How open innovation processes vary between urban and remote environments: slow innovators,market-sourced information and frequency of interaction

Geographic research on firm-level innovation is generally premised on the idea of open innovation, suggesting that innovation occurs more readily in urban settings or clusters, which generate local buzz and allow access to external actors. However, a growing body of evidence demonstrates that firms also introduce first-to-market innovations in remote locations. In this exploratory paper, building upon work by Philip McCann, we outline a conceptual framework that connects innovators (differentiated by information source and frequency of interaction with interlocutors) and location (distance from a metropolitan area): slow innovators, relying on non-market-sourced information and infrequent contacts, will be overrepresented in isolated locations. Fast innovators, relying on market-sourced information and frequent interactions, will locate closer to cities. Our results confirm this. Our interpretation of these results – slow innovators are more reliant on technological information which loses value more slowly than faster decaying market-oriented information – requires further investigation.     

Implementing optimal procurement auctions with exogenous quality

In this paper, we consider the implementation of the optimal procurement auction outcome when there is a trade-off between price and quality for the buyer. The quality proposals of the competing firms are assumed to be exogenous and common knowledge. After defining the optimal auction, we characterize the discriminatory first score auction and the modified second score auction implementing it when the buyer is assumed to have the same information as the firms. Then we consider an auction which requires no specific information from the buyer and show that a second score auction followed by a negotiation stage can implement the optimal auction outcome under this more realistic assumption. Received: 30 March 2001 / Accepted: 14 December 2001 I am grateful to the anonymous referees for comments on an earlier version of this paper. The usual disclaimer applies.     

Distinctive Features of Environmental Innovators: An Econometric Analysis

This paper analyzes the main determinants influencing environmental innovators (i.e. firms developing or adopting environmental innovations) in Spain with respect to non‐environmental innovators. Similarly to other contributions in the literature, our results show that Spanish environmental innovators respond to regulatory stimulus in the form of demand‐pull and technology‐push instruments. They have a high internal technological capability and combine internal and external information sources, mostly in cooperation with knowledge institutions. Environmental innovators are more concentrated in mature, traditionally highly polluting sectors, but new firms are not more environmentally innovative than incumbents. Most importantly, in contrast to other environmental innovation studies, mostly carried out in a German context, we have not found evidence of a market pull from either the domestic or international markets. Furthermore, cost savings are not found to be a distinctive driver for environmental innovators. These differential results are possibly related to the special features of Spain regarding its national innovation system and the degree of stringency of environmental regulation and environmental consciousness of its consumers. Copyright © 2013 John Wiley & Sons, Ltd and ERP Environment.     

基于边际成本递增的多属性反向拍卖最优策略

针对当前传统的基于单一价格属性的逆向拍卖机制已难以满足企业日益复杂的采购需求的现状,需要研究采购环境下的多属性英式拍卖机制。首先,文中提出了基于边际成本递增的多属性拍卖模型。然后运用多属性效用理论,进一步研究了在多属性英式拍卖机制下投标人的最优投标策略及拍卖人最优评分规则。最后,基于边际成本递增的多属性拍卖模型,研究了不同因素及边际成本对拍卖人最优评分规则的影响。     

Quality incentive contract design in government procurement of public services under dual asymmetric information

In the process of government procurement of public services (GPPS), adverse selection and moral hazard caused by dual asymmetric information can damage public interests and negatively affect the quality of public services. To improve the quality of GPPS, in this study, quality incentive contract models under the condition of dual asymmetric information are designed. These models are based on the optimal incentive contract model in principal–agent theory. The results show that under dual asymmetric information conditions, incentive contracts designed for a continuous type of service capability can identify and stimulate the service abilities of social organizations.     

Patents, Secrets, and the First-Inventor Defense

We analyze optimal patent design when innovators can rely on secrecy to protect their innovations. Secrecy has no fixed term but does not preclude accidental disclosure nor independent creation by other inventors. We derive the optimal scope of the rights conferred to such second inventors, showing that if the patent life is set optimally, second inventors should be allowed to patent and to exclude first inventors who have relied on secrecy. We then identify conditions under which it is socially desirable to increase patent life as much as is necessary to induce first inventors to patent. The circumstances in which it is preferable that they rely on secrecy seem rather limited .     

