The formation of Coasean institutions to provide university knowledge for innovation: a case study and econometric evide
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The formation of Coasean institutions to provide university knowledge for innovation: a case study and econometric evidence for Switzerland Dominique Foray1 · Martin Woerter2 Accepted: 25 September 2020 © The Author(s) 2020
Abstract “Coasean” institutions are an alternative institutional form that provides a solution to some market and coordination failures. As such they can weaken considerably the case for public subsidies in a vast range of context. They are “market-based” and an inexpensive way to address the public good issues of R&D. They are, however, a largely overlooked institutional option. Early theoretical notions emphasize the advantages of such an institutional setting, however, broader empirical evidence about their effectiveness is lacking. We apply two different empirical approaches to assess the relationship between “Coasean” institutions and the innovation performance of SMEs. In a case study, we investigate Inspire AG, a successful bottom-up, institutional invention in the spirit of a “Coasean” institution. To assess the general validity of this model, we use representative firm-level data to econometrically investigate the relationship between “Coasean” institutions and the sales share of innovative products. “Coasean” institutions are positively related with innovative sales only if the company has a sufficiently large absorptive capacity for external knowledge. This positive moderating effect of “Coasean” institutions for the innovation performance is larger for SMEs. Our empirical findings provide a strong case for policies aimed at encouraging the operation of this type of institution. Keywords R&D collaboration · Coasean institutions · Case study · Firm-level panel data · Innovation performance JEL Classification 025 · 031 · 038
* Martin Woerter [email protected] Dominique Foray [email protected] 1
College of Management, EPFL, ODY station 5, 1015 Lausanne, Switzerland
2
ETH Zürich, KOF Swiss Economic Institute, Leonhardstrasse 21, 8092 Zurich, Switzerland
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D. Foray, M. Woerter
1 Introduction In many ecosystems of innovation and entrepreneurship, one of the important gaps to be addressed by policies is the provision of inputs that most small and medium companies can draw on, even if they do not contribute to their production. At a conceptual level, the centrality of such inputs to allow firms to develop innovative projects is a recurrent topic in the Hausmann and Rodrik literature devoted to industrial policy (Hausmann and Rodrik 2006; Rodrik 2007). Such inputs include specialized skills, research about the basic principles of the design and manufacturing of the goods produced by the considered SMEs, the design of more useful specialized equipment, as well as other specialized services for innovation. Some of these goods are private goods but many of them have the features of quasi-public goods. At empirical level, Berger (2013) argues that—based on numerous case studies in the US, Germany and China—the lack of such resources can be a real proble
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