Human capital inflow,firm innovation and patent mix

In this article, a theoretical model of heterogeneous firms is built that emphasizes how human capital inflow (HCI) affects a firm’s innovation. The model shows that when HCI increases, the cost of a firm’s innovation decreases, the relative innovation efficiency gap between any two patents decreases, and the quality of each existing patent increases, which makes firms produce more patents, improve the quality of innovation and reduce the skewness of the patent mix. Empirical tests with data from Chinese Listed Companies are consistent with the predictions of the theoretical model, and robust to various estimation specifications. Moreover, the impacts of HCI vary across different types of patents, that is, both the quantity and quality of invention patents increase with HCI, while the skewness of the patent mix decreases. However, there is no evidence that HCI influences utility model patents.     

Export Intensity and Plant Characteristics: What Can We Learn from Quantile Regression?

Using quantile regression and a rich cross section data set for German manufacturing plants this paper documents that the impact of plant characteristics on export activities varies along the conditional size distribution of the export/sales ratio. For example, firm size is statistically significant at a conventional level for the 0.25 quantile only; branch plant status matters at the upper tail of the conditional distribution of the export/sales ratio only; the craft shop dummy is only significant for the very top quantile; and patents do not matter at the very lower end of the conditional distribution of export over sales. This has implications both for understanding what makes a successful exporter, and for the design of policy measures with a focus on supporting exporters. JEL no. F10, D21, L60     

Is downsizing a good strategy during the downturn? Evidence from Taiwanese manufacturing firms

In response to a crisis, while retrenchments are considered to be an important part of a firm’s long-term recovery, research has indicated that downsizing strategies, reducing employment and shrinking the R&D budget, may lead to an erosion of a firm’s valuable core competence. Drawing from the literature of organizational turnaround strategies, this study advances the downsizing research by explaining how downsizing strategies affect a firm’s long-term performance. Using a uniquely compiled dataset of 2559 Taiwanese manufacturing firms, our research shows that increasing labor employment during a financial crisis can significantly improve a firm’s long-term total factor productivity and sales. In other words, employment downsizing may not be the best solution when encountering an economic downturn.     

Industry specific effects on innovation performance in China

This research aims to understand how industrial characteristics in Chinese industrial sectors are related to and affect innovation activities. Using Heckman's two-step procedure, this study contributes to examine firms' innovation determinants with a framework that clearly distinguishes between the two steps of innovation model: innovation propensity (probability of being innovative) and innovation performance (patents and innovation sales). In particular, the moderating effects of industrial characteristics on the relationships between R&D intensity, financial incentives and innovation performance are discussed. The findings show that different industrial characteristics generate different impacts on innovation propensity and innovation performance. Firms in capital intensive industries and relative monopoly industries are more likely to innovate. The findings also show that Direct Government Subsidy does not contribute significantly to improve economical innovation performance of firms and Indirect Government Subsidy on innovative economic performance is easier to be influenced by industry characteristics, which have important potential policy implications to guide innovation activities for Chinese policy makers as well as for Chinese firms.     

Advertising, in-house R&D, and growth

This paper develops a quality-ladder model of endogenous growthto study the interplay between in-house R&D and combativeadvertising expenditure, and its implications for economic growth,firm size, and welfare. The analysis shows that, somewhat surprisingly,higher incentives to engage in advertising, although combative,unambiguously foster innovation activity of firms. This, possibly,leads to faster growth and even higher welfare. These resultsrest on two features of the model which are well-supported byempirical evidence. First, if firms incur higher sunk costsfor marketing, concentration and firm size rise. Second, firmsize and R&D expenditure are positively related as largerfirms are able to spread R&D costs over higher sales. Theanalysis also suggests that R&D subsidies are conduciveto R&D and growth without inducing firms to raise advertisingoutlays.     

Tax incentive,R&D investment and firm innovation: Evidence from China

We estimate the effect of R&D tax incentives on firm-level R&D expenditures (RDE) and patenting using a change in the eligibility criteria for a super deduction in China. In 2006, the Chinese government relaxed the “10 % eligibility criterion”, which stated that only firms with a 10 % or higher increase in prior-year RDE can claim an additional 50 % tax deduction. We use an event study approach to show that firms that became newly eligible to claim the super deduction (those just below the criterion) catches up on RDE and product innovation measured by the sales of new products. In the long run, we also observe a closing gap in the number of patents between the two groups of firms. Moreover, extending tax benefits to all firm helps to lower the tax burden, and we find no evidence of manipulation and relabeling.     

