My paper “Public funding for innovation and the exit of firms” [this is a pre-print version] is now published in the August issue of the Journal of Evolutionary Economics.
The paper focuses on the effect public subsidies for innovation have on the exit of firms. Utilizing Finnish firm level data I employ a kernel matching approach to eliminate the selection bias of public funding and estimate the counterfactual. As a robustness check a treatment model is estimated. Public funding for innovation exhibits a significant effect reducing the probability of exit. Distinguishing between exit by merger and exit by closure shows that public funding has a significant effect on the former. No significant effect on the latter can be found.
The paper “Product innovation and the complementarities of external interfaces” by Sverre J. Herstad and myself is accepted for publication with the European Management Review. This paper investigates the relationship between new product introduction, and three constructs (search, collaboration and external R&D) developed to capture the different means by which firms link internal R&D to external inputs. By including interaction effects and applying detailed marginal effects analysis, it sheds new light on a research question, which has generated much empirical ambiguity: are external interfaces complements? Search diversity and collaboration diversity measure the extent to which different types of information sources and collaboration partners are used. Both affect innovation performance positively, and are complementary to each other. External R&D measures the relative importance of contract R&D, and is found to have a conditional negative impact which is reduced by search and reinforced when combined with collaboration. When including interaction effects involving the overall R&D intensity of firms, our findings suggest the existence of two competing ideal types of open innovation strategy and organization.
The paper “Industrial innovation collaboration in a capital region context” by Sverre J. Herstad, Øyvind Pålshaugen and myself is accepted for publication with the Journal of the Knowledge Economy. In this paper we investigate the relationship between capital region location, and the firm level decision to engage in collaboration for innovation. We find that firm location in the capital region is associated with a slightly lower propensity to engage in innovation collaboration within the region, and a distinctively lower propensity to engage in domestic collaboration as a whole. By contrast, we find no substantial differences between firms in the capital and other Norwegian regions with respect to foreign innovation collaboration, or with respect to innovation activity in general. This means that firms in the capital exchange knowledge among each other by other means than collaboration. They draw comparatively less of their innovation input from the collaboration networks which define the national innovation system as a whole.
This year’s PRO INNO Europe Partnering Event (April 5 – April 7) in Munich focussed on a broad understanding for knowledge transfer to support broad based innovation. It also emphasized that innovation depends on sources which go far beyond internal research and development of companies. My presentation with the title “How much innovation bases on outside technology, knowledge and creativity?” highlighted the (preliminary) findings of the INNOGrips WP 3 about the effects of and the determinants for firms’ utilization of open innovation practices among European SMEs.
“Go abroad or have strangers visit? On organizational search spaces and local linkages.“ Is a paper, on which Sverre J. Herstad and me have been working for quite a while. It was accepted for publication with the Journal of Economic Geography. It is now available online.
The paper explores the role of multinational enterprise groups in linking geographically bounded innovation collaboration networks to external sources of information. To investigate if the information content of the corporate network of affiliates increases with internationalization, we distinguish first between uninational and multinational networks. We then compare affiliation with MNE networks headquartered within the focal economy to affiliation with networks which are controlled from outside. Using Norwegian firm level innovation survey data, we find that the former is associated with the highest likelihood that affiliates combine local collaborative knowledge development outside the corporate network, and innovation search within it.
The ZukunftsForumHolz (forum for the future of wood) presented by pro:holz Austria draws representatives of the Austrian wood-based industries to the loveley vilage of Alpbach. Participating this years forum with discussions about innovation and wood-based industries gives me a first hand insight into the opportunities and challenges faced by all actors in the industry. The key note about social innovation was delivered by Josef Hochgerner.
Moderating a workshop about innovation in the wood-based industries is an amazing experience in this context. It allows to observe the whole value chain of an industry as represenetatives of all partners in the industry are present such as representatives of primary production, saw mills (Binderholz), wood building producers (e.g. Unterluggauer), architects (e.g. Armin Kathan of holzbox) and designers (e.g. Günther Grall). The group blended with actors in the sectoral innovation system such as academic research partners (e.g. Michael Flach, Alfred Teischinger and colleagues) and representatives of wood interest groups which broadened the discussion.
The paper “Open innovation practices and their effect on innovation performance” by Carter Bloch, Sverre Herstad, Els Van De Velde and myself is accepted for publication with the International Journal of Innovation and Technology Management. The paper develops an indicator framework for examining open innovation practices and their impact on performance. The analysis, which is based on Community Innovation Survey (CIS) data for Austria, Belgium, Denmark and Norway, yields a number of interesting results. First, we find that open innovation practices have a strong impact on innovation performance. Second, results suggest that that broad-based approaches yield the strongest impacts, and that the collective of open innovation strategies appear more important than individual practices. Third, intramural investments are still important for innovative performance, stressing that open innovation is not a substitute for internal knowledge building.
The WP “Do Direct R&D Subsidies Lead to the Monopolization of R&D in the Economy?” by Dirk Czarnitzki and Bernd Ebersberger has been finalized recently.
In this paper we explore the impact of R&D subsidies on the concentration of R&D in an economy. First, governments are often criticized of subsidizing predominantly larger firms and thus contributing to the persistence of leadership in markets and higher barriers to entry, and, hence, reduced competition eventually. Second, theoretical literature, such as endogenous growth literature, has also shown that governmental intervention in the market for R&D affects the distribution of R&D which finally affects product market concentration. We test the relationship between R&D subsidies and R&D concentration employing treatment effects models on data of German and Finnish manufacturing firms. The data and estimations allow calculating concentration indices for the population of firms for both the actual situation where some selected companies receive R&D subsidies and the counterfactual situation describing the absence of subsidies.
We find that R&D subsidies do not lead to higher concentration of R&D. On the contrary, we even find that R&D concentration is significantly reduced because of subsidies. This result may be attributed to the fact that technology policy maintains special funding schemes for small and medium-sized companies. The fact that the larger companies benefit from a higher likelihood of a subsidy receipt is offset by the phenomenon that smaller firms may be completely deterred from any R&D activity if they would not receive governmental support.
Recently Sverre Herstad (NIFU STEP, Oslo) and myself finalized a short paper about titled “Entrepreneurship and Regional Development”. The paper will be the basis for a keynote at the Business School Ostrava (CZ) later this week. This paper discusses entrepreneurship and regional development from three different viewpoints: regional innovation systems, related variety and open innovation. It distils two major insights for regional development. Heterogeneity and entrepreneurship are to be fostered to support innovation led regional growth. Finally the discussion arrives at one conclusion: regional development strongly hinges on the understanding of regional innovation systems, the heterogeneity of their actors and their entrepreneurial activities. Finally it depends on how these actors interact in generating and exploiting knowledge.
The paper “Gender, management education and the willingness for academic entrepreneurship” [see a draft] by Bernd Ebersberger and Christine Pirhofer (both MCI) is accepted for publication with the Applied Economics Letters.
The paper explores the determinants of academic entrepreneurship. In particular it investigates the effects of gender and supplementary management education on academics’ willingness to start up a company. The analysis is based on a survey of academics. Controlling for academic achievement, field of science and perceived hampering factors we find that female academics show a significantly lower propensity to have a high willingness to start up. Our results indicate that supplementary management education does not in general have a significant effect on the willingness to start up. Yet, for female academics supplementary management education exerts a significantly positive effect almost offsetting the gender effect.