We show that when the researcher’s (observable but not contractible) contribution to innovation is crucial, a covenant not to compete (CNC) reduces effort and profits under both spot and relational contracts. Having no CNC allows the researcher to leave for a rival. This alleviates a commitment problem by forcing the firm to reward a successful researcher. However, if the firm’s R&D investment ...

How does technological progress occur? Is the nature of innovation stable over time? We shed new light on these questions through a mixture of empirics and theory. We begin with an empirical analysis of patents granted by the United States Patent and Trademark Offi ce. This analysis reveals several striking facts that emphasize the increasing importance of novel combinations of technologies for...

This paper considers the effect of different firm leadership on the innovative performance of firms from seven EU countries. We investigate whether owner-led or manager-led firms achieve a larger share of their turnover with product innovations. Economic theory does not propose clear answers to this question. In the empirical analysis, it turns out that the manager-led firms are more active inn...

We analyze the implications of entrepreneurial spawning for a variety of firm characteristics such as size, focus, profitability, and innovativeness. We examine the dynamics of spawning over time. Our model accounts for much of the empirical evidence relating to the relation between spawning and firm characteristics. Firms that have higher patent quality spawn more, as do firms that have higher...

We analyse economic welfare in R&D intensive industries under varying assumptions on the spillover process. The focus lies on spillover processes with complementary R&D investments such as those modelling absorptive capacity. There spillovers give rise to both negative and positive externalities. We show that the rationale for public policy intervention is strengthened where spillovers also hav...

Innovation is at the basis of economic development and as such, it is instrumental for developing countries. We review the literature on innovation from the perspectives of four select branches of economics to build a conceptual framework of innovation applicable to developing countries. The conceptual framework includes insights from the surveyed literature and identifies areas of further rese...

We analyze the implications of entrepreneurial spawning for a variety of firm characteristics such as size, focus, profitability, and innovativeness. We examine the dynamics of spawning over time. Our model accounts for much of the empirical evidence relating to the relation between spawning and firm characteristics. Firms that have higher patent quality spawn more, as do firms that have higher...

This paper discusses the determinants of product innovation in young innovative companies (YICs) by looking at in-house and external R&D and at the acquisition of external technology in embodied and disembodied components. These inputoutput relationships are tested on a sample of innovative Italian firms. A sampleselection approach is applied. Results show that in-house R&D is linked to the pro...

This paper discusses several features of knowledge that are often considered crucial for characterizing the economic significance of knowledge: whether it is overtly accessible or tacit, whether it can be or is encoded or not, and whether it has public or private good character. It is argued that all these features depend similarly on the state of the knowledge technology, i.e. on how knowledge...

We introduce non-homothetic preferences into an R&D based growth model to study how demand forces hape the impact of inequality on innovation and growth. Inequality affects the incentive to innovate via a price effect and a market size effect. When innovators have a large productivity advantage over traditional producers a higher extent of inequality tends to increase innovators’prices and mark...