The seductive power of Irish rain. Location determinants of foreign R&D investments in European regions

Foreign direct investments (FDI) in research and development (R&D) are important catalysts of economic development. Through a diversity of direct and indirect policy measures, governments compete in attracting such investments. Our study investigates the factors that affect the degree of attractiveness of European regions from the perspective of a company investing abroad based on evidence gathered from all the FDI in R&D realized between 2003 and 2014. We use mixed logit models to assess: i) the relative importance of the factors influencing the choice made by multinational firms about where to locate foreign R&D investments to European regions, and ii) how such influences vary according to timing, investments’ area of provenience and industry. On average, the fiscal regime and the size of destination regions as well as the sharing of a common language in the sending and receiving regions are the most important determinants. Labor costs, technological strength and R&D expenditure, especially performed by the higher education sector, are also important, yet to a lower extent. The strength of determinants still varies greatly across considered breakdowns.JRC.I.1-Modelling, Indicators and Impact Evaluatio

The Innovation Output Indicator 2019

This report presents the 2019 update of the Innovation Output Indicator (IOI), which is a composite indicator published every year by the European Commission since 2013 aiming to quantify the extent to which ideas for new products and services carry an economic added value and are capable of reaching the market. A novelty of this report is a special focus on radical innovator companies in Europe, referred to as "global innovation champions" (GICs). The dispersion of a relatively small number of exporter companies that introduced a “world-first” product innovation deserves particular attention. While small- or medium-sized radical innovator enterprises in Europe are embedded in global value chains, they often remain “hidden champions” for innovation policy makers and are typically the object of selected case studies in reason of limitations in the granularity of reliable data sources. The special focus of this report aims to quantify and characterize them for a relatively large number of countries. The report presents the latest figures for the underlying indicators and composite index for 40 countries – European Union Member States and selected EFTA, OECD and emerging economies. In this edition, 2 scores are computed for the European Union, one for a bloc of 28 countries alongside with estimates where the United Kingdom is excluded. The four components of the IOI provide a benchmark for countries and the European Union as an aggregate in terms of patent-based technological innovation, skilled labor force feeding into the economic structure of a country, competitiveness of knowledge-intensive goods and services, as well as employment in fast-growing enterprises in innovative sectors. The methodology is unchanged with respect to the refinements introduced in the 2017 editions. Composite results show that the EU (using both aggregates) is outperformed by the US. There is some evidence of convergence, the gap between the EU with respect to the US as well as Israel and Japan has somewhat declined since 2011. Nevertheless, additional efforts are needed for the EU to catch up with Israel and Japan. When comparing European countries, we notice that Ireland, Sweden, and the UK are among the leaders in terms of innovation output, whereas Lithuania, Croatia and Romania are at the end of the ranking. The analysis shows the importance of benchmarking a country’s performance not only according to its composite scores, but also according to the various components. Most notably, the multivariate analysis on the relationship between the component indicators indicates that the component measuring employment in fast-growing enterprises in innovative sectors (DYN) shows a weak, positive association with the rest of the components and, as a consequence, with the IOI aggregate index. This suggests that innovation performance of countries is constituted by at least two rather distinct dimensions. The first one is related to the performance of the technology- and knowledge-based economy (development of new technology, strength of sectors relying on highly-skilled workers, and exports in sectors close to the innovation frontier). The second one concerns entrepreneurship and business dynamism in innovative sectors. Strong performance in one of these two dimensions does not automatically imply strong performance in the other, suggesting that innovation policy should carefully monitor and foster the development of both in their own merits.JRC.I.1-Monitoring, Indicators & Impact Evaluatio

High-growth, innovative enterprises in Europe. Counting them across countries and sectors

High-growth, innovative enterprises are a key source of business dynamics, but little is known about their actual share in the enterprise population. This is due to an inherent uncertainty in how to define the threshold that distinguishes high-growth firms from non-high-growth firms – illustrated by the lack of agreement between the definitions applied by Eurostat and the OECD. This explorative study aims to help measure the share of high-growth, innovative enterprises in the European enterprise population, test how the choice of definition affects their share. We introduce a methodology to address the uncertainty in the definition, and compute national and sectoral average scores for high-growth and innovation in order to assess their distribution across countries and sectors of economic activity. We test the impact of a number of alternative definitions on a pooled sample of 92,960 European firms observed by the 2012 wave of the Community Innovation Survey (CIS). Our finding suggests that the share of high-growth, innovative enterprises in Europe may range between 0.1 to 10%, depending on the definitions, and the outcomes are most sensitive to the growth measure (employment- or turnover-based) and threshold (absolute or relative), as well as the degree of novelty expected of the innovations introduced by firms. With the help of aggregate measures, we observe a trade-off between high-growth and innovation performance at the country-level, which disappears at the overall European sectoral level. This observation highlights the importance of structural differences across EU Member States in terms of firms’ innovation profile, size and associated high-growth performance.JRC.I.1-Modelling, Indicators and Impact Evaluatio

The ERA of International R&D Investments

The internationalization of highly knowledge-intensive activities of multinational enterprises (MNEs) has triggered competition at multiple, interrelated geographical levels. Not merely countries, but urban areas within countries, and regional integration blocs compete to attract activities such as research, development, design or testing. This study assesses the role of local, national and supranational factors influencing MNEs’ decisions about where to locate knowledge-intensive foreign direct investments. In order to better understand the complex nature of competition, we compiled socio-economic information for 277 comparable urban areas – cities and their agglomeration, with a population of at least half a million – located in 28 countries across the world. Estimating nested logit models with different nesting structures, we show that supranational integration blocs’ borders do matter when firms decide the location of their knowledge-intensive activities. Both supranational and national borders play an important role in Europe, while national borders seem more relevant in North America. The findings support the role of EU policy instruments, such as the European Research Area (ERA), aimed at creating an integrated research and innovation area in Europe.JRC.I.1-Monitoring, Indicators & Impact Evaluatio