Can breakthrough innovations serve the poor (bop) and create reputational (CSR) value? Indian case studies

Though radical and complex reengineered product innovations are not discussed much in either the ‘Corporate Social Responsibility’ (CSR) or the ‘Base of the Income Pyramid’ (BoP) literature, both support the premise that if an innovation serves the poor, then it will generate CSR gains. To test this assumption with respect to breakthrough technological innovations, the present paper proposes a theoretical construct and uses it to examine two innovations launched in India, namely genetically modified cotton seeds and a HIV/AIDS drugs cocktail. Because firms decide on innovation outlays to maximize profit without including an explicit CSR component, it develops indicators to examine if any involuntary CSR effort was embedded in the innovation strategy. It confirms that though firms do not invest in innovation to earn CSR credit, some breakthrough technological innovations, not all, can trigger CSR returns. There are tradeoffs between CSR effort and BoP innovation market value. Higher the consumer surplus generated by the innovation, better the bargaining position of the innovator vis-à-vis contestations. The windows of opportunity for generating BoP market value and CSR value are context specific. A robust business strategy rather than philanthropy is needed for breakthrough technological innovations to be marketed to BoP communities.     

Innovate or Imitate? Behavioural technological change

We propose a behavioural model of technological change with evolutionary switching between costly innovators and free imitators, and study the endogenous interplay of innovation decisions, market price dynamics and technological progress. Innovation and imitation are strategic substitutes and exhibit negative feedback. Endogenous technological change is the cumulative outcome of innovation decisions. There are three scenarios: market breakdown, Schumpeterian rents and learning curves. The latter is characterised by an increasing fraction of innovators when demand is elastic, while inelastic demand allows technological progress with shrinking innovation effort. Model simulations are compared to stylised features of empirical data in two industrial sectors.     

Impact of changes in regulatory performance standards on innovation: A case of energy performance standards for newly-built houses

This paper explores the impact of changes in prescribed performance standards on innovation in an industry characterised by loosely coupled systems. Using a case of energy performance standards for newly-built houses, it investigates how changes to these standards have affected the innovation of houses, combining qualitative and quantitative data from the Netherlands. The key finding is that standardisation does not only increase the amount of innovation conducted in an industry while achieving societal goals, such as improving energy efficiency. It also triggers different types of innovation. While innovators in the investigated field prefer incremental innovations which can be integrated easily into existing ways of building houses, tightened requirements require systemic innovations, meaning that processes and organisations need to be changed. Additionally, we find that ambitious performance standards can also impact the organisation of an entire sector: they can force integration, the tightening of couplings between firms, in order to achieve systemic innovation.     

欧盟电子采购分类体系比较研究

随着信息化技术的不断发展,电子采购已经逐渐渗透到各行各业,包括政府采购领域。产品和服务分类标准是电子采购运行的基本元素,电子采购网站的多样化催生了不同的产品和服务分类标准。欧盟是电子采购制度相埘健全、成效相对突出的地区。文章深入分析了欧盟公共与私营领域常见的电子采购分类标准的制定背景、异同点以及各自的优缺点,同时提出了完善建议。     

Information Sharing in Contests

We study the incentives to share private information ahead of contests, such as markets with promotional competition, procurement contests, or research and development (R&D). We consider the cases where firms have (i) independent values and (ii) common values of winning the contest. In both cases, when decisions to share information are made independently, sharing information is strictly dominated. With independent values, an industry‐wide agreement to share information can arise in equilibrium. Expected effort is lower with than without information sharing. With common values, an industry‐wide agreement to share information never arises in equilibrium. Expected effort is higher with than without information sharing.     

Health insurance reform: The impact of a Medicare buy-in

The steady-state general equilibrium and welfare consequences of a Medicare buy-in program, optional for those aged 55–64, is evaluated in a calibrated life-cycle economy with incomplete markets. Incomplete markets and adverse selection create a potential welfare improving role for health insurance reform. We find that adverse selection eliminates any market for a Medicare buy-in if it is offered as an unsubsidized option to individual private health insurance. The subsidy needed to bring the number of uninsured to less than 5 percent of the target population could be financed by an increase in the labor income tax rate of just 0.03–0.18 percent depending on how the program is implemented.     

Selling shares to retail investors: auction vs. fixed price

We analyze the problem of selling shares of a divisible good to a large number of buyers when demand is uncertain. We characterize equilibria of two popular mechanisms, a fixed price mechanism and a uniform price auction, and compare the revenues. While in the auction truthful bidding is a dominant strategy, we find that bidders have an incentive to overstate their demand in the fixed price mechanism. For some parameter values we find that the fixed price mechanism outperforms the auction.     

Existence of optimal auctions in general environments

We provide a unified approach to the problem of existence of optimal auctions for a wide variety of auction environments. We accomplish this by first establishing a general existence result for a particular Stackelberg revelation game. By systematically specializing our revelation game to cover various types of auctions, we are able to deduce the existence of optimal Bayesian auction mechanisms for single and multiple unit auctions, as well as for contract auctions with moral hazard and adverse selection. In all cases, we allow for risk aversion and multidimensional, stochastically dependent types.     

