complementarities in the search for innovation managing markets and relationships abstract extant research has characterized a firm s search for external knowledge in its innovation activities as either relational or transactional in nature the former implies that a firm chooses and develops collaborative relationships with knowledge sources like universities customers or suppliers while the latter suggests transactions governed by markets for technology we argue that prior literature has ignored that both search strategies are interrelated and complementary adopting one strategy has a higher marginal return on innovation performance if the other one is present moreover we suggest the benefits from complementarity to be higher when a firm is more distant to the technological frontier in the industry and when markets for technology in that industry are shallow we test our hypotheses on a sample of 3921 german firms from 2001 to 2009 and find support for our hypotheses

cost reduction competition and industry performance in many markets firms compete over time by expending resources with the purpose of reducing their costs sometimes the cost reducing investments operate directly on costs in many instances they take the form of developing new products that deliver what customers need more cheaply therefore product development can have the same ultimate effect as direct cost reduction in fact if one thinks of the product as the services it delivers to the customer in the way that lancaster pioneered then product development often is just cost reduction

royalty sharing and technology licensing in universities using data for 102 u s universities we show that royalty sharing arrangements cash flow rights vary substantially across universities and that they are largely unrelated to most observed university characteristics including faculty size quality research funding technology mix of the faculty and size of the technology licensing office however higher inventors royalty shares are associated with higher licensing income at the university controlling for other factors the results suggest that monetary incentives from inventions have real effects in the university sector jel o31 o34 l3 l01

universities as strategic actors in the knowledge economy the university plays a particular role in the global knowledge economy as provider of both public and private goods related to education research and societal impacts at the same time universities in the plural play many different roles and exhibit a rich experimentation in organizational forms and knowledge foci adapting to local and global conditions there is also an aspect of uneven regional development and agglomeration of competencies as the individuals and organizations must also balance local interests and stakeholders with global networks in science technology and innovation thus we can identify empirically that universities are changing their strategies organizational structures and competencies in order to respond to new external demands and internal management practices bonaccorsi and daraio 2007 the question is how to explain this theoretically and identify empirical trends and pathways little previous research has focused upon how universities are learning to compete and why they try to act strategically this article as well as the selected articles in the special issue focus upon how and why this transition is occurring as well as the impacts for understanding universities as strategic actors in the knowledge economy section 2 provides an overview it introduces the three themes and articles collected in this special issue providing a summary of the main contributions section 3 then provides our perspective on how to analyze and understand universities as strategic actors it discusses relevant literature as a way of beginning to provide our perspective of the necessity and elements involved in a more united theoretical and empirical understanding this includes statement of predictions as well as empirical evidence that these trends are occurring section 4 concludes with relevant research themes for the future

an efficient approach for optimal allocation and parameters determination of tcsc with investment cost recovery under competitive power market this paper proposes an investment cost recovery based efficient and reliable optimization approach to optimal allocation of thyristor controlled series compensator tcsc in double auction power market the optimization technique has been used with an objective to maximizing the social welfare and minimizing the device investment cost by suitable location and rating of single tcsc in the system the effectiveness of proposed approach for location of tcsc has been compared with some existing methods of single tcsc placement in terms of its impact on social welfare tcsc investment recovery and optimal generation as well as load patterns the results have been obtained on 5 bus system modified ieee 14 bus system and 246 bus indian practical northern regional power grid nrpg system

strategic responses to automobile emissions control a game theoretic analysis abstract this paper examines the dynamics of standard setting regulation under technological uncertainty and asymmetric information about technological capability a two period model which allows fully strategic action is developed and applied to the regulation of automobile emissions a situation in which standards have been used to force innovation it is found that the initial level of r d activity caused by regulation increases with the intrinsic technical capability of industry this result done not depend on marginal productivities of research that favor high capability types and implies that a poor capability industry will not attempt to compensate for its inability to innovate with increased research activity it is also found that the regulator s ability to induce investment is greater when r d is likely to be unsuccessful

imports domestic production and transnational vertical integration a theoretical note suppose a developing country has the choice of importing cars i or producing them at home in a subsidiary s of a transnational company or in a domestic firm under a licensing l contract from a transnational which ties the import of components from the latter if the criterion of national benefit is given by consumer surplus under i or s and by consumer surplus plus the profits of the domestic firm under l we compare the benefits from the alternative regimes i s or l under different market structure assumptions in most cases the regime s seems to dominate the conclusions are then modified by pointing to factors excluded from the basic model

batneec the economics of technology based environmental standards with a uk case illustration all environmental standards however implement ed impose costs on the regulated party this is true of emission or ambient quality standards environ mental taxes tradable emission permits and stand ards basedon the best available technology bat not surprisingly therefore all environmental reg ulation is to a greater or lesser degree the outcome of some political balancing of costs and benefits part at least of the initial cost is passed on to final consumers the extent depends on the price elastic ity of demand which is consistent with thepollut er pays principle oecd 1975 the costs of regulation are therefore borne by society as a whole the benefits of regulation are also shared by society as a whole although some groups in society may be efit more than others and where trans boundary pollution is involved different countries will re ceive variable benefits

a patent system for both diffusion and exclusion public policy analysis of optimal patent regimes is often framed as a tradeoff between static and dynamic efficiency in this analytical framework weak patent protection and strict antitrust policy are taken to be directed toward static concerns while protection of intellectual property through strong patent laws is taken as a reflection of broader social concerns for long run growth and technological progress this characterization has some truth but the magnitude of the conflict between static and dynamic efficiency can easily be exaggerated in this article i want to argue that weak patent protection need not be inimical to economic growth and conversely that strong patent protection need not be an enemy of diffusion appropriately structured patent law and antitrust rules can together ensure incentives for r d and also induce cooperation among firms in diffusing r d results through licensing and other means at the same time cooperation among firms at the r d stage can counterbalance weak patent protection by internalizing spillovers from ongoing r d programs and such cooperation may also produce additional spillovers from the existing knowledge

the case for permissive patents whatever its shortcomings in practice until very recently patent law has sought to embody the winner takes all principle this paper argues that it is both feasible and desirable to allow multiple prizes indeed it is possible that complete abolition of the patent system by raising the returns to late finishers would yield an improvement on the current situation

