We analyze a model where a multinational fir can use a superior technology in a foreign subsidiary only after training a local worker. Technological spillovers from foreign direct investment arise when this worker is later hired by a local firm Pecuniary spillovers arise when the foreign affiliat pays the trained worker a higher wage to prevent her from moving to a local competitor. We study conditions under which these spillovers occur. We also show that the multinational fir might fin it optimal to export instead of investing abroad to avoid dissipation of its intangible assets or the payment of a higher wage to the trained worker.
Die Dis cus si on Pape rs die nen einer mög lichst schnel len Ver brei tung von neue ren For schungs arbei ten des ZEW. Die Bei trä ge lie gen in allei ni ger Ver ant wor tung der Auto ren und stel len nicht not wen di ger wei se die Mei nung des ZEW dar.Dis cus si on Papers are inten ded to make results of ZEW research prompt ly avai la ble to other eco no mists in order to encou ra ge dis cus si on and sug gesti ons for revi si ons. The aut hors are sole ly respon si ble for the con tents which do not neces sa ri ly repre sent the opi ni on of the ZEW. We investigate the effect of mobility of R&D workers on the total patenting activity of their employers. Does the Mobility of R&D Labor Increase Innovation?Our study documents how mobile workers affect the patenting activity of the firm they join and the firm they leave. The effect of labor mobility is strongest if workers join from patent-active firms. We also find evidence of a positive feedback effect on the former employer's patenting from workers who have left for another patentactive firm. Summing up the effects of joining and leaving workers, we show that labor mobility increases the total innovative activity of the new and the old employer. Our study which is based on the population of R&D active Danish firms observed between 1999 and 2004 thus provides firm-level support for the notion that labor mobility stimulates overall innovation of a country or region due to knowledge transfer. JEL-classification: J62, C26Keywords: labor mobility, innovation, research and development, patenting ¶ Financial support from the Danish Social Science Research Council (Forskningsrådet for Samfund og Erhverv) for the research project "Human Capital, Patenting Activity, and Technology Spillovers" and from the EPRN network is gratefully acknowledged. We are indebted to Cédric Schneider for sending us a ready-to-use patent citations database. We thank Ann-Kathrine Ejsing for excellent research assistance.
We analyze firms' incentives to cluster in an industrial district to benefit from reciprocal technology spillovers. A simple model of cumulative innovation is presented, where technology spillovers arise endogenously through labor mobility. It is shown that firms' incentives to cluster are the strongest when the following three conditions are met: (1) the growth potential of an industry is high; (2) competition in the product market is relatively soft; (3) the probability of a single firm to develop an innovation is neither very high nor very low. Trade secret protection based on punitive damages is, except in some extreme cases, beneficial for firms' profits, stimulates clustering, and is not an impediment to technology spillovers.JEL classification: J3; K2; L1; O32; O34
Die Dis cus si on Pape rs die nen einer mög lichst schnel len Ver brei tung von neue ren For schungs arbei ten des ZEW. Die Bei trä ge lie gen in allei ni ger Ver ant wor tung der Auto ren und stel len nicht not wen di ger wei se die Mei nung des ZEW dar.Dis cus si on Papers are inten ded to make results of ZEW research prompt ly avai la ble to other eco no mists in order to encou ra ge dis cus si on and sug gesti ons for revi si ons. The aut hors are sole ly respon si ble for the con tents which do not neces sa ri ly repre sent the opi ni on of the ZEW.Download this ZEW Discussion Paper from our ftp server:ftp://ftp.zew.de/pub/zew-docs/dp/dp10062.pdf Executive summaryThis paper studies the effects of a reference price reform in Denmark on price and demand for statins, products that reduce the blood cholesterol levels. Too high cholesterol levels may cause cardiovascular diseases. Reference pricing is a cost containment tool that is applied to reduce health expenditures in 19 European countries as well as Australia, British Columbia and New Zealand.Our paper is the first to combine price data and demand data to study reform effects. We produce estimates for changes in total government (health care) expenditures, patient expenditures, patient welfare and producer revenues.A main finding is that government and patients did indeed benefit in terms of price declines and declining total expenditures from the reform while producers incurred losses.There are, however, striking differences between products that were "cheap" before the reform and those that were "expensive" before the change. The benefits to patients and the government were primarily due to the initially expensive products. The reform effects were hence quite asymmetrically distributed across products (and thus patients).We also show that an empirical analysis of the reform effects that studies price changes only may lead to quite misleading implications for welfare analysis. On April 1, 2005, Denmark changed the way references prices, a main determinant of reimbursements for pharmaceutical purchases, are calculated. The previous reference prices, which were based on average EU prices, were substituted to minimum domestic prices. Novel to the literature, we estimate the joint effects of this reform on prices and quantities. Prices decreased more than 26 percent due to the reform, which reduced patient and government expenditures by 3.0 percent and 5.6 percent, respectively, and producer revenues by 5.0 percent. The prices of expensive products decreased more than their cheaper counterparts, resulting in large differences in patient benefits from the reform. Das Wichtigste in Kürze JEL-classification: I18, C23
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