We propose an incomplete contract model of licensing of a cost-reducing technology. We incorporate exchange rate uncertainty and analyze its impact on the parties' investment and licensing decisions. We show that exchange rate uncertainty introduces a distortion in the parties' specific...

In this note, we construct two theoretical models that analyze the relationship between inequality of access and rates of innovation as well as correlative data that show a negative correlation between income inequality and levels of innovativeness. Our two models suggest that unequal access to...

In this note we compare the laissez-faire steady-state solution in the Howitt and Aghion (1998) model to the social optimum. The analysis offers several new insights in comparison to the welfare analysis in Aghion and Howitt (1992). We find various new distortions between private and optimal...

This paper examines the determinants of innovation amongst small and medium enterprises in the Malaysian manufacturing sector using firm-level data. For small-sized firms, younger firms are more likely to innovate compared to older firms. However, for medium-sized and large-sized firms, older...

This paper examines the macroeconomic determinants of scientific production in Africa by focusing on direct and indirect roles that political and economic institutions may play. A theoretical model of scientific production that integrates the quality of institutions, as well as econometric...

We examine the pattern of information technology (IT) capital adjustment using data from U.S. industries. Using the gap between actual and desired IT capital stocks, we estimate the shape of the adjustment cost function in IT investment. Both ordinary least squares and nonparametric regression...

We investigate the optimality of the actual degree of Intellectual Property Rights protection using a methodology derived from Patent Race Literature. We applied the methodology to Colombia, using the available two Innovation Surveys. Our result are consistent with an already optimal existing...

We tested for the presence of IT capital externalities, based on a translog cost function framework applied to 10 Japanese manufacturing industries for the years 1974 to 1993. This framework allows us to test whether investment in IT capital in other industries reduces costs in a given industry....