sources procedures and microeconomic effects of innovation fabio arcangeli paul david frank engelman christopher freeman massimo moggi richard nelson luigi orsenigo nathan rosenberg michele salvati g n von tunzelman two anonymous referees and the participants at the meeting of the committee on distribution growth and technical progress of the italian national research council cnr rome november 16 1985 have helped with various redraftings a particularly grateful acknowledgment is for the insightful and patient help of moses abramovitz this work has been undertaken at the science policy research unit spru university of sussex as part of the research program of the designated research centre sponsored by the economic and social research council esrc earlier support to the research that led to this paper by the italian national research council cnr is also gratefully acknowledged the statistical research has been undertaken with the assistance of stephano brioschi ilaria fornari and giovannu prennushi

firm incentives to promote technological change in pollution control reply abstract the process of technological change in pollution control is broken into three basic steps innovation diffusion and optimal agency response firm incentives to promote these steps are then examined under five regulatory regimes direct controls emission subsidies emission taxes free marketable permits and auctioned marketable permits on a relative basis emission taxes and auctioned permits provide the highest firm incentives to promote technological change at times free permits generate lower incentives direct controls which are common regulatory tools usually provide the lowest relative firm incentives to promote technological change

regulatory balancing and the efficiency of green r d we identify and analyse several dynamic implications of setting environmental standards such as to balance marginal costs and benefits the adoption of such a regulatory approach is shown to effect i the speed of improvement of abatement technologies ii the direction in a sense to be defined of that improvement iii its source and the distribution of the rents from it and iv the rate of development of defensive averting technologies existing views are thoroughly synthesised in the context of a simple diagrammatic model several new results are derived and at least one conventional wisdom questioned the message of the analysis for legislators and regulators is that cost benefit balancing should be done with care

endogenous technical change and environmental regulation abstract a model of environmental regulation under uncertainty is developed to compare the effect of price versus quantity rules upon technical change quantity rules tend to encourage more efficient levels of technical change

the multinational firm direct investment is incorporated into a simple general equilibrium model of international trade the analysis focuses on an attempt to endogenize the internalization decision it is argued that a reasonable approach assumes that arm s length contracts must be simple so that complex arrangements require internalization the model relates direct investment to the degree of underlying uncertainty and to fundamental trade determinants such as relative factor endowments the behavior of the model contrasts sharply with that of the markusen helpman model which takes internalization for granted

real options analysis and strategic decision making the real options approach is frequently advocated as an approach that offers a positive and radical reassessment of the value of risk and exploration we examine a recent case where merck used the real options approach to justify an investment in an r d project this case is used to highlight some of the problems associated with using real options we note that the assumptions incorporated in most standard option valuation models can conflict with the conclusions reached by strategic analysis as a result users of real options models should understand the quantitative aspects of these models and may often need to create a customized model for each situation the difficulty of developing customized models may explain in part the limited use of the real options approach in strategic analysis

potential for private cost increasing technological innovation under a tax based economic incentive pollution control policy a criticism of the current pollution control policy is its lack of incentive for technological innovation the author argues that the implementation of a tax based economic incentive policy may have its pay off in terms of lower real control outlays but this makes it possible for total private compliance costs resource costs and tax or transfer costs to actually increase upon the introduction of some new less expensive control technologies he presents a numerical illustration of this phenomenon then derives the conditions under which such cost increases may occur cost increasing technological innovations could generally be avoided if the tax incentive is coupled with a net revenue lid for the pollution control authorities 4 references 3 tables

patents versus ex post rewards a new look abstract economic studies that aim at comparing the patent system social efficiency versus an ex post reward system rest on an outdated view of patents they assume that firms use the patent system only in order to be granted a short term commercial monopoly rent this assumption is convenient because it allows straightforward comparisons between patents and rewards but it is not confirmed by empirical studies which stress that in many industries most firms use patents as strategic devices to trade technologies and to ease r d collaborations this change leads to rethinking the framework of the patent reward debate

the drivers of efficient knowledge transfer performance evidence from british universities using data from the united kingdom this study explores the institutional and environmental factors that influence universities efficiency in knowledge transfer while studies of universities knowledge transfer performance have so far focused on patent commercialisation and research contracting with industry it is increasingly acknowledged that universities engage in a broader range of knowledge transfer activities including consulting public engagement and provision of knowledge intensive services when these are taken into account less research intensive universities and those with a greater share of staff in the arts and humanities improve their relative efficiency more specialised older and larger institutions are more efficient performers while research intensity is no longer a strong predictor of efficiency

an approach for optimal placement of static var compensators based on reactive power spot price in this paper a new reactive power spot price index qspi has been suggested to determine the optimal location of static var compensator svc in the power system the proposed index has been computed at each bus based on the reactive power spot price under different loading conditions for the system intact and critical line outage contingency cases the effectiveness of the proposed method has been tested on two practical indian systems the results show that the suggested method of svc placement is effective in reducing the real and reactive power spot prices generation cost system real power loss total wheeling charges and enhancing the system loading margin during normal as well as critical contingency cases

what determines patent value insights from the semiconductor industry abstract this paper contributes to an understanding which impacts certain patent characteristics have on the value of patent rights in an exploratory study 127 individual patents from a semiconductor company were evaluated comprehensively by technical and marketing representatives the analysis of this rare data shows that for patents used as bargaining chips novelty and inventive activity are most important difficulty of inventing around and disclosure turn out to be of limited importance due to a selection bias the influence of patent age on its value cannot be determined the results hint at a differentiated theoretical plausibility of value indicators

real options logic revisited the performance effects of alternative resource allocation regimes we delineate three dimensions of resource allocation behavior that allow us to distinguish between real options logic and alternative resource allocation regimes sequencing low initial commitment and reallocation we then measure these in a product innovation context to test for the performance effect of real options logic vis a vis its alternatives sequencing which distinguishes dynamic allocation regimes more generally is associated with higher new product sales low initial commitment and reallocation do not show individual direct effects on new product sales however when assessed as a match we find that the fit between low initial commitment and reallocation yes yes no no increases performance significantly after controlling for such fit as well as sequencing we find no significant performance difference between real options logic and other regimes our findings imply that insufficient identification of real options logic picks up confounding effects which may provide an explanation for the inconclusive results in prior studies of real options and performance in addition to bounding the concept more precisely we contribute to theory by situating real options logic within the broader set of allocation regimes conducive to innovation performance in uncertain competitive markets

