Complementarities in Innovation Policy
35 Pages Posted: 26 Mar 2001
Date Written: February 2001
Abstract
This Paper develops a framework for testing discrete complementarities in innovation policy using European data on obstacles to innovation. We propose a discrete test of supermodularity in innovation policy leading to a number of inequality constraints. We apply our test to two types of innovation decisions: to innovate or not, and if so, by how much. We find that industries display a considerable amount of complementarity, with some industries being complementary across all obstacles. We also find that the lack of internal human capital (skilled personnel) is complementary to all the other obstacles in almost all industries. In this sense, our results suggest that internal human capital is key to any innovation policy, insofar that it is complementary to all the other factors that might hamper innovation activities.
Keywords: Complementarity, innovation, supermodularity
JEL Classification: L5, O31, O38
Suggested Citation: Suggested Citation
Do you have a job opening that you would like to promote on SSRN?
Recommended Papers
-
Internal and External R&D: Complements or Substitutes? Evidence from a Dynamic Panel Data Model
By Boris Lokshin, René Belderbos, ...
-
Testing for Complementarity and Substitutability in the Case of Multiple Practices
By Boris Lokshin, Martin A. Carree, ...
-
By Ewa Balcerowicz, Anna Wziatek-kubiak, ...
-
Markets for Inventors: Examining Mobility Patterns of Engineers in the Semiconductor Industry
-
Beyond the Knowledge Production Function: The Role of R&D in a Multi-Faceted Innovative Process
-
By Chia-lin Chang and Stéphane Robin