DETERMINANTS OF INNOVATION
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1 DETERMINANTS OF INNOVATION
2 Also by Alfred Kleinknecht INNOVATION PATTERNS IN CRISIS AND PROSPERITY: Schumpeter' s Long Cycle Reconsidered NEW CONCEPTS IN INNOVATION OUTPUT MEASUREMENT (editor with Donald Bain) NEW FINDINGS IN LONG-WAVE RESEARCH (editor with Ernest Mandel and Immanuel Wallerstein)
3 Determinants of Innovation The Message from New Indicators Edited by Alfred Kleinknecht Professor of Industrial Economics Vrije Universiteit, Amsterdam
4 Selection, editorial matter and Chapter 1 Alfred Kleinknecht 1996 Chapters 2-6 inclusive Macmillan Press Ltd 1996 Softcover reprint of the hardcover 1st edition 1996 All rights reserved. No reproduction, copy or transmission of this publication may be made without written permission. No paragraph of this publication may be reproduced, copied or transmitted save with written permission or in accordance with the provisions of the Copyright, Designs and Patents Act 1988, or under the terms of any licence permitting limited copying issued by the Copyright Licensing Agency, 90 Tottenham Court Road, London W1P 9HE. Any person who does any unauthorised act in relation to this publication may be liable to criminal prosecution and civil claims for damages. First published 1996 by MACMILLAN PRESS LTD Houndmills, Basingstoke, Hampshire RG21 6XS and London Companies and representatives throughout the world ISBN ISBN (ebook) DOI / A catalogue record for this book is available from the British Library
5 Contents List of Tables List of Figures Notes on the Contributors 1 New Indicators and Determinants of Innovation: An Introduction Alfred Kleinknecht vi viii ix 1 2 Industrial Innovation in Switzerland: A Model-based Analysis with Survey Data 13 Spyros Arvanitis and Heinz Hollenstein 3 Schumpeterian Conjectures: A Moderate Support from Various Innovation Measures 63 Bruno Crepon, Emmanuel Duguet and Isabelle Kabla 4 Determinants of Innovation: A Microeconometric Analysis of Three Alternative Innovation Output Indicators 99 Erik Brouwer and Alfred Kleinknecht 5 Factors Determining R&D and Innovation Expenditure in German Manufacturing Industries 125 Johannes Felder, Georg Licht, Eric Nerlinger and Harald Stahl 6 Firm Size and Participation in R&D 155 Robert W. Vossen and Bart Nooteboom Index 169
6 List of Tables 2.1 Measurement of innovation related to different stages of the innovation process Innovation variables used in model estimation Specification of the explanatory variables Factor analysis of appropriation mechanisms Factor analysis of external sources of knowledge Structure of the final sample of the 1993 innovation survey by KOF/ETH The probability of responding: Probit estimates with responding vs. non-responding firms Ordered Probit (or Tobit) estimates with measures related to the generation of innovation (Model 1) Ordered Probit (or Tobit) estimates with measures related to the generation of innovation (Model 2) Tobit estimates with output-orientated innovation measures (Models 1 and 2) Innovating firms only: ordered Probit (or Tobit) estimates with various measures for product innovations (Model 1) Impact of firm size: ordered Probit (or Tobit) estimates with various measures for product innovations (Model 1) Innovation as a function of firm size Size dependency of the innovation determinants (modified Model 2) Factor analysis of innovation variables Tobit estimates with an aggregate measure of innovativeness (Models 1 and 2) Decomposition of the explained variance by group of variables (a) Sample statistics, explanatory variables, l(b) Sample statistics, endogenous variables 70 3.l(c) Sample statistics, comparison of innovation involvement measures (a) Explanations of research and development investments, 1989, generalized Tobit model 77
7 List of Tables vii 3.2(b) Explanations of research and development investments, LS Explanations of the number of patents, , truncated negative binomial model Explanations of patenting involvement, , Binit and Logit models Explanations of innovation involvement, , Binit and Logit models Explanations of the percentage of innovative sales, , into 1990 total sales, ordered Probit model Correlation matrix of explanatory variables, Second-order flexible form Percentages of firms by size class which have some innovation activities according to different indicators Innovation performance according to alternative innovation indicators Factors which influence sales of products 'new to the firm': summary of generalized Tobit estimates Factors which influence sales of products 'new to the sector': summary of generalized Tobit estimates Count data model estimates (Hurdle geometric regression) on factors which influence new product announcements in trade journals List of variables and abbreviations Descriptive statistics by region and size class Participation in R&D, R&D intensity and innovation intensity A1 List of abbreviations and aggregation of industries A2 Factor analysis of sources of information of innovation activities A3 Factor analysis for objectives of innovation activities Simultaneous estimation of participation and spending models Separate estimation of spending model 162
8 List of Figures 5.1 Innovating and R&D-performing firms as a share of all manufacturing firms, 1992, West Germany Innovating and R&D-performing firms as ashare of all manufacturing firms, 1992, East Germany Components of innovation expenditure by firm size Components of innovation expenditure in West and East Germany R&D intensity and innovation intensity by firm size Participation in R&D in supplier-dominated and scale-intensive industries Participation in R&D in specialized suppliers and science-based industries Predicted participation and estimated firm size effect on R&D spending 165