the economics of invention incentives patents prizes and research contracts though public intervention in the market for research is virtually universal economists have paid surprisingly little attention to the choice of the form of research incentive in a given market structure many studies concentrate on patents but any assumption of their superiority over other incentives has been founded on intuition rather than on formal analysis in this paper i analyze the choice between three of the most common alternative means of public intervention in the research market namely patents prizes and direct contracting for research services i show why and under what conditions any one of the three may be preferred by a social welfare maximizing administrator in a competitive economy using a model that for the first time pays explicit attention to differences in the informational roles of each of these alternatives in the extensive literature on the economics of patents see arnold plant 1934 fritz machlup 1958 charles taylor and z a silberston 1973 morton kamien and nancy schwartz 1975 and f m scherer 1977 for valuable surveys formal analysis weighs the benefits of patents as a solution to the market failure associated with the inappropriability of knowledge against the welfare cost due to the restriction on the use of the knowledge generated and this tradeoff is optimized by patent life adjustment in william nordhaus 1969 scant analytical attention is paid to alternative incentive mechanisms an exception is ben yu 1981 who considers the role of prior contracting for inventions but as many writers for example dan usher 1964 yoram barzel 1968 joseph stiglitz 1969 carole kitti 1973 glenn loury 1979 partha dasgupta and stiglitz 1980a have pointed out in various contexts the incentive offered by an unlimited patent to competitive researchers may be excessive due to the common pool problem discussed further in section i below if the patent administrator and researchers share the same information as implicitly assumed in previous models then the patent life limitation can be adjusted to provide the optimal patent incentive given the common pool problem but in all such models patents would not be chosen in a fully optimized fiscal system researchers and the administrator are assumed to have identical information about the shadow price of potential inventions a patent is just a means of turning this shadow price into a monetary reward but monetary compensation can instead be offered directly to researchers by the state assuming that patent revenues incur a higher deadweight loss than an equivalent amount of public funds financed by less distortionary means for example a minimally efficient tax system appropriate prizes or government contracts are socially preferable to patents with optimal lives if the patent is ever to be the optimal incentive mechanism for research it must possess advantages not captured in existing models informal discussions of patents emphasize their informational role to include the latter as a justification for decentralized invention incentives i incorporate an ex ante imbalance of information about costs and benefits of research in the model presented in section ii but this alone is not quite enough it is further necessary to specify that the terms of the award must be fixed before department of economics economic growth center box 1987 yale station yale university new haven ct 06520 i thank with the usual caveat marguerite alejandro wright cindy arfken martin baily nuong brennan steven englander robert evenson richard levin richard nelson susan rose ackerman denis wright and two referees for assistance of various kinds

r d appropriability opportunity and market structure new evidence on some schumpeterian hypotheses one of the largest bodies of literature in the field of industrial organization is devoted to the interpretation and testing of several hypotheses advanced by joseph schumpeter 1950 concerning innovation and industrial market structure one set of hypotheses focuses on the role of firm size as a determinant of r d spending and the rate of technological advance another set focuses on the effect of market concentration on r d and technological advance in this paper we reexamine the latter set of hypotheses at the industry level using new data on r d appropriability and technological opportunity collected by levin et al 1984 in a survey of r d executives in 130 industries

real options theory in international business the last quarter century has witnessed substantial growth in applications of real options theory rot to international business ib research in this review we explicate the core rot concepts in the ib context and discuss the contributions of rot based research to three core ib issues timing and scale of market entry or exit entry mode and governance form and the role of multinational networks based on our review we propose a holistic rot view of the multinational enterprise that synthesizes the insights of existing studies finally to move the field forward we highlight key questions and challenges in current rot based work provide a more precise definition of exogenous and endogenous uncertainty suggest empirical designs to test unique rot predictions and explore areas where rot can be combined with other theoretical perspectives to better understand ib phenomena

supply and demand factors of cleaner technologies some empirical evidence this article identifies and analyzes factors that affect the willingness of firms and consumers to develop and adopt cleaner technologies cleaner technologies is used as a general term for pollution abatement technologies re use systems and environmentally sound consumer products and materials the article also contains the findings of three case studies on cleaner technologies cfc substitutes low solvent paints and coatings and membrane technology in which the importance of the identified factors is investigated from the case studies some general conclusions are drawn about these factors and the way in which policy instruments can be used to stimulate innovation in and diffusion of cleaner technologies no single policy instrument is considered to be optimal instead a policy mix is needed involving a much wider use of economic instruments

institutions supporting technical advance in industry elsewhere 1982 economists beliefs that modern capitalism is a fine innovation generating machine have no intellectual grounding in contemporary neoclassical theory the twin theorems take technologies as given the apparent effectiveness of capitalism in this arena must reside in characteristics and mechanisms other than those featured in the microeconomic theory textbooks in our book we attempt to analyze these it also is true that the capitalist engine is a much more complicated one than many economists seem to think i presently am

monopoly with incomplete information recent theoretical research on principal agent relationships has emphasized incentive problems that arise when the parties involved are constrained by either asymmetric information or their inability to monitor each other s actions here we concentrate on the former constraint and consider the case of a single principal the monopolist the main contribution is to show that under a separability assumption strong conclusions can be drawn about the nature of optimal incentive schemes although the primary focus is on optimal quantity discounts in a monopolized market the results also shed light on related topics such as optimal income taxation and commodity bundling

the interaction between forms of insurance contract and types of technical change in medical care a simple three parameter description of medical technology is introduced to investigate the relationships between technical change welfare and type of insurance contract the value of a particular change in technology depends on the existing form of contract the marginal equilibrium expected utility to consumers of different types of technical change hinges on the manner in which the insurance arrangement is designed to mitigate moral hazard these results open the way for a positive model of the effects of insurance arrangements on the types of technology that are adopted and the effects of technical changes on the prevalent forms of insurance contract

persistent heterogeneity of r d intensities within sectors evidence and policy implications abstract do firms in the same sector converge towards the same r d intensities previous research has often assumed this to be true a closer examination using microdata from the eu industrial r d investment scoreboard for the years 2000 2015 shows considerable heterogeneity in r d intensities among firms in the same sector and that this heterogeneity persists over time statistical tests of convergence show that the variation in r d intensities does not decrease over time i e no convergence although firms with an r d intensity below the industry average do seem to catch up with the leaders i e evidence of convergence overall firms in the same industry do not converge to a common r d intensity policy implications are discussed

