Creative destruction and the innovative core: is innovation persistent at the firm level?

Responses to changes in marginal income tax rates can be more complex than a simple adjustment in hours worked. Given this, a more inclusive way to assess the deadweight costs of taxes on labour income is to examine the effect of changes in the marginal tax rate on taxable income rather than on labour supply. In this paper we apply a grouping estimator to data from the UK Survey of Personal Incomes so assess the magnitude of taxable income responses of the self employed. Our results point to a modest degree of deadweight loss

Determinants of cooperation with institutional partners and innovation - performance of Polish manufacturing enterprises. Research outcomes

The aim of this paper is to assess of the influence of institutional cooperation (with research institutes and universities) on the innovation performance of companies as well as determinants of such cooperation. The analysis was based on data from the Polish version of the Community Innovation Survey (CIS) for 2008-2010. The sample consists of 7783 medium-sized and large manufacturing enterprises from sections C to E. Based on the results of a structural equation model it has been concluded that there is a statistically significant relation between institutional cooperation and innovation performance of the researched companies, as well as (in the case of cooperation with Polish companies) in the introduction of product innovations new for the country, Europe or the world. The analysis of critical values between parameters enables the establishment of a hierarchy of company features which determines such cooperation. These include the system of employee incentives for the creation of intellectual property, company size and own R&D -department. The application of the employee incentive system better explains the decision to establish cooperation with Polish companies than with foreign ones. However a feature which is not institutional cooperation friendly is belonging to a larger group of companies. Key words: institutional cooperation, innovation -performance, Polish CIS, PolandPreparation and printing funded by the National Agency for Research and Development under project “Kreator Innowacyjności – wparcie dla Przedsiębiorczości akademickiej

How do venture capitalists inform their investors on the investment portfolio? An empirical investigation of the Belgian private equity market.

Venture capital investments are valued for a variety of reasons. In particular, venture capital managers periodically need to reconsider the valuation of the investment portfolio in view of their proper corporate disclosure activities. After all, investors in venture capital funds require such valuation information to assess the value of their investment in the venture capital fund and to appraise the performance of the venture capital fund's management. How the valuation is determined as well as what information disclosing the valuation process is reported remains obviously a controversial subject. Nonetheless, one can identify two distinct levels of guidance regarding the valuation and reporting problem with which venture capitalists are confronted. On the one hand, they are subject, just as any other company, to the accounting and corporate regulation. On the other hand, a set of more detailed and specific guidelines was issued by the industry itself. Whereas an earlier study (Thoen, 2002) discussed in detail the precise consequences following from this double set of prescriptions and recommendations for practitioners, the objective of the present study was to examine the actual business practice. In fact, we were interested in testing the extent to which Belgian venture capitalists comply with both sets of requirements and guidelines. Therefore, an empirical study was carried out by means of a survey, the main results of which are discussed here.Accounting; Companies; Disclosure; Empirical study; Industry; Information; Investment; Investment portfolio; Investments; Management; Managers; Market; Performance; Portfolio; Processes; Recommendations; Regulation; Reporting; Requirements; Studies; Valuation; Value; Venture capital;

National scientific capabilities and technological performance: An exploration of emerging industrial relevant research domains.

Today's theories and models on innovation stress the importance of scientific capabilities and science-technology proximity, especially in new emerging fields of economic activity. In this contribution we examine the relationship between national scientific capabilities, the science intensity of technology and technological performance within six promising industrial fields. Our findings reveal that national technological performance is positively associated with scientific capabilities. Countries performing better on a technological level are characterized both by larger numbers of publications and by numbers of involved institutions that exceed average expected values. The latter observation holds for both companies and knowledge generating institutes actively involved in scientific activities. As such, our findings seem to suggest beneficial effects of scientific capabilities shouldered by a multitude of organizations. In addition, higher numbers of patent activity coincide with higher levels of science intensity pointing out the relevance of science 'proximity' when developing technology in newer, emerging fields. Limitations and directions for further research are discussed.Performance; Research; Theory; Models; Model; Innovation; Field; Science; Intensity; Technology; Country; Expected; Value; Companies; Knowledge; Effects;

