EU framework programmes: positive and negative effects on member states' innovation performance

Research background: Seeking to ensure competitiveness in the global market, the EU is constantly improving its innovation policy. Compared to other EU initiatives, the Framework Programs for Research and Innovation (FPs) act as the main instrument with the longest history and the largest budget to boost member states' innovation performance. Despite the initial presumptions that these financial inflows should bring positive and constructive effects, the results significantly diverge across the countries with highly uneven and incoherent progress. Therefore, complex and reliable tools must be adopted to evaluate the long-term influence of EU investment and the reasons which distort the innovation performance in separate member states. Purpose of the article: The purpose of this article is to evaluate the influence of EU investment on its member states? innovation performance by using a redeveloped national innovative capacity framework and including technological, non-technological and commercial innovative output. Methods: Panel unit root tests were used to assess the time series stationarity. Autoregressive distributed lag models helped in calculating the long-term influence of EU investment on member states? innovation performance. Finally, by employing dummies, it was analysed how this influence varied over time and across different countries. Findings & value added: The findings provide evidence that EU investment exerts positive long-term influence on the technological innovative output proxied as total, business and higher education institutions? patent applications, as well as product and process innovations. The effects were also positive on trademarks and marketing, and organisational innovations. However, small but negative influence was found in the case of patent applications by the government sector and the exports of hi-tech products and knowledge-intensive services. These insights may serve in the designing process of the specific instruments and the future innovation policies, which would bring the maximum benefit for the society and economy.

Wuthigrai Siriphon: Highlighting tradition

The innovative output of Wuthigrai Siriphon draws on his Thai heritage and extensive knowledge and practical experience of regional textile craft techniques. But whilst his work often references historical forms and colour palettes, his studio textiles are far from staid, exhibiting a modernist sensibility frequently verging on the spectacular. Securely pigeonholing such a creative practitioner is always problematic, but any attempt at categorization is made even more difficult so once the viewer acknowledges the layered nature of South East Asian textile practice. This is a region where traditional understandings of fabric and colour still compete with modernist perspectives on design, material selection and colour application and rural craft weavers continue to make a living alongside industrial factories. Wuthigrai and his ouvre is a product of this complex and vibrant material culture, highlighting tradition whilst retaining its contemporary relevance.

The Effects of Prize Structures on Innovative Performance

Successful innovation is essential for the survival and growth of organizations, but how best to incentivize innovation is poorly understood. We compare how two common incentive schemes affect innovative performance in a field experiment run in partnership with a large life sciences company. We find that a winner-takes-all compensation scheme generates significantly more novel innovation relative to a compensation scheme that offers the same total compensation but shares it across the ten best innovations. Moreover, the winner-takes-all scheme does not reduce innovative output on average and, among teams of innovators, generates more output than the less risky prize structure.

Assessment of the impact of labor productivity on the effectiveness of innovative activities in Kazakhstan and the Northwestern Federal District of Russia

Object: In many foreign countries, growth in labor productivity leads to a reduction in working hours. But these processes are not always proportional and depend on the correlation of social and economic priorities of states, on the conditions of general globalization and neoliberalization. The unfavorable ratio of the internal price proportions of some states and the low level of development of technics and technology act as obstacles to increasing the rate of economic growth. In such conditions, a reduction in working hours will inevitably lead to a reduction in the country's economic potential and the level of income of citizens. The purpose of this article is to study the nature of labor productivity and analyze the relationship between the proportions of labor productivity and the volume of production of innovative products in Russia and Kazakhstan as the largest EAEU states that determine development trends in the region. Methods: The collected data on the relationship between labor productivity and the volume of output of innovative products were analyzed using cluster analysis and nonparametric Data Envelopment Analysis (DEA). Findings: Labor productivity affects the level of innovative development and affects the overall economic development of individual regions and countries as a whole. The analysis of these processes is very important for the formation of state development policy. Therefore, this study examines the relationship between labor productivity and the volume of innovative products, as well as examines similar processes in certain regions of Russia and Kazakhstan. Conclusions: According to the results obtained, the following hypotheses were accepted: in Kazakhstan and Russia, labor productivity directly affects the innovative production of products. This influence is different in the regions of both countries. In Kazakhstan and Russia, there are regions that are similar in characteristics of the processes of the impact of labor productivity on innovative output, and for them similar measures to improve state policy are recommended.

