Explaining the decisions to carry out product and process innovations: the Spanish case.

We investigate the determinants of innovation activity making a distinction between product and process innovations. We analyse a pseudo production function of innovations where among the explanatory variables, special attention is paid to firm and market characteristics. The study is applied to a large sample of Spanish manufacturing firms during the period 1990–1993. There are important implications arising from the empirical results: 1) Product and process innovations are intimately related independently of the model used in the estimation. 2) The control by unobserved firm effects as the ability and experience of manager is so important as to affect the conclusions on the managerial decisions about which type of innovation develop. 3) Given the feedback effects amongst innovation decisions and other factors determining them, it is also very important to consider a version of the model that allows correlation among those unobserved effects and explanatory variables. 4) The probability to innovate is higher in capital intensive firms and in firms with export activities. 5) Market competition encourages the decision to innovate up to a threshold. vi) The past firm experience and the managerial quality play a significant role in the probability to innovate. vii) Product and process innovation decisions are complementary

The Effects of Fiscal Incentives for R & D in Spain

This paper explores the effect of fiscal incentives for R&D on innovation. Spain is considered one of the most generous countries in the OECD in fiscal treatment of R&D, yet our data reveal that tax incentives are little known and, especially, seldom used by firms. Restricting our empirical analysis to those firms that do report knowing about such incentives, we investigate the average effect of tax incentives on innovation, using both nonparametric methods (matching estimators) and parametric methods (Heckman’s two-step selection model with instrumental variables). First, we find that large firms, especially those that implement innovations, are more likely to use the tax incentives, while small and medium enterprises (SMEs) encounter some obstacles to using them. Secondly, the average effect of the policy is positive, but significant only in large firms. Our main conclusion is that tax incentives increase innovative activities by large and high-tech sector firms, but may be used only randomly by SME

Persistence and ability in the innovation decisions

The main concern of this paper is to analyse the complementarities between the decisions to carry out both product and process innovations. We also try to identify the main determinants of the innovation activity as well as to separate the experience effect of the firm (capacities, routines as organization) from the experience effect of the manager (skills, abilities). It has been common when facing the study of technological change, to consider innovation as a homogeneous activity. The main analyses have focused on the determinants of such activity trying to explain decisions, counts or R and D expenses in the context of a unique activity. Several recent works, however, are worried about the possibility of analysing innovation distinguishing among different types according to the final purpose of this activity. We focus on two different decisions, product and process innovations, using typical discrete choice specifications (univariate and bivariate models) and also binary choice models with heterogeneity. Among the results, we find complementary but asymmetric effects concerning both decisions in static models even controlling heterogeneity. We also test whether the persistence in conducting innovation activities matter. We do so in an extensive database that provides information about manufacturing firms. Our results point towards the importance of both ability of the manager (unobserved heterogeneity) and experience of the firm (dynamics in the equation indicator)

The effect of innovation activity on innovating quasi-rents: an empirical application

This paper investigates whether innovations generate quasi-rents and whether the size of those quasi-rents are affected by market conditions. Using a panel data of Spanish manufacturing firms during the period 1990-93 we answer affinnatevely to both questions. Product, process and both innovations generate quasi rents and such quasirents appears to be higher for process innovations. The size of innovation quasi-rents seems to be affected positively by demand growth, by product standarisation, and by low product market concentration. The three empirical results are in agreement with the theoretical predictions such as the Schmoockler' s theory of demandpool innovation, the price-elasticity of demand effects of Kamien and Schwartz and the replacement effect of Arrow. Process innovations are more affected by market conditions than the rest of innovations, at the tine of generating quasi-rents

Explaining the decisions to carry out product and process innovations: the Spanish case

We investigate the determinants of innovation activity making a distinction between product and process innovations. We analyse a pseudo production function of innovations where among the explanatory variables, special attention is paid to firm and market characteristics. The study is applied to a large sample of Spanish manufacturing firms during the period 1990–1993. There are important implications arising from the empirical results: 1) Product and process innovations are intimately related independently of the model used in the estimation. 2) The control by unobserved firm effects as the ability and experience of manager is so important as to affect the conclusions on the managerial decisions about which type of innovation develop. 3) Given the feedback effects amongst innovation decisions and other factors determining them, it is also very important to consider a version of the model that allows correlation among those unobserved effects and explanatory variables. 4) The probability to innovate is higher in capital intensive firms and in firms with export activities. 5) Market competition encourages the decision to innovate up to a threshold. vi) The past firm experience and the managerial quality play a significant role in the probability to innovate. vii) Product and process innovation decisions are complementaryPublicad