patent protection imitation and the mode of technology transfer abstract this paper analyzes a model in which a firm endowed with a new technology can choose between exports licensing and direct investment as entry modes in a foreign market i endogenize the vintage of the transferred technology and allow for imitation by the licensee subsidiary production and exports circumvent imitation but involve higher costs for the innovating firm the firm can strategically use the vintage of the technology to deter imitation by the licensee as a result transfers to affiliates might be of later vintage than technologies sold to outsiders through modification of the imitation costs the host country s system of patent protection influences the mode of technology transfers which in turn affects the welfare of the recipient economy

assessing the relative performance of u k university technology transfer offices parametric and non parametric evidence abstract we present evidence on the relative performance of u k university technology transfer offices ttos using data envelopment analysis dea and stochastic frontier estimation sfe u k ttos are found to exhibit low levels of absolute efficiency there also appear to be decreasing returns to scale implying that ttos may need to be reconfigured into smaller units the development of regionally based sector focused ttos is also advised consistent with qualitative evidence from u s ttos we find that there is a need to upgrade the business skills and capabilities of u k tto managers and licensing officers

the influence of market demand upon innovation a critical review of some recent empirical studies abstract a number of recent empirical studies of technical change at the level of the individual firm have concluded that market demand is the dominant influence upon the innovation process calling forth innovations in market economies the pace of innovation in the private sector heavily influences the growth of national output and productivity and these studies and their conclusions have therefore received much attention having been extensively quoted in discussions of appropriate government policy for the encouragement of innovation this paper reviews a number of these studies and concludes that their findings and the interpretations of their findings in the secondary literature are seriously flawed and in many cases invalid the proposition that market demand governs the innovation process is by no means conclusively demonstrated in these studies and they are therefore inadequate and inappropriate guides for the formulation of policy most of the studies examined employ a working definition of demand factors which is so broad as to embrace a range of possible influences upon innovation which should more properly be classified elsewhere the concept of demand utilized in these studies bears little resemblance to the more restrictive and precise definition of market demand found in economics in addition the phenomena analyzed in these studies are a very heterogeneous lot the studies do not address identical empirical questions and their findings are as a result neither uniform nor unambiguous both demand and supply side influences are crucial to understanding the innovation process and it is the exclusive preoccupation with only one set of these forces which is criticized in this paper some implications of the criticism for government policy toward innovation are discussed in the conclusion

university knowledge transfer private ownership incentives and local development objectives abstract we study the impact of private ownership incentive pay and local development objectives on university licensing performance we develop and test a simple contracting model of technology licensing offices using new survey information together with panel data on u s universities for 1995 99 we find that private universities are much more likely to adopt incentive pay than public ones but that ownership does not affect licensing performance conditional on the use of incentive pay adopting incentive pay is associated with about 30 40 percent more income per license universities with strong local development objectives generate about 30 percent less income per license but are more likely to license to local in state start up companies in addition we show that government constraints on university licensing activity are costly in terms of forgone license income and the creation of start up companies these results are robust to controls for observed and unobserved heterogeneity

location decentralization and knowledge sources for innovation when firms seek to innovate they must decide where to locate their innovation activity this location choice requires firms to make a simultaneous choice about the organizational structure of innovation activity almost by definition multiple locations per firm imply some degree of decentralization we compare predictions of the knowledge based view with the predictions of organizational economics regarding the location and decentralization of r d using firm level data on r d locations in finland we examine the conditions under which firms with multiple r d locations also have greater innovation output our results indicate that multilocation of r d activity is positively associated with imitative innovation output and is strongly correlated with greater external knowledge sourcing we also find that the positive association between multiple r d locations and innovative output does not apply to new to the market innovations the results are consistent with the interpretation that multilocation of r d enables firms to access a broad set of external sources of knowledge in pursuit of imitative rather than new to the market innovation moreover these findings imply heterogeneity in r d strategies between firms pursuing new to the market innovation and firms pursuing imitative innovation it is thus important to distinguish between new to the market and imitative innovations because their determinants may differ

university technology transfer how in efficient are french universities this paper presents the first assessment of the efficiency of the technology transfer operated by the french university system and its main determinants the analysis is based on a detailed and original database of 51 ttos categorized by type of university they belong to over the period 2003 2007 overall we find a low level of efficiency and both intra category and inter categories efficiency variation the analysis of determinants showed that french ttos efficiency depends extensively on the nature of the category with universities specialised in science and engineering being the most efficient ones on institutional and environmental characteristics we found that both the seniority of tto and size of the university have a positive effect in terms of environmental variables the intensity of rd however in terms of growth rate only the private r d activity seems to be the main driver lastly we find that the presence of a university related hospital is detrimental for the efficiency an extended discussion of the results within the existing literature is also offered

the location of overseas production and production for export by u s multinational firms abstract the location of overseas manufacturing production is influenced by common factors that operate in all industries notably proximity to the united states and to other markets within industries opposites attract low wage and low capital intensity parents choose high wage countries production for export is attracted by large internal markets in host countries economies of scale in production presumably make large markets economical as export bases another factor is high trade propensities of host countries u s firms tend to export from high wage countries but labor cost is not in general a major influence on the location of export production

averting behavior and the benefits of reduced soiling abstract the individual s choice of cleaning frequency is examined theoretically under assumptions more general than those of previous authors the individual is assumed to maximize utility over cleanliness and a general commodity where cleanliness is determined by frequency of cleaning and ambient pollution allowance is made for the possibility that the cost per cleaning episode is positively affected by pollution and negatively affected by the frequency of cleaning the present framework is used to make comparisons and comments regarding the assumptions and results of watson and jaksch j environ econ manag 9 1982 248 262 and courant and porter j environ econ manag 8 1981 321 329

multinationals multi plant economies and the gains from trade a general equilibrium model of a multinational enterprise based on economies of multi plant operation is developed these economies are modelled as arising from the existence of a joint input whose productivity in each production facility is independent of the number of facilities maintained by a firm the multinational thus offers the world increased technical efficiency by eliminating the duplication of the joint input that would occur with independent national firms since this technical efficiency may come at the expense of increased market power the full determinants of home country host country and world welfare are considered

