The Link Between Firms? Innovation Decision and the Business Cycle: An Empirical Analysis

The sensitivity of innovation activities with respect to the business cycle is often assumed to be small. In this paper the hypothesis on cyclical dependence of innovation activities is tested for firms in the German manufacturing, and additionally for SMEs. To this end firms? innovation decisions are considered. The decision to innovate in one period is modelled via a first-order Markov chain approach. The results suggest that the patterns in innovative behavior are linked to the business cycle. --Innovation,Business Cycle,Panel Model,Markov Chains

A Test of the Quality of Concentration Indices

Theory predicts a positive relationship between market concentration and profitability in most scenarios. In empirical work, however, this relation is frequently not found or only a weak connection is observed. We compare the performance of concentration and market share variables, which are generated on the basis of the official industry classification, with information collected directly from firms. Information from companies on the number of competitors, their relative size and the intensity of price competition is highly significant in explaining profit levels, while none of the concentration indices performs well. Hence, the poor quality of industry data is responsible for the loose connection that is usually found between concentration and profitability. --Concentration Indices,Profitability,Discrete Regression Models

Barriers to Entry and Profitability

Barriers to entry are regarded as major impediments to the working of markets. Entry must not necessarily actually take place - the perceived threat of entry may encourage incumbent firms to behave as if they are in a competitive market, even if they are not. We present empirical evidence on effects of perceived threat of entry on profitability. Using information from managers about how they assess the existence of entry barriers a strong impact of these assessments on profitability is confirmed. The number and the relative size of competitors also exert considerable effects. We find no statistically significant relation between the perceived threat of entry and the actual number of firms if the size of the relevant market is taken into account. --Barriers to Entry,Profitability,Discrete Regression Models

You can't make an omelette without breaking eggs: the impact of venture capitalists on executive turnover

We present evidence on venture capitalists? (VCs) impact on turnover of executives for a sample of nearly 47,000 German high-tech start-ups between 1995 and 2004. We confirm that the presence of VCs increases the probability of a change in the initial executive team. Additionally, we take a closer look on the subsample of venturebacked firms. We find that a small distance between the VCs and the companies they finance and a larger total stake in the company owned by VCs increase the probability of changes in the initial executive teams. --Venture Capital,Executive Turnover

Technologie- und wissensintensive Unternehmensgründungen wieder im Aufwind

Nachdem die Anzahl der Unternehmensgründungen insgesamt in den vergangenen Jahren zurückgegangen war, zeigte sich seit 2002 wieder eine Erholung. Die Anzahl der wissens- und technologieintensiven Gründungen folgte 2003 erstmals der allgemeinen Erholungstendenz. Die Anzahl wissensintensiver Dienstleistungsgründungen erreichte 2003 erstmalig wieder das Niveau von 1998. Einzig in der Spitzentechnik, auf die sich die Hoffnungen für zukünftige Arbeitsplätze und die Stärkung der Wettbewerbsfähigkeit besonders konzentrieren, sank die Gründungszahl weiter

Konjunkturbedingte Schwankungen bei Innovationsaktivitäten?

Viele unternehmerische Entscheidungen werden durch konjunkturelle Schwankungen beeinflusst. Gerade Innovationsentscheidungen können oft kurzfristigen Anpassungsprozessen unterliegen. Das Thema ist aktuell wieder von besonderem Interesse, da sich einerseits ein erneuter konjunktureller Abschwung andeutet, gleichzeitig aber die Bundesregierung im Rahmen ihrer High-Tech-Strategie ehrgeizige Ziele zur Erhöhung der Forschungs- und Innovationsleistungen der deutschen Wirtschaft bis 2010 verfolgt, darunter eine höhere Innovationsbeteiligung von kleinen und mittleren Unternehmen (KMU). Dies wirft die Frage auf, inwieweit Innovationspolitik auf eine veränderte konjunkturelle Situation reagieren soll. Dieser Beitrag präsentiert empirische Forschungsergebnisse zum Einfluss der Konjunktur auf Innovationsentscheidungen von Unternehmen

The propensity to patent with vertically differentiated products: An empirical investigation

This paper empirically investigates a firm's propensity to patent. It thereby builds on a theoretical model on a firms' patenting decision in a market with vertically differentiated products. We deduce and empirically test several hypotheses from the theoretical results regarding patenting and rival's market entry decision presented in Zaby (2009). Our main finding is that in industries which are characterized by easy-to-use knowledge spillover, the technological lead of the inventor is reduced to such an extent that the propensity to patent increases. Furthermore, the intensity of patent protection has a delaying impact on rival's market entry. --patenting decision,secrecy,disclosure requirement,patent height,vertical product differentiation

Money for novelty : The role of venture capital investments for innovation in young technology-based firms

This paper examines the role of venture capital on a firm's innovation activities by using a data set of German technology-based firms founded between 1996 and 2005. Innovation is proxied by patent counts and an index of innovativeness which reflects the degree to which a young firm has developed new technologies based on its own or external resources. The results show that VC financing has a positive impact on both patenting and innovativeness, even if we account for endogeneity of VC financing

The propensity to patent with horizontally differentiated products: An empirical investigation

In this paper we empirically investigate the theoretical results obtained in Zaby (2009). From the theoretical model, which introduces the decision to patent into a setting with horizontally differentiated products we deduce several hypotheses and test these empirically. We find that the propensity to patent increases when market entry costs decrease. Furthermore, if the disclosure requirement linked to a patent has an impact, the propensity to patent decreases with the strength of the disclosure effect. --patenting decision,secrecy,disclosure requirement,market entry,horizontal product differentiation