Complementarities in Innovation Policy

This paper develops a framework for testing discrete complementarities in innovation policy using European data on obstacles to innovation. We propose a discrete test of supermodularity in innovation policy leading to a number of inequality constraints. We apply our test to two types of innovation decisions: to innovate or not, and if so, by how much. We find that industries display a considerable amount of complementarity, with some industries being complementary across all obstacles. We also find that the lack internal human capital (skilled personnel) is complementary to all the other obstacles in almost all industries. In this sense, our results suggest that internal human capital is key for any innovation policy, insofar that it is complementary to all the other factors that might hamper innovation activities. ZUSAMMENFASSUNG - (Innovationspolitik als komplementäres System) In diesem Beitrag wird die Innovationsfähigkeit von Unternehmen in Abhängigkeit von Standortfaktoren - wie etwa die Bereitstellung von Risikokapital, staatliche Regulierungen, und qualifizierte Mitarbeiter - als komplementäres System modelliert. Es wird aufgezeigt, wie die neue Komplementaritätstheorie in der empirischen Innovationsforschung angewandt werden kann, indem die Innovationsfunktion von Unternehmen auf die Eigenschaft der Supermodularität hin überprüft wird. Unter Berücksichtigung dieses Ansatzes wird, anhand von Innovationsdaten aus der CIS Datenbank, die Komplementaritätshypothese für eine Reihe von Industrien und Länder untersucht. Die Ergebnisse zeigen auf, daß viele Branchen von einem beträchtlichen Maße an Komplementarität gekennzeichnet sind. Damit bestätigen die Befunde, daß Innovationen, in bestimmten Branchen, ein koordiniertes Handeln der unter­schiedlichen Standortfaktoren voraussetzt. Als höchst komplementär zu allen anderen Stand­ortfaktoren in fast allen Industriezweigen erweist sich der Mangel an qualifiziertem Human­kapital. In diesem Sinne bekräftigen unsere Ergebnisse die These, daß Humankapital der Schlüssel für jede Innovationspolitik ist, insbesondere aufgrund der komplementären Beziehung zu allen anderen Faktoren.

Complementarities in innovation policy

"This paper develops a framework for testing discrete complementarities in innovation policy using European data on obstacles to innovation. We propose a discrete test of supermodularity in innovation policy leading to a number of inequality constraints. We apply our test to two types of innovation decisions: to innovate or not, and if so, by how much. We find that industries display a considerable amount of complementarity, with some industries being complementary across all obstacles. We also find that the lack internal human capital (skilled personnel) is complementary to all the other obstacles in almost all industries. In this sense, our results suggest that internal human capital is key for any innovation policy, insofar that it is complementary to all the other factors that might hamper innovation activities." (author's abstract)"In diesem Beitrag wird die Innovationsfähigkeit von Unternehmen in Abhängigkeit von Standortfaktoren - wie etwa die Bereitstellung von Risikokapital, staatliche Regulierungen, und qualifizierte Mitarbeiter - als komplementäres System modelliert. Es wird aufgezeigt, wie die neue Komplementaritätstheorie in der empirischen Innovationsforschung angewandt werden kann, indem die Innovationsfunktion von Unternehmen auf die Eigenschaft der Supermodularität hin überprüft wird. Unter Berücksichtigung dieses Ansatzes wird, anhand von Innovationsdaten aus der CIS Datenbank, die Komplementaritätshypothese für eine Reihe von Industrien und Länder untersucht. Die Ergebnisse zeigen auf, daß viele Branchen von einem beträchtlichen Maße an Komplementarität gekennzeichnet sind. Damit bestätigen die Befunde, daß Innovationen, in bestimmten Branchen, ein koordiniertes Handeln der unterschiedlichen Standortfaktoren voraussetzt. Als höchst komplementär zu allen anderen Standortfaktoren in fast allen Industriezweigen erweist sich der Mangel an qualifiziertem Humankapital. In diesem Sinne bekräftigen unsere Ergebnisse die These, daß Humankapital der Schlüssel für jede Innovationspolitik ist, insbesondere aufgrund der komplementären Beziehung zu allen anderen Faktoren." (Autorenreferat

Cooperation with public research institutions and success in innovation: Evidence from France and Germany

We evaluate the impact of cooperation with public research institutions on firms' inno-vative activities in France and Germany, using data from the fourth Community Innova-tion Survey (CIS4). We propose an original econometric methodology, which explicitly takes into account potential estimation biases arising from self-selection and endoge-neity, and apply it to both process and product innovation. We find a positive effect of cooperation on both types of innovation. This effect is significant in both countries, but much higher in Germany than in France. Drawing on a comparison of the institutional context of cooperation across both countries, we interpret this difference as a conse-quence of the more diffusion-oriented German science policy. Finally, our robustness checks confirm the importance of controlling for selection and endogeneity. We show that these problems can be serious, and may lead to inconsistent estimates if ne-glected. --Public/private research partnerships,University/industry linkages,Innova-tiveness,Heckit procedure with endogenous regressors