technology transfer under asymmetric information licensing contracts for newly patented innovations are observed to vary along several dimensions including the form and size of the payment to the inventor fixedfee versus some output based royalty the degree of exclusivity and the division of rents in this article we show that theform of the contract can be explained by two problems in technology exchange the superiority of a licensor s precontractual information about the economic value of the innovation and thefact that sharing this information with the licensee mayfacilitate imitation we show that a licensor signals her technology type with an output based payment or royalty and may leave some of the rents with the licensee conditions under which exclusive license contracts linear and nonlinear and nonexclusive linear contracts are used to transfer technology are identified

the diffusion of clean technologies a review with suggestions for future diffusion analysis abstract this article gives an overview of the literature on clean technology diffusion followed by suggestions for future analysis findings from diffusion analysis are presented in the form of 10 stylised facts helping the reader to see the forest for the trees the overall conclusion is that the diffusion of clean technology same as the diffusion of normal innovations is governed by endogenous mechanism epidemic learning and learning economies and by exogenous mechanisms policy is important for clean technology diffusion but other factors are important too the characteristics of the clean technology absorptive capacities of potential adopters and the age structure of capital it is often overlooked that companies have a choice they can choose between an end of pipe solution a process change adaptation and a change of process substitution this means that the diffusion and evolution of one clean technology will be at the expense of the diffusion of another clean technology something overlooked in studies on clean technology diffusion further research is needed on the influence of public policy on clean technology choice expectations about learning economies and prices adjustment costs network externalities and complementary innovations on clean technology adoption choices

resources capabilities risk capital and the creation of university spin out companies abstract the commercialization of university research has become an increasingly important issue given concerns regarding licensing and the university s desire to maximize the returns to intellectual property ip in this paper we assess the impact of university resources and routines capabilities on the creation of spin out companies we find that both the number of spin out companies created and the number of spin out companies created with equity investment are significantly positively associated with expenditure on intellectual property protection the business development capabilities of technology transfer offices and the royalty regime of the university these results highlight the importance not just of resource stocks but also of developing appropriate capabilities of technology transfer officers in spinning out companies the results suggest that universities and policy makers need to devote attention to the training and recruitment of technology officers with the broad base of commercial skills

what is behind the recent surge in patenting abstract we investigate the cause of an unprecedented surge of us patenting over the past decade conventional wisdom points to the establishment of the court of appeals of the federal circuit by congress in 1982 we examine whether this institutional change which has benefited patent holders explains the burst in us patenting using both international and domestic data on patent applications and awards we conclude that the evidence is not favorable to the conventional view instead it appears that the jump in patenting reflects an increase in us innovation spurred by changes in the management of research

mid range universities linkages with industry knowledge types and the role of intermediaries we analyze how mid range universities can contribute to industrial change through the transfer of tacit and codified knowledge in the areas of spin offs licensing and patents contract research consultancy and reach out and graduate and researcher mobility we use archival survey and interview data relating to mid range universities in mid range environments in the uk belgium germany and sweden our findings suggest that mid range universities primarily need to focus on generating world class research and critical mass in areas of expertise as well as developing different types of intermediaries mid range universities may need to develop a portfolio of university industry linkages in terms of the scope of activities and the types of firms with which they interact we also show that different intermediaries have important roles to play in developing university industry linkages for mid range universities

price cap regulation and technical change abstract existing analyses of the implications of price cap regulation for the development of cost reducing technologies assume that all r d is done by the regulated industry this is unrealistic we present a simple model of non cooperative r d by a regulated firm and a single external developer under a price cap regime of the sort characterised by cabral and riordan in equilibrium the external developer exerts less r d than is socially optimal the regulated firm may exert more or less a tightening of the regulatory regime impacts the r d incentives of both players though in different ways the optimal regulatory adjustment parameter may be bigger or smaller than that suggested by existing studies despite the scope for duplication of results research by an outsider necessarily enhances welfare

clean technology innovation and environmental regulation the development and diffusion of clean technologies has an important role to play in preventing pollution government must address the issue of how firms can be given the necessary incentive to develop environmentally sound production techniques and products this paper focus on how subsidies can under certain restrictive conditions stimulate innovation subsidization is usually assumed to involve unit subsidies for pollution reduction unit subsidies have little to do with the subsidy schemes in actual use our focus is on subsidy schemes specifically designed to promote the development of clean technologies through the use of grants financial aid based on data from the development projects initiated through the danish clean technology programme we analyze how environmental innovations take place when the polluters their suppliers and consultants are actively engaged in the development processes the main merit of subsidy schemes like the danish one is its direct focus on the innovation processes and the active incorporation of the network of firms surrounding the polluters our findings lead us to conclude that when it comes to subsidization the role of government should be redefined government can act as a matchmaker by providing firms with informative incentives and necessary contacts for finding more efficient technological solutions to specific environmental problems

accounting for innovation and measuring innovativeness an illustrative framework and an application the purpose of this paper is to propose and illustrate an accounting framework for innovation we characterize the intensity of innovation by a sales weighted measure of innovation the share of sales in innovative products but other output indicators of innovation could be considered as well comparing statistics on the share of innovative sales across countries industries or firms measures but does not explain the intercountry interindustry or interfirm differences in innovation intensity to have a more meaningful basis of comparison we need a model if an exact model of innovation in its various dimensions existed and if we knew it we would be able to understand fully why innovation differs among countries industries or firms of course such a model does not exist nevertheless it is worth trying to account for innovation differences if only very roughly in such an endeavor what remains to be explained is as important to consider as what can be explained because it reflects the extent of innovative ability or capacity or innovativeness to motivate our approach better and make it more explicit we find it appealing to draw a comparison with the standard framework for growth accounting and the underlying model of a production function production output is viewed as resulting from a process of transformation of inputs into output that can be represented and analyzed in terms of a production function based on the production function an accounting framework can be constructed in which changes in output between periods years decades or differences between spatial units firms industries countries are ascribed to changes or differences in the inputs and in a residual that is known as total factor or multifactor productivity tfp or mfp or simply productivity likewise innovation output can be viewed as resulting from innovation inputs such as r d efforts and other contextual determinants such as the pressure of competition this linkage can be represented in terms of an innovation function and an innovation accounting framework on the basis of which changes in innovation output between periods or differences between spatial units can be ascribed to changes or differences in the factors of innovation and in a residual that we call innovativeness or the unexplained ability to turn innovation inputs into innovation output innovativeness is thus to innovation what tfp is to production innovativeness is conditional on a model of an innovation function and a set of factors of innovation just as tfp is conditional on an assumed specification of the production function and measured factors of production both correspond to omitted factors of performance such as technological organizational cultural or environmental factors and to other sources of misspecification errors although tfp is commonly interpreted as being mainly an indicator of technology the produc