Wages and innovations in Spanish manufacturing firms

The question of whether workers take part of the rents when a firm introduces technological changes is studied. Information from a Spanish survey, the Encuesta sobre Estrategias Empresariales covering a period of five years, 1990-94 is used. Given the data available, panel data techniques are used to control unobserved heterogeneity. A new estimation method proposed by Arellano and Bover (1995) has also been used to improve efficiency results. The results provide confirmation that innovations may be a good approximation to economic rents. In fact, firms which carry out process and product innovations jointly pay larger wages. Moreover, there exists evidence that process innovations and process and product innovations jointly are determined with wages.Publicad

Flexibilidad laboral y progreso técnico. Una aplicación a la industria española

El progreso técnico afecta considerablemente a los niveles de empleo. Este trabajo se propone investigar si, además, tiene efectos sobre su estructura. El principal objetivo es analizar si se produce efecto sustitución de trabajadores fijos por eventuales cuando se introducen cambios técnicos en las organizaciones. El análisis empírico llevado a cabo utiliza datos de aproximadamente 2.000 empresas manufactureras tomadas de la Encuesta sobre Estrategias Empresariales (ESEE) en el período 1990-1993. Los resultados sugieren la existencia de un cambio en la estructura del empleo que, una vez se ha controlado por el tamaño empresarial y la actividad de la empresa, tiene que ver principalmente con el cambio tecnológico experimentado por las empresas.Technical progress has a considerable impact on employment levels. This paper proposes to analyse whether it also affects employment structures. The primary objective is to ascertain whether long-term workers are replaced by temporary workers when organisations introduce technical change. The empirical analysis conducted drew from the data on approximately 2,000 manufacturers gathered under the Business Structure Survey (ESEE) during the period 1990-1993. The results suggest a change in employment structures which, after adjusting for employer size and line of business, is found to be primarily related to the technological change taking place in the companies studied.Publicad

R&D INVESTMENT AND FINANCIAL CONTRACTING IN SPANISH MANUFACTURIG FIRMS

This paper presents a model in which a firm with a degree of R&D specialization raises external funds to develop a two-period project that involves some non-verifiable returns (R&D-type of project). Taking into account a possible opportunistic behavior by the manager, we find out that the optimal firm's debt equity ratio is negatively related to the firm's degree of R&D specialization, its internal funds, and the output generated by the R&D project. Moreover, the expected R&D output of the firm is related negatively to the firm’s leverage and positively to the firm’s degree of R&D specialization as well as the amount of internal funds. The novelty of this work is to derive these results from strategic default consideration of the managers of firms specialized in R&D investments, as opposed to the standard collateral arguments concerning debt financing. This has a consequence of a lower growth of the firm’s debt-equity ratio once we compare firms specialized on R&D investments with others non specialized in these activities. We confirm our main theoretical findings making use of a Spanish data set of manufacturing firms during the period 1990-94.

PERSISTENCE AND ABILITY IN THE INNOVATION DECISIONS

The main concern of this paper is to analyse the complementarities between the decisions to carry out both product and process innovations. We also try to identify the main determinants of the innovation activity as well as to separate the experience effect of the firm (capacities, routines as organization) from the experience effect of the manager (skills, abilities). It has been common when facing the study of technological change, to consider innovation as a homogeneous activity. The main analyses have focused on the determinants of such activity trying to explain decisions, counts or R&D expenses in the context of a unique activity. Several recent works, however, are worried about the possibility of analysing innovation distinguishing among different types according to the final purpose of this activity. We focus on two different decisions, product and process innovations, using typical discrete choice specifications (univariate and bivariate models) and also binary choice models with heterogeneity. Among the results, we find complementary but asymmetric effects concerning both decisions in static models even controlling heterogeneity. We also test whether the persistence in conducting innovation activities matter. We do so in an extensive database that provides information about manufacturing firms. Our results point towards the importance of both ability of the manager (unobserved heterogeneity) and experience of the firm (dynamics in the equation indicator).

Explaining export regional involvement through marketing strategy : the case of Spanish companies exporting to Latin America

The equivalence between the absence of arbitrage and the existence of an equivalent martingale measure fails when an infinite number of trading dates is considered. By enlarging the set of states of nature and the probability measure through a projective system of topological spaces and Radon measures, we characterize the absence of arbitrage when the time set is countable