Sailing through the storms towards Treasure Island: The relationships between strategies, obstacles and firm performance

Companies devise strategies to successfully navigate the treacherous waters of an uncertain business environment. They need to tackle regulatory or market obstacles in order to succeed and eventually achieve strong growth performance. This study aims to better understand the complex relationship between strategies, obstacles and firm performance. It uses regression techniques on a cross-national homogeneous sample of 37,150 European companies based in 14 Member States in order to study the correlation between: i) firms’ perceptions about the importance of their strategies and the obstacles they face, and ii) firms’ innovation and economic performance. The findings point out that the firms pursuing cost reduction strategies and perceiving the lack of demand and of adequate finance as important obstacles experience poor performance. By contrast, those pursuing adaptability strategies and perceiving the lack of qualified personnel as an important obstacle grow faster, and those with explicit product innovation strategies innovate more. Moreover, the results indicate specific needs of high-growth enterprises that, in comparison with other firms, appear less sensitive about financial constraints, more interested in the availability of skilled labour and benefiting more from cooperative strategies.JRC.I.1-Modelling, Indicators and Impact Evaluatio

Open for growth? Evidence on EU countries and sectors

The Open Innovation (OI) concept has pervaded the academic and policy debate due to its potential to further stimulate the circulation of knowledge between business partners and institutions and, consequently, to increase their innovation potential. This paper studies the relationships between OI and innovation and economic returns at the \u2018aggregate\u2019 level, i.e. at the country and industry levels. It exploits three waves of the Community Innovation Survey to conduct an empirical analysis on sectoral data for 16 EU countries. Results confirm the role of OI in stimulating \u2013 even at the aggregate level \u2013 innovation, with returns increasing at diminishing rates. OI also has an indirect impact on value added by strengthening the positive effect exerted on aggregate economic performance by R&D expenditure. The mutual reinforcement of R&D intensity and collaborations between companies and business partners is coherent with the principles underlying \u2018smart specialization\u2019 policies of the European Union

Open for Growth? Evidence on EU countries

The Open Innovation concept has pervaded the academic and policy debate, due to its potential to further stimulate the circulation of knowledge across business partners and institutions and, consequently, to increase their innovation potential. The contribution of this paper is to unveil the economic returns associated to such a model, to answer the main question whether the productivity growth slowdown observed in the EU in recent years could be overcome through a more open and dynamic innovation environment. An empirical analysis conducted on sectoral data for 16 EU countries is provided, exploiting three waves of the Community Innovation Survey. Results confirm the role of Open Innovation in stimulating – even at the aggregate level – innovation, and, to a limited extent, to economic returns. However, when testing for the association between Open Innovation and economic growth, no robust effect emerges.JRC.I.1-Monitoring, Indicators & Impact Evaluatio

Essays on the Poverty Dynamics of Children and their Families

Studi recenti hanno evidenziato come la comprensione del fenomeno della povertà si arricchisca integrando il concetto più tradizionale di povertà cross-sectional con un concetto longitudinale. La crescente letteratura sulle dinamiche di povertà si occupa del tempo in cui individui diversi rimangono poveri e le transizioni dentro e fuori la condizione di povertà. Chapter 1 è una review delle strategie econometriche che sono state suggerite nella letteratura. L’attenzione è posta sulla derivazione econometrica di ogni modello, ma l’obiettivo è anche di chiarire le domande specifiche a cui ogni modello vuole dare risposta e le relative implicazioni di politica. Poiché è una regolarità empirica ben documentata che le famiglie con figli sono sovra-rappresentate al fondo della distribuzione dei redditi di molti paesi così come che i bambini che crescono in situazione di svantaggio sono associati a basse capacità cognitive e relazionali, il resto della tesi si incentra su diversi aspetti dinamici del fenomeno della povertà. In particolare, Chapter 2 studia la presenza di dipendenza dallo stato nella povertà infantile in Italia tra il 1993 e il 2006, mentre il Capitolo 3 è una valutazione dell’effetto di particolari politiche di sostegno alle famiglie che sono state introdotte in Gran Bretagna alla fine degli anni ’90 sulla durata delle esperienze di povertà.Recent studies gave evidence on how a better understanding of the phenomenon of poverty is achieved by integrating the more traditional concept of cross-sectional poverty with a longitudinal concept. The increasing literature on poverty dynamics deals with the time different individuals spend in poverty and the transitions in and out of poverty. Chapter 1 is a review of the econometrical strategies that have been employed in the literature. The focus is on the econometrical derivation of each model, but I aim also at clarifying the specific research questions each model wants to answer and the related policy implications. As it is a well-established finding that families with children are over-represented at the bottom of the income distribution in many countries as well as that children who grow up in disadvantaged environments are associated with diminished cognitive and social skills, the remaining of the thesis focuses on different dynamics facets of the poverty phenomenon. In particular, Chapter 2 investigates the presence of state dependence in Italian child poverty between 1993 and 2006, while Chapter 3 is an assessment of the effect of particular families oriented policies introduced in Britain in the late 1990s on the duration of poverty experiences

Open for Growth? : evidence on EU countries

Dokumenty Evropského dokumentačního střediskaLuxembour