imitation costs and patents an empirical study it has long been recognised that the costs of imitating new products have an important effect on the incentives for innovation in a market economy as arrow i962 and others have pointed out if firms can imitate an innovation at a cost that is substantially below the cost to the innovator of developing the innovation there may be little or no incentive for the innovator to carry out the innovation in their discussions of the innovation process economists frequently have called attention to the major role played by the costs of imitation but there has been little or no attempt to measure these costs to test various hypotheses concerning the factors influencing them or to estimate their effects in this paper we report some findings of what seems to be the first study of this topic in addition we present data regarding the effects of patents on imitation costs and on the rate of innovation

beyond lobbying expenditures how lobbying breadth and political connectedness affect firm outcomes the extant lobbying literature largely focuses on the effects of firm aggregate lobbying expenditures suggesting that more lobbying expenditures fuel positive firm benefits we argue the focus on

dynamic r d investment policies this paper examines dynamic r d investment policies and the valuation of r d programs in a contingent claims framework we incorporate the following characteristics of r d programs into our model learning by doing collateral learning between different projects in the program interaction between project cash flows periodic reevaluations of the program different intensities of investment capital rationing constraints and competition we show that a firm may invest in multiple projects even if only one can be implemented after development is complete furthermore the firm may significantly alter its funding policy over time for example it may simultaneously develop multiple projects for a period of time then focus on a lead project and potentially resume funding of a backup project if the lead project fails to deliver on its early promise we show how a firm can forecast expected r d spending through time for an optimally executed r d program while project volatility plays an important role in determining r d program value we find that for high volatility projects the optimal investment policy is not very sensitive to changes in or misestimation of volatility in considering whether to accelerate development of a project a firm should balance the adverse effects of increased costs and the loss of investment flexibility against the positive effects of rapid uncertainty resolution and accelerated cash flows in the presence of a budget constraint that prevents the firm from simultaneously accelerating projects and developing projects in parallel we find that if one project significantly dominates another early in the development stage the option to accelerate the lead project is likely to be more valuable than the option to exchange projects thus the backup project would be shelved in order to commit extra resources to development of the lead project finally competition from other firms leads to more parallel investment in the early development stages of projects less parallel investment in the latter stages of development and lower overall investment

changes to university ipr regulations in europe and the impact on academic patenting this article develops a general framework to describe the changes in university ipr regulations in europe and their effects on the patenting activities of universities and on knowledge transfer processes understanding the effects of changes in ipr regulations on academic patenting is a complex issue and parallels with the us case can be misleading first despite the general trend towards institutional ownership university ipr regulations in europe remain extremely differentiated and there is no one to one mapping to the us system second it is difficult to disentangle the quantitative and qualitative effects of changes in ipr ownership regulations on academic patenting activities from the effects of concurrent transformations in the institutional cultural and organizational landscape surrounding academic knowledge transfer the article proposes a review and typological classification of national university ipr ownership systems on the basis of their development since 2000 and uses it to analyze the aggregate dynamics of academic patent ownership in several european countries the analysis of patterns of ownership of academic patents shows that there has been a general increase in university patenting since 1990 with a significant slowdown and even reduction in some countries after early 2000s accompanied by a switch in academic patents ownership in favor of university ownership though preserving the european specificity of high company ownership of academic invented patents

in search of complementarity in innovation strategy internal r d and external knowledge acquisition empirical research on complementarity between organizational design decisions has traditionally focused on the question of existence of complementarity in this paper we take a broader approach to the issue combining a productivity and an adoption approach while including a search for contextual variables in the firms strategy that affects complementarity analysis of contextual variables is not only interesting per se but also improves the productivity test for the existence of complementarity we use our empirical methodology to analyze complementarity between innovation activities internal research and development r d and external knowledge acquisition our results suggest that internal r d and external knowledge acquisition are complementary innovation activities but that the degree of complementarity is sensitive to other elements of the firms strategic environment we identify reliance on basic r dthe importance of universities and research centers as an information source for the innovation processas an important contextual variable affecting complementarity between internal and external innovation activities

technology transfer offices and commercialization of university intellectual property performance and policy implications the recent increase in the rate of commercialization of intellectual property at us and european universities has important performance and policy implications we review recent studies of the antecedents and consequences of these activities and then draw some lessons learned for policy makers a key conclusion is that universities and regions must formulate and implement coherent and feasible technology transfer commercialization strategies

price and advertising signals of product quality we present a signaling model based on ideas of phillip nelson in which both the introductory price and the level of directly uninformative advertising or other dissipative marketing expenditures are choice variables and may be used as signals for the initially unobservable quality of a newly introduced experience good repeat purchases play a crucial role in our model a second focus of the paper is on illustrating an approach to refining the set of equilibria in signalling games with multiple potential signals

the economics of product patents this paper develops a model of product patents in which the patent changes the nature of market entry behavior rather than preventing entry entirely the model incorporates three levels of action namely the innovator s patenting decision the potential entrant s location decision and possible court action the analysis demonstrates how the characteristics of the patents system and the enforcement framework can influence rivals variety choices and thus the market equilibrium it also considers how the system can in principle be adjusted to improve social welfare copyright 1990 by american economic association

evidence from patents and patent citations on the impact of nasa and other federal labs on commercial innovation federal lab commercialization is explored 1 by analyzing us government patents and 2 in a qualitative analysis of one nasa lab s patents tests apply to three distinct sets of patents 1963 94 nasa all other us government and a random sample of all us inventors patents the federal patenting rate plummeted in the 1970s consistent with increasing commercialization both nasa s and other federal agencies rates recovered in the 1980s the case study finds citations to be a valid but noisy measure of technology spillovers excluding spurious cites two thirds of cites to patents of nasa lewis electro physics branch were evaluated as involving spillovers

