Embedding environmental innovation in local production systems: SME strategies,networking and industrial relations: evidence on innovation drivers in industrial districts

Technological innovation is a key factor for achieving better environmental performances. Its role is even more relevant in local productions system, where innovation density, knowledge spillovers and externalities are concentrated in a circumscribed territory. The paper exploits new data for a sample of manufacturing firms in Northern Italy. New evidence is provided by testing a set of hypotheses, concerning primarily the role of environmental‐devoted R&D, networking activities, quality/nature of industrial relations. The role played by environmental policy pressure, structural firm features and past firm performances is also investigated to account for more exogenous forces. We show that structural characteristics of the firm appear to matter less than R&D, induced policy costs and innovative‐oriented industrial relations. Environmental auditing schemes also show some relevant correlation to innovation adoptions. R&D efforts appear to be associated to networking activities, which substitute for size‐related economies of scale. Overall, endogenous factors driven by firm strategy or local idiosyncratic features matter more than exogenous and structural firm factors.     

Impact of firm size and industry type on R&D efficiency throughout innovation and commercialisation stages: evidence from Korean manufacturing firms

Technological innovation through R&D is a critical element in enhancing and fostering firm performance. In particular, measurement of R&D efficiency throughout the innovation and commercialisation stages is important. However, almost of R&D efficiency-related studies assumed that R&D is a single stage. This study aims at analysing relative efficiency scores throughout the stages of the R&D process using a two-stage data envelopment analysis (DEA) model with a sample of 1039 Korean manufacturing firms. Based on our preliminary results, this study was extended by comparing subsample groups categorised by firm size and industry type. The key findings include: (1) firms show imbalanced R&D efficiency throughout the two stages and (2) R&D efficiency is different by firm size and industry type. The empirical results and findings may assist policy- and decision-makers to enhance R&D efficiency at the firm level. Moreover, introduction of the two-stage DEA model and comparative analysis methods to firm-level data contributes to scholars.     

Innovation and productivity in manufacturing and service firms in Catalonia: a regional approach

This article analyses the determinants of research and development (R&D) and the role of innovation on labour productivity in Catalan firms. Our empirical analysis found a considerable heterogeneity in firm performances between the manufacturing and service industries and between low- and high-tech industries. The frontiers that separate manufacturing and service industries are increasingly blurred. In Catalonia high-tech knowledge-intensive services (KIS) play a strategic role in promoting innovation in both manufacturing and service industries, and driving growth throughout the regional economy. Empirical results show new firms created during the period 2002–2004 that have a greater R&D intensity than incumbent firms (54.1% in high-tech manufacturing industries and 68.8% in high-tech KIS). Small and young firms in the high-tech KIS sector are very prone to carrying out R&D and they invest more in innovation projects. R&D expenditures, output innovation, investment in physical capital, market share and export have positive effects on labour productivity in both the manufacturing and service sectors. Firm size, on the other hand, has a positive effect on productivity in manufacturing industries but not in services.     

Evidence on the impact of R&D and ICT investments on innovation and productivity in Italian firms

Both research and development (R&D) and information and communication technology (ICT) investment have been identified as sources of relative innovation underperformance in Europe vis-à-vis the USA. In this article, we investigate the R&D and ICT investment at the firm level in an effort to assess their relative importance and to what extent they are complements or substitutes. We use data on a large unbalanced panel data sample of Italian manufacturing firms constructed from four consecutive waves of a survey of manufacturing firms, to estimate a version of the CDM model of R&D, innovation, and productivity [Crépon–Duguet–Mairesse 1998. Research, innovation and productivity: An econometric analysis at the firm level. Economics of Innovation and New Technology 7, no. 2: 115–58] that has been modified to include ICT investment and R&D as the two main inputs into innovation and productivity. We find that R&D and ICT are both strongly associated with innovation and productivity, with R&D being more important for innovation, and ICT investment being more important for productivity. For the median firm, rates of return to both investments are so high that they suggest considerably underinvestment in both these activities. We explore the possible complementarity between R&D and ICT in innovation and production, but find none, although we do find complementarity between R&D and worker skill in innovation.     

