The Relationship between Knowledge Intensity and Market Concentration in European Industries: An inverted U-Shape

This paper is motivated by the European Union strategy to secure competitiveness for Europe in the globalising world by focussing on technological supremacy (the Lisbon - agenda). Parallel to that, the EU Commission is trying to take a more economic approach to competition policy in general and anti-trust policy in particular. Our analysis tries to establish the relationship between increasing knowledge intensity and the resulting market concentration: if the European Union economy is gradually shifting to a pattern of sectoral specialisation that features a bias on knowledge intensive sectors, then this may well have some influence on market concentration and competition policy would have to adjust not to counterfeit the Lisbon-agenda. Following a review of the available theoretical and empirical literature on the relationship between knowledge intensity and market structure, we use a larger Eurostat database to test the shape of this relationship. Assuming a causality that runs from knowledge to concentration, we show that the relationship between knowledge intensity and market structures is in fact different for knowledge intensive industries and we establish a non-linear, inverted U-curve shape.market structure, knowledge intensity, competition policy

Late Innovation Strategies in Asian Electronics Industries: A Conceptual Framework and Illustrative Evidence

This paper was published in Oxford Development Studies special issue in honor of the late Professor Linsu Kim. The paper reviews evidence on the evolution of electronics design in Asia's leading electronics exporting countries, to establish what capabilities have been developed, and to shed light on the forces that are driving "late innovation" strategies. It also reviews intellectual sources that can be used to theoretically ground these hypotheses. Using a well-known taxonomy of innovation that distinguishes incremental, modular, architectural and radical innovations, and the concept of "disruptive technologies", I argue that Asian firms may have realistic chances to engage in incremental innovations as well as in architectural innovations. However, to sustain "late innovation" strategies over a longer period, "complex system integration" capabilities are necessary to provide the missing link.

Innovation policy in the European Union: instruments and objectives

We provide an overview of the specific innovation policies that are implemented at European level, highlighting, where possibile, the connections between these policies and the guidance documents issued by the Community’s institutions. We describe the kinds of policy interventions that are implemented, providing at the same time some useful elements in order to understand the assumptions and theories that underpin them.Innovation policy; European institutions; Lisbon strategy; Structural funds; European research policy; European enterprise policy

Do Inter-sectoral Linkages Matter for International Export Specialisation?

This paper basically adopts a ‘technology gap’ approach for explaining international export specialisation. Within this broad label there has been one tradition which has applied cumulativeness in technological change as an explanation, while another tradition has emphasised the role of inter-sectoral linkages (the so-called home market effect) in this context. However, given that the sources of innovation (inducements mechanisms) differ between firms according to principal sector of activity, different variables should not be expected to be of equal importance across industrial sectors. Thus, using the Pavitt taxonomy as a starting point, the paper statistically investigates the importance of variables reflecting different inducement mechanisms, across 9 OECD countries. The paper concludes that the two types of technological activities, namely technological activities in the ‘own’ sector, and inter-sectoral linkages are both important in the determination of national export specialisation patterns. However, the importance differ according to the mode of innovation in each type of sector.international export specialisation, patent data, input-output analysis, inter-sectoral li

Technology transfer, institutions and development

The trade and capital flows across the national borders of developing countries have recently accelerated and produced the conditions for faster transmission of knowledge. While the economic literature has mainly focused on how international technology transfer affects standard economic performance, less attention has been paid to a broader development perspective. This paper fills this gap by addressing two main issues. It investigates whether the technology transfer conveyed by international trade flows has positively influenced the development paths of developing countries. It also focuses on whether country-specific structural features and institutional quality support the positive impulse of technology transfer on development.Technology Transfer, International Trade, Human Development, Institutions

Intellectual property related development aid: is supply aligned with demand?