overconfidence and excess entry an experimental approach psychological studies show that most people are overconfident about their own relative abilities and unreasonably optimistic about their futures e g shelly e taylor and j d brown 1988 neil d weinstein 1980 when assessing their position in a distribution of peers on almost any positive trait like driving ability ola svenson 1981 income prospects or longevity a vast majority of people say they are above the average although of course only half can be if the trait is symmetrically distributed this paper explores whether optimistic biases could plausibly and predictably influence economic behavior in one particular setting entry into competitive games or markets many empirical studies show that most new businesses fail within a few years for example using plant level data from the u s census of manufacturers spanning 1963 1982 timothy dunne et al 1988 estimated that 61 5 percent of all entrants exited within five years and 79 6 percent exited within 10 years most of these exits are failures see also dunne et al 1989a 1989b d shapiro and r s khemani 1987

taxation and the transfer of technology by multinational firms this paper analyzes a multinational s transfer of technology to a foreign subsidiary for the case where there is a risk of expropriation an expropriation is assumed to give rise to competition between the parts of the previous multinational enterprise to reduce the benefit of expropriation the multinational generally transfers an inferior technology even if the transfer of technology is costless with a reduced benefit of expropriation the multinational has to pay lower taxes to prevent expropriation the multinational optimally transfers additional technology over time if it has a finite horizon in the country for this case tax payments also are shown to increase over time in a tax holiday like fashion

innovation in pollution control comparisons of the various institutional arrangements for controlling pollutant emissions from individual sources effluent fees effluent control subsidies marketable permits and direct command and control regulation have usually focused on their static efficiency properties and institutional feasibility e g dales 1968 zerbe 1970 baumol and oates 1975 kneese and schultze 1975 marin 1978 mills and white 1978 spence and weitzman 1978 russell 1979 a relatively neglected area has been the study of how each arrangement influences innovation in pollution control a few studies e g kneese and schultze 1975 marin 1978 mills and white 1978 russell 1979 have casually claimed that the control methods that rely on economic incentives provide superior incentives for innovation but there have been few systematic studies of the question this paper provides a simple model of pollution control innovation by a profitmaximizing polluter who is subject to the various control methods the consequences of the methods will be explored in three major contexts first we assume that the polluter and the innovation is a small enough part of the overall pollution problem so that none of the important marginal conditions are changed by the innovation second we assume that the polluter and the innovation are important enough so that marginal conditions are changed by the innovations but that the governmental authority determining pollution control incentives or levels fails to make the appropriate adjustments third we again assume that the innovation causes marginal conditions to change but in this case the governmental authority makes the appropriate adjustments we use the term ratcheting to describe this last phenomenon in all cases we assume that the innovating polluter correctly predicts the reactions of the governmental authority and bases his innovation decisions on that prediction a profit maximizing entrepreneur would normally be expected to adopt any innovation that promised gains present discounted value to him in excess of initial

project management under risk using the real options approach to evaluate flexibility in r d managerial flexibility has value in the context of uncertain r d projects as management can repeatedly gather information about uncertain project and market characteristics and based on this information change its course of action this value is now well accepted and referred to as real option value we introduce in addition to the familiar real option of abandonment the option of corrective action that management can take during the project the intuition from options pricing theory is that higher uncertainty in project payoffs increases the real option value of managerial decision flexibility however r d managers face uncertainty not only in payoffs but also from many other sources we identify five example types of r d uncertainty in market payoffs project budgets product performance market requirements and project schedules how do they influence the value from managerial flexibility we find that if uncertainty is resolved or costs revenues occurafter all decisions have been made more variability may smear out contingencies and thus reduce the value of flexibility in addition variability may reduce the probability of flexibility ever being exercised which also reduces its value this result runs counter to established option pricing theory intuition and contributes to a better risk management in r d projects our model builds intuition for r d managers as to when it is and when it is not worthwhile to delay commitments for example by postponing a design freeze thus maintaining flexibility in r d projects

the diffusion of biological waste water treatment plants in the dutch food and beverage industry this article develops an economic model of environmental technology adoption decisions the model is applied econometrically to the diffusion of biological waste water treatment plants in the dutch food and beverage industry it shows that it is possible to explain the overall diffusion pattern of biological waste water treatment plants in terms of a rational choice model in which prospective adopters trade off the costs of effluent treatment against the savings on effluent tax payments effluent charges are shown to be a significant positive factor in the timing of adoption of biological effluent treatment plants this result is brought out by both the rational choice and the epidemic models none of the models however can explain year to year changes in the ownership of biological waste water treatment plants during the 1974 91 period which suggests that there are other factors not included in the model that affect the timing of adoption

pathways to impact and the strategic role of universities new evidence on the breadth and depth of university knowledge exchange in the uk and the factors constraining its development there has been an increasing focus on the strategic role of universities in stimulating innovation and economic growth primarily though the transfer of technology this paper interrogates some of the key aspects of much of the conventional wisdom concerning the transfer of technology and the knowledge exchange process in general it analyses the results from two unique surveys a survey of the uk academic community that generated more than 22 000 responses and a stratified survey of businesses that generated more than 2 500 responses the results suggest that much of the conventional wisdom concerning knowledge exchange involving academia is too narrowly confined or is misinformed first there is an excessive focus in much of the academic and policy discourse on commercialisation and technology transfer there are many knowledge exchange mechanisms used by academics these include commercialisation processes but also many other hidden connections second the focus on the science base ignores that knowledge exchange involves academics from all disciplines third the preoccupation with improving innovation and business performance tends to ignore that knowledge exchange involves partners from the public and third not for profit sectors as well as private sector businesses fourth the main constraints that hinder or limit the knowledge exchange process include a lack of time insufficient internal capability to manage relationships and insufficient information to identify partners problems concerning cultural differences between academics and business and disputes concerning intellectual property are not prominent overall the paper suggests that the notion of an academic ivory tower seems to be a myth as far as the uk is concerned it also suggests that a strategic focus on strengthening connections between academia and the rest of society may generate long term benefits but it will also face challenges and should not distort or divert from the wider foundations of scholarship on which the success of universities are built

tariffs technology transfer and welfare it is found that the welfare gain per unit of revenue raised is maximized for an export tariff on technology transfer followed by an import tariff on goods with an export tariff on goods the poorest policy alternative these results are derived within a monopolistic competition model where the production of any good requires some initial research and development r d and technology transfer occurs when r d is done in one country for production of goods in the other an intuitive explanation is presented based on the public good nature of r d and also the elasticity of demand for technologies from firms

