nep-gro New Economics Papers
on Economic Growth
Issue of 2019‒11‒11
nine papers chosen by
Marc Klemp
University of Copenhagen

  1. Migrant Inventors and the Technological Advantage of Nations By Dany Bahar; Prithwiraj Choudhury; Hillel Rapoport
  2. Does railway accessibility boost population growth? Evidence from unfinished historical roadways in France By Kakpo, Eliakim; Le Gallo, Julie; Grivault, Camille; Breuillé, Marie
  3. Competition, technological change and productivity gains: the contribution of information technologies By Ciriani, Stephane; Jeanjean, Francois
  4. Effects of Expenditures in Science, Technology and R&D on Technical Change in Countries in Latin America and the Caribbean By Alexander Cotte Poveda; Carolina Jimenez
  5. Disruptive Innovation by Heterogeneous Incumbents and Economic Growth: When do incumbents switch to new technology? By Ohki, Kazuyoshi
  6. Corruption and economic growth: the case of Portugal By Pedro Miguel Avelino Bação; Inês Gaspar; Marta Cristina Nunes Simões
  7. Industrial Growth in Sub-Saharan Africa: Evidence from Machine Learning with Insights from Nightlight Satellite Images By Christian S. Otchia; Simplice A. Asongu
  8. Effects of subsidies on growth and welfare in a quality-ladder model with elastic labor By Hu, Ruiyang; Yang, Yibai; Zheng, Zhijie
  9. Growth Gains from Trade By Sugata Marjit; Anwesha Basu; C. Veeramani

