Katrin Hussinger

Exports Versus FDI in German Manufacturing: Firm Performance and Participation in International Markets

This paper tests some of the predictions of recent advances in trade theory that have focused on different trade patterns of firms within the same sector. Helpman, Melitz and Yeaple (2005) develop a model in which innate productivity differences between firms determine the degree of international engagement of firms: The least productive firms produce for the domestic market, better performers engage in export activities, and the top firms establish foreign subsidiaries. Using German firm-level data from 1996 to 2002, we test this prediction using non-parametric methods, by examining the distribution functions of the three subsets of firms for stochastic dominance. Rather than just comparing first moments, this technique allows us to compare productivity over the entire distribution. Our results show robust support for the prediction from theory.

The Link between R&D Subsidies, R&D Spending and Technological Performance

This paper analyzes the effects of public R&D funding on R&D expenditure and patenting behavior of German firms. The main focus is the direct impact of subsidies on R&D and the indirect effect on innovation output measured by patent applications. We distinguish the productivity of purely privately financed R&D and additional R&D induced by public incentive schemes. For this, a treatment effects analysis is conducted in a first step. The results are implemented into the estimation of a patent production function. It turns out that both purely privately financed R&D and publicly induced R&D show a positive productivity.

Is Silence Golden? Patents Versus Secrecy at the Firm Level

In the 1990s, patenting schemes changed in many respects: Upcoming new technologies accelerated the shift from price competition towards competition based on technical inventions, a worldwide surge in patenting took place, and the ‘patent thicket’ arose as a consequence of strategic patenting. This study analyzes the importance of patenting versus secrecy as an effective alternative to protect intellectual property (IP) in the inventions’ market phase. The sales figure with new products is introduced as a new measure of the importance of IP protection tools among product innovating firms. Focusing on German manufacturing in 2000, it turns out that patents are an effective means to protect IP in the market, whereas secrecy seems to be rather important for inventions that are not yet commercialized.

Formal and Informal Knowledge and Technology Transfer from Academia to Industry: Complementarity Effects and Innovation Performance

Literature has identified formal and informal channels in university knowledge and technology transfer (KTT). While formal KTT typically involves a legal contract on a patent or on collaborative research activities, informal transfer channels refer to personal contacts and hence to the tacit dimension of knowledge transfer. Research is, however, scarce regarding the interaction of formal and informal transfer mechanisms. In this paper, we analyze whether these activities are mutually reinforcing, i.e., complementary. Our analysis is based on a comprehensive data-set of more than 2,000 German manufacturing firms and confirms a complementary relationship between formal and informal KTT modes: using both transfer channels contributes to higher innovation performance. The management of the firm should therefore strive to maintain close informal relationships with universities to realize the full potential of formal KTT.

Why Challenge the Ivory Tower? New Evidence on the Basicness of Academic Patents*

While often presumed in academic literature and policy discussions there is little empirical evidence showing that academic patents protect more basic inventions than corporate patents. This study provides new evidence on the basicness of academic patents using German professor patents linked to patent opposition data from the European Patent Office (EPO). Patent oppositions are the most important mechanism by which the validity of patents filed at the EPO can be challenged. Controlling for patent value, asymmetric information and diverging expectations between the opposition parties, the likelihood of a potentially litigious situation and the relative costs of opposition versus settlement, we find that academic patents are opposed less frequently than a control group of corporate patents. This suggests that academic patents cover rather basic inventions with a low immediate commercial value not threatening current returns of potential plaintiffs. The effect is weaker for academic patents in collaboration with the business sector, which suggests that those patents are evaluated as more applied by owners of potentially rival technologies.

In Search for the Not-Invented-Here Syndrome: The Role of Knowledge Sources and Firm Success

The not-invented-here (NIH) syndrome refers to internal resistance in a company against externally developed knowledge. In this paper, we argue that the occurrence of the NIH syndrome depends on the source of external knowledge and the success of the firm that aims at adapting external knowledge. In line with social identity theory, we hypothesize that internal resistance is most likely to occur if knowledge is acquired from similar organizations. This hypothesis is supported by our finding that the NIH syndrome occurs when knowledge is acquired from competitors but not if knowledge is acquired from suppliers, customers or universities. Further, we show that successful companies are most likely to experience the NIH syndrome (if knowledge is acquired from competitors). This is in line with our hypothesis that firm success increases the extent to which employees identify themselves with their company resulting in stronger in-group favoritism and a superior tendency to reject externally generated knowledge.

European market integration through technology-driven M&As

Merger and Acquisitions (M&As) have been an important tool for reorganizing the European market since the establishment of European Economic and Monetary Union. This article suggests that European integration helped and encouraged European firms to source technology across national borders in Europe, establishing European innovative firms. The figures confirm that, once barriers impeding the free movement of capital, goods and labour had fallen, European firms used M&As intensively to enter foreign European markets. Enhancing technology competencies is found to be one of the main motives for cross-border acquisitions in the 1990s but is not a factor in domestic acquisitions over the same period.

The Market Value of Blocking Patent Citations

There is a growing literature that aims at assessing the private value of knowledge assets and patents. It has been shown that patents and their quality as measured by citations received by future patents contribute significantly to the market value of firms beyond their R&D stocks. This paper goes one step further and distinguishes between different types of forward citations patents can receive at the European Patent Office. While a patent can be cited as non-infringing state of the art, it can also be cited because it threatens the novelty of patent applications (“blocking citations�?). Empirical results from a market value model for a sample of large, R&D-intensive U.S., European and Japanese firms show that patents frequently cited as blocking references have a higher economic value for their owners than patents cited for nonblocking reasons. This finding adds to the patent value literature by showing that different types of patent citations carry different information on the economic value of patents. The result further suggests that the total number of forward citations can be an imprecise measure of patent value.

Market and Technology Access Through Firm Acquisitions : Beyond One Size Fits All

Firm acquisitions have been shown to serve as a way to gain access to international markets, technological assets, products or other valuable resources of the target firm. Given this heterogeneity of takeover motivations and the skewness of the distribution of the deal value we show whether and how the importance of different takeover motivations changes along the deal value distribution. Based on a comprehensive dataset of 652 European mergers and acquisitions in the period from 1997 to 2003, we use quantile regressions to decompose the deal value at different points of its distribution. Our results indicate that the importance of technological assets is indeed higher for smaller target firms. The findings support the view on small acquisition targets to complement the acquirer?s technology portfolio while larger acquisition targets tend to be used to gain access to international markets.

The Market Value of Technology Disclosures to Standard Setting Organizations

In light of the increased demand for interoperability, fragmented ownership of intellectual property and high costs for communicating new technologies, open standard-setting activities emerged as an important coordination and diffusion mechanism. Little is known about the value of contributions to standard setting organizations (SSOs) for technology providers. This paper provides a large-scale empirical assessment of the value of disclosures to SSOs for technology sponsors. Our findings show that disclosures referring explicitly to patents are evaluated positively by the market while this is not the case for blanket disclosures. This indicates that the expected benefits of participating in SSOs outweigh potential disadvantages from making patented technologies available to the market under SSO licensing conditions. The market does not appreciate disclosures to SSOs if there is uncertainty about the associated technologies.