technology transfer and public policy a review of research and theory abstract my purpose is to review synthesize and criticize the voluminous multidisciplinary literature on technology transfer to reduce the literature to manageable proportions i focus chiefly not exclusively on recent literature on domestic technology transfer from universities and government laboratories i begin by examining a set of fundamental conceptual issues especially the ways in which the analytical ambiguities surrounding technology transfer concepts affect research and theory my literature review follows and i emphasize technology transfer s impact and effectiveness i employ a contingent effectiveness model of technology transfer to organize the literature as the model s name implies it assumes that technology effectiveness can take a variety of forms in addition to examining the more traditional effectiveness criteria those rooted in market impacts the model considers a number of alternative effectiveness criteria including political effectiveness capacity building

technology creation in semi industrial economies abstract technological activities in the semi industrial economies of latin america leading to the adaptation of imported technologies as well as the development of new products and processes have been both an involuntary byproduct of manufacturing activities and the result of deliberate decisions to set up technological research facilities technological research reported by latin american firms is shown to be largely complementary to production and carried out to reap the extra benefits of protection external effects are thus disregarded since the benefits from industrial production suffice to induce the requisite adaptive research the paper suggests that the as yet not well understood interaction between industrial and technological development be studied by focusing on technology as information and engineers as its processors looking at the learning stages from using imports to the creation of new products and examining these processes in terms of a progression toward increasing technological complexity

is free trade passe abstract if there were an economist s creed it would surely contain the affirmations i understand the principle of comparative advantage and i advocate free trade yet the case for free trade is currently more in doubt than at any time since the 1817 publication of ricardo s principles of political economy and this is due to changes that have recently taken place in the theory of international trade while new developments in international trade theory may not yet be familiar to the profession at large they have been substantial and radical in the last ten years the traditional constant returns perfect competition models of international trade have been supplemented and to some extent supplanted by a new breed of models that emphasizes increasing returns and imperfect competition these new models call into doubt the extent to which actual trade can be explained by comparative advantage they also open the possibility that government intervention in trade via import restrictions export subsidies

facts devices allocation with control coordination considering congestion relief and voltage stability this paper presents an optimal allocation method for flexible ac transmission system facts devices for market based power systems considering congestion relief and voltage stability the purpose of the facts devices installation is to provide benefit for all entities accomplished by both minimizing annual device investment cost and maximizing annual benefit defined as difference between expected security cost esc with and without facts devices installation different from previous approaches the proposed method accurately evaluates the annual cost and benefits obtainable by facts devices installation by formulating a large scale optimization problem that contains power flow analyses for a large number of system states representing annual power system operations in addition dynamic state transitions caused by specified contingencies are also simulated in the optimization problem to evaluate the effect of facts control actions as well as the other coordinated controls the expected cost consists of operating cost under normal and contingency states along with their related probabilities to occur maximizing social welfare is the objective for normal state while minimizing compensations for generations re scheduling and load shedding as well as maximizing social welfare are the objectives in case of contingency although installation cost of facts devices is required they are useful as cost free means which can reduce effectively the annual costs for generations re scheduling and load shedding

the international economics of intellectual property right protection a welfare theoretic trade policy analysis abstract this paper provides an analytical construct for examining the trade policy effects of greater intellectual property protection in technology importing countries it is shown that two types of conflict are likely to arise between net technology importers and exporters the first relates to the level of protection with importers preferring a low level and exporters a high one the second conflict hitherto unexplored relates to the manner of protection with importers likely to prefer discriminatory regimes favoring local r d creation whereas exporters would prefer nondiscriminatory protection in importing countries

inventor networks in renewable energies the influence of the policy mix in germany technological change and gains in efficiency of renewable power generation technologies are to a large extent driven by governmental support various policy instruments that can broadly be categorized as technology push demand pull or systemic constitute part of the policy mix for renewable energies our goal is to gain insights into the influence of this policy mix on the intensity and organization of inventive activities for wind power and photovoltaics in germany since the 1980s we examine the effect of different instruments on the size and structure of co inventor networks based on patent data our results indicate notable differences between the technologies the network size for wind power is driven by technology push and systemic instruments while in photovoltaics demand pull is decisive for network growth by and large the instruments complement each other and form a consistent mix of policy instruments the structure of the networks is driven by demand pull for both technologies systemic instruments increase interaction especially in the wind power network and are complementary to demand pull in fostering collaboration

international technology transfer with an information asymmetry and endogenous research and development abstract in this paper an information asymmetry concerning technology type and the cost of operating across national boundaries interact with location considerations to determine whether international technology transfer occurs via the export of goods subsidiaries or licensing it is shown that market share restrictions and per unit royalties can signal technology type and make licensing the most attractive option in addition it is shown that policies which restrict the mode of technology transfer do not necessarily reduce the amount of research and development undertaken

licensing versus direct investment implications for economic growth we develop a symmetric two country model of foreign direct investment fdi that captures the internalization decision and its implications for both the rate and magnitude of innovations when mode choice licensing versus fdi is fixed a subsidy to multinational production increases the rate but decreases the size of innovations when mode can switch the rate and size of innovations both increase provided the subsidy is not too large although innovation size decreases for industries where firms already were choosing fdi innovation size increases for industries where firms switch from licensing to fdi because multinationals choose larger innovations than licensors 2002 elsevier science b v all rights reserved

digging for golden carrots an analysis of research tournaments contracting for research is often infeasible because research inputs are unobservable and research outcomes cannot be verified by a court sponsoring a research tournament can resolve these problems a model is presented in which contestants compete to find the innovation of highest value to the tournament sponsor the winner receives a prespecified prize the tournament game has a unique subgame perfect equilibrium free entry is not optimal because equilibrium effort by each researcher decreases in the number of contestants an optimally designed research tournament balances the probability of overshooting the first best quality level against the probability of falling short copyright 1995 by american economic association

entrepreneurial orientation technology transfer and spinoff performance of u s universities this paper adopts a resource based perspective to understand why some universities are more successful than others at generating technology based spinoff companies in this respect we derive eight hypotheses that link attributes of resources and capabilities institutional financial commercial and human capital to university spinoff outcomes using panel data from 1980 to 2001 our econometric estimators reveal evidence of history dependence for successful technology transfer to occur although faculty quality size and orientation of science and engineering funding and commercial capability were also found to be predictors of university spinoff activity we conclude by drawing implications for policy makers and university heads