Francesco Rentocchini

Why do firms invest abroad? An analysis of the motives underlying Foreign Direct Investments

Although FDI have been at the forefront of economic debate since a long time, economists have not yet developed a unified framework for their investigation. In this paper, we put forward the idea that an essential point to analyze FDI concerns their underpinning motives. Motives are at the core of FDI and FDI are only but one of different alternative means for firms to grasp an opportunity in a foreign country. We discuss the factors that shape the set of available alternatives and analyze those affecting the decision to engage in FDI (internalization determinants), along with those influencing their localization (local- ization determinants). Starting from Dunning (1993) we put forward a revised taxonomy of FDI motives consistent with this framework { resource seeking, market seeking and non-marketable asset seeking. In order to show its practical implications, we survey common empirical issues on FDI showing how our analysis can shed light on seemingly contradictory empirical results

Sources and Characteristics of Software Patents in the European Union: Some Empirical Considerations

This work provides a deeper account of an increasing phenomenon characterising the European Union in recent years, i.e. software patenting. To this purpose we present a novel database of software patents providing a reliability check. According to that, more than 30 000 software patents have been granted so far to both European and Non-European companies. We investigate the relevant factors explaining firm-level software patenting at the EPO. Software patents are mainly applied by American and Japanese firms, are characterised by an higher average length of the granting procedure and firms belonging to the software sector do not apply for them. Finally, results from non-linear panel data estimation reveal that patents are not deemed as useful appropriability instruments by software firms and that a threat effect by hardware firms is growing in importance. This last result is in line with recent developments of the literature relative to strategic patenting.

Exploring and Yet Failing Less: Learning from Exploration, Exploitation and Human Capital in R&D

Exploration is both a risky activity and a key ingredient in the strategy of firms that strive for radical innovations. This paper investigates a dual facet of the exploratory component of R&D activities with regards to innovation failures: while exploration increases firms’ exposure to failure, it also provides learning opportunities to curve down innovation failures. This paper contributes to organizational learning and innovation management research by proposing that firms’ valuable learning does not automatically follow from exploration, but instead,it is conditional on reaching a threshold level of exploratory R&D activities. It is also proposed that valuable learning from exploration is enhanced when exploration is combined with other complementary sources oflearning: exploitation and human capital. Our baseline results point to an inverted U-shaped relation: investment in exploratory activities increases the rate of failure in innovation up to a point beyond which exploration is found to decrease the rate of failure. We observe this inverted U-shaped relationship both at the conception and development phases of the innovation process. We also show that firms’ commitments to exploitative R&D activities and the availability of human capital act as relevant moderators: they contribute to speed the organisational learning process enhanced by exploration and result in lowering the probability of innovation failure at the downstream and conception phases, respectively.

The effects of incubation on academic and non-academic high-tech start-ups: evidence from Italy

This study aims at empirically investigating whether technology incubators help academic high-tech start-ups to establish collaborations with other organizations, thus increasing the competitiveness of these firms. In doing so, we take into account the specificities of academic high-tech start-ups with respect to their non-academic counterparts. We compare the effects of incubation on academic and non-academic high-tech start-ups through econometric estimates using a large sample of Italian firms. Our findings suggest that incubated academic high-tech start-ups do not enjoy any advantages in establishing collaborations with respect to their non-incubated peers. Conversely, technology incubators do help non-academic high-tech start-ups in establishing collaborations with public research organizations. We thus come to the interesting conclusion that the effects of incubation are moderated by the genetic characteristics of incubated firms.

An Analysis of the Adoption of Open Source Software by Local Public Administrations: Evidence from the Emilia-Romagna Region of Italy

The wide diffusion of open source software OSS is driving discussion among scholars on a set of issues, including its adoption by public administrations PA. Previous works discussed a few factors that drive the decision to adopt OSS and did not address the potential benefits in terms of e-government that OSS may bring to PA. This paper fills these gaps. The analysis is based on the Emilia-Romagna region of Italy and studies the adoption of software both proprietary and open source by local PA. The results show there is increased adoption of OSS in several different domains of application, both servers and desktop clients. Among the motivations to adopt OSS, dependence on software suppliers is important. Its adoption also positively affects the variety and extent of interactivity of local public e-services.