Short-term loans and Firms' high-quality innovation: Evidence from the access to patent-backed loans in China

When obtaining short-term loans, an innovative firm tends to expand its production scale, thereby reallocating its R&D-related resources away from innovation. By exploiting the unique situation in China that patenting firms for the first time obtained short-term patent-backed loans (PBLs), we find that the PBL access negatively influences firms' propensities of producing high-quality innovation. Consistent with the R&D resource reallocation hypothesis, we find that this negative effect exists only among firms initially having invention patents; it is more pronounced when the PBL covers a larger portion of firm investment and when these firms expand more aggressively. We confirm the scale expansion effect by finding that the PBL access positively influences firms' subsequent size.     

Product Reliability,R&D,and Manufacturing Cost Shocks

Suppose a firm’s research and development (R&D) improves product reliability which in turn decreases the cost of product failure for both the firm and its customers. The primary research question of the paper is how a firm with market power optimally adjusts its R&D if it experiences a manufacturing cost shock. Our model suggests that a manufacturing cost shock prompts the firm to do less R&D in the cases where the replacement cost is low or the marginal manufacturing cost is high. Conversely, if the replacement cost is high and the marginal manufacturing cost is low, then the firm increases R&D, mitigating some of the increase in the manufacturing cost. The paper also compares the outcomes for reliability, profits, consumer surplus, and social surplus for the optimal R&D case as compared to the case of doing no R&D, paying particular attention to how exogenous changes in the marginal manufacturing cost affect this comparison.     

山西省新材料企业的知识产权管理建议

经济与科技的创新发展为新材料产业带来了良好的发展机遇,愈来愈多的研究创新也出现在新材料产业发展过程中,其知识产权也成为侵权的风险高发区。鉴于此,以山西省内新材料企业为例,对其专利情况进行统计对比,分析研究新材料行业目前的知识产权现状及风险点,并就企业如何加强新材料产业领域中的知识产权管理和保护、应对或规避潜在的知识产权风险提出对策建议。     

The role of regional knowledge spillovers on China's innovation

The new economic geography has increased attention on the spatial dimension of knowledge spillovers and innovation. In this paper, we test the hypothesis that regional knowledge spillovers positively influence China's innovation growth from 2001 to 2008. As knowledge is subjected to spatial decay, innovation of a region is enhanced when location in neighboring regions encourages the formation of regional knowledge and information flows. Applying a spatial autoregressive model to China's provinces, the paper finds that regional knowledge spillovers have a favorable effect on design, invention and utility patents. This indicates that proximate location to innovative neighbors can help to raise the innovation capability of a province. In addition, evidence also shows that R&D expenditure and skilled personnel of research institutes and universities positively affect invention and utility patents. This suggests a favorable role for the government in enhancing indigenous innovation capability.     

R&D and market value of Japanese firms in the 1990s

There is a concern in Japan that the R&D profitability of its domestic firms fell significantly in the 1990s, following the US pattern in the 1980s. This paper finds, however, that the effect of R&D on the market value of a firm, relative to that of tangible assets, increased in the 1990s in terms of both within firm variations and cross section variations, even though the average market value itself significantly fell. More trade and higher foreign ownership significantly enhanced the market value of a firm, and so did more patents in sectors such as pharmaceuticals. J. Japanese Int. Economies 20 (2) (2006) 155–176.     

Firm size and export performance

Economic analysis based on the Theory of the Firm shows that the exporting firm can be conceptualized as a discriminating monopolist, facing several demand curves. The analysis shows that under these conditions, and assuming certainty, the larger the firm, the higher the ratio of exports to total sales.When uncertainty is introduced into the model, the conclusion regarding the relationship between size and the ratio of exports to sales is reinforced. Large firms can afford to assume more risks than small ones; in addition, their risks from foreign operations are less than those of small firms because the large firms benefit from economies of scale in foreign marketing. Consequently, the risk premium demanded by large firms from foreign marketing is less than the premium insisted upon by small firms. Large firms therefore tend to export a higher share of their output. These theoretical constructs are confirmed by empirical analysis performed on a sample of several hundred firms from six industries in Denmark, Holland and Israel. The figures confirm, with few exceptions, that the size of firms is indeed positively correlated with the ratio of exports to sales.The normative conclusion which can be drawn from the above is that economic policy-makers who wish to increase the export potential of industrial firms, should adopt policies which will encourage large firms to come into being through mergers, take-overs or simply fast growth.     

Impact of Competition and Taxes on Responsibility Center Organization and Transfer Prices*

We show that a firm can use its decentralized organizational structure and transfer price as commitment devices to obtain strategic advantage in the product market only when there are nonstrategic reasons to decentralize and to distort transfer prices away from marginal costs, such as the sales office's local knowledge about market conditions and the presence of tax rate differentials across the two tax jurisdictions. Surprisingly, an increase in the sales office's tax rates may help a firm increase overall profits. An increase in the sales office's tax rates causes the firm to increase its transfer price, which in turn dampens the sales office's competition and may more than offset the effect of increased tax rates on the firm's overall profits.     

