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PS-4.08: Sectoral innovation system, industrial policy and development 4
2:00pm - 3:30pm
Session Chair: Olga Mikheeva, Tallinn University of Technology Discussant: Gabriela Dutrénit, Universidad Autónoma Metropolitana
Location:Maribaya Room (Preanger)
Imitation to Innovation: Late Movers’ Catch-up Strategy and Technological Leadership Change
Keun Lee, Sungyoung Chang, Jaeyong Song, Hyunseob Kim
seoul national university, Korea, Republic of (South Korea)
Little attention has been devoted to the question of how late movers overcome first-mover advantage and catch up with incumbents. We examine the role in catch-up of late movers’ optimal resource allocation between innovation and imitation. Building on Nelson and Winter’s (1982) technology learning and competition model, we develop computational models of late movers’ R&D allocation strategy and technological leadership change. The results suggest that one-sided dependency upon either imitation or innovation deters technological leadership change by late movers in the long run, since the leading firms are moving targets. Furthermore, when a late mover’s technology level is low, the late mover should focus on imitation and build technological capabilities and absorptive capacity; then, as the technological gap decreases, the late mover should allocate more R&D resources to innovation and attempt technological leapfrogging. This transition from imitation to innovation plays a critical role in catch-up. We also test our models including a range of technological environment variables such as appropriability, cumulativeness, and technological opportunity. Our model shows that our original findings are resilient across a wide range of technological environment variables.
Firm heterogeneity, growth performance and exit in the Ethiopian manufacturing sector: the role of Productivity and capital intensity
Abdi Yuya Ahmad
Adama Science and Technology University, Ethiopia
This paper examined firm growth and exit in the Ethiopian manufacturing sector using firm level data over 2000-2011 from the medium and Large manufacturing with ten and above permanent employees. We analyzed firm growth and exit controlling for firm heterogeneity in terms of size, age, sector, ownership and other performance indicators. In this paper we argued that productivity and capital intensity are important for enhancing the growth of firms and reducing the exit probability. We also hypothesized that firms in more concentrated sector are more likely to exit while this effect is expected to be stronger among small and inefficient firms. To verify our argument, we hired a two step estimation strategy where productivity and efficiency were first estimated using a semiparametric approach of Levisohn and Petrin and stochastic production frontier, respectively. Then, we estimated growth and exit regression using system GMM and panel probit models in their respective orders. Results showed that high productive, and firms with high capital intensity registered better growth rates. Productivity and capital intensity helps also in reducing the risk of exit. Young and small firms appeared to have higher exit probability. Firms in more concentrated sector are more likely to be competed out and the effect was found to be stronger among small and less efficient firms. The finding suggests that improving the productivity, efficiency, and helping firms in access to better resource choice can increase firm growth and reduce the risk of exit.
Mapping the Dynamic Co-evolution of Technological Convergence and Transitions in the Technological Life Cycle: Evidence from the Herbal Medicine Sector
Hon-Ngen Fung, Chan-Yuan Wong
University Malaya, Malaysia
Research and innovation play a major part in affecting technological convergence, which in turn plays a key role in the advancement of the technological life cycle. In this paper, we present an evolutionary perspective of how patent keyword clusters evolve at different phases of the technological life cycle of the herbal medicine sector. Utilizing scientometric data, we map the trajectory of the technological life cycle and correlate this with snapshot patent cluster landscape through the Patsnap Patent 3-D Landscaping visualization tool. We observe evidence of convergence of modern biotechnological methods with existing herbal medicine innovations resulting in the strengthening of patent clusters and penetration of herbal medicine in novel niches. We also observe the emergence of universities as significant latecomers in patenting activities, which is evidence of a long incubation period for the commercialization of university research in herbal medicine.