Productivity spillovers from foreign affiliates and domestic firm internationalization: firm-level evidence for Belgium.

We examine to what extent local firms can reap productivity gains from knowledge spillovers due to the presence of manufacturing affiliates of multinational firms, taking into account that domestic firms' internationalization through import and export activities may also lead to productivity growth. We examine spillovers occurring within sectors as well as those potentially occurring across industries due to client or supply relations of local firms with foreign-owned affiliates in downstream and upstream sectors, respectively. Fixed affects panel analysis on a sample of 4594 local Belgian firms during 2000-2007 reveal significant positive effects of horizontal and backward spillovers on the productivity levels of local firms. Evidence of productivity benefits due to forward linkages from foreign-owned affiliates supplying local firms is only be found for local firms with no export or import activities. Both importing and exporting activities are associated with higher productivity. In general, backward spillovers are weaker for exporting firms, and forward spillovers do not benefit importing firms, suggesting that local spillovers from client/supply relations with foreign multinationals and internationalization can be seen as alternative ways in which internationalization of an economy can enhance productivity performance.

International and domestic technology transfers and productivity growth: Firm level evidence.

We examine the drivers of international and domestic technology transfer strategies of firms and the impact of these transfers on firms’ productivity performance in a sample of 440 Flemish innovating firms during 2003-2006. Technology transfers may occur through R&D contracting, purchase of licenses and know how, purchase of specialized machinery, hiring of specialized personnel, and various informal channels. Analysis of the drivers of technology sourcing strategies shows that combined technology sourcing strategies are more likely to be adopted by firms that 1) face resource limitations in their innovative effort 2) have a basic research orientation and conduct more R&D 3) successfully use various technology protection strategies to appropriate the benefits of innovation efforts 4) are engaged in international R&D collaboration. Estimates of a dynamic productivity model show that firms engaging in international knowledge sourcing strategies record substantially and significantly higher productivity growth. The largest impact is found for firms combining foreign transfer strategies with local technology acquisition, suggesting that a diverse external technology strategy combining local technologies as well as know how from abroad is most likely to improve firm performance.Technology transfer; Productivity; Multinational Firms;

Determinants of high-tech entrepreneurship in Europe

High-tech entrepreneurship is one of the main means by which new knowledge and technologies are converted into economic and social benefits. This report analyses the levels and determinants of high-tech entrepreneurship across European countries. To this end, it uses country-level data on high- and low-tech total early-stage entrepreneurial activity provided by the Global Entrepreneurship Monitor (GEM). Panel data estimations for the period 2007-2014 reveal that EU Member States with better access to finance, less bureaucracy, more consistent policy regimes, favourable entrepreneurship education, and qualitative intellectual property rights that lower patent thicketing strategies exhibit a higher proportion of high-tech firm creation. In addition, greater technological density is associated with a higher rate of high-tech entrepreneurship creation, suggesting beneficial influences of path-dependency and agglomeration effects.JRC.B.6-Digital Econom

An analysis of national research systems (II): Efficiency in the production of research excellence

The main contribution of this project lies in the assessment of the efficiency of national research systems in achieving excellent research performances. The efficiency assessment is not only restricted to the production of research excellence in general, but is disentangled by type of research field, distinguishing between science and technology. This distinction provides a helpful tool for policy makers in assessing the discrepancy of efficiency in both science and technology excellence within and across countries. In our conceptual framework, a national research system’s efficiency can be defined as the extent to which a country is able to transform research assets into excellent research. We conducted efficiency analyses on three main model specifications in which we relate the amount of resource assets (public, private, total R&D expenditure) to the performance on excellent research. In our empirical analysis of efficiency, we report on two methodologies: output/input ratios (partial measures of efficiency) and robust production frontiers (complete and robust measures, order-m and order-alpha method, as developed by Daraio and Simar (2007a). Various conclusions are drawn based on these analyses.JRC.G.3-Econometrics and applied statistic

Update on the Composite Indicators of Structural Change towards a More Knowledge-Intensive Economy

This report aims at assessing whether the economic structure of Europe is becoming more knowledge-intensive, in comparison with other countries (EU, EFTA and non-European benchmarks US, Japan, China). This entails the measurement of key dimension of structural change with a simple policy tool. The present work builds on and updates the results of the previous Feasibility Study on the development of composite indicators of structural change (Vertesy et al., 2012). It also builds on a previous study by Malerba et al. (2011) that identified indicators measuring changes in the actual sectoral composition of the economy. In this study we construct a composite indicator on structural change at the country level, including indicators on R&D, skills, sectoral specialization, international specialization and internationalization. This composite is a supply-oriented indicator that is largely based on past performance (the outcomes of past efforts that are already measurable in terms of actual value added and employment levels in knowledge-based activities, revealed competitive advantages, supply of skilled human resources, etc.). All these indicators are related to the overall structure of the economy and are slow to change. In order to capture short-term characteristics of structural change related to the dynamics of smaller and younger firms, future research should focus on the development of a longitudinal database collecting indicators on the share of gazelles and the share of high-growth firms in terms of employment and turnover.JRC.G.3-Econometrics and applied statistic

Validation of the Innovation Radar assessment framework

In this report we provide an assessment of the statistical methodology behind the Innovation Radar. In particular we analyse to what extent the Innovation potential index and the Innovator capacity index are analytically and statistically sound and transparent. The aim of this report is to evaluate to what extent variables that have been included in these composite indicators make sense from a statistical point of view. Overall, the Innovation potential index is found to be statistically sound with particularly room for improvement of the market potential dimension. The Innovator capacity index is conceptually sound but can be improved statistically.JRC.B.6-Digital Econom

Innovation and Employment in Patenting Firms: Empirical Evidence from Europe

This report explores the possible job creation effect of innovation activity. We analyze a unique panel dataset covering nearly 20,000 patenting firms from Europe over the period 2003-2012. The main outcome from the proposed GMM-SYS estimations is the labour-friendly nature of innovation, which we measure in terms of forward-citation-weighted patents. However, this positive impact of innovation is statistically significant only for firms in the high-tech manufacturing sectors, while not significant in low-tech manufacturing and services.JRC.DDG.01-Econometrics and applied statistic

Technology and Employment: Mass Unemployment or Job Creation? Empirical Evidence from European Patenting Firms

This paper explores the possible job creation effect of innovation activity. We analyze a unique panel dataset covering almost 20,000 patenting firms from Europe over the period 2003–2012. The main outcome from the proposed GMM-SYS estimations is the labor-friendly nature of innovation, which we measure in terms of forward-citation weighted patents. However, this positive impact of innovation is statistically significant only for firms in the high-tech manufacturing sectors, while not significant in low-tech manufacturing and services

Report No. 28: Review of Methodologies Applied for the Assessment of Employment and Social Impacts

Joint report with ECORYS Netherlands for the DG Employment, Social Affairs and Equal Opportunities of the European Commission, Bonn 2010 (217 pages)

An analysis of national research systems (I): A Composite Indicator for Scientific and Technological Research Excellence

This paper first develops a framework for the analysis of national research systems, with particular focus on the excellence of scientific and technological research, a central topic for the current European research and innovation policy discourse. Next, after carefully considering measurement and data issues, it proposes a set of strong and weaker country-level indicators of research excellence, based on which a composite indicator of scientific and technological research excellence is proposed and tested for robustness and sensitivity. The research was conducted on behalf of DG-RTD within the framework of the 'Composites_4_IU' project.JRC.G.3-Econometrics and applied statistic