Atmospheric ozone measurements made from B-747 AIRLINERS: Spring 1975

Atmospheric ozone in the upper troposphere and lower stratosphere north of the equator has been registered aboard two commercial B-747 airliners. The composite ozone, flight and meteorological data are reported. Attention is drawn particularly to the vertical profiles of atmospheric ozone mixing ratio as a function of both distance from the tropopause and curvature of the streamlines. The GASP observations suggest that ozone levels typical of the lower stratosphere are often embedded in the upper troposphere, principally during occassions when cyclonic wind curvature was noted

The Contribution of Transport and Human Capital Infrastructure to Local Private Production: A Partial Adjustment Approach

This paper uses a partial adjustment approach to measure the contribution of public infrastructure to local private production. In the first step of the empirical analysis we apply a principal component analysis in order to construct 2 new infrastructure indicators from an array of 7 measures of transport and human capital infrastructure. In the second step the output of different sectors is regressed on private factor inputs and on these 2 infrastructure indicators. Our main finding is that expected long-run equilibrium output in an area of local government will be higher, the better it is endowed with both transport and human capital infrastructure. Moreover, transport and human capital infrastructure appear to be complementary, i.e. raising only transport infrastructure will not yield an increase in private production at the local level. ZUSAMMENFASSUNG - (Der Beitrag von Verkehrs- und Humankapitalinfrastruktur zur lokalen privaten Produktion: Ein "partial adjustment" Ansatz) Diese Studie verwendet einen "partial adjustment" Ansatz, um den Beitrag von öffentlicher Infrastruktur zur privaten Produktion auf der lokalen Ebene zu bestimmen. Im ersten Schritt der empirischen Analyse wird eine Hauptkomponentenanalyse durchgeführt, um 2 neue Infrastrukturindikatoren aus 7 Variablen für Verkehrs- und Humankapitalinfrastruktur zu bestimmen. Im zweiten Schritt wird der Output von verschiedenen Sektoren auf die privaten Faktorinputs sowie die 2 gefundenen Infrastrukturindikatoren regressiert. Das wichtigste empirische Ergebnis der Analyse ist, daß der erwartete langfristige Gleichgewichtsoutput in einem Kreis höher ist, je besser die Ausstattung sowohl mit Verkehrs- wie auch mit Humankapitalinfrastruktur ist. Weiterhin finden wir, daß Verkehrs- und Humankapitalinfrastruktur zueinander komplementär sind, d.h. falls nur die Ausstattung mit Verkehrsinfrastruktur verbessert würde, daraus keine Erhöhung der privaten lokalen Produktion resultiert.

Inequality aversion and externalities

We conduct a general analysis of the effects of inequality aversion on decisions by homogeneous players in static and dynamic games. We distinguish between direct and indirect effects of inequality aversion. Direct effects are present when a player changes his action to affect disutility caused by inequality. Indirect effects occur when the own action is changed to affect other players' actions. We provide necessary and sufficient conditions for the occurrence of either effect. Moreover, we examine the direction of the effects. Whereas indirect effects induce players to internalize externalities they impose on others, direct effects act in the opposite direction. --inequality aversion,externalities,direct effects,indirect effects

Residual Income in Four Dimensions: Goal-Congruity, Controllability, Understandability and Practicability

The article discusses ten versions of residual income known in the literature from the point of view of four criteria that are of special importance if the measure is to be the basis of managerial bonuses: goal-congruity, controllability, understandability and practicability. There is – on average – a considerable trade-off between goal-congruity and the three remaining criteria. However, there are residual income versions – like net economic income (NEI) and the variant of residual income that is based exclusively on unadjusted book values (RIBV) – which demonstrate outstandingly favorable levels of goal-congruity, controllability, understandability and practicability. Although NEI exhibits the highest level of goal-congruity among the ten versions of residual income studied in the article and acceptable levels of three remaining features, it is deficient of intensive scientific examination which is necessary to make such a new tool the subject of justified recommendation. On the other hand, RIBV is the most controllable and seems to be the most understandable and the most practicable among the ten versions analyzed in the paper. However, its goal-congruity is relatively low. Yet, it can be improved without making the computational formula more complex simply by including some mechanisms making managers less myopic in bonus plan architecture.residual income (RI), net economic income (NEI), residual income that is based exclusively on unadjusted book values (RIBV), goal-congruity