Appropriability, Technological Opportunity, Market Demand and Technical Change, Empirical evidence from Switzerland
The purpose of this paper is to analyze both theoretically and empirically those factors which underlay the - empirically observable - inter-industry differences in technical progress. At the theoretical level economists agree more and more that technical progress can be explained at the industry level by the following three factors: (1) the technological opportunities, (2) the appropriability conditions, meaning the ability to capture and protect the results of technical innovations and (3) the market demand conditions. The basic theoretical model was tested with the help of two sets of Swiss data. One set was made available by Swiss Federal Office of Statistics and consists of quantitative information on R&D expenditures, R&D personnel, total employment and sales figures for 124 (4-digit SIC) industries for the year 1986. The second set was derived from a survey I carried out in the summer of 1988. 940 industry experts were approached; 358 of them, or 38%, covering 127 industries, completed the questionnaire. The items on the questionnaire were related to the two supply-side determinants of technical progress - items (1) and (2) above. For the empirical specification of the theoretical model, technical progress (as the dependent variable) was measured by three indicators: an output indicator, representing the introduction rate of innovations since 1970; two input indicators, "share of R&D expenditures in sales" and "share of R&D personnel in total employment". All data were aggregated at the industry-level (4-digit SIC). Three equations were estimated individually, using the OLS, GLS and Tobit methods. The most important results of the empirical analysis can be summarized as follows: - The ability to appropriate the results of innovations exerts a positive impact on technical progress in all three models. In this context, the non-patent related means of appropriability "secrecy", "lead time", "moving downward on the lea
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- Levin, Richard C, 1978. "Technical Change, Barriers to Entry, and Market Structure," Economica, London School of Economics and Political Science, vol. 45(180), pages 347-61, November.
- Levin, Richard C, 1986. "A New Look at the Patent System," American Economic Review, American Economic Association, vol. 76(2), pages 199-202, May.
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- Levin, Richard C, 1988. "Appropriability, R&D Spending, and Technological Performance," American Economic Review, American Economic Association, vol. 78(2), pages 424-28, May.
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- Richard Levin & Peter C. Reiss, 1984. "Tests of a Schumpeterian Model of R&D and Market Structure," NBER Chapters, in: R&D, Patents, and Productivity, pages 175-208 National Bureau of Economic Research, Inc.
- Lee, Tom & Wilde, Louis L, 1980. "Market Structure and Innovation: A Reformulation," The Quarterly Journal of Economics, MIT Press, vol. 94(2), pages 429-36, March.
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