Survey of the literature on innovation and economic performance

Despite very strong differences in their treatment of technological change in economic theory, both the neoclassical and the more Schumpetarian (and evolutionary) economic approaches often assume that market selection rewards the most innovative firms. However, despite such strong assumptions, empirical evidence on whether innovative firms perform better than non-innovative firms remains inconclusive. If innovators do not grow more, does this imply that market selection fails? And does the different impact of innovation on industrial performance (measured by firm growth and profitability) and financial performance (measured by market value and stock returns) signal differences in how industrial and financial markets react to firm level efforts around innovation? This discussion paper reviews the literature on the interaction between innovation and economic/financial performance, and outlines the way that work within FINNOV Work Package 2 (SELECTION), Co-Evolution of Industry Dynamics and Financial Dynamics, will contribute to better understanding this interaction

Does managing a SRI fund cost more? Evidence from the European financial market

open2Our aim is to provide evidence regarding managing costs differences comparing Socially Responsible Investing (SRI) funds with traditional ones, if any, and if these are influenced by the ethical rating of the fund. The methodology is based on a multiple linear regression model in a matched-pair sample of 309 European SRI and non-SRI funds managed by the same managing company and a comprehensive sample of 558 European SRI funds. Our main findings are on size, country, asset class, and ethical rating. Yet, the higher the ethical rating, the lower the TER, especially at the highest level of rating. If investors actively select higher ethically rated SRI funds, he or she will benefit from a lower cost charged by specialised asset managers. In investing in 'good', choose the best!openArrigoni, Stefania; Lanzavecchia, AlbertoArrigoni, Stefania; Lanzavecchia, Albert

The Impact of a Carbon Tax on Sectors Competitiveness

Asymmetric climate policies are expected to distort the level-playing field regarding international trade, singularly to the detriment of small open economies. The paper develops a flexible method that provides essential input regarding the design of offsetting measures at the sectoral level. It builds on input-output analysis and standard input-output data to provide proxies for both the carbon-intensity and the trade-intensity of production. These are used to reckon the impact that such policies as carbon taxation have on the price-competitiveness of sectors. The method is then applied to the case of Belgium.Asymmetric climate policies; Carbon taxes; Input-output analysis; Sectors price-competitiveness

The opportunity cost of negative screening in socially responsible investing

This paper investigates the impact of negative screening on the investment universe as well as on financial performance. We come up with a novel identification process and as such depart from mainstream socially responsible investing literature by concentrating on individual firms’ conduct and by studying a much wider range of issues. Firstly, we study the size and financial performance of fourteen potentially controversial issues: abortion, adult entertainment, alcohol, animal testing, contraceptives, controversial weapons, fur, gambling, genetic engineering, meat, nuclear power, pork, (embryonic) stem cells, and tobacco. We investigate an international sample of more than 1,600 stocks for more than twenty years. We then analyze the impact of applying negative screens to a market portfolio. Our findings suggest that the choice for negative screening strategies does matter for the size of the investment universe as well as for risk-adjusted return performance. Investing in controversial stocks in many cases results in additional risk-adjusted returns, whereas excluding them may reduce financial performance. These findings suggest that there are opportunity costs to negative screening.Publisher PDFPeer reviewe

Environmental impacts of global supply chain: a review of scientific, policy and legal components for including environmental and climate challenges

During the last two decades globalisation has been a key variable driving economic growth and raising the living standards of nearly everyone on the planet, although not without cost. Indeed, the growth in world trade resulting from globalisation is now increasingly seen as an issue in the scientific and political debate on the environmental impacts of global supply chain and consumption. Most cost efficient locations around the world accelerate the trends towards international specialization causing some distortions of the markets in terms of the use of natural resources. The relative international competitiveness of companies in nations with stronger environmental protection regulations (haven hypothesis) is one argument for looking at alternative global environmental regulatory tools that are compatible with international trade agreements and development policies. Literature recognises that stringent environmental policies can force pollution intensive sectors to move to regions more favourable if the abatement costs are too high. However, trade is not a driver of environmental degradation, but the structure of the markets and the presence of market failures (externalities, no definitions of property rights) are the causes of environmental impacts.This report analyses the key features of global supply chain and its environmental impacts related to biodiversity loss, water conservation, raw material. The report provides a deep analysis on Climate change and global supply chain. It analyses the scientific, legal and policy components of the international debate over carbon and trade. It introduces and analyses the concept of the consumption-based approach and compares it with the production-based one. The reports highlights that policy makers should look beyond the traditional geo-political regions and a consumption-based perspective would represent a significant step in this direction in order to manage a sustainable global supply chain.JRC.H.7-Climate Risk Managemen