Claudio Cozza

Innovation, profitability and growth in medium and high-tech manufacturing industries: Evidence from Italy

The main goal of this article is to assess the impact of product innovation on the economic performance of firms operating in Medium and High-Tech (M&HT) industries. Using information from a large and unique dataset on Italian firms we estimate, by means of Propensity Score (PS) matching methods, a positive and significant ‘innovation premium’ both in terms of profitability and growth (in the short-run) for those firms who introduced new innovative products. We also find that this innovation premium is particularly large for small firms and even more so when considering new established firms.

Doing R&D or Not (in a Crisis), That Is the Question …

This study investigates how corporate R&D evolves in the light of the contemporary economic crisis. We study empirical evidence from past downturns, discuss the relevant literature and perform an empirical analysis of recent business survey data (collected during 2009). Pivotal for our considerations is the question whether companies tend to spend more or less on R&D and innovation activities during periods of recession. We empirically analyse what general patterns can be distinguished in this regard, given the particular circumstances of the most recent crisis. Our findings suggest that company behaviour varies: some companies have recently reduced their innovation activities significantly, while others maintained them and a third group even significantly increased their activities to reap the benefits in the expected upswing. Overall, we observe a deceleration of R&D and innovation activities induced by the crisis, but the trend figures remain positive. Driven by the companies that reinforce their R&D and innovation efforts to thrive through the downturn and thus seek to gather the benefits in the upswing to come, the R&D and innovation landscape is likely to look different in the aftermath of the crisis.

Investigating Chinese Outward Foreign Direct Investments: How Can Firm‐level Data Help?

The empirical literature on Chinas outward foreign direct investment mainly relies on aggregate data from official statistics, but the reliability of such data is currently a matter of concern because it does not take account of relevant features such as industry breakdown, ownership structure and entry mode. A novel firm-level database, EMENDATA, compiled by matching data from several available sources on various types of cross-border deals and including information on group structure, provides a more accurate picture and enables new empirical analyses of the rapidly increasing presence of Chinese companies abroad. Based on this database, this paper offers a more precise assessment of the geographical and sector specialization patterns of Chinese outward foreign direct investment into Europe and suggests new avenues for future research.

The 2009 EU Survey on R&D Investment Business Trends

This report presents the findings of the sixth survey on trends in business R&D investment. These are based on 205 responses of mainly larger companies from the 1000 EU-based companies in the 2010 EU Industrial R&D Investment Scoreboard. These 205 companies are responsible for R&D investment worth almost €40 billion, constituting around 30% of the total R&D investment by the 1000 EU Scoreboard companies. The main result is that top R&D investing companies in the EU expect their global R&D investments to grow by 5 % annually from 2011 to 2013. This is more than double the rate of last years expectations, and represents a significant upturn from the 2.6 % R&D investment cuts observed for these companies in 2009. Companies surveyed expect their R&D investment inside the EU to grow 3 % a year over the next three years, although this remains the lowest rate compared to what they expect to invest in R&D in other world regions, especially in Asian countries like China (25%) or India (8%), but also in the US and Canada (5%).

Chinese and Indian Multinationals: A Firm-Level Analysis of their Investments in Europe

Abstract This paper contributes to the literature on Chinese and Indian multinationals investing in Europe through an empirical investigation about their identity, their characteristics and the association between their features and their international strategies. The investigation exploits a database, named EMENDATA (Emerging Multinationals’ Events and Networks DATAbase), at the level of the investing firms. In relation to the mode of entry, we find that greenfield investments are a more likely option for large-sized companies. Moreover a high propensity for innovation is associated with a high probability to enter with an acquisition and with technological asset-seeking investments. Finally, high profitability is needed to invest in the EU-core countries.

