International technology spillovers and innovation: Evidence from Taiwanese high-tech firms

This paper uses Taiwanese high-tech firms’ data from 2003 to 2007 to investigate the impacts of international technology spillovers and firms’ R&D activities on firms’ innovation performance. We also consider absorptive capability and examine whether the technology spillovers have different effect on firms' innovation performance. We choose patent application counts to measure firms' innovation performance, and adopt panel Ordinary Least Squares (OLS) with fixed-effect and random-effect models as well as System Generalized Method of Moments (GMM) model to estimate. The empirical findings indicate the innovation performance of high-tech firms is positively affected by their R&D efforts, export performance, and the presences of multinational corporations. Furthermore, when absorptive capacity is taken into account, the technology spillovers by exporting and technology import would affect the innovation performance more.     

North-South technology transfer through licensing

The incentives of Southern governments to protect intellectual property rights are examined when Northern innovating firms license technology to Southern firms in a game with asymmetric information. Southern firms may or may not be able to imitate after they license the technology, and Northern firms do not know whether the Southern firm can imitate. The form of the licensing contract and the distribution of the gains from licensing will affect the incentives of Southern countries to protect patents. Southern consumers gain from patent infringement but at the expense of Southern firms that cannot acquire licenses at the most favorable terms.     

How SMEs exploit their intellectual property assets: evidence from survey data

This paper seeks to understand how motives to patent affect the use of the patent portfolio with a particular focus on motives aimed at the monetization of intellectual property. The analysis relies on data from an international survey conducted by the European Patent Office. There are three main results. First, small- and medium-sized enterprises (SMEs) exhibit a much stronger reliance on ??monetary patents?? than large companies and nearly half of the SMEs in the sample patent for monetary reasons. Second, SMEs tend to use their patents more actively than large firms. Third, smaller companies generally have a higher proportion of their portfolio that is licensed, but the licensing rate is significantly higher in the USA. An American SME is twice as likely as a European SME to have a high share of its portfolio that is actually licensed, witnessing a fragmented market for technology in Europe.     

Does external technology acquisition determine export performance? Evidence from Chinese manufacturing firms

Although technology profile has been one of the key determinants of firms’ export performance in the international business literature, most research has focused on only the role of internal technology efforts rather than the role of external technology. This study thus aims to extend our understanding of the determinants of export performance by examining the impact of the inter-organizational dimension of innovation strategy to export performance, which has been ignored in the prevailing “strategy tripod” perspective of exporting research. This study is based on a sample of 141 Chinese indigenous manufacturing firms that engaged in inward technology licensing between 2000 and 2003. The empirical results indicate that external technology acquisitions positively influence Chinese firms’ export performance. Moreover the exporting performance of using external technology varies depending on the their sources (domestic and foreign). The exporting firms that acquired technology from foreign countries outperformed those relied on domestically developed technology.     

Globalization and technology adoption: evidence from emerging economies

This paper examines the role of globalization in the creation and dissemination of technology across firms operating in 30 emerging and developing economies. Firm-level data from four rounds of Business Environment and Enterprise Performance Surveys from 2002 to 2014 is pooled to assess whether international exposure translates into greater propensity for firms to innovate. The viability of different channels of international technology transmission, i.e. exporting and importing activities, foreign licensing agreements and foreign direct investment are studied to analyze whether they indeed succeed in delivering the push to the firms operating in developing countries to innovate and as a result push them closer to the world's technology frontier. The empirical results endorse the view that exporting and importing activities and foreign licensing agreements are important channels for technology transfer. This study also acknowledges country, sector and firm specific characteristics and their differential capacity to benefit from foreign exposure.     

