Spillovers from publicly financed business R&D: some empirical evidence from Germany

This paper investigates the effects of interindustry R&D spillovers from publicly financed business R&D on private R&D efforts and productivity using data of West German manufacturing industries. The results suggest that it is important to distinguish between the effects of spillovers from privately and publicly financed business R&D. In particular, estimation results provide evidence of productivity-enhancing effects of spillovers from privately financed R&D while results are less clear-cut for publicly financed R&D. Moreover, there is some empirical evidence that private R&D efforts of higher-technology industries are stimulated by spillovers from privately financed R&D but not by spillovers from publicly financed R&D. However, public funding of R&D in higher-technology industries seems to induce private R&D investments within these industries.     

The ex ante assessment of knowledge spillovers: Government R&D policy, economic incentives and private firm behavior

This paper investigates the role of government R&D subsidy programs in stimulating knowledge spillovers. R&D subsidies are an effective public policy instrument when knowledge spillovers exist yet ex ante it is difficult to identify projects that have the greatest potential to increase innovation and economic growth. This paper derives a set of project and firm attributes that the literature finds generate knowledge spillovers and uses data on project proposals to estimate the degree to which a government R&D program conforms. We find that projects that were awarded R&D subsidies were more likely to have attributes such as participation in new research joint ventures and connections to universities and other firms. Following the post-award activities of firm, we find that receipt of a government R&D subsidy increased the funding from other sources when compared to firms that were not awarded funding.     

Social structures and the flow of scientific information in public agencies: an ideal design

Despite widespread dissatisfaction with the quality of scientific information employed in planning and policy-making in public agencies, relatively little is known about the scientific information acquisition behaviors of public managers. The purpose of this paper is to facilitate research on scientific information acquisition in public agencies by suggesting that: (1) planning and policy-making are ‘policy technologies’ and share certain attributes with more traditional technologies; (2) many propositions developed in the literature on information flows in R&D labs are, therefore, helpful in structuring thinking about information flows in public agencies; and (3) it may be possible self-consciously to design social and organizational structures so as to enhance informal flows of scientific information. After gleaning some of the propositions concerning scientific information flows from the R&D management literature, an ‘ideal design’ approach is employed to develop a model in which the social and organizational structures of a public agency optimize scientific information flow.     

Knowledge integration in the shadow of tacit spillovers: Empirical evidence from U.S. R&D labs

Integrating knowledge across a firm's value chain (e.g. between R&D, marketing and manufacturing functions), which we denote “Knowledge Integration” (KI), has been consistently found to be a strong predictor of product innovation performance in the management literature. Such cross-functional integration does not occur by chance, but by design, as a result of managerial practices and organizational arrangements. The significant heterogeneity characterizing the diffusion of cross-functional integration across firms is suggestive of the well-known tension between internal and external diffusion of knowledge. In this paper, we argue that the hidden cost of KI is to expose firms to a higher risk of knowledge leakages and provide the first systematic empirical evidence of this apparent tension between internal and external knowledge flows. Based on data from the CMU Survey (one of the rare datasets offering observables on both sides of the tension for a representative set of R&D active firms in the US), we investigate the impact of knowledge spillovers to competitors on internal cross-functional knowledge integration involving the R&D function among manufacturing firms. We find that the intensity of (tacit) R&D knowledge spillovers at the industry-level has a negative and significant impact on the likelihood that firms adopt or achieve KI. Our results therefore suggest that firms may trade their optimal innovative performance against superior appropriability of their rents.     

What determines technological hits?: Geography versus firm competencies

The centrality of firms vis-à-vis regions underlines a general contrast between two models of producing innovations. This paper uses a new database composed of 4262 European chemical patents applied by 693 firms during 1987–1996 to compare the relative effect of firm and regional characteristics on the production of technological “hits” (highly cited patents). By using extensive controls, the main finding of the paper is that technological hits in the “traditional” chemical sectors are explained only by R&D intensity at the firm level and the scale of the research projects. Firm competencies, particularly technological specialisation, are still important in biotechnology. However, the distinct feature of the biotechnology model is that localised knowledge spillovers also matter.     