Knowledge sourcing and firm performance in an industrializing economy: the case of Taiwan (1992–2003)

We examine the impact of R&D and technology imports on firm performance in Taiwan??s manufacturing industry in a policy context of industrial upgrading. To do so, we estimate a Translog production function on two panels (covering 1992?C1995 and 1997?C2003), using stochastic frontier models. We find that the effects of both knowledge inputs become significant in a larger number of industries in the second panel. These results suggest that the policies encouraging innovation implemented from 1991 onwards paid off in the second half of the 1990s, with innovation driving firm sales. In traditional industries, the effect of innovation can be interpreted as an effort to catch up with the global technology frontier. In the electronics and high-technology industries, it rather testifies of the emergence of a new domain of specialization for Taiwan??which was largely enabled by the aforementioned innovation policies.     

Firm size and types of innovation

We propose a general theory of innovation that illustrates the relative benefits of performing process versus product R&D when firm size is endogenous. A firm's size, scope, and R&D portfolio are shown to reflect the same underlying characteristic of the firm, namely manufacturing efficiency. We demonstrate that efficient firms become larger, have greater scope, and perform more of both process and product R&D. In light of decreasing returns to R&D, this implies small firms obtain more product innovations per dollar of R&D than large firms, which is consistent with evidence we present that small firms are more innovative than large firms as they obtain more patent counts and citations per dollar of R&D.     

Innovation,competition and firm size distribution on fragmented markets

This paper presents a simple model of firm and consumer behavior. We formulate a sub-market entry game, where boundedly rational firms decide on investing in R&D for inventing new products that will appeal to targeted groups of consumers. The success depends on the amount of resources available for the project as well as on the firm’s familiarity with market characteristics. Successful innovation feeds back into the firm size and (potentially into) market knowledge and increases the future R&D productivity. A new product decreases the market-shares of incumbents. However, this business stealing effect is asymmetric across incumbent population. We identify the section of parameter space where firms have an incentive to diversify horizontally. In this section, the model results in rich industrial dynamics. Firm size heterogeneity emerges endogenously in the model. Equilibrium firm size distributions are heavy tailed and skewed to the right. The heaviness of the tail depends on submarket specificity of firm’s market knowledge. This relationship is non-monotonic, emphasizing two different effects of innovation on industrial dynamics (positive feedback and asymmetric business stealing).     

R&D subsidies in a model of growth with dynamic market structure

This paper presents the effects of an R&D subsidy in a Schumpeterian general equilibrium model with rich industry dynamics. R&D subsidies raise the long-run growth rate, but they also raise the level of industry concentration. In the model firms compete for market share through process R&D endogenously determining the market structure within and across industries. Endogeneity of the market structure allows for analysis of changes in the moments of the firm size distribution in response to policy. R&D subsidies primarily benefit large incumbent firms who increase their innovation rates creating a greater technological barrier to entry. Concentration increases with fewer firms and a higher variance in the market shares. In general equilibrium, the greater distortions in the product market cause the wage rate to fall which leads to increased turnover rates. In addition, the analysis demonstrates that the model captures a large number of empirical regularities described in the industrial organization literature, but absent from most endogenous growth models. These features, such as entering firms are small relative to incumbents, the hazard rate of exit is negatively related to firm size, and large firms spend more on R&D than small firms play important roles in understanding the impact of R&D subsidies on the economy.     

欧美跨国公司在华离岸研发的空间区位战略比较研究*——基于城市层面集群网络的视角

本文基于研发子公司空间分布的城市集群网络特征,构建了跨国公司离岸研发“集群寻求型”战略框架,并采用离散选择模型对这一理论视角进行实证检验。样本包含了1992-2012年期间在华275家美国研发子公司和207家欧洲研发子公司跨越27个城市的区位战略。实证结果揭示了欧美在华离岸研发的差异化空间区位战略：美国公司采用“知识集群寻求型”战略,即一个城市的知识资源和技术基础设施是重要的区位因素;欧洲公司则采用“工业集群寻求型”战略,例如,一个城市的制造业基础、产业专业化以及公司内部的前向关联显著地影响其区位选择。此外,母国公司规模和欧洲公司母国的异质性的影响也得到证实。     

The Relationship Between Firm Size and Innovation Activity: A Double Decision Approach†

The main purpose of this paper is to analyse the relationship between firm size and innovation activity using Spanish data at firm level corresponding to the manufacturing sector for the period 1990-93. This exercise is different to previous applications because we allow for different size effects in the decision to innovate and the innovation count equation, in the context of a double-hurdle approach. Several tests confirm the hurdle negbin model. We find that firm size is a relevant factor, although size effects are different in both decisions. A robust result from the different specifications estimated is the rejection of the Gilbert and Newbery hypotheses. We find out that the behaviour of firm size is neither linear in the decision nor in thc count equation. We also provide additional, and sometimes different, evidence to previous Spanish studies on R&D.     