Appropriation of Innovation and Patent Behaviors of Technological Firms in the Yangtze Delta Area

In the transition from “made in China” to “invented in China,” what is the motivation of Chinese firms in applying for patents? Why do some firms bypass patents? How is patenting developing within Chinese firms? This paper attempts to answer these questions using data of Chinese firms in the Yangtze River Delta region. Results indicate that, for product innovation, obtaining the lead time for market entry is of top priority in innovation protection, followed by confidentiality and patent protection. As for process innovation, confidentiality ranks first, followed by patent protection and obtaining the lead time. There is a significant and positive relationship between prior experience of patent licensing and possibility of future patent licensing. Firms with painful patent litigation experience tend to avoid it in the future. It is also found that there are great differences in patent behaviors between Chinese enterprises and their foreign counterparts.     

The dual role of local sites in assisting firms with developing technological capabilities: Evidence from China

As strong local knowledge bases emerge in some developing countries and regions, more research efforts are devoted to examine the role of local sites in technological-capability development of firms from developing countries. However, most of these studies illuminate the direct input (e.g., knowledge, human capital) and the role of motivating multinational companies (MNCs) to upgrade their local operations in developing countries so as to perform more innovation activities. Few articles are presented that examine the role of local sites in the learning and technological-capability building processes that take place during technology import activities. This study investigates how local sites in developing countries help their firms benefit from the spillovers of international technology diffusion, by empirically scrutinizing Chinese licensee firms. The empirical results support the hypothesis that Chinese local sites assist with their firms’ technological-capacity building, driven by international technology licensing-in activities, in three indirect ways. That is, the enrollments of sufficient R&D personnel from local sites, the collaborations with local universities and research institutes, and the collaborations with local industrial community firms positively influence the relationship between firms’ international inward technology licensing and technological capabilities.     

Dynamic analysis of innovation and international transfer of technology through licensing

This paper develops a quality-ladder type dynamic general equilibrium model with endogenous innovation and technology licensing as a major source of international technology transfer in developing countries. Examining the dynamic characteristics of the model fully, we explore the short- and long-run effects of both an improvement in the probability of reaching a licensing agreement with a given effort and an increase in the license fee rate. The model shows that the former promotes innovation and technology transfers in both the long and short run, while the latter discourages them.     

Do safeguard tariffs and antidumping duties open or close technology gaps?

This paper examines how the country-breadth of tariff protection can affect the technology adoption decisions of both domestic import-competing and foreign exporting firms. The contribution of the analysis is to show how firm-level technology adoption changes under tariffs of different country-breadth. I show that a country-specific tariff like an antidumping duty induces both domestic import-competing firms and foreign exporting firms to adopt a new technology earlier than they would under free trade. In contrast, a broadly-applied tariff like a safeguard can accelerate technology adoption by a domestic import-competing firm, but will slow-down technology adoption by foreign exporting firms. Because safeguard tariffs can delay the foreign firm's adoption of new technology, the worldwide welfare costs associated with using them may be larger than is generally believed.     

The impact of the institution of patent protection and enforcement on entry mode strategy: A panel data investigation of U.S. firms

The Trade-Related Aspects of Intellectual Property Rights (TRIPS) agreement has engendered a harmonisation of patent laws across countries but the extent of enforcement of these laws continues to vary. This study investigates the degree to which de jure book law protection of patents and de facto enforcement of these laws influences the propensity of firms to exploit their patented technology in foreign markets with company-owned operations or unrelated concerns using licensing agreements. Analyzing data on royalty and fee receipts of U.S. parent companies from affiliates and non-affiliated parties abroad from 1998 to 2007, and using separate measures for de jure and de facto patent protection and enforcement, we find that strengthening de jure protection induces greater affiliate licensing while strengthening de facto enforcement induces non-affiliate licensing. We conclude by observing that greater account should be taken of de facto enforcement measures when investigating the role of institutions on the international activities of firms.     

