Content
This module will provide students in-depth insights into the field of the Economics of Innovation.
The module will discuss some of the prevailing models in the field of Industrial Organization
dedicated to the analysis of the incentives and constraints to innovative activities (R&D activities)
as well their relation with imitation, spillovers, firm size and market structure. The module also
comprises a dynamic and knowledge-based view, introducing models involving the direct
generation of new knowledge, the catching-up/falling behind dynamics of competition and the role
played by market selection between innovative firms. The objective of is also to apply the acquired
knowledge to selected topics in the field of innovation research. The students will be asked to write
a research paper and to present their work in class.
Learning outcomes
This module introduces the students to the main issues in the economics of innovation and
advances their understanding of the core concepts and principles in the field. The ultimate
objective to enhance both theoretical as well as an applied view on the topic enabling students
to understand academic as well as public debate on questions related to the economics behind
innovation and technological progress. Upon successful completion of this module, students
will be therefore able (1) to identify and (2) conceptualize different important issues related to
the Economics of Innovation. They (3) are able to identify gaps in the understanding of the focal
topic and (4) developed suggestions for improving the understanding of the field. In addition, by
presenting their topic to the class, they will (5) enhance their presentation skills and by writing the
research paper (6) their scientific writing skills. Through working in groups, the (6) students will
work on their teamwork skills.
Examination
The students will work in small groups on one of five topics: Creation of knowledge, diffusion
of knowledge, industry and macroeconomic aspects, intellectual property rights, innovation
policy. The group work aims at 1) understanding the topic in depth and 2) presenting the most
important insights from their topic to classmates. Moreover, the students will derive research gaps
in the literature related to their topic and summarize both main insights and research gaps in a
presentation (20-30 min. per person) to the class. By presenting in a team, students demonstrate
their ability within a team to manage resources, and deadlines through timely submission of the
enumerated tasks. Finally, they will submit an extended version of the presentation topic as a
written research paper (8.000 to 10.000 words). By writing the research paper, students show their
ability to work independently on solving complex scholarly problems related to the Economics of
Innovation.
The final grade will be based on the written research paper with a weight of 80% and the
presentation with a weight of 20%
Prerequisites
Familiarity with microeconomics
Teaching & learning methods
The module is a seminar, in which the students will gain in-depth insights in the Economics of
Innovation. The seminar will start with an introductory lecture, which will provide the bases for
deeper study of the most relevant topics. The first phase will then concentrate on problem-based
learning by reading relevant scientific literature and by discussing these articles in the group. In the
second phase, students will individually elaborate a written paper as well as presentations in which
they need to show their understanding of their focal topic as well as show their capability to identify
research gaps in the discussed literature.
Media & reading list
in general:
- Fagerberg, J., Mowery, D. and Nelson, R. R. (2010), Oxford Handbook of Innovation, Oxford:
Oxford University Press
- Hall, B. H. and Rosenberg, N. (2010), Handbook of the Economics of Innovation, Oxford:
Elsevier,
specific topics:
- Czarnitzki, D., Hottenrott, H. and Thorwarth, S. (2011) ‘Industrial research versus development
investment - the implications of financial constraints', Cambridge Journal of Economics, 35,
527-544.
- Jaffe, A., Trajtenberg, M. and Henderson, R. (1993), ‘Geographic Localization of
Knowledge Spillovers as Evidenced by Patent Citations', Quarterly Journal of
Economics, 108, 577-598.
- Aghion, P., Dechezleprêtre, A., Hemous, D., Martin, R. and Van Reenen, J. (2016), ‘Carbon
Taxes, Path Dependency and Directed Technical Change: Evidence from the Auto Industry',
Journal of Political Economy, 124 (1).
- Gallini, N. und Scotchmer, S. (2002), ‘Intellectual Property: When Is It the Best
Incentive System?', in: Jaffe et al. (Eds.), Innovation Policy and the Economy, MIT
Press, 51-77.
- Lundval & Borrás (2005), ‘Science, technology, and innovation policy', in: Fagerberg, J., Mowery,
D. and Nelson, R. R. (eds.), Oxford Handbook of Innovation, Oxford: Oxford University Press,
599-631.
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