Previous research has argued that innovative activities should be concentrated in recessions. However, innovation, as measured by R&D expenditure, seems to concentrate in booms. We argue that R&D expenditures do not capture the different dimensions of firms’ innovative search strategies. We introduce a model of innovative exploration and exploitation over the business cycle and present supporti...

In order to implement our empirical strategy we need to measure three types of information: the location of firms’ innovative activity, firms’ productivity performance, and the domestic and foreign spillover pools available to companies. We use data from the US Patent Office (USPTO), firm accounting information, and OECD data on industry level R&D expenditure, to measure each of these respectiv...

Background Innovative biotechnology firms play major roles in the development of biotechnology industry because of their product innovations. Since 2005, the Malaysian government has increased support towards the biotechnology sector to drive this industry forward. The aim of this paper was to identify the challenges in developing biotechnology industry from the prospective of private biotechno...

This study investigates whether institutional bond blockholders (i.e., bond funds that hold more than 5% of a firm’s outstanding bonds) impede firm innovative activities, and if they do, through which channels. We find that long-term bond blockholders do not discourage firms from conducting innovative activities. Short-term bond blockholders, however, significantly reduce both firm investments ...

Abstract By reviewing economic performance, two main phenomena could be identified: The first phenomenon is prior to the third wave of the Industrial Revolution in which limited resources are the predominant input; in other words, physical and natural resources are much more credited than human resources. The second phenomenon resonates with the third wave of industrial revolution to the presen...

We examine variation in the concentration of inventive activity across 72 of North America’s most highly innovative locations. In 12 of these areas, innovation is particularly concentrated in a single, large firm; we refer to such locations as “company towns.” We find that inventors employed by large firms in these locations tend to draw disproportionately from their firm’s own prior inventions...

New technologies have been continuously emerging to enable effective reuse of an ever-growing amount of data on the Web. Innovative firms can leverage the available technologies and data to provide useful services. Comparison-shopping services are an example of reusing existing data to make bargain-finding easier. Certain reuses have caused conflicts with the firms whose data has been reused. C...

The rapid rise of an innovative private manufacturing economy in China challenges standard economic explanations of growth, which typically assume the existence of well-defined formal institutions such as property rights and company laws safeguarding investor and creditor interests. We highlight the social structure of cooperation that enables innovative activity in private manufacturing firms ...

This paper analyzes the impact of the decision to contract ICT consulting on firms’ innovative incentives. The paper develops a theoretical model and estimates some of its implications for a sample of German firms. In particular, the paper estimates the average treatment effect of the decision to contract ICT consulting on firms’ innovative incentives, considering the role of endogeneity and un...

The recent surge of interfirm cooperative agreements can be seen to express a way for firms to respond to and organize market failure, especially in technology markets. The incentives for firms to internalize activities are to avoid the disadvantages, or capitalize on the advantages, of imperfections or disequilibria in external mechanisms of resource allocation. The purpose of this paper is to...