知识溢出跨地域边界的影响因素研究——以生物技术产业为例

基于1999—2014年美国专利数据,以采集的764个中国生物技术专利为研究对象,从微观专利技术视角,探讨知识产生跨地域影响的决定因素。实证结果发现专利的科技关联度与知识溢出本地化呈现U型关系,而专利的合作开发对知识本地化溢出具有负向影响。     

R&D effort and US exports and foreign affiliate production of manufactures

This paper examines the relationship between US R&D expenditures and the pattern of US manufacturing exports and foreign affiliate sales across industries and regions for the years 1966 and 1976. While differences in relative research capability between the United States and the rest of the world have narrowed over this period, research effort still significantly explains the pattern of US sales in foreign markets. For any region, the export and foreign affiliate sales performance of research-intensive industries exceeds that of non-research-intensive industries. The relative performance of the formed is greater in regions with larger market size and high per capita income. The analysis also reveals that over the time period studied the ratio of US exports to foreign affiliate sales has generally fallen for all industries and foreign markets.These observations accord with a broad interpretation of the product cycle theory. While the United States has lost its uniqueness as a location of innovation, the ability to develop and market new products through R&D expenditures is still a strong force behind its exports and sale abroad. The decrease in exports relative to foreign affiliate sales may reflect a more rapid shift in comparative advantage in the production of such products to foreign locations. Hence the positive effect on US exports of development of any given new product may be becoming more short-lived.     

R&D co-operation and innovation a microeconometric study on French firms

The scope of this paper is to report new empirical evidence on the determinants of R&D co-operation. Indeed, the literature on the capabilities of firms emphasises the role of knowledge in the performance and evolution of firms who use knowledge developed in others to build their own knowledge capital. R&D co-operation between firms is one of the many strategies by which this knowledge may be transmitted. Several theoretical models have stressed that R&D co-operation is more likely when the level of spillovers is high. While this supposition is used in many theoretical models, it has rarely been tested before. Our results do not lend strong support to this intuition. Indeed, our spillover variables (national pure spillovers, national rent spillovers and imports of machine tools), which were supposed to match the theoretical notion of spillovers used in these theoretical models have a positive but not a significant role when explaining R&D co-operation. The R&D co-operation increases with size and with R&D intensity, but not with market share. It also increases with the budget spent on paying license fees and on acquiring patents and labour from foreign firms. In this study, we also analyse the determinants of innovation. In more precise terms, we compare the effects of R&D co-operation to those played by traditional internal factors and those exerted by external, pure and rent spillovers on the innovation capacity of the firms. Our results show that the commercial success of innovations of French firms depends mainly on size, market share, R&D intensity and human capital. Inward FDI from industrialised countries exerts a positive and significant effect. The finding highlights the important role of the absorptive capacity of firms. Spillover measurements, such as the acquisition of machine tools, foreign patents, licenses, and technological opportunities have a positive impact on innovation.     

Defense department payments for ‘company-financed’ R&D

The US Department of Defense funds a significant fraction of the in-house R&D of its defense contractors through its Independent Research and Development (IR&D) program. These IR&D funds, however, are reported as company-financed R&D in statistics compiled by the National Science Foundation. The program is most important in the aircraft industry, where we estimate that IR&D payments were 20% of the R&D reported as company-financed in 1973. Because special regulations govern the IR&D program, it would be more appropriate for most purposes to treat IR&D as part of federally-financed, not company-financed, R&D.     

Investments in modernization, innovation and gains in productivity: Evidence from firms in the global paper industry

This paper examines the impact of investments in modernization and innovation on productivity in a sample of firms in the global pulp and paper industry. This industry has traditionally accounted for significant amounts of employment and capital investment in North America and Europe. In contrast to much of the existing literature which focuses on the impact of R&D and patents on firms’ performance and productivity, we examine data on actual investment transactions in four main areas: (i) mechanical, (ii) chemicals, (iii) monitoring devices and (iv) information technology. We find that firms that implemented a greater number of investment transactions in modernization achieved higher productivity, and these estimated quantitative effects are greater than the impact of standard innovation variables such as patents and R&D. Investment transactions in the information technology and digital monitoring devices imparted a particularly noticeable boost to productivity. These results are obtained after controlling for other firm-specific variables such as capital intensity or mergers and acquisitions. Thus, firms’ decisions to undertake investments in modernization and incremental innovations appear to be critical for achieving gains in productivity, compounding to form meaningful differences in performance, productivity and competitive position across firms in the longer run. For some of the traditional industries like pulp and paper, R&D and patents seem to be particularly poor indicators of innovation and, more generally, how firms go about achieving gains in productivity.     

