Veranstaltungen

Max-Planck-Institut für Innovation und Wettbewerb, München, Raum 313

While economic theories (e.g. Hicks (1932); Acemoglu (2010)) suggest substitutability between labor and automation innovation, the relationship between labor supply and investments into automation innovation has so far escaped empirical examination. We analyze the local impact of changes in labor factor endowments on innovative activities by exploiting a placement policy that led to exogeneous inflows of immigrants during the 1990s and 2000s in Germany. Our results indicate that these positive shocks of low-skilled labor supply were followed by an absolute as well as relative decline in automation innovation. This pattern is consistent with the substitutability hypothesis on labor and labor-saving innovation. Subgroup analyses reveal effect heterogeneity by pre-existing labor market tightness. We further show that these inflows did not impact the level of non-automation innovation.

Ansprechpartner: Michael Rose

Max-Planck-Institut für Innovation und Wettbewerb, München, Raum E10

Hasty Buyers? Target Age in Times of Technology Hype

Referenten: Tobias Hlavka und Joachim Henkel (beide TU München)

Choking Under Pressure - The Effect of Asymmetric Contests on Stress and Performance

Referent: Jonas Heite (Max-Planck-Institut für Innovation und Wettbewerb)

Max-Planck-Institut für Innovation und Wettbewerb, München, Raum 313

By issuing patents, society grants an inventor temporary monopoly rights in exchange for the disclosure of the patented invention. If, however, what is patented is otherwise already visible to society, and what is otherwise not visible is kept secret by the inventor, then the bargain fails. We use exogenous variation in the strength of trade secrets protection from the Uniform Trade Secrets Act to show that patenting of processes is more adversely affected than that of products when patenting becomes relatively less attractive (compared to trade secrets). Arguing that processes are on average less visible (or self-disclosing) than products, stronger trade secrets have thus a disproportionately negative effect on the disclosure of inventions that are not otherwise visible to society. We then develop a structural model of initial and follow-on innovation to determine the impacts of such a shift in disclosure on overall welfare in industries characterized by cumulative innovation. In counterfactual analyses, we find that while stronger trade secrets encourage more investment in R&D, they may have negative effects on overall welfare - the result of a significant decline in follow-on innovation. This is especially the case in industries with relatively profitable R&D.

Ansprechpartner: Fabian Gaessler

Max-Planck-Institut für Innovation und Wettbewerb, Raum E10

Moderation: Heiko Richter

Max-Planck-Institut für Innovation und Wettbewerb, Raum 313

Schumpeter claims that recessions are periods of “creative destruction”, concentrating innovation that is useful for the long-term growth of the economy. However, previous research finds that standard measures of innovation, such as R&D expenditures or number of patents, concentrate in booms. We argue that these standard measures 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 find evidence that exploitation strategies are more prevalent in booms while exploration strategies are more prevalent in recessions. Results are stronger for more cyclical and less financially constrained firms. In contrast to the Schumpeterian view of creative destruction, we show that young and old firms contribute equally to the countercyclicality of innovation. Taken together, these results raise questions on macroeconomic stability as a policy goal.

Ansprechpartner: Fabian Gaessler

Max-Planck-Institut für Innovation und Wettbewerb, Raum 313

In evaluating the effectiveness of R&D subsidies, the literature so far has completely neglected the possibility of misappropriation of public funds. This paper contributes to the literature by evaluating the causal effect of R&D subsidies on R&D expenditures when monitoring is weak and misappropriation takes place due to moral hazard behavior. Our analysis is based on Chinese firm-level data for the period 2001-2011. Misappropriation is a major concern as we calculate that 42% of grantees misused R&D subsidies, corresponding to 53% of the total amount of R&D subsidies. In a setting with one-sided noncompliance to funding contract rules, we differentiate between the intention-to-treat (ITT) effect and the complier average causal effect (CACE). The ITT shows how effective the R&D policy was in practice when misappropriation exists. The CACE, in contrast, depicts how effective the policy could have been without misappropriation and thus is a measure for the efficacy of the R&D subsidy policy. Combining entropy balancing and IV methods to estimate both ITT and CACE, the ITT results show mild partial crowding out of R&D expenditures. Most strikingly, however, the CACE turns out to be more than twice as large as the ITT and confirms additionality of R&D subsidies. Thus, misappropriation of R&D subsidies considerably undermines the efficacy of Chinese R&D programs. (joint work with Philipp Boeing)

Ansprechpartner: Fabian Gaessler

Max-Planck-Institut für Innovation und Wettbewerb, München, Raum 313
 

We investigate the impact of the introduction of patent rights for software inventions in the U.S. on academic computer scientists’ publication output. Difference-in-difference estimations that compare U.S. academic computer scientists working on software to (1) U.S. academic scientists working on hardware and (2) European university scientists working on software reveals that the introduction of software patents in the U.S. led to a decrease of (citation-weighted) publications as compared to U.S. computer scientists working on hardware and as compared to the European peers. The effect is stronger for scientists at the left-hand side of the ability distribution. This pattern is consistent with a simple model of time allocation between patenting and publishing. (joint work with Laurent Bergé and Thorsten Doherr)

Ansprechpartner: Felix Pöge

Max-Planck-Institut für Innovation und Wettbewerb, Raum E10

Moderation: Jörg Hoffmann

Max-Planck-Institut für Innovation und Wettbewerb, München, Raum 313

Considering that both patents and trade secrets can promote knowledge diffusion via licensing, we compare patents and secrets on the way they facilitate diffusion through non-exclusive licensing. This comparison is important because AI algorithms are not patentable. Patents differ from trade secrets on the easiness of imitation when licensed to many downstream producers. In view of this, we argue that secrets are better in defending one’s monopoly under the threat of imitation, inducing market failure on the diffusion of AI. We also find a non-linear relationship between patent strength and the diffusion of ideas, i.e., patents of intermediate patent strength are best as diffusion instruments.

Ansprechpartner: Dr. Fabian Gaessler

Max-Planck-Institut für Innovation und Wettbewerb, München, Raum 313

We theoretically derive a simple rule for the optimal patent breadth and duration of pharmaceutical patents. The rule requires only data on generic firms’ investments in imitation prior to the expiry of originator patents. We then test the rule using a unique patent level data set from the US. Paragraph IV challenges offer a clear metric of imitation and patent term extensions create the variation in patent term. Using two quasi-experimental approaches and newly constructed data, we document that extending patent length increases incentives to imitate whereas broadening patents reduces these incentives. Our results together suggest that effective terms of new drug patents should be made shorter and delays in commercialization of new drugs should be compensated by increasing breadth.

Ansprechpartner: Felix Pöge