Let it snow! Let it snow! Let it snow! Estimating cocaine production using a novel dataset based on reported seizures of laboratories in Colombia

BACKGROUND Data on the cocaine market appear inconsistent, as they tend to show declining prices vis-a-vis steady or increasing demand and a declining supply. This paper proposes an explanation for this trend by providing evidence of an under-estimation of the supply of cocaine. METHODS We propose a conservative estimate of cocaine production in Colombia for 2008, using data based on all reported seizures from 328 laboratories made by the counteracting organisations operating within the Colombian territory. RESULTS Our conservative estimate of 935 tons from the seized laboratories is at least twice the estimate declared in official statistics of 295-450 tons. We are careful to keep all variables to their minimum boundary values. Our methodology could prove to be a useful tool, especially if used in parallel with the standard tools. Moreover, its characteristics (affordability, ease of use and potential for worldwide adoption) make it a powerful instrument to counteract cocaine production.

That Was then, this is Now: Skills and Routinization in the 2000s.

We analyze changes in the skill content of occupations in US four-digit manufacturing industries between 1999 and 2010. Following a ‘task-based’ approach, we elaborate a measure of Non-Routine skill intensity that captures the effects of industry exposure to both technology and international trade. The paper adds to previous literature by focusing on both the determinants of demand for Non-Routine skills and their effects on industry productivity and wages. The key finding is that import competition from low-wage countries has been a strong driver of demand for Non-Routine skills during the 2000s. Both technology and trade with low-wage countries are associated with mild cross-industry convergence in skill intensity while trade with high and medium wage countries are at root of persistent heterogeneity across occupational groups. We also find that higher Non-Routine skill intensity has had at best a modest effect on productivity and wages, except for high-skill occupations.

The effect of academic consulting on research performance: evidence from five Spanish universities

This paper investigates whether engagement in consulting activities has a significant impact on the research performance of academic scientists. The study relies on a sample of 2678 individual faculty, from five Spanish universities, who have been recipients of publicly funded grants or have been principal investigators in activities contracted by external agents over the period 1999-2004. By implementing a propensity score matching estimator method, we show that engaging in consulting activities has an overall negative impact on the average number of ISI-publications. However, the effect of consulting on the scientific productivity of academic scientists depends on the scientific fields and the intensity of engagement in consulting activities. Academic consulting is found to have a negative impact in the fields of ‘Natural and Exact Sciences’ and ‘Engineering’, but not in the case of ‘Social Sciences and Humanities’. When the intensity of consulting activity is taken into account at the discipline level, engaging in consulting activities has an overall negative impact on scientific productivity only for high levels of involvement in consulting activities, but not for moderate ones.

Software Patents and Open Source Software in the European Union: Evidences of a Trade-Off?

The present work aims at giving an account of the patenting behaviour in the software sector, focusing on the European Union and pointing out issues regarding a trade-off which would support a policy attitude in favour of a wider diffusion of the Open Source model.

An Agent-Based Model of Product Competition: Network Structure and Coexistence Under Different Information Regimes

The paper analyzes how the structure of interaction networks affects the diffusion patterns and market shares of different products in case of local network externalities and imperfect information. The diffusion of the different products/technologies in the market is modelled as the result of two (only partly) interrelated dynamics: i) the interaction between idiosyncratic individual thresholds and local network externalities; ii) the diffusion of the information about the product (via broadcast diffusion and word-of-mouth). The average clustering coefficient affects the overall outcome and the actual possibility that one product corners the market. Moreover, in case of small-world networks, despite the high clustering coefficient which increases the probability of an outcome with coexistence, the increase in the speed of diffusion impinges on the actual realization of such an outcome in case of sequential entry of the different technologies and/or imperfect information.