If you cannot block, you better run: Small firms, cooperative innovation, and appropriation strategies

This empirical study examines small firms’ strategies for capturing returns to investments in innovation. We find that small firms’ strategies are qualitatively different from those found in earlier studies of both small and large firms. Most of the small firms examined here find informal means of protection, such as speed to market or secrecy, more important than patenting. Only firms with university cooperation—typically R&D intensive and science-based small firms—were likely to identify patents as the most important method of appropriating innovation returns in their field. Thus, the strategic choice for most small firms is between secrecy and speed to market. Firms that cooperate in innovation with horizontal partners or significantly depend on vertical partners tend to prefer speed, whereas process innovators with modest R&D investments or few cooperative R&D activities display a preference for trade secrets. Indeed, cooperation activities greatly influence the choice of intellectual property strategy for small firms. Earlier research has emphasized patents and trade secrets as key strategies of appropriation, yet these strategies do not appear to be very beneficial for small firms engaged in cooperative innovation. These results raise policy questions regarding the functionality of the existing system of intellectual property rights.     

Innovation activities, use of appropriation instruments and absorptive capacity: Evidence from Spanish firms

This article empirically investigates the relationship between innovation activities of firms, their use of appropriation instruments and their absorptive capacity. We study a wide range of manufacturing and service industries, not just high-tech, and a wide range of innovation activities, not just R&D. We use multilevel logit models for complex samples to disentangle industry from firm-specific effects. We find that within an industry, firms that invest in appropriation instruments to reduce outgoing spillovers tend to conduct more R&D and downstream activities than firms that do not. Acquisition of technology is not related to the use of appropriation instruments. The effects of incoming spillovers (measured through absorptive capacity) on innovation activities of firms are industry specific and stronger for firms that invest in appropriation instruments. For this type of firm, both the capability to scan the external environment for technology and the capability to integrate new technology are related to the innovation activities. For firms that do not invest in appropriation instruments, only scanning capabilities are related.     

Government and the decentralization of R&D

The purpose of this article is to show how costs and benefits of geographical decentralization of R&D can be identified and compared. The benefits for the region that receives R&D activities are studied in section 2. They stem from the short-run multiplier effect, the amelioration of human capital and the possible modernization of the local industrial structure. On the cost side examined in section 3, the observable impacts of the decentralization of R&D concern the loss of returns to scale and urban economies of the production of the R&D output. It is shown, in section 4, that the flows of costs and benefits must be discounted by the social cost of capital. The main conclusion of this article is that the decentralization of R&D in a large, sparsely populated country entails social costs and this would weaken its competitive position in world commerce. On the other hand, the issue of decentralization is more crucial for small countries (in terms of population and economic size) than for large ones, like the U.S., where critical masses of research efforts can be simultaneously attained in many fields and in many places.     

Overseas R&D, knowledge sourcing, and patenting: an empirical study of Japanese R&D investment in the US

This paper purports to study the contribution of R&D at home and abroad to the firm’s inventive activity, using a sample of 137 Japanese multinationals. The empirical analysis relates the number of inventions in Japan and that in the US, as measured by the number of patents issued by the USPTO, to the parent’s R&D, the US subsidiaries’ R&D, the presence of R&D in Europe, the firm’s experience in the US, entry mode, and industry dummies. In addition, to study the subsidiary’s role in sourcing local technological knowledge, we construct indices of local technological strength of the state in which the subsidiary is located. The results, most importantly, indicate that these indices positively contribute to inventions at home and in the US among Type R firms, whose R&D subsidiaries mainly aim to research, suggesting that knowledge sourcing is an important function of these subsidiaries and locational choice is important for this purpose. These results do not hold among Type S firms, whose R&D subsidiaries mainly aim to support local manufacturing and sales activities.     