We assessed to what extent developed country development aid programmes are likely to have interacted with, and potentially contributed to the promotion of country-appropriate sustainable changes in IP strategies and technological capacities over the period 2005-10. This was done primarily on the basis of an imputed impact assessments of four emerging and transition economies; namely Brazil, India, Poland and Thailand. Through an analysis of various measures of the domestic economic, technological and Intellectual Property context, we studied to what extent the supply of IP-related development aid provided between 2005 and 2010 responded to the likely needs of recipient countries. While the data shows that technical and financial assistance in this area could be of great use, and there is clearly a need for well-targeted IP TA and much scope for useful IP TA interventions, there seemed to only be a partial alignment between country needs and the direction of IP TA. On the whole, most IP-related development aid and technical assistance ended to focus on similar areas in each country, regardless of the development context. In Brazil and India’s case, training on IP administration may have influenced increased efficiency (from a low base) at the INPI and IP India, while the substantial EU support to raise SME IP awareness in Poland is likely to have had some significant impacts. In India, sustained development aid in this area likely influenced legislation on plant variety protection, as did WIPO TA on legislative reforms in Thailand. In all cases, the substantial US (and to a more limited extent EC) focus on development aid directed towards enforcement coincided with improvements in this area, though the political and economic pressures by both providers, and especially the US Section 301 System probably dwarfed the impact of this type of aid. Further, the typology and direction of IP related development aid reflects the comparative advantage of IP TA providers, as well as political and diplomatic interests, trade priorities and colonial ties, among many other things. As such, it is important to understand that IP TA is also highly political – a fact often concealed in the emphasis on its “technical” nature.Intellectual Property and development, aid and technical assistance technological capacities in Brazil, India, Poland, Thailand, taxonomy of development, funding flows Intellectual Property and development, aid and technical assistance technological capacities in Brazil, India, Poland, Thailand, taxonomy of development, funding flows Intellectual Property and development, aid and technical assistance, technological capacities in Brazil, India, Poland, Thailand, taxonomy of development, funding flows Intellectual Property and development, aid and technical assistance technological capacities in Brazil, India, Poland, Thailand, taxonomy of development, funding flows

The Innovation Performance of Foreign Affiliates: Evidence from Dutch Manufacturing Firms

innovation, performance, manufacturing, firms

Technology and the Generation of International Knowledge Spillovers. An Application to Spanish Manufacturing Firms

Technology is among firms ownership advantages explaining their internationalisation as, now for decades, the eclectic approach has highlighted. The debate about the positive versus negative effects that foreign capital generates in the host economy has gained a new relevance today insofar as, on the one hand, the concept of systems of innovation allows us to rethink the interaction with the domestic/recipient economies and, on the other, the increasing internationalisation of the technological activities of multinational companies (MNCs) introduces new forms of that interaction. Therefore, the possibility of generation of external effects by MNCs today demands a new reformulation of the problem. In this vein, one of the strengthening aspects commonly underlined is that foreign knowledge, not completely appropriable by the foreign firms, may spill over into domestic firms. However, since the findings of the empirical evidence are not fully confirmatory of the hypothesis, and taking into account the new conditions, this essay attempts to offer new light with research about the Spanish manufacturing firms. Two main issues are focused on this analysis. First, the importance of dynamics in the assessment of technological spillovers motivated by foreign direct investment (FDI), which is possible thanks to the availability of a panel data for manufacturing firms in Spain in the period 1991-1999. Second, the importance that technology may have for the generation of spillovers and to what extent the Pavitt taxonomy of industries is still useful for in depth analysis of such a learning process.Foreign capital, Foreign direct investment,Spanish manufacturing firms, Knowledge Spillovers

Factors affecting innovation revisited

El propósito de este trabajo es contribuir a un mejor conocimiento de los factores que afectan a la innovación mediante el análisis de los microdatos de la encuesta de innovación de las empresas españolas de 2003. El estudio se aborda desde la elaboración de una taxonomía de sectores combinando las Ventajas Tecnológicas Reveladas de la industria española con el dinamismo tecnológico mundial; además se introduce una clasificación de las empresas en función de la pertenencia o no a un grupo de empresas y de si esos grupos son de nacionalidad española o extranjera. Se utilizan técnicas de Análisis Factorial para reducir y organizar la abundante información disponible en Factores con significado económico que después son empleados como variables explicativas de la innovación de producto y de proceso. Se encuentran diferencias entre ambos tipos de innovación tanto por el número de factores significativos como en la intensidad de su capacidad explicativa. La taxonomía elaborada muestra su importancia al mostrar patrones de comportamiento distintos entre los cuatro tipos de casos construidos.The aim of this paper is to contribute to a better understanding of factors affecting innovation by analysing the Spanish manufacturing sector using microdata of the 2003 Spanish Innovation Survey. To enrich the analysis a self developed sectoral taxonomy is used coming from the combination of both of the sectoral Revealed Technological Advantages (RTA) and worldwide technological dynamism of the sectors; moreover firms are classified according to the type of capital ownership: independent companies, companies belonging to a national group and subsidiaries of multinational enterprises. The abundance and heterogeneity of variables advised us to use Factor analysis to reduce and organise the original variables into a number of consistent and theoretically significant factors. We found differences between product and process innovation, both in number of explicative variables (significant independent variables) and in relative effect of independent variables (even, in some cases, a sign change from product to process innovation). Taxonomy matters because of some differences in explanatory (independent) variables for each sector and model explanatory power differences between sectors, and, on the other hand, because of the “non significance” of some significant variables once we control by sectoral taxonomy.Innovation, Factors affecting innovation, Multinational enterprises, Sectoral taxonomies, Spain.