Testing for the Ratchet Effect in the R&D Tax Credit

Many countries have implemented the R&D tax credit to encourage firms’ R&D spending. The design of the tax credit is important for its effectiveness. Some countries such as Korea, Taiwan, Japan, France and the US have employed an incremental R&D tax credit system. The US case that made a major change in its design from the moving average base to the fixed base in calculating the credit provides us with a natural experiment to measure the effectiveness of the tax credit from the perspective of the ratchet effect. By applying an endogenous switching regression model to US manufacturing firm data, we attempt to measure the ratchet effect of R&D credit on firms’ R&D investment. According to the empirical results, the R&D tax credit policy has been effective with the price elasticity, –1.818, for the qualified firms, and the re-design of R&D credit improved the positive impact of R&D credit. This provides some policy implication for those countries that adopted an incremental credit system. In addition, our result suggests the existence of selectivity bias in the previous literature.     

R&D spillovers and employment: evidence from European patent data

In this paper we investigate the role of patents in the relationship between R&D activity, spillovers and employment at the firm level. A reduced-form labour demand equation is estimated. Our analysis is based upon a dataset consisting of 879 R&D-intensive manufacturing firms worldwide for which information was collected for the period 2002–2010. We use data from all EU R&D investment scoreboard editions issued every year until 2011 by the JRC-IPTS (scoreboards). Since the innovation output of the industrial strategy of every firm is the number of patents, the main contribution to the existing literature is to investigate also the impact of patents/R&D ratio and patents/spillovers ratio on employment level. The empirical results suggest a significant impact of R&D spillover effects on company employment although the results differ substantially according to the spillover stock, which may considerably affect policy implications.     

R&D boundaries of the firm: An estimation of the double-hurdle model on commissioned R&D,joint R&D,and licensing in Japan

This paper studies the firm’s decisions on in-house R&D and its procurement from outside through commissioned R&D, joint R&D, and technology acquisitions (i.e., licensing-in). Using the data about 14,000 manufacturing firms in Japan, we estimate a modified double-hurdle model in which the first hurdle determines whether the firm should perform any R&D at all and the second hurdle determines whether (and how much) it should perform each mode of procured R&D. The results generally support the two major theories—the transaction cost theory and the capability theory. The estimated positive effects of firm size, in-house R&D intensity, diversification, and vertical integration support the hypothesis that capability is needed for procured R&D, while the estimated positive effect of the index of appropriability by patents supports the hypothesis that this appropriability reduces transaction costs. In addition, we found that information flow from scientific sources and that from transaction-based sources affect the three modes of procured R&D differently.     

Foreign direct investment in R&D and domestic entrepreneurship in China’s manufacturing industries

This paper argues that internationalization of innovation and the related spillovers can also affect the likelihood of firm entry and exit into an industry. By making use of firm-level panel data from China over the period 2005 to 2007, this paper examines the impact of foreign direct investment (FDI) in research and development (R&D) and the related linkages on entry and exit likelihoods of domestic firms in (i) transport equipment and (ii) electrical machinery and equipment manufacturing industries. In order to evaluate the region-of-origin effect, this paper also separately examines the impact of FDI in R&D originating from (i) all countries except Hong Kong, Macau and Taiwan and (ii) Hong Kong, Macau and Taiwan. Furthermore, the impact of FDI in R&D on entry and exit of Chinese firms in the two industries is examined by splitting the data into large and small firms within the two industries. The results of the pooled probit regression reveal that FDI in R&D and the related spillovers can have a significant impact on the likelihood of entry and exit of domestic firms in transport equipment and electric machinery and equipment industries. The empirical analysis also suggests that the impact of changes in FDI in R&D and the related spillovers varies across firm size.     

