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.     

Occupational job creation: patterns and implications

This paper empirically investigates the matching process ofjob seekers and job vacancies, on different occupational labormarkets, and reveals the relative importance of supply and demandfactors, and frictions in the job creation process. Using datafrom German administrative records, we estimate matching functionsboth on the aggregate level, and for different occupationaland educational groups. The data allow to avoid some of theusual problems in empirical matching studies; extensive robustnessand stationarity tests are carried out. The results indicatesubstantial heterogeneity in the matching processes at disaggregatelevels. This information can be useful for policymakers, sincepolicy interventions that are effective in creating employmenton some occupational labor markets might lead to unsatisfactoryresults for other occupations.     

Editorial

Ohne Zusammenfassung     

Cointegration Testing in Single Error-Correction Equations in the Presence of Linear Time Trends

Banerjee, Dolado and Mestre (J. Time Ser. Anal. 19 (1998) 267−283)introduce an error-correction test for the null hypothesis of no cointegration. The present paper supplements their work. They provide critical values forregressions with and without detrending. Here it is shown that the latter arenot appropriate if the series display linear trends. This does not mean thatdetrending is required. Correct percentiles are suggested for the case thatseries follow linear time trends but tests are based on regressions withoutdetrending. They are readily available from the literature.     

Der Mass Customization-Ansatz als neue Wettbewerbsstrategie in der privaten Krankenzusatzversicherung

The competitive position of the additional private health insurance fund is mainly dependent upon the development of the compulsory health insurance fund. The wide scale legislative interventions result in new market leeway for additional private health insurance on the one hand. On the other hand these measures bear the risk of intensifying the competition. This paper shows the competitive approach of the Mass Customization as a new scope for design considering the supplier as an additional source of private health insurance. The author shows on an empirical review of the situation to check if the main goal of the Mass Customization approach has fulfilled the customized needs by also considering the context of the special competitive situation. The aim is to see if this goal has been achieved on the market of additional private health insurance products. The author makes a point in showing composition approaches and points out problems and limits of implementing additional private health insurance products for usage.     

On the cost of delayed currency fixing announcements

In Foreign Exchange Markets vanilla and barrier options are traded frequently. The market standard is a cutoff time of 10:00 a.m. in New York for the strike of vanillas and a knock-out event based on a continuously observed barrier in the inter bank market. However, many clients, particularly from Italy, prefer the cutoff and knock-out event to be based on the fixing published by the European Central Bank on the Reuters Page ECB37. These barrier options are called discretely monitored barrier options. While these options can be priced in several models by various techniques, the ECB source of the fixing causes two problems. First of all, it is not tradable, and secondly it is published with a delay of about 10–20 min. We examine here the effect of these problems on the hedge of those options and consequently suggest a cost based on the additional uncertainty encountered.