This paper studies the relationship between venture capital (VC) and innovation using a self-collected dataset containing 119 innovative, VC-funded firms and 164,486 controls that operate in Spain. Probit model estimates indicate that firms that have applied for at least one patent are significantly more likely to obtain VC investments. However, when implementing a matching approach to correct for selectivity, no evidence is found of a significant impact of VC on firms’ patenting activity. Rather, evidence is found of a positive effect of VC on the sales growth of funded firms. These results suggest that, rather than having an impact on innovation activities, venture capitalists (VCs) focus on the commercialization of existing products. A finer breakdown by ownership and investment stage also provides evidence that private VCs and early stage investments are notably more effective at stimulating sales than public VCs and late stage investments respectively.

The aim of this paper is to track the location decisions of knowledge-intense firms in a redeveloped urban district in the city of Barcelona in which government policy has promoted the formation of a cluster of knowledge-based activities. After decades of economic and industrial stagnation in a district called Poblenou, in the year 2000 the City Council of Barcelona implemented a plan to renew the area’s urban and economic structure. Under the development plan, knowledge-based firms were encouraged to set up in the area creating a cluster of advanced activities. This paper examines the success of this local policy and aims to determine whether cluster amenities have played a part in attracting knowledge-based activities. First, we evaluate the cluster implementation via a differences-in-differences analysis comparing the increase in the number of knowledge-based firms in this specific area with the increase of this kind of firm elsewhere in the city and the metropolitan area. Second, to test whether cluster amenities are determinant factors for the location of knowledge-based firms, we perform a multivariate regression analysis explaining intra-city firm location at the ZIP code level. Data about new firms come from a business-census that contains detailed information about location determinants of these firms as well as their characteristics.

This article argues that the consequences of the ‘fragmentation’ of the European patent system are more dramatic than the mere prohibitive costs of maintaining a patent in force in many jurisdictions. The prevalence of national jurisdictions, which are highly heterogeneous in their costs and practices, over the validity and enforcement of European patents induces both a high level of uncertainty and an intense managerial complexity which undoubtedly reduces both the effectiveness and the attractiveness of the European patent system in its mission to stimulate innovation.

Countries compete for new FDI investment, whereas stocks of FDI generate agglomeration benefits and are potentially subject to extortionary taxation. We study the interaction between these aspects in a simple vintage capital framework with discrete time and an infinite horizon, focussing on Markov perfect equilibrium. We show that the equilibrium taxation destabilizes agglomeration advantages. The agglomeration advantage is valuable, but is exploited in the short run. The tax revenue in the equilibrium is substantial, and higher on «old» FDI than on «new» FDI, even though countries are not allowed to use discriminatory taxation. If countries can provide fiscal incentives for attracting new firms, this stabilizes existing agglomeration advantages, but may erode the fiscal revenue in the equilibrium.

It is well understood that the two most popular empirical models of location choice-conditional logit and Poisson – return identical coefficient estimates when the regressors are not individual specific. We show that these two models differ starkly in terms of their implied predictions. The conditional logit model represents a zero-sum world, in which one region’s gain is the other regions’ loss. In contrast, the Poisson model implies a positive-sum economy, in which one region’s gain is no other region’s loss. We also show that all intermediate cases can be represented as a nested logit model with a single outside option. The nested logit turns out to be a linear combination of the conditional logit and Poisson models. Conditional logit and Poisson elasticities mark the polar cases and can therefore serve as boundary values in applied research.

In recent years various studies have examined the factors that may explain academic patents. Existing analyses have also underlined the substantial differences to be found in European countries in the institutional framework that defines property rights for academic patents. The objective of this study is to contribute to the empirical literature on the factors explaining academic patents and to determine whether the incentives that universities offer researchers contribute towards explaining the differences in academic patenting activity. The results of the econometric analysis for the Spanish universities point towards the conclusion that the principal factor determining the patents is funding of R&D while royalty incentives to researchers do not appear to be significant.