Ownership and firm innovation in a transition economy: evidence from China

Innovative start-ups are an important driver of economic growth. This article presents empirical evidence on the effects of research and development (R&D) on new product development, interfirm alliances and employment growth during the early life course of firms. We use a dataset that contains a sample of new firms that is representative of the whole population of start-ups. This dataset covers the first 6 years of the life course of firms. It is revealed that R&D plays several roles during the early life course of high-tech as well as high-growth firms. The effect of initial R&D on high-tech firm growth is through increasing levels of interfirm alliances in the first post-entry years. R&D efforts enable the exploitation of external knowledge. Initial R&D also stimulates new product development later on in the life course of high-tech firms, but this does not seem to affect firm growth. R&D does not affect the growth rate of new low-tech firms, which seem to be driven mainly by the growth ambitions of the founding entrepreneur. The results show that R&D matters for a limited but important set of new high-tech and high-growth firms, which are key in innovation and entrepreneurship policies.

/pdf/the-roles-of-r-d-in-new-firm-growth-kheqf272sj.pdf

The roles of R&D in new firm growth

This paper analyses the evolution of regional innovation policy into the mainstream of public policy. The paper examines the empirical and theoretical developments which have shifted much of the focus on innovation-related issues to matters of economic geography. As well as academic material we also review the literature on the subject produced by the international development institutions. In terms of policy, special attention is devoted to the role of local market failures and local institutions in explaining the importance and need for regional innovation policies, and the advent of the smart specialisation agenda is discussed. Finally, the paper discusses the current regional innovation policy tools and interventions observed around the world, which are seen by international institutions as examples of best practice.

Modern regional innovation policy

The traditional economics of innovation, inspired by Schumpeter and more recent advances on his work, seem unable to explain why firms with similar external conditions may show greatly different performance in innovation. Contrastingly, the literature on corporate governance provides some useful insights for understanding corporate innovation activity, to the extent that such literature examines the economic effects of different modes of coordination between firm members. The process through which individuals integrate their human and physical resources within the firm is central to the dynamics of corporate innovation. This paper provides the first survey of the literature on this issue. We start by discussing how various theoretical approaches to the analysis of the firm deal with technological innovation. We then describe three main channels – corporate ownership, corporate finance and labour – through which a system of corporate governance shapes a firm's innovation activity. Finally, we examine the relationship between country-level institutional settings, national patterns of corporate governance and the aggregate innovation activity of corporations. We conclude by suggesting that future research should focus more deeply on the interrelation between the various dimensions of corporate governance and on their joint effect on firm innovation.

https://papers.ssrn.com/sol3/Delivery.cfm/SSRN_ID1768949_code1302532.pdf?abstractid=1583831&mirid=1&type=2

Corporate Governance and Innovation: A Survey

Using data from 3,638 Spanish firms between 1996 and 2000, this article studies the relationship between the presence of large shareholders in the ownership structure of firms and R&D investment. Consistent with our theoretical contention, our results indicate that the impact of large shareholders on the R&D investment is (1) negative when blockholders are banks, (2) positive when blockholders are non-financial corporations and (3) null when blockholders are individuals. In addition, we find a systematic negative relationship between the number of blockholders and R&D investment. Finally, we extend our study by analysing the influence that the combined effect between blockholder type and R&D investment has on the firm’s economic performance. Results of this work provide relevant implications for policy makers and academic research.

/pdf/do-the-type-and-number-of-blockholders-influence-r-d-ts4ys1t7i2.pdf

Do the Type and Number of Blockholders Influence R&D Investments? New evidence from Spain

Based on the Knowledge Production Function framework given by Griliches (1979), we slightly modify it so that the innovative output depends upon a set of factors related to the firm internal characteristics and are influenced by the envi- ronment. Specifically, regarding the firm internal determinants the effect of the con- centration of the ownership, the composition of the boards of directors and the effect of the nature of the ownership (foreign and public) are analyzed. Additionally, in order to capture the determinants of the environment in which the firm operates other varia- bles concerning the internationalization of market, the agglomeration economies and the regional knowledge externalities are also considered. In order to assess the impact of these determinants on the number of patents and models of use awarded by the firm, the discreteness of the latter variable has to be taken into account. We apply Pois- son and Negative Binomial models for a more comprehensive evaluation of the hypot- hesis in a panel of Spanish manufacturing firms. The results show patenting activity is positively favoured by being located in an environment with a high innovative acti- vity, due to the existence of knowledge spillovers and agglomeration economies.

/pdf/evidence-on-the-role-of-ownership-structure-on-firms-1kx8sjuypn.pdf

Evidence on the role of ownership structure on firms' innovative performance

Entrepreneurship, Industrial Location and Economic Growth

Innovations and Entrepreneurship in Functional Regions

La aplicacion de los mecanismos de control de los problemas de agencia: un analisis de las empresas manufactureras espanolas

Product and Process Innovations and the likelihood of survival

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