Do Spillovers Stimulate Incremental or Drastic Product Innovations? Evidence from German Establishment Data*

Despite the generally recognized importance of knowledge spillovers, the empirical literature is essentially silent on the type of innovation stimulated by spillovers. We estimate the determinants of product innovations differing in their degree of newness to the adopting firm. Knowledge spillovers from rivals have a positive impact on incremental innovations. This impact is largely independent of participation in R&D cooperation. Spillovers exert no such independent influence on drastic innovation activities. The results support the hypothesis that establishments face difficulties in using knowledge that comes from areas they are not familiar with. Establishments exploit spillovers for incremental innovations rather than for drastic innovations. To some degree R&D cooperation can help to overcome the difficulties in using spillovers for drastic innovations. Furthermore, our estimates provide evidence that the firm's own R&D effort and the use of outside information are substitutes.     

Better Late than Early: Vertical Differentiation in the Adoption of a New Technology

After the initial breakthrough in the research phase of R&D, a new product undergoes a process of change, improvement, and adaptation to market conditions. We model the strategic behavior of firms in this development phase. We emphasize that a key dimension to this competition is the innovation that leads to product differentiation and quality improvement. In a duopoly model with a single adoption choice, we derive endogenously the level and diversity of product innovations. We demonstrate the existence of equilibria in which one firm enters early with a low-quality product while the other continues to develop the technology and eventually markets a high-quality good. In such an equilibrium, no monopoly rent is dissipated and the later innovator makes more profits. Incumbent firms may well be the early innovators, contrary to the predictions of the "incumbency inertia" hypothesis.     

Managerial Incentives Based on Acquisition of Information

In a moral hazard setting, we model the fact that the agent may get private signals about the final outcome of his effort before the public realization of this outcome. Actions affect both the distribution of the outcome and the quality of the agent's private information. We compare simple contracts, based on output only, with revelation contracts, based on output and messages about signals. Revelation contracts give the agent some discretionary power during the course of the relationship; they are optimal if and only if lowering effort does not increase the quality of private information in the sense of Blackwell (1953). In the context of managerial compensation schemes, the revelation contracts we analyze can be viewed as allowing the agent to exercise an option on the final profits before the realization of these profits. The theory thus provides an alternative justification of the widespread use of stock options in managerial compensation schemes, as opposed to compensation schemes that rely only on salary, bonus, and (restricted) stock plans.     

Successful eco‐innovators: Exploring the association between open inbound knowledge strategies and the performance of eco‐innovative firms

The main purpose of this paper is to analyse the association between open inbound knowledge strategies and the performance of eco‐innovative firms in the food and beverage industry. We propose a mixed framework based on the eco‐innovation literature and the open innovation approach. We consider the characteristics in a traditional sector based upon a resource‐based perspective. Three types of firms are distinguished in terms of their sales growth in the Spanish food industry from the least to the most successful eco‐innovators. Using multinomial logistic regression models, it is shown that the diversity of collaborators (breadth of external sources of knowledge) and joint adoption of product and process eco‐innovations are positively associated with the probability of achieving high sales growth. Moreover, we find an inverted U‐shaped relationship between the breadth of the external search and firm performance, but only for the group of the most successful firms. Moreover, operational flexibility, knowledge‐based capabilities and company size are also positively related to the group of successful eco‐innovators.     

Teaching an old dog a new trick: Reserve price and unverifiable quality in repeated procurement

This paper shows that, in a repeated competitive procurement, a buyer can use the reserve price in a low-price auction as a “public”—hence nondiscriminatory—incentive device to elicit unverifiable quality. We study a model with many firms and one buyer, who is imperfectly informed on the firms' costs. When firms are ex ante identical, the provision of quality is sustained by a sufficiently high reserve price to reward firms for the quality provision and by the threat of setting a low reserve price forever, if quality is not delivered. The buyer can elicit the desired level of unverifiable quality provided her baseline valuation of the project is not too high and the net benefit from unverifiable quality is not too low. These results are robust to firms' heterogeneity in their time preferences when the punishment for a deviation is finite but sufficiently long.     

Environmental Innovations as a Source of Competitive Advantage or Vice Versa?

The aim of this paper is to examine the links between developed environmental innovations and the competitiveness of firms. It seeks answers to the question: Are the developed environmental innovations associated with the improved or impaired competitiveness of firms? In addition, it explores how competitive advantage is created along the innovation process. This will be done by comparing the successful and unsuccessful green innovators. The empirical evidence is based on the longitudinal dataset gathered from 128 Finnish firms which have developed one or more environmental innovations. The data covers nine years from 2002 to 2010. This study provides two contributions to academic literature. First, it deepens the existing knowledge of how environmental innovations are associated with competitive advantage. It identifies the types of competitive advantages as well as potential disadvantages along the innovation process. Second, this study demonstrates how the competitive advantage was enhanced along the successful innovation process. Copyright © 2013 John Wiley & Sons, Ltd and ERP Environment