The IPR System, Venture Capital and Capital Markets – Contributions and Distortions of Small Firm Innovation?

This study explores how capital markets, exemplified by venture capital, and recent trends in the patent system may influence innovation activity and the financing of small businesses. Specifically it is evaluated if there are costs and distortions of incentives related hereto. Additionally, the positive contribution of venture capital in the patenting process is investigated. It is found that trends at a macro economic level is nowadays of major importance for the patenting and innovation behaviour and financing of firms. Patenting has increased in scale, scope and trade volume, patents have become a strategic asset to an extent that may de-link it from innovation activities. The IPR-system may render distortions of innovation activities facilitated by these trends. These distortions may impose costs on the overall function of the innovation system, costs that are unequally distributed among firms as small firms are bearing most of the burdens. The results points to new perspectives on strategy that are important to management of firms and investment funds.Small firms; venture capital; IPR

Panel Data, Local Cuts, and Orthogeodesic Models

Orthogeodesic models admit marginal local cuts and therefore separate inference on subparameters is asymptotically justified. Doubly-flat orthogeodesic models admit local cuts marginally and conditionally. Two important empirical models for panel data are used to illustrate this property and demonstrate its usefulness. The relation to local ancillarity and local sufficiency is explored. An alternative characterization of local cuts in terms of curvature is given and shown to be intrinsic. Applications to semiparametric estimation are considered.

Finance and Innovation System or Chaos

The present paper discusses an important part of the framework conditions for innovation in a number of European countries (France, Italy, Spain, the Netherlands, the United Kingdom) as well Japan and the United States through a comparison of the development of the financial systems in these countries. The main focus is whether a convergence can be observed between what is traditionally perceived as market based and credit based systems respectively. Based on quantitative statistics it is concluded that a convergence has taken place, and it is becoming increasingly more difficult to divide national financial systems into two main categories based on quantitative data alone. But differences still remain, and the paper continues by discussing reasons for convergence and divergence respectively. These reasons include internationalization, differences in industrial structure, as well as changes in national and international regulation. Before turning to a discussion of the policy perspectives of the observed development the paper discusses the financial systems ability to finance different types of transactions.Financial systems; innovation financing; economic integration and convergence

The Static and Dynamic Benefits of Migration and Remittances in Nicaragua

This paper utilizes a unique three-wave panel of household data from Nicaragua, which allows a thorough exploration of the relationships between migration, remittances and household consumption. The paper distinguishes between the effects of emigration and the impacts of remittances received. There is a self-selection bias in the decision to send a migrant, as well as in the decision to receive remittances. To adequately correct for these selection biases, we develop a bivariate selection correction procedure. Perhaps surprisingly, the results show that households do not benefit (in terms of higher consumption growth) from receiving remittances, but rather from having migrants abroad. This suggests that not only money are remitted from abroad, but also something more subtle, which could be business ideas, belief systems, aspirations, patterns of social interaction, and other intangibles, which have been dubbed social remittances.Migration, Remittances, Social Remittances, Nicaragua, Bivariate Selection Correction

The Implied-Realized Volatility Relation with Jumps in Underlying Asset Prices

Recent developments allow a nonparametric separation of the continuous sample path component and the jump component of realized volatility. The jump component has very different time series properties than the continuous component, and accounting for this allows improved forecasting of future realized volatility. We investigate the potential forecasting role of implied volatility backed out from option prices in the presence of these new separate realized volatility components. We show that implied volatility has incremental information relative to both the continuous and jump components of realized volatility when forecasting subsequently realized return volatility, and it appears to be an unbiased forecast. Furthermore, implied volatility has predictive power for future values of each component of realized volatility separately, showing in particular that even the jump component of realized volatility is, to some extent, predictable.Bipower variation, implied volatility, instrumental variables, jumps, options, realized volatility, stock prices, vector autoregressive model, volatility forecasting

Labor Mobility in Bolivia: On-the-job Search Behavior of Private and Public Sector Employees

This paper estimates structural parameters of both a simple and an extended job separation model with the purpose of understanding constraints in the labor market in Bolivia. The results confirm the hypothesis that skilled labor is a scarce commodity in Bolivia, while unskilled labor is abundantly available. This implies that skilled employees shop around for alternative employment opportunities and quit their jobs when a better opportunity arises. The quit rate among skilled employees in the private sector is much higher than the quit rate among skilled employees in the public sector. The reverse is true for the lay-off rate, and together this suggests that the private sector has difficulties maintaining its skilled labor. The estimates of the wage sensitivity of job search effort parameters presented in this paper suggest that it would be difficult for the private sector to improve its capacity to retain skilled employees by increasing wages – skilled employees in the private sector do not seem to reduce their on-the-job search in response to higher wages. The results are consistent with the hypothesis that the public sector in Bolivia, inflated by high levels of foreign aid (about 10% of GDP), may be detracting scarce human resources from local productive sectors, potentially jeopardizing the opportunity for sustainable development.Mobility, on-the-job search, labor markets, Bolivia

Extending and Deepening the Analysis of Innovation Systems - with Empirical Illustrations from the DISCO-project

Traditionally innovation system have been analysed either as rooted in the R&Dsystem or the production system. This paper suggests a broader approach to national innovation systems and analyse these as rooted in constellation of a national production structure and human resource development institutions. The argument is linked both to the literature on innovation systems and an empirical account of the Danish innovation system (the DISKO-project) and the economy in general. It is argued that change of the innovation and production system is difficult without a reform of the human resource development system as the dynamics of these two dimensions are closely connected. Results from the DISKO-project are used to illustrate the new analytical and political issues emanating from such a shift in perspective. On the one hand it is shown that the general economic climate in terms of the transformation pressure and the intensity of competition has a major impact on what the firm does in terms of technical innovation and organisational change. On the other hand it is demonstrated how the behaviour of individual firms affect aggregate employment and specifically the employment opportunities of unskilled workers. It is argued that the broader approach to the analysis of innovation systems also calls for a broader policy approach. Innovation is affected by other types of policy than industrial policy and a sharp division between macro-economic and competition policy on the one hand and education, labour market and innovation policy on the other hand is shown to be problematic.innovation systems, human resources, transformation pressure, organisational change

Kinematics of the Outer Stellar Halo

We have tested whether the simple model for the kinematics of the Galactic stellar halo (in particular the outer halo) proposed by Sommer-Larsen, Flynn and Christensen (SLFC) is physically realizable, by directly integrating particles in a 3-D model of the Galactic potential. We are able to show that the SLFC solution can be realized in terms of a distribution of particles with stationary statistical properties in phase-space. Hence, the SLFC model, which shows a notable change in the anisotropy from markedly radial at the sun to markedly tangential beyond about Galactocentric radius r=20 kpc, seems a tenable description of outer halo kinematics.Comment: 13 pages, 6 figures, accepted for publication in MNRAS. also available at http://astro.utu.fi/~cflynn/papers/fslc4/fslc4.htm