9 Notes on the Contributors Spyros Arvanitis is a senior research economist of KOF/ETH, Center for Research of Economic Activity, Federal Institute of Technology, Zruich. Dr Arvanitis holds degrees from the University of Zurich (economics) and the Federal Institute of Technology in Zurich (chemistry). He was responsible (together with Heinz HoHenstein) for two national postal surveys on industrial innovation in Switzerland, and has published on indistrial innovation. Erik Brouwer is a fellow of SEO, Foundation for Economic Research of the University of Amsterdam. He is responsible for contract research for government and semi-government bodies, business associations, private companies, and for international institutions. He is currently preparing a PhD thesis on determinants of innovation. He graduated in econometrics at the University of Amsterdam, where, as a student, he was engaged as a research assistant in the department of microeconomics. Bruno Crepon is the head of the Bureau de Ia Politique Economique at the Direction de Ia Prevision, Paris-Bercy. He was Administrator at the lnstitut National de Ia Statistique et des Etudes Economiques (INSEE), Division Marches et Strategies d'entreprises, and visitor of the National Bureau of Economic Research at Cambridge for one year while writing the present contribution. He is a former student of the Ecole Polytechnique and holds a Doctorat from the Universite de Paris 1-Pantheon-Sorbonne. Emmanuel Duguet is Attache Temporaire d'enseignement et de Recherche (research and teaching assistant) at the Universite de Paris 1-Pantheon Sorbonne and is completing a Doctorat at the Centre de Recherche en Economie et Statistique (CREST), Laboratoire d'economie lndustrielle. He holds a DiplOme d'etudes Approfondies, a Magistere d'economie and a Maftrise d'econometrie from the Universite de Paris 1-Pantheon-Sorbonne. Johannes Felder works at the Centre for European Economic Research (ZEW), where his main research fields are new growth theory and innovation research. He graduated in Economics at the University of Mannheim and was research fellow at the Department of Economics there from 1988 to 1993.
10 X Notes on the Contributors Heinz HoHenstein is a senior research economist and Deputy Director of KOF/ETH, Center for Research of Economic Activity, Federal Institute of Technology, Zurich. Dr HoHenstein holds degrees in economics from the University of Berne. He was responsible (together with Spyros Arvanitis) for two national postal surveys on industrial innovation in Switzerland, and has published on international trade and industrial innovation. Isabelle Kabla is Administratrice at the lnstitut National de Ia Statistique et des Etudes Economiques (INSEE), Division Marches et Strategies d'entreprises. She is a former student of the Ecole Polytechnique and holds a DiplOme d'etudes Approfondies from the Ecole des Hautes Etudes en Sciences Sociales (EHESS). Alfred Kleinknecht is Professor of Industrial Economics and Research Director of the Economic and Social Institute, Vrije Universiteit Amsterdam. He was a research fellow of the Wissenschaftszentrum Berlin ( ) and of the Vrije Universiteit Amsterdam (1980-4). From 1984 to 1988 he was lecturer in Economics at Rijksuniversiteit Limburg, Maastricht. From he was Senior Economist of SEO, Foundation for Economic Research, Universiteit van Amsterdam. He was responsible for three national surveys of industrial innovation in The Netherlands in 1983, 1988 and 1992, and has published on industrial innovation and on Kondratieff long waves in economic growth. Georg Licht is Head of the Department of Industrial Economics and International Management at the Centre for European Economic Research (ZEW) at Mannheim, Germany. He holds degrees from the University of Heidelberg and the University of Augsburg. From 1985 to 1992 he was a research fellow at the department of economics at the University of Augsburg. He is responsible for the Mannheim innovation survey and a related project for the service sector. His current research focuses on innovation and survey methodology. Eric Nerlinger works at the Centre for European Economic Research (ZEW) and is a member of the research group implementing the Mannheim Innovation Panel. He studied economics at the University of Augsburg and his ongoing PhD research focuses on new technology-based firms in Germany. In 1995 he also joined the Federal Ministry for Education, Science, Research and Technology.
11 Notes on the Contributors xi Bart Nooteboom is Professor of Industrial Organization at the faculty of Management and Organization, Groningen University. He studied mathematics in Leiden and econometrics in Rotterdam and worked for four years with Shell in the Hague and London, where he developed tools for strategic planning in anticipation of the oil crisis. Subsequently he worked for fourteen years at the Dutch Economic Institute for Research of Small Business (ElM); for the last four years as scientific director. In 1980 he obtained his PhD with a thesis on retailing. He has acted on several advisory committees including a committee on technology policy for the ministry of economic affairs. Since 1980 he has written numerous articles for international and Dutch journals, together with books on a variety of subjects including innovation and diffusion of innovations. Harald Stahl is a member of the innovation research group at the Department of Industrial Economics and International Management at the ZEW. He holds a degree of economics from the University of Heidelberg. In 1990 and 1991 he stayed with Empirica, a private research company, working on housing markets. He was then member of the department of economics of the University of Paderborn doing research on consumer demand systems. In 1992 he joined the Centre for European Economic Research (ZEW) for a project focusing on the demand for telecommunication infrastructure. Robert W. Vossen studied econometrics and business at Groningen University and was a research assistant at both the faculty of Management and Organization and the Faculty of Economics for several years. From 1991 to 1996 he worked on a research project on R&D decisions, firm size and market structure, funded by The Netherlands' national science foundation (NWO). In 1996, he attained the degree of Dr from Groningen University, where he is currently working as a lecturer at the Faculty of Management and Organization.
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