The Effect of Humor on The Innovative Output with Innovative Work Behavior as Variable of Medition

The aim of this research is to know the role of innovative work behavior mediation on the relationship of humor to the innovative output. The population in this study is all owners of SMEs in the Semarang city. Methods of data collection using observation, interview, and questioners. Sampling technique using multiple random sampling. The sample size is 201 SMEs actors. Methods of data analysis using descriptive analysis, validity and reliability test, and hypothesis test. Data analysis using WarpPLS software version 7.0. The results showed that humor increases innovative work behavior and innovative output. In addition, innovative work behavior also increase innovative output. Furthermore, this study found the effect of humor on innovative output can be mediated by innovative work behavior.

Real Effects of Financial Reporting on Innovation: Evidence from Tax Law and Accounting Standards

This study examines whether financial accounting standards moderate the effectiveness of tax policy. Specifically, we examine whether myopic managers' focus on short-term financial reporting reduces the effectiveness of tax subsidies that incentivize innovation. We employ a novel setting, the issuance of Financial Interpretation No. 48 (FIN 48), which changed the financial reporting for some important, yet uncertain, tax incentives to innovate. For firms most affected by the standard change, we find evidence of reduced investment in innovation, reduced sensitivity of investment to tax incentives, and reduced future innovative output. Consistent with earnings myopia, we find the effect is more pronounced in firms with higher levels of transient institutional ownership and newly vesting equity compensation. These results indicate financial reporting myopia has real effects on innovation and can reduce tax policy effectiveness. The results further suggest that tax policymakers should consider both financial reporting and cash flow incentives in designing policy.

Misvaluation and Corporate Inventiveness

We test how market overvaluation affects corporate innovation. Estimated stock overvaluation is strongly associated with measures of innovative inventiveness (novelty, originality, and scope), as well as research and development (R&D) and innovative output (patent and citation counts). Misvaluation affects R&D more via a nonequity channel than via equity issuance. The sensitivity of innovative inventiveness to misvaluation increases with share turnover and overvaluation. The frequency of exceptionally high innovative inputs/outputs increases with overvaluation. This evidence suggests that market overvaluation may generate social value by increasing innovative output and encouraging firms to engage in “moon shots.”

Microfirms and innovation in the service sector

In the context of microfirms, this paper analyzes whether the link between the three aspects involving innovative activities—R&D, innovative output, and productivity—hold for knowledge-intensive services. With especially high start-up rates and the majority of employees in microfirms, knowledge-intensive services (KIS) have a starkly different profile from manufacturing. Results from our structural models indicate that KIS firms benefit from innovation activities through increased labor productivity with highly skilled employees being similarly important compared to R&D for creating innovation output in microfirms. Moreover, the firm size advantage of large firms found for manufacturing almost disappears in KIS, with start-ups and young firms having a higher probability of initiating innovation activities and of successfully turning knowledge into innovation output than mature firms.

Corporate Taxes, Patent Shifting, and Anti-avoidance Rules: Empirical Evidence

We empirically assess international corporate tax avoidance by strategic location of innovative output. The analysis draws on the universe of patent applications to the European Patent Office from 1990 to 2006 linked with data on multinational entities (MNEs) in Europe. Four findings emerge: first, patent holdings are distorted toward low-tax countries. Second, patent location in low-tax countries is correlated with a geographic separation of research and development output and input. Third, MNEs systematically sort high-value (low-value) patents to low-tax (high-tax) countries. Fourth, the propensity to locate patent ownership in low-tax countries is significantly decreased if controlled foreign company rules are enacted in the MNE’s parent country. The tightening of transfer pricing legislation, in turn, exerts a weak negative effect on the location of patent ownership only.