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External Effects as a Microeconomic Determinant of Innovation Efficiency

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  • Hariolf Grupp

Abstract

Recent studies point to the significant effects unintended technological spillover has on profits, market value and patent output of enterprises. The public good character relates not only to technology, but also to (public) science. The paper introduces a new data source on German businesses making possible new variables for innovation, spillover, investment and competition. By employing Data Envelopment Analysis (DEA), innovation efficiency and the role of externalities is modelled and explained. For this sample, neither advantages nor disadvantages in innovation efficiency are found on the part of large firms. This emphasises the fragility of the size hypothesis in industrial economics. Instead, the firms with more activity in interconnected, spilling-over technologies are the efficient ones. The benefits from appropriation of spillovers seem to outweigh- any unintended losses of know-how to competitors

Suggested Citation

  • Hariolf Grupp, 1997. "External Effects as a Microeconomic Determinant of Innovation Efficiency," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 4(2), pages 173-188.
    • Handle: RePEc:taf:ijecbs:v:4:y:1997:i:2:p:173-188
    DOI: 10.1080/758516226
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    References listed on IDEAS

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    1. Giovanni Dosi & Keith Pavitt & Luc Soete, 1990. "The Economics of Technical Change and International Trade," LEM Book Series, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy, number dosietal-1990, November.
    2. Davidson, Russell & MacKinnon, James G., 1993. "Estimation and Inference in Econometrics," OUP Catalogue, Oxford University Press, number 9780195060119.
    3. Giovanni Dosi & Christopher Freeman & Richard Nelson & Gerarld Silverberg & Luc Soete (ed.), 1988. "Technical Change and Economic Theory," LEM Book Series, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy, number dosietal-1988, November.
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    Cited by:

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    2. Erik Lehmann & Jürgen Weigand & Susanne Warning, 2004. "Governance Structures, Efficiency, and Firm Profitability," Papers on Entrepreneurship, Growth and Public Policy 2004-22, Max Planck Institute of Economics, Entrepreneurship, Growth and Public Policy Group.

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    More about this item

    Keywords

    Innovation efficiency; Spillovers; Competition; Profitability; DEA; JEL classification: O31; L21; H4; O33;
    All these keywords.

    JEL classification:

    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • L21 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Business Objectives of the Firm
    • H4 - Public Economics - - Publicly Provided Goods
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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