Knowledge appropriability, firm size, and growth

Empirical evidence shows that the number of patents per R&D dollar declines with firm size. In this paper, we propose a Schumpeterian growth model that accounts for this evidence. We analyze an economy with firms that engage in cost-reducing innovation resulting from the accumulation of both codified and tacit knowledge: the former occurs through the purchase of patents, while the latter is the result of R&D conducted in-house by firms. We study the relation between knowledge appropriability and market structure, and we show that a shift from patents to in-house research occurs as firm size gets larger. Since innovation statistics concentrate mainly on patents, this process of research reallocation results into an under-estimation of innovative activity and is responsible for the declining ratio of patents to R&D expenditure. Survey data on UK-based firms provide support to our results.     

Hidden innovators: the role of non-R&D activities

Although R&D has been highlighted as the main source of firm-level innovations, a significant group of firms develop innovations without performing R&D activities. The primary goal of this study is to understand the sources of innovation in such firms. To accomplish this goal, we explore the role played by other, non-R&D activities that can lead to innovation – activities such as technology forecasting, design, use of advanced manufacturing technologies and training. Our empirical analysis is based on a representative panel of Spanish manufacturing firms. The results strongly support the view that non-R&D activities are critical factors in explaining both product and process innovations attained by any firm, especially in the case of firms not performing R&D. Academic, managerial, and policy implications are derived from these results.     

Firm growth and R&D: Evidence from the Portuguese manufacturing industry

This work studies the effects of R&D activities and investment, both physical and R&D, on the growth of firms by considering a dynamic firm growth model with serial correlation. The main hypotheses maintain that firms with a strong commitment to R&D have a higher growth rate, and investment has a positive effect on firm growth. We investigate such relations with reference to an unbalanced panel data set of Portuguese manufacturing firms over the period of 1990 to 2001. We find that a systematic tendency for smaller firms to grow more quickly is the main reason why firm growth is not entirely stochastic.     

Research,Innovation And Productivi[Ty: An Econometric Analysis At The Firm Level

This paper studies the links between productivity, innovation and research at the firm level. We introduce three new features: (i) A structural model that explains productivity by innovation output, and innovation output by research investment: (ii) New data on French manufacturing firms, including the number of European patents and the percentage share of innovative sales, as well as firm-level demand pull and technology push indicators; (iii) Econometric methods which correct for selectivity and simultaneity biases and take into account the statistical features of the available data: only a small proportion of firms engage in research activities and/or apply for patents; productivity, innovation and research are endogenously determined; research investment and capital are truncated variables, patents are count data and innovative sales are interval data.

We find that using the more widespread methods, and the more usual data and model specification, may lead to sensibly different estimates. We find in particular that simultaneity tends to interact with selectivity, and that both sources of biases must be taken into account together. However our main results are consistent with many of the stylized facts of the empirical literature. The probability of engaging in research (R&D) for a firm increases with its size (number of employees), its market share and diversification, and with the demand pull and technology push indicators. The research effort (R&D capital intensity) of a firm engaged in research increases with the same variables, except for size (its research capital being strictly proportional to size). The firm innovation output, as measured by patent numbers or innovative sales, rises with its research effort and with the demand pull and technology indicators, either directly or indirectly through their effects on research. Finally, firm productivity correlates positively with a higher innovation output, even when controlling for the skill composition of labor as well as for physical capital intensity.     

R&D competition between public and private sectors

We investigate a mixed market where a welfare-maximizing public research institute competes against profit-maximizing private firms. We investigate R&D competition by using a standard model of patent races where each firm chooses both its innovation size and R&D expenditure. We find that the innovation size (R&D expenditure) chosen by the public institute is too small (too large) from the viewpoint of social welfare, respectively, and so the government should control the public institute appropriately. We also discuss the welfare implications of privatization of public research institutes.     

The Causality Between R&D And Investment

The aim of this paper is to investigate the relationship between R&D expenditure and investment in machinery and equipment in order to test for causality. New growth theory emphasises the role of R&D in creating blueprints needed to produce new capital goods implicitly assuming causality running from R&D to investment. Other recent studies using firm level data have investigated the relationship between innovative activity and investment in fixed capital. In this paper we use aggregate data from the US economy on R&D expenditure in the industrial sector and aggregate investment in machinery and equipment. Standard Granger causality tests, together with the Hsiao version, are then performed, showing that causality runs from R&D to investment. In addition we perform a cointegration analysis allowing a test of possible long-run feedbacks. This dynamic representation shows that any feedback between investment and R&D is only significant in the long run.