Productivity Gaps Among European Regions

How is the R&D-productivity link affected by the environment where firms locate? Are companies located with their registered offices in more R&D favorable environments better able to translate their R&D knowledge into productivity gains? Our paper tries to answer these questions analyzing - in the European context - if R&D performing companies cluster themselves in “higher-order R&D regions”, as the Economic Geography theories postulate, inducing a polarisation in terms of labour productivity in comparison with firms located in “lower-order R&D regions”. The proposed microeconometric estimates are based on a unique longitudinal database of publicly-traded companies belonging to manufacturing and service sectors. The final unbalanced sample comprises 626 European companies for a total of 3,431observations, covering the period 1990-2008. Results show that European “higher-order R&D regions” not only invest more in R&D, but also achieve more in terms of productivity gains from their own research activities. Results also show that in the case of “lower-order R&D regions”, physical capital stock is still playing a dominant role.

Interplay between regional and industrial aspects in the R&D–productivity link: evidence from Europe

ABSTRACT Interplay between regional and industrial aspects in the R&D–productivity link: evidence from Europe. Regional Studies. The paper tests the effect of the interplay between regional and sectoral dimensions in the firm-level research and development (R&D)–productivity link. Using a longitudinal database of innovative publicly traded European companies between 1991 and 2008, the following main results arise. First, the elasticity of value added with respect to R&D is larger in regions characterized by a higher innovation performance (knowledge hubs versus industrial zones). Second, in knowledge hubs, industry affiliation mediates the gains from R&D: high-tech manufacturing firms profit more from R&D than low-tech ones. This evidence suggests that an innovative regional environment increases the capacity to translate R&D investments into productivity for European high-tech industries. This virtuous circle is not at work in services and in low-tech manufacturing industries.

Ownership and Execution of Regional Corporate R&D — Methodological Hints from the Italian Case

The paper aims to provide methodological suggestions on the measurement of regional corporate R&D, by using a new approach to disentangle corporate R&D by region of ownership and of execution. We make distinction in the concepts: what we call “region of ownership” is where the R&D performer has its registered office and “region of execution” is where the R&D actually takes place. This duplicity allows for the calculation of three regional indicators: regional R&D Autonomy, regional R&D Inward and regional R&D Outward. Using micro-data for Italy in the period 2001–2005, a high level of R&D concentration in a few Italian regions is confirmed; furthermore, information on the strengths and weaknesses of Italian regions are added, addressing regions’ R&D performance as not univocal but representing a complex phenomenon. The growing importance of regional figures at the EU level asks for a more refined overview of economic phenomena, included Science and Technology ones. Given its general approach and the reference to official statistics, the methodology is considered replicable at international level and overtime.

The concentration of Health research and innovation across EU regions

Health research and innovation (RandI) is attracting the attention of EU, national and regional policymakers. As Health policies are becoming a public policy priority – targeting not only social needs but also the overall economic development of EU countries – Health RandI have been identified as key areas of investment. However, despite the attempts to reduce inequalities also in this field, a strong concentration of Health R&I across EU regions still exists. The paper provides recent and novel empirical evidence on the topic, describing the concentration of Health patents, publications and EU project participation in top EU regions. Regional data help in assessing that, also in the Health sector, concentration is not only a cross-country but also a within-country issue.

Explaining the Patenting Propensity: A Regional Analysis Using EPO-OECD Data

The aim of this chapter is to conduct an empirical study of the patenting propensity at the European regional level using the OECD-REGPAT dataset.We use patent applications by inventor’s region as, in this case, linkage to the territory is stronger than using applicant’s region. Data analysis reveals the existence of a deep, uneven distribution of patent applications, R&D expenditure and human capital. Richer regions show higher levels of both private and public R&D expenditure as well as a consistent share of the total European patent applications. Starting from the analysis of these key variables, we proceed explaining the determinants of patenting propensity. The results substantially confirm the significant role of R&D expenditure on patenting activity: mainly the business enterprises, but also the government sector component. Human capital variables show similar positive effect, while average enterprise size seems not to play a determining role in patent applications.