the main results of this work are presented in the last section of the document. 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