Dear Colleagues,
we are pleased to share with you the fourth issue of Industry & Innovation for 2025.
This issue features articles on a variety of topics including the role of pro-market institutions in SOEs' innovation, the contribution of firms' patenting to collective knowledge creation, the impact of China's carbon policies on productivity, and the impact of ethical misconduct on scientific development.
The issue concludes with a target article featuring the heated debate held at the 2023 DRUID conference on whether Lean Startup represents a giant leap for our understanding of entrepreneurship.
We hope you will enjoy the reading:
Research Articles
When do state-owned enterprises innovate? The moderating role of pro-market institutions
Christopher John Boudreaux
Abstract
I explore how pro-market institutions moderate the relationship between private or state ownership and innovation. Due to political and social connections, state-owned enterprises (SOEs) have several advantages over private-owned enterprises (POEs) in China, but I hypothesise that these advantages wane when institutional environments prioritise market competition, rule of law, and the rewards to profitable enterprise. Using data from the World Bank's Enterprise Survey in China, the results suggest that POEs are more innovative than SOEs but only in market-oriented provinces. In provinces that are not market-oriented, SOEs are more innovative than POEs.
Firms' patenting and collective cumulative knowledge: evidence from the largest R&D investors in the world
Elena Cefis, Nicola Grassano & Matteo Tubiana
Abstract
The article discusses R&D investments' efficiency and intellectual property rights (IPR)' suitability. There is a debate about whether IPR systems balance private knowledge returns' appropriation and access to cumulative knowledge to feed technological progress, thus contributing to social welfare. We analyse private R&D expenses' productivity in terms of inventiveness and investigate whether R&D investments generate knowledge that is of any use in further knowledge creation, examining the citations received by each patent family. Exploiting data about the largest R&D investors worldwide between 2007–2015, we find that R&D investments generate cited and uncited patents with approximately equal elasticities. We observe that an increasing number of patents do not contribute to collective knowledge creation because they are uncited. Eventually, uncited patents absorb more R&D resources than cited ones. Results are robust across industries and patent offices. We posit that uncited patents are socially undesirable and suggest implications for innovation policies.
The impact of China's total carbon emission control policy on low carbon total factor productivity
Lingqian Kong, Xinyi Jin, Yihua Xu & Kai Xu
Abstract
The evaluation of the policy effect of total carbon emission control policy (TCP) is crucial to achieve high-quality economic development in China. This paper measures the low-carbon total factor productivity (LCTFP) of 282 Chinese cities from 2010 to 2021, and examines the impact of TCP on LCTFP through differences-in-differences (DID) method. The results show that TCP can effectively improve LCTFP in policy implementation areas. TCP has a stronger LCTFP promotion effect on eastern cities, resource-based cities and higher-level cities. Technological progress effect and industrial structure effect are important channels for TCP to improve LCTFP. TCP has a negative spatial spillover effect on LCTFP. This paper provides valuable references to promote the implementation of TCP in China.
The price of mistrust: the impact of a medical ethics scandal on scientific capacity in Sub-Saharan Africa
Caroline Fry & Shannon Tran
Abstract
This study investigates how negative news alleging ethical misconduct in clinical trials can hinder scientific development in emerging economies. We examine a 2000 exposé surrounding a clinical trial conducted in Northern Nigeria, leading to decades of community mistrust in foreign pharmaceutical companies. By comparing scientific output of researchers in affected and less affected regions, we find a significant decline in publication growth, particularly for medical researchers. An exploration of the mechanisms suggests that eroded community support and participation in research and reduced international collaboration contributed to this slowdown. This study highlights the importance of the science-community relationship in fostering scientific development. Our findings imply that a 'social license to operate' grounded in community trust is essential for scientific progress, and that future research on the determinants of scientific capacity in developing countries should consider community attitudes and involvement.
Target Article
A debate: does Lean Startup represent a giant leap?
Christopher L. Tucci, Yuliya Snihur, Elena Novelli & Teppo Felin
Abstract
The Lean Startup approach, introduced by Eric Ries in 2011, has become a widely recognized method in entrepreneurship, emphasizing rapid experimentation, customer feedback, and iterative development over traditional business planning. Building on a debate from the DRUID 2023 conference, this article presents scholarly reflections on whether the Lean Startup represents a 'giant leap' in our understanding of entrepreneurship, offering arguments both for and against this claim. The discussion highlights both the strengths and limitations of the Lean Startup approach, ultimately emphasizing the need for a nuanced perspective on the conditions under which tools such as the Lean Startup are most effective to foster entrepreneurship and business model innovation.
Best regards
Alessandra Perri and Vera Rocha
Co-Editors-in-Chief, Industry and Innovation
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Alessandra Perri
Luiss university
Rome
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