Experience,age and exporting performance in UK SMEs

We consider the determinants of SME exporting performance using a survey of internationally engaged UK SMEs. We first develop a model incorporating organisational and prior managerial learning effects. Our empirical analysis then allows us to identify separately the positive effects on exporting from the international experience of the firm and the negative effects of firm age. Positive exporting effects also result from grafted knowledge – acquired by the recruitment of management with prior international experience. Innovation also has positive exporting effects with more radical new-to-the-industry innovation most strongly linked to inter-regional exports; new-to-the-firm innovation is more strongly linked to intra-regional trade. Early internationalisation is also linked positively to the number of countries to which firms export and the intensity of their export activity. We find no evidence, however, relating early internationalisation to extra-regional exporting, suggesting that early-exporting SMEs tend be ‘born regional’ rather than ‘born global’.     

How companies overcome barriers to overseas business

The choice to a company among exporting, acquiring other firms, licensing products and services, and entering into strategic alliances with other business firms is often strongly influenced by governmental policies and practices. In turn, companies’ responses to such influences have increasing feedback effects on governmental activities as public-sector decision-makers are being forced to understand that they now have to become internationally competitive in the economic policies they devise.     

Financial vulnerability and export dynamics

This paper examines the implication of financial shocks on firms’ export dynamics in developing economies. To address this question, we use the Exporter Dynamics Dataset, which contains new data on the microstructure of exports for 34 developing countries between 1997 and 2011, and investigate how exporter behaviour is affected by financial crises. We find that financial crises in both the origin and destination countries have a large negative effect on firm, product and destination dynamics, particularly in industries dependent on external finance. Financial crises make the costs of exporting more difficult to meet and in turn reduce firms’ ability to start exporting, introduce new products and sell to new destinations. We also find that the impact of financial crises is less pronounced in exporting countries with relatively more open capital accounts, suggesting that portfolio inflows may be a good substitute for underdeveloped domestic financial markets.     

When an Importer's Protection of IPR Interacts with an Exporter's Level of Technology: Comparing the Impacts on the Exports of the North and South

Using bilateral trade data of countries from 2000 to 2007, this paper contributes to the empirical literature on the role of intellectual property rights (IPRs) in global trade. The existing literature has focused on how IPRs in the destination country affect exports from a source country. In this paper, we add an additional dimension: the level of technology of the exporting country (LT). This is quite important for distinguishing the impact of IPRs on the exports of developed and developing countries, since the technology levels vary across countries at different stages of development and intellectual property rights better protect exports that are technologically advanced than exports that are imitative and potentially infringing. By factoring in the level of technology (LT), our empirical analysis makes the case that IPRs can act as a barrier to the exports from the South, especially the rapidly catching‐up economies, and thus be a source for the middle‐income trap phenomenon.     

Organizing for external technology exploitation in diversified firms

Besides applying technology in their own products, industrial firms increasingly exploit their technologies externally, for example through out-licensing. Earlier studies cannot explain the discrepancies between a few pioneering firms in active technology licensing and the managerial difficulties of many others. In diversified firms, diverging interests of the corporate and business unit level in the keep-or-sell decision constitute a central barrier to active licensing. Therefore, this article examines two essential dimensions of designing the corporate/business unit interface in diversified firms: the centralization of the activities on the corporate level and the alignment between the organizational levels. The study tests three hypotheses regarding the interaction and consequences of these organizational dimensions with data from 152 firms. Consistent with the hypotheses, the data provide support for the benefits from medium levels of corporate centralization and corporate/business unit alignment. The results have implications for technology exploitation, open innovation, markets for technology, and corporate strategy.     

Impact of Horizontal Mergers on Research & Development and Patenting: Evidence from Merger Challenges in the U.S.

This paper contributes further empirical evidence on the effects of mergers on innovation using company level data. Evidence on this issue has implications for the relationship between innovation and market concentration. Our departure from previous work is that we focus on a sample of horizontal mergers whose market concentration impacts were flagged by U.S. antitrust authorities as potentially posing a problem for antitrust law compliance. We employ propensity score matching and difference-in-differences estimation to compare the innovation activities of challenged and non-challenged merger firms to a control group of non-merged firms. We use R&D, patent grants, and citation-weighted patent grants to measure the innovation activities of firms before and after a merger. Our results indicate that the post-merger innovation outcomes of firms whose mergers were challenged are lower than they would have been had the firms not merged. But for non-challenged mergers, or mergers that do not raise concerns about market concentration, post-merger innovation outcomes are not significantly different from what they would have been without a merger.     