An integration of short run neokeynesian analysis and growth theory

Summary The paper provides a synthesis of short run Neo-Keynesian theory and long run growth models. The general approach is illustrated with the analysis of the short run and long run effect of changes in government spending when government budget deficits and surpluses are bond-financed. Such pure fiscal policy actions are shown to have long run effects on real variables even in a full employment model. The stability properties of the model turn out to depend crucially on the speed of adjustment of inflationary expectations.This paper is based on my Ph.D. DissertationTemporary Equilibrium and Long-Run Equilibrium. The advice and help of James Tobin, Gary Smith and Katsuhito Iwai are gratefully acknowledged. I have also benefitted from discussions with Gregory Chow. The detailed and wide-ranging comments of Dr. Th. C. M. J. van de Klundert and Dr. S. K. Kuipers on earlier drafts of this paper were most valuable, both as regards substance and form.Assistant Professor of Economics and International Affairs, Princeton University.     

光伏产业发展障碍的经济学思考

目前我国光伏产业呈现出投资强劲、资金充沛的局面,但市场饱和、技术落后和产业链结构单一等一系列亟待解决的问题也随之出现,通过对光伏产业的经济学思考,本文从政府补贴、开拓国内终端市场以及产业链整合方面提出了解决思路。     

Profits,dividends and industry restructuring: the Swedish paper and pulp industry between 1945 and 1977

This paper explores the role of profit distribution in the restructuring of the Swedish paper and pulp (P&P) industry between 1945 and 1977. In addressing this issue, we will draw on the life-cycle theory and market imperfection arguments to examine whether the less profitable firms shared more of their profits as dividends, or remained on the market longer by reinvesting the majority of the profits. Our study shows that an increasing share of the profits was distributed to owners over time, and thus less profit was reinvested in industrial renewal. We find that the observed general upward trend in dividends can be attributed to the decline in profit and firm legacy, as firms in the Swedish P&P industry kept dividends up while reducing reinvestment as their profit margins decreased over time. Our study shows that the market imperfections related to capital taxation and investment funds increased rather than decreased dividends.     

Overreaction effects independent of risk and characteristics: evidence from the Japanese stock market

This paper shows that the firm size (SZ) and the book-to-market ratio (BM) cannot fully explain stock returns on prior-return-based portfolios in Japan. The overreaction effect after controlling for SZ and BM effects is significant and plays an important role in explaining the zero-investment returns on the loser-to-winner strategy. Motivated by this observation, we construct a portfolio whose return serves as a new factor that mimics overreaction. This new factor improves the performances of the three-factor model [Fama, E.F., French, K.R., 1993. Common Risk Factors in The Returns on Stocks and Bonds. Journal of Financial Economics. 33, 3–56] in several prior-return-based and characteristics-based portfolios.     

On the Determinants of Career Interruption by Childbirth among Married Women in Japan

The purpose of this paper is to investigate determinants of job continuity across childbirth for married women in Japan. We use data from the Statistical Bureau's 1992Employment Status Surveyon nearly 8000 married women who were employed right before childbirth. Our estimation and simulation results suggest that education and access to child care are important determinants for a married woman to continue her work across childbirth, while high wages and short working hours help her to continue to work but are less important determinants. Also, the estimation result suggests that diversified working environments across industries and firm sizes possibly influence women's decisions.J. Japan. Int. Econ., March 1999,13(1), pp. 73–89. Tokyo Metropolitan University, Department of Economics, Hachioji, Tokyo 192-03, Japan; and University of Tsukuba, Institute of Policy and Planning Sciences, 1-1-1 Tennodai, Tsukuba, Ibaraki 305-8573, Japan.Copyright 1999 Academic Press.Journal of Economic LiteratureClassification Numbers: J22.     

Cooperative and predatory advertising: Effects on oligopoly advertising investment

An oligopolist's advertising behavior depends upon the externalities generated. Negative externalities occur when the firm's advertising gains in sales are a result of a loss to the rest of the industry. On the other hand, positive externalities may result because advertising by any single firm may increase that firm's sales while at the same time increasing sales in the rest of the industry.In the literature these types of externalities are referred to as "predatory advertising" and "cooperative advertising," respectively. Market shares are redistributed when advertising is purely predatory, and advertising is a public good when advertising is purely cooperative. The effect of advertising externalities on the firm's incentive to advertise is investigated in this paper.     

Trade agreements and international technology transfer

Review of World Economics - This is the first paper that analyzes for a global sample of countries how trade agreements that include technology-related provisions impact exports of goods,...