Does technological diversification promote innovation?: An empirical analysis for European firms

This paper analyses the impact of technological diversity on innovative activity at the firm level. The empirical study on a panel of European R&D active companies shows that both R&D intensity and patents increase with the degree of technological diversification of the firm. Possible explanations are that, on the one hand, a firm that diversifies its technology can receive more spillovers from other (related) technological fields. On the other hand, diversification can reduce the risk from technological investments and it creates incentives to spend more on R&D. The paper provides empirical evidence relevant to the diversity-specialization innovation debate.     

Specialisation precedes diversification: R&D productivity effects

We model how R&D enters the innovation system in four ways (intramural, extramural, cooperative, and spillover). Despite measuring three different spillovers together, for a very large sample of European enterprises we conclude that the productivity effects of spillovers were at best smaller than intramural R&D productivity effects. We also find that building on the greater skills and experience of enterprises already undertaking R&D (intensity) raised labour productivity more than providing support for those beginning R&D (extensity). Optimal extramural R&D intensity was higher than the actual level; sample firms could boost productivity either by abandoning extramural R&D or by doing much more. There were substantial differences in our sample between enterprises and countries in terms of R&D spillovers. Greater multinational corporation incidence in new EU members accounted for these countries' high direct R&D intensity productivity, regardless of their generally low overall labour productivity. Absorptive capacity made little difference to the utilisation of spillovers.     

Japanese-style evaluation systems for R&D projects: The MITI experience

This article examines some of the key features of Japanese evaluation systems utilized in evaluating R&D policies. The distinctive features of the system are that Japan depends upon in-house self-assessment combined with close cooperation and consensus-seeking behavior with the government and its advisory bodies. This system is markedly different from those predominant in countries where R&D policies are evaluated separately, independent from the sphere of decision-making. The system described here is subjective rather than objective in that the direct promoters of R&D plans were directly included in the evaluation activities. The system has evolved gradually in the course of Japanese technological development, and has been influenced also by Japan's particular internal and external environment. The system appears to have worked well in areas where research programs were modified to obtain incremental improvement or to create new types of R&D programs. However, recent constraints caused by budget deficits, together with the shift from applied to more basic research, have required a new type of evaluation system for Japan's R&D policy.     

Relative efficiency of R&D activities: A cross-country study accounting for environmental factors in the DEA approach

This paper applies the production framework associated with the data envelopment analysis (DEA) method to evaluate the relative efficiency of R&D activities across countries. R&D capital stocks and manpower are treated as inputs while patents and academic publications are considered as outputs. A three-stage approach, which involves using DEA for evaluating efficiency and using Tobit regressions for controlling the external environment, is applied to 30 countries in recent years. The results show that less than one-half of the countries are fully efficient in R&D activities and that more than two-thirds are at the stage of increasing returns to scale. Most countries have a more significant advantage in producing SCI cum EI publications than in generating patents.     

Adoption of green chemistry: an analysis based on US patents

Green chemistry patents are an indicator of environmental innovation and R&D. Over 3200 green chemistry patents were granted in the US patent system between 1983 and 2001, with most assigned to the chemical sector. The university and government sectors place greater emphasis on green chemistry than most industrial sectors. Worldwide, the emphasis on green chemistry technology relative to chemical, plastic, rubber, and polymer technologies has increased since 1988. The United States appears to have a competitive advantage in green chemistry. The most rapid growth in the emphasis on US green chemistry patents coincides with revisions to major US environmental laws in the late 1980s and early 1990s. However, the ratio of green chemistry patents to patents in other areas of chemical sciences in heavily regulated industries are low, suggesting that these industries did not necessarily embrace green chemistry as a means to reduce their regulatory burden.     

基于进口贸易的国际技术外溢测度与应用

近年来的大量研究表明国际贸易极大促进了贸易伙伴国之间的知识流动与技术传播，特别是发达国家R＆D创造的技术与知识已通过贸易渠道扩散至他国。本文主要借鉴前人的研究成果，在进口贸易的技术外溢测度模型中引入实际进口渗透率变量，并采用我国的相关数据，对我国基于进口贸易的技术外溢效应进行测度。实证分析表明，通过进口贸易传导机制，贸易伙伴国的先进技术、R＆D成果对于我国技术水平的提高具有显著的促进作用。但我国国内的研发投入比外国研发投入对TFP的影响要更为突出。