Firm heterogeneity and technology transfers to local suppliers: Disentangling the effects of foreign ownership,technology gap and absorptive capacity

In this paper, I present novel microeconomic evidence on the effects of firm heterogeneity on the creation and impact of technology transfers from foreign direct investment (FDI) to local suppliers in a developing country setting. The main findings are threefold. First, FDI firms are significantly more involved in knowledge transfer activities than domestic producer firms. In particular, FDI firms offer more technological support, support with a direct positive impact on production processes of local suppliers. Second, the type of ownership also influences the effect of the technology gap on technology transfers. A large technology gap between a producer firm and its suppliers lowers the provision of support; however, FDI firms offer more technological support to their suppliers of material inputs when the technology gap is large. Independent of the support that the suppliers receive, foreign ownership of client firms and a large technology gap make it more likely that suppliers experience large positive impacts. Third, the level of absorptive capacity of local suppliers is also important for the impact of the technology transfers, confirming the notion that heterogeneity among both producer firms and local suppliers affect the level, nature and impact of local technology transfers.     

Innovation capacity,international experience and export performance of SMEs in Brazil

Innovation capacity and international experience are factors often related to the internationalisation process of firms, with export activities as the first stage of the process. However, firms from emerging countries seem to show advantages and follow patterns of international expansion that may differ from firms based in developed countries, where the internationalisation models were created. Specifically, exporting firms from emerging countries tend to have limited resources, especially small firms (e.g., for investing in R&D). Despite these facts, the literature on export performance seems biased towards recommending firms to enhance, above all, their innovation capacity in order to achieve better export performance, while little attention is paid to international experience as a factor that is as important as innovation. In this context, the objective of this study is to investigate the impact of innovation capacity and international experience on the export performance of small and medium-sized enterprises (SMEs) located in an emerging country and to identify which factor is more significant. The Resource-Based View and Dynamic Capabilities approach were used as theoretical frameworks. A research model was developed and tested on a significant sample of Brazilian industrial SMEs. The data were analysed through partial least squares structural equation modelling. The results indicate that international experience has a greater impact on export performance than innovation capacity, showing that there is possibility of overemphasising the role of innovation in the export performance of SMEs, at least, in the Brazilian context.     

Innovation and Trade Policy Coordination: The Role of Firm Heterogeneity

Recent studies have concluded that R&D grants can induce firms to export and that exporting and innovating can be complementary activities at the firm level. Yet the trade literature has paid little attention to the scope of innovation policy as a stimulus to both trade and innovation. To investigate this question, we rely on a general workhorse model of trade and firm heterogeneity with firm investments in R&D activities. The interplay of innovation and trade policies uncover novel results. In particular, we show that the effects of either policy depend on the degree of protectionism in a country. Therefore, countries can respond differently to the same policy, and similarly to different policies. In such a context, different governments may face different trade‐offs in achieving a given target.     

Foreign Ownership and the Extensive Margins of Exports: Evidence for Manufacturing Enterprises in Germany

We examine how foreign ownership of a firm affects the variety of goods that the firm exports and the number of countries it trades with. We construct a simple theoretical model of how foreign ownership may affect these extensive margins of exports and take this model to data from Germany, one of the leading actors on the world market for goods. In line with theoretical predictions we find that foreign‐owned firms do export more goods to more countries after controlling for firm size, productivity and industry affiliation. These differences between foreign‐owned firms and domestically controlled firms are highly statistically significant, and they are large from an economic point of view, with foreign‐owned firms exporting up to 39 per cent more goods to up to 31 per cent more countries.