Néstor Duch-Brown

Assessing the assignation of public subsidies: Do the experts choose the most efficient R&D projects?

espanolLa implementacion de un programa de subvenciones publicas a proyectos empresariales de I+D comporta establecer un sistema de seleccion de proyectos. Esta seleccion se enfrenta a problemas relevantes, como son la medicion del posible rendimiento de los proyectos de I+D y la optimizacion del proceso de seleccion entre proyectos con multiples y a veces incomparables medidas de resultados. Las agencias publicas utilizan mayoritariamente el metodo peer review que, aunque presenta ventajas, no esta exento de criticas. En cambio, las empresas privadas con el objetivo de optimizar su inversion en I+D utilizan metodos mas cuantitativos, como el Data Envelopment Analisis (DEA). En este trabajo se compara la actuacion de los evaluadores de una agencia publica (peer review) con una metodologia alternativa de seleccion de proyectos como es el DEA. EnglishThe implementation of public programs to support business R&D projects requires the establishment of a selection process. This selection process faces various difficulties, which include the measurement of the impact of the R&D projects as well as selection process optimization among projects with multiple, and sometimes incomparable, performance indicators. To this end, public agencies generally use the peer review method, which, while presenting some advantages, also demonstrates significant drawbacks. Private firms, on the other hand, tend toward more quantitative methods, such as Data Envelopment Analysis (DEA), in their pursuit of R&D investment optimization. In this paper, the performance of a public agency peer review method of project selection is compared with an alternative DEA method.

The Link between Public Support and Private R&D Effort: What is the Optimal Subsidy?

The effectiveness of R&D subsidies can vary substantially depending on their characteristics. Specifically, the amount and intensity of such subsidies are crucial issues in the design of public schemes supporting private R&D. Public agencies determine the intensities of R&D subsidies for firms in line with their eligibility criteria, although assessing the effects of R&D projects accurately is far from straightforward. The main aim of this paper is to examine whether there is an optimal intensity for R&D subsidies through an analysis of their impact on private R&D effort. We examine the decisions of a public agency to grant subsidies taking into account not only the characteristics of the firms but also, as few previous studies have done to date, those of the R&D projects. In determining the optimal subsidy we use both parametric and nonparametric techniques. The results show a non-linear relationship between the percentage of subsidy received and the firms’ R&D effort. These results have implications for technology policy, particularly for the design of R&D subsidies that ensure enhanced effectiveness.

R&D Drivers and Obstacles to Innovation in the Energy Industry

The energy industry is facing substantial challenges that require innovation to be fostered. Nevertheless, levels of R&D investment and innovation remain quite low in comparison with other sectors. In this paper we analyse the main drivers of R&D investment and obstacles to innovation in the energy industry. We examine, firstly, whether the stated R&D objectives pursued by firms play a role in their R&D effort. Secondly, we analyse the effects of financial, knowledge and market barriers on the innovation outcomes of the firms. We rely on data from the Technological Innovation Panel (PITEC) for Spanish firms for the period 2003-2010. We use a structural model with three equations corresponding to the decision to carry out R&D or not, the R&D effort and the production of innovations. The results of the econometric estimations show, first, that R&D intensity is positively related to process innovation. Second, the main barriers that hamper innovation in the energy industry are related to market factors while financial and knowledge obstacles are not significant.

The Spanish defence industry: an introduction to the special issue

In Spain, the existence of industries devoted to the production of military equipment dates back to the thirteenth century. The success of the Spanish empire of the sixteenth and seventeenth centuries can be explained, in part, by the early production of battleships, fire guns, gunpowder and explosives, artillery pieces, and swords. Some of the factories created during this period of history are still in operation today, although deeply transformed and integrated within larger and modern organizations. The establishment in 1941 of the National Industry Institute (Instituto Nacional de Industria, INI) was an important event for the Spanish military industrial base, since it had an outstanding role in the creation and maintenance of several defence firms, restructuring old arsenals, and military establishments that needed deep transformations in order to adapt to the new scenarios. Even if the INI had quite a success in consolidating some of the firms that eventually became prime defence contractors at a later stage, the modernization of military material arrived in the mid 1950s from overseas, thanks to agreements with the USA and in detriment of national development. However, the lack of a significant market hindered modernization and access to new technologies. In a first attempt to overcome these structural weaknesses, the government passed in the early 1970s the Law of Endowments (Ley de Dotaciones). The law was oriented to guaranteeing minimum procurement expenditure in order to give continuity to material acquisitions directed to the national industry. This allowed launching for the first time big industrial programs, especially those referred to international cooperation (e.g. the F-5 with the USA and the Daphne submarine with France). At the end of the 1970s, there were in Spain around 35 solid companies and several research and development centers that

The Economics of Ownership, Access and Trade in Digital Data

Despite the rapidly growing volume and economic importance of data in the digital economy, the legal framework for data ownership, access and trade remains incompletely defined in the EU and elsewhere. De facto data ownership dominates and often leads to fragmentation or anti-commons problems in data. Combined with limited access and trade, this inhibits the realisation of the full economic benefits of non-rival data. It may slow down innovation and affect the efficiency of data markets. We examine three potential sources of data market failures: externalities related to economies of scope in data, strategic behaviour of data owners and transaction costs in data exchanges. We link the legal debate on data ownership with relevant branches of the economics literature, including intellectual property rights economics, the commons and anti-commons literature, models of trade under the Arrow Information Paradox and multi-sided markets. Economists are inclined to think that well-defined private property rights are a necessary condition for an efficient resource allocation. The question in this paper is to what extent this view holds for non-rival data. We show that the allocation of data ownership or residual control rights matters, not only for private benefits but also for social welfare. The outcomes of bargaining over data ownership and access rights do not necessarily maximize social welfare. Can regulators intervene to improve these outcomes? Would a better specification of legal ownership rights or introducing access provisions to improve efficiency and reduce data market failures? There are no easy answers to these largely empirical questions. We offer no policy solutions yet and more research is required to bring economics up to speed with these questions.

Market Structure and Technical Efficiency of Spanish Defense Contractors

This paper uses an output-oriented stochastic distance function to compute defense contractors’ technical efficiency as a measure of performance. Then, nesting a market structure and conduct equation into the frontier, we identify firm and industry factors that affect the observed inefficiency levels. The empirical results confirm that there exist multi-directional causal correlations among market structure, conduct, and performance of defense contractors. In addition, the paper shows that there exists a great variability among the different sectors that compose the defense industrial base. Therefore, policies oriented to influence the industry must take into account the multi-directional causal relation among its components.

Explaining Export Performance in the Spanish Defense Industry

This paper presents empirical results on the export performance of Spanish defense contractors. The objective is threefold. First, we briefly describe the export profile of the Spanish defense industry at the firm level. Second, in light of some results on the determinants of firm-level export intensity, we empirically test some of these variables for the case of defense-related exports. We find that exporters tend to be capital intensive, diversified, and showing high R&D effort. In the analysis by sectors, learning by exporting is the most frequent result. Third, we assess the exporter productivity premium, regressing productivity on exporter status and firm size. Our results indicate that when controlling for firm heterogeneity, no such premium exists.

A new perspective on the exporter productivity premium: Online trade

ABSTRACT We use a unique firm-level data set including 9000 companies from 26 European Union countries covering four different sectors to take a close look at the relationship between online exports and productivity. The online exporter productivity premium is estimated using different techniques (ordinary least squares, quantile regressions and robust estimation). Results consistently indicate that the estimated online exporter productivity premium is statistically different from zero, positive and significant from an economic point of view. European online exporters, according to these results, are approximately 2% more productive than non-online exporters. Productivity differences between firms could be related to variables that are not included in the empirical model. More research would be needed to address this issue in the future.

The economic impact of removing geo-blocking restrictions in the EU Digital Single Market

This study investigates the welfare impact of lifting geo-blocking restrictions to cross-border e-commerce in the EU, using a dataset for consumer electronics products in ten European countries for the period 2012-2105. We simulated two counterfactual scenarios where geo-blocking is either fully or only indirectly removed. This would allow consumers to arbitrage, taking advantage of price differences, and to expand product variety through imports. We computed the welfare effects, as changes in both consumer and producer surpluses. Finally, we extrapolated these partial results to all online sales in the EU28. The results indicate that both consumers and producers would gain from removing geo-blocking restrictions. Smaller countries would benefit comparatively more than larger countries.

Innovation strategies of energy firms

Investment by energy firms in innovation can have substantial economic and environmental impacts and benefits. Internal R&D is the main input and driver of the innovation process, but innovation involves other activities, including capital purchases and other current expenditures. While the R&D activities of energy firms have been analysed, few studies have examined the typology of their innovation activities. Here, we analyse the impact of the main characteristics of the sector’s firms on their decisions to invest in each of three types of innovation activity: namely internal R&D; external R&D; and, the acquisition of advanced machinery, equipment or software. In conducting this analysis, we take the potential persistence of innovation activities into account. We also examine the role that different innovation objectives have on firms’ investment decisions. Given that engagement in a specific type of innovation may result from decisions that are not taken independently of each other, we analyse whether there is any complementarity between the three innovation activities. In carrying out the empirical analysis, we draw on data for private energy firms included in the Technological Innovation Panel (PITEC) for Spanish firms for the period 2004-2013. We use panel triprobit models to examine potential complementarity.