nep-ino New Economics Papers
on Innovation
Issue of 2017‒03‒12
29 papers chosen by
Uwe Cantner
University of Jena

  1. A Theory of Grand Innovation Prizes By Galasso, Alberto; Mitchell, Matthew; Virag, Gabor
  2. Policy for system innovation - the case of Strategic Innovation Programs in Sweden By Coenen, Lars; Grillitsch, Markus; Hansen, Teis; Miörner, Johan; Moodysson, Jerker
  3. Migration, communities-on-the-move and international innovation networks: An empirical analysis of Spanish regions By D'Ambrosio, Anna; Montresor, Sandro; Parrilli, Mario Davide; Quatraro, Francesco
  4. Jacobian spillovers in environmental technological proximity: the role of Mahalanobis index on European patents within the Triad By Aldieri, Luigi; Kotsemir, Maxim; Vinci, Concetto Paolo
  5. Incumbents' Asymmetric Responses to Environmentally Friendly Entrants in the Automotive Industry By Uwe Cantner; Josefine Diekhof
  6. Innovation in an Aging Population By Legge, Stefan
  7. Innovation Policy and Economic Actors: State, Market and Enterprise By Satoshi Mizobata
  8. Going Entrepreneurial? IPOs and New Firm Creation By Tania Babina; Paige Ouimet; Rebecca Zarutskie
  9. Eco‐systems for young digital innovators By Reinhilde Veugelers
  10. Introducing Cattle Producer to the Hardin s World- Can Monopolies in Seed Markets Be Welfare Enhancing? By Bialek, Sylwia
  11. Licensing contracts and the number of licenses under screening By Antelo, Manel; Antonio, Sampayo
  12. Innovation in Clean Coal Technologies: Empirical Evidence from Firm-Level Patent Data By Wetzel, Heike; Kruse, Jürgen
  13. Environmental policy and directed technological change: evidence from the European carbon market By Raphael Calel; Antoine Dechezlepretre
  14. R&D Expenditures and Employment: Evidence from Europe By Piva, Mariacristina; Vivarelli, Marco
  15. Designing Dynamic Research Tournaments By Letina, Igor; Benkert, Jean-Michel
  16. The productivity effects of worker replacement in young firms By Murmann, Martin
  17. The Productivity Impact of Business Mobility: International Evidence By Piva, Mariacristina; Tani, Massimiliano; Vivarelli, Marco
  18. Politiques favorables à l’innovation en santé By Nadia Benomar; Joanne Castonguay; Marie-Hélène Jobin; François Lespérance
  19. Globalization, Technological Change and Skills: Evidence from Ethiopia By Haile, Getinet; Srour, Ilina; Vivarelli, Marco
  20. Is R&D Good for Employment? Microeconometric Evidence from the EU By Piva, Mariacristina; Vivarelli, Marco
  21. Longevity and technological change By Gehringer, Agnieszka; Prettner, Klaus
  22. Technology-Skill Complementarity in Early Phases of Industrialization By Franck, Raphael; Galor, Oded
  23. Innovative start-ups in Italy: their special features and the effects of the 2012 law By Paolo Finaldi Russo; Silvia Magri; Cristiana Rampazzi
  24. Destructive Creation at Work: How Financial Distress Spurs Entrepreneurship By Tania Babina
  25. Long-run dynamics of the U.S. patent classification system By Francois Lafond; Daniel Kim
  26. Pricing the Transfer of Intellectual Property: A Plea for Regulated and Internationally Coordinated Profit Splitting By Richter, Wolfram F.; Breuer, Markus
  27. Innovation, Technology, and the Payments System : a speech at Blockchain: The Future of Finance and Capital Markets?, The Yale Law School Center for the Study of Corporate Law, New Haven, Connecticut, March 3, 2017. By Powell, Jerome H.
  28. Children's health, human capital accumulation, and R&D-based economic growth By Baldanzi, Annarita; Bucci, Alberto; Prettner, Klaus
  29. In brief... Is technology to blame for jobless recoveries? By Georg Graetz; Guy Michaels

  1. By: Galasso, Alberto; Mitchell, Matthew; Virag, Gabor
    Abstract: The past decade has witnessed a resurgence in innovation awards, in particular of Grand Innovation Prizes (GIPs) which are rewards to innovators developing technologies reaching performance goals and requiring breakthrough solutions. GIPs typically do not preclude the winner also obtaining patent rights. This is in stark contrast with mainstream economics of innovation theories where prizes and patents are substitute ways to generate revenue and encourage innovation. Building on the management of innovation literature which stresses the difficulty to specify ex-ante all the technical features of the winning technologies, we develop a model in which innovative effort is multi-dimensional and only a subset of innovation tasks can be measured and contracted upon. We show that in this environment patent rights and cash rewards are complements, and that GIPs are often preferable to patent races or prizes requiring technologies to be placed in the public domain. Moreover, our model uncovers a tendency for patent races to encourage speed of discovery over quality of innovation, which can be corrected by GIPs. We explore robustness to endogenous entry, costly public funds, and incomplete information by GIP organizers on the surplus created by the technology.
    Keywords: innovation; patent; prizes
    Date: 2017–02
  2. By: Coenen, Lars (CIRCLE, Lund University); Grillitsch, Markus (CIRCLE, Lund University); Hansen, Teis (CIRCLE, Lund University); Miörner, Johan (CIRCLE, Lund University); Moodysson, Jerker (CIRCLE, Lund University)
    Abstract: System innovation policy refers to a horizontal policy approach that mobilises technology, market mechanisms, regulations and social innovations to solve complex societal problems in a set of interacting or interdependent components that form a whole socio-technical system. Even if policies start to be aimed at addressing these complex societal challenges, system innovation framing is still under-developed and it is unclear how to implement such policies. In this report we seek to contribute to both gaps. Firstly, we develop an analytical framework that allows to specify the conditions that enable and constrain system innovation. Secondly, we apply this framework on two Strategic Innovation Programs, a policy initiative by Vinnova, Sweden’s Innovation Agency, targeting system innovation.
    Keywords: System innovation; transition theory; innovation systems; policy; strategic innovation porgrammes
    JEL: O30 O33 O38
    Date: 2017–03–05
  3. By: D'Ambrosio, Anna; Montresor, Sandro; Parrilli, Mario Davide; Quatraro, Francesco (University of Turin)
    Abstract: This paper investigates the impact of migration on innovation networks between regions and foreign countries. We posit that immigrants (emigrants) act as a transnational knowledge bridge between the host (home) regions and their origin (destination) countries, reinforcing their networking in innovation and facilitating their co-inventorship. We argue that the social capital of both the hosting and the moving communities reinforces such a bridging role, along with the already recognised effect of language commonality and migrants’ human capital. By combining patent data with national data on residents and electors abroad, we apply a gravity model to the co-inventorship between Spanish provinces (NUTS3 regions) and a number of foreign countries, in different periods of the last decade. Both immigrants and emigrants are found to affect this kind of innovation networking. The social capital of both the moving and the hosting communities actually moderate this impact in a positive way. The effect of migration is stronger for more skilled migrants and with respect to non-Spanish speaking countries, pointing to a language-bridging role of migrants. Overall, individual and community aspects combine in accounting for the impact of migration on international innovation networks.
    Date: 2017–01
  4. By: Aldieri, Luigi; Kotsemir, Maxim; Vinci, Concetto Paolo
    Abstract: The aim of this paper is to investigate the role of Jacobian externalities stemmed from different technological sectors for international firms engaged both in environmental and in dirty activi- ties. Firms’ innovation, measured, as the development of new patents, is a key factor behind the achievement of desired economic performances. Empirical literature usually deals with the inte- gration between ecological efficiency and product value enhancement. The results of these stud- ies lead to the lack of integrated innovation adoption behind environmental productivity per- formance. In this work, we analyse the integration between more environmental goals in an original way, by applying different methodologies to compute technological proximity, based on the Mahalanobis approach. To this end, we use information from 240 large international firms, located in three economic areas: USA, Japan and Europe and we select their environmental and dirty patents from European Patent Office data.
    Keywords: Innovation; Technology spillovers; Environmental relatedness.
    JEL: O32 O33 Q5
    Date: 2017–03
  5. By: Uwe Cantner (School of Economics and Business Administration, Friedrich-Schiller-University Jena); Josefine Diekhof (DFG-GRK-1411 "The Economics of Innovative Change", PhD program of the Max Planck Institute of Economics & Friedrich-Schiller University Jena)
    Abstract: In the context of technological change, the influence of innovative entrants on incumbents is considered a major driving force. Using global patent data, we analyze this influence for the case of the transition from combustion engine vehicles towards alternative technology vehicles (ATVs). Entrants play a key role in developing ATV-related patents, whereas automotive incumbents are considered as being less motivated in pursuing this new technology. Our results indicate that entrants' ATV-related knowledge accumulation stimulates incumbents' ATV-related research. Domestic entrants had a positive effect on the large incumbent majority that exhibited low ATV patent stocks whereas incumbents with high ATV patent stocks reacted with decreasing patenting; which is assumed to be a sign of R&D outsourcing or strategic acquisitions. Entrants in foreign countries yielded increasing incumbent responses along increasing incumbents' ATV patent stocks; which is in line with previously found competitive reactions to entry. Further, younger entrants, pre-entry patent- inexperienced entrants, and entrant leaders with greater technological relevance were more influential than their counterparts (old, experienced, and less technological relevant). This suggests that not only diversifying but also new establishments have an effect on incumbents. As technological leading and inexperienced entrants showed a stronger effect on incumbents but were outnumbered by their counterparts, it underpins that entrants with important characteristics and not the pure number of entrants drive these effects on incumbents.
    Keywords: Environmental Economics, Technological Change, Industry Dynamics, Entrepreneurship, Transport Industry, Electric Vehicle
    JEL: Q55 O3 Q52 R49 L91 L26 O31
    Date: 2017–03–10
  6. By: Legge, Stefan
    Abstract: What is the effect of population aging on the rate of innovation? In this paper, I examine a new channel and argue that demographic shifts affect the demand for innovative goods. In an overlapping-generations model, it is assumed that individuals must spend time on learning how to use new technology. This creates age-dependent demand structures because older individuals have limited time windows for investments to pay off. The result is that in an aging population a larger fraction of the population does not invest in acquiring new skills. The amount of R&D is reduced as demand for innovative goods falls. Using data from all OECD countries for the period 1978-2010, I find support for these theoretical predictions. Those countries that faced the largest demographic shifts experienced the sharpest growth reduction in patent applications.
    JEL: J11 J31 O41
    Date: 2016
  7. By: Satoshi Mizobata (Institute of Economic Research, Kyoto University)
    Abstract: The paper analyses the contemporary Russian innovation policy and innovation system, and posits that Russia needs to overcome considerable barriers in order for it to become a sound innovative society. After its transformation, Russia changed its innovation policy from government-led to market-led. In the midst of weakened international competitiveness and economic decline, however, its policy has spontaneously changed to one of ‘governmentalization’, showing path-dependent evolution. Throughout the 2000s, the government introduced a succession of innovation modernization programs, but the results appear limited, and the macroeconomic indicators explain how the country continues to be mired by its traditional backwardness, as evidenced by its heavy dependence on energy