  1. By: Dany Bahar; Prithwiraj Choudhury; Hillel Rapoport
    Abstract: We investigate the relationship between the presence of migrant inventors and the dynamics of innovation in the migrants’ receiving countries. We find that countries are 25 to 50 percent more likely to gain advantage in patenting in certain technologies given a twofold increase in the number of foreign inventors from other nations that specialize in those same technologies. For the average country in our sample this number corresponds to only 25 inventors and a standard deviation of 135. We deal with endogeneity concerns by using historical migration networks to instrument for stocks of migrant inventors. Our results generalize the evidence of previous studies that show how migrant inventors "import" knowledge from their home countries which translate into higher patenting. We complement our results with micro-evidence showing that migrant inventors are more prevalent in the first bulk of patents of a country in a given technology, as compared to patents filed at later stages. We interpret these results as tangible evidence of migrants facilitating the technology-specific diffusion of knowledge across nations.
    Keywords: Innovation;Migration;Patent;Technology;Knowledge
    JEL: O31 O33 F22
    Date: 2019–10
  2. By: Kakpo, Eliakim; Le Gallo, Julie; Grivault, Camille; Breuillé, Marie
    Abstract: The railway revolution that swayed through Europe in the nineteenth century left a legacy of unexplored networks. In this paper, we observe a subset of unfinished railways to evaluate the impact of railroads on population growth. Using the random nature of the achieved portions, we compare municipalities located around the planned but not realized segment of the railways to those in the vicinity of the operated sections. Our results indicate that the railways boost population growth in the medium and long-run. However, the medium-run effects are only visible in municipalities with high pre-arrival population. The railroads also seem to have solved a coordination problem in the sense that treated municipalities were more likely to gain access to other transport infrastructures later.
    Keywords: Urbanization, population growth, development, railways, transport
    JEL: N44 O18 R11
    Date: 2019–10
  3. By: Ciriani, Stephane; Jeanjean, Francois
    Abstract: This paper addresses the empirical relationship between the level of competition and the rate of productivity growth across thirty sectors of the French production system during the period 1978- 2015. It shows that there exists an optimal level of competition for each sector that is defined by the mark-up that maximizes the growth rate of labor productivity. The information technologies Sectors have the highest mark-ups for maximizing productivity growth. The persistence of nonoptimal mark-ups in French sectors is associated with a 0.4% loss in aggregate average annual labor productivity growth during the period (1.86%). Hence, long-term productivity growth could have reached 2.25% if mark-ups had been at their optimal level. There is a strong significant positive correlation between the optimal mark-up and the rate of Hicks-neutral technical progress in each sector. This finding implies that sectors with high technical progress, as information technologies sectors, require higher mark-ups to maximize their rate of labor productivity growth. Overall, the aggregate economy would benefit from a decrease in the gap between nonoptimal and optimal mark-ups, as such an alignment would foster productivity growth.
    Keywords: Technical progress,productivity growth,mark-up
    JEL: O11 O31 O47 L16
    Date: 2019
  4. By: Alexander Cotte Poveda; Carolina Jimenez
    Abstract: This research analyzes the effects of expenditures in science, technology and research and development (R&D) on technical change in countries with a high human development index in Latin America. We argue that with higher investments in science, technology and R&D, the productivity of Latin American countries should increase, thereby offering several advantages for the population. Moreover, we investigated the factors that determine the relationship between economic growth and development and technical change. In this study, we use a technological change model to determine the factors that influence the productivity conditions of every Latin American country analyzed. The findings show that the expenditures in science, technology, R&D and patents have a positive influence on the technological change of those countries.
    JEL: O3 O31 O34 O38
    Date: 2019–06–20
  5. By: Ohki, Kazuyoshi
    Abstract: In this paper, we construct a tractable endogenous growth model to examine heterogeneous incumbents' current technology-switching behavior. Then, we examine the effects of policies such as a subsidy for innovation by incumbents, a subsidy for innovation by entrants, and the extension of patent length. Our setting suggests interesting and counterintuitive results. High quality incumbents tend to be less likely to conduct innovation, which is inconsistent with Schumpeter's hypothesis. A subsidy for innovation by entrants decreases the average quality of differentiated goods. Moreover, it may decrease the growth rate of the economy if the positive spillover of innovation from average quality production is adequately large. Aggregate innovation can be small even when the population size is large if the barriers to entry are extremely high.
    Keywords: Economic Growth, R&D, Firm-Heterogeneity, Innovation by Incumbents, IPR Policy
    JEL: O31 O32 O33 O34 O41
    Date: 2019–10–31
  6. By: Pedro Miguel Avelino Bação (Centre for Business and Economics CeBER and Faculty of Economics, University of Coimbra); Inês Gaspar (Faculty of Economics, University of Coimbra); Marta Cristina Nunes Simões (Centre for Business and Economics CeBER and Faculty of Economics, University of Coimbra)
    Abstract: In this paper we investigate the impact of corruption on economic growth in Portugal over the period 1980-2018. The empirical approach makes use of a VAR model inspired by the standard CobbDouglas aggregate production function. The VAR model includes the capital stock, hours worked,total factor productivity and the corruption perceptions index (CPI) of Transparency International.The CPI combines several sources of information on the level of corruption in each country. The scale of this index goes from 0, the highest level of corruption, to 10, the lowest level. The magnitude of the estimated effect of corruption on economic growth in the unrestricted VAR model is large (and positive), but statistically not significantly different from zero. However, the results from the estimation of a structural VAR model with economically plausible long-run restrictions indicate modest gains from reducing corruption.
    Keywords: Corruption; Economic Growth; Portugal; VAR model; SVAR.
    JEL: D73 O11 O40 O52
    Date: 2019–10
  7. By: Christian S. Otchia (Kwansei Gakuin University, Japan); Simplice A. Asongu (Yaoundé, Cameroon)
    Abstract: This study uses nightlight time data and machine learning techniques to predict industrial development in Africa. The results provide the first evidence on how machine learning techniques and nightlight data can be used to predict economic development in places where subnational data are missing or not precise. Taken together, the research confirms four groups of important determinants of industrial growth: natural resources, agriculture growth, institutions, and manufacturing imports. Our findings indicate that Africa should follow a more multisector approach for development, putting natural resources and agriculture productivity growth at the forefront.
    Keywords: Industrial growth; Machine learning; Africa
    JEL: I32 O15 O40 O55
    Date: 2019–01
  8. By: Hu, Ruiyang; Yang, Yibai; Zheng, Zhijie
    Abstract: This paper develops a quality-ladder growth model with elastic labor supply and distortionary taxes to analyze the effects of different subsidy instruments: subsidies to the production of final goods, subsidies to the purchase of intermediate goods, and subsidies to research and development (R&D). The model is calibrated to the US data to compare the growth and welfare implications of these subsidies. The main results are as follows. First, a coordination of all instruments attains the social optimum. Second, as for the use of a single instrument, the R&D subsidy is less growth-enhancing and welfare-improving than the other subsidies. Finally, as for the use of a mix of any two instruments, subsidizing the production of final goods and the purchase of intermediate goods is most effective in promoting growth but least effective in raising welfare.
    Keywords: Economic Growth; R&D; Quality Ladder; Subsidies
    JEL: D61 E62 O31 O38
    Date: 2019–11–04
  9. By: Sugata Marjit; Anwesha Basu; C. Veeramani
    Abstract: This paper revisits the relationship between international trade and economic growth. We measure trade openness indices separately with respect to intermediate inputs and final goods and find that it is the former which turns out to be significant in explaining growth gains from trade. Using sectoral level data from WORLD KLEMS Database on industrial productivity and output and global input output tables to construct the measures of trade openness, our empirical analysis covering 21 countries, 30 industries and 15 years reveals that trade openness in terms of intermediate and capital goods lead to economic growth. Openness in terms of final consumer goods turns out to be insignificant in most specifications. We also estimate traditional cross country growth regressions where we use trade data to construct the two trade openness indices for 174 countries. Here again, we find that it is import of intermediate and capital goods that results in real per-capita income growth. Our empirical results are in line with our theoretical model, where we show, without imposing any transplanted structure in our model that trade in intermediate goods directly leads to higher growth relative to autarky as opposed to trade in final goods.
    Keywords: trade, openness, growth, gains from trade, per capital income
    JEL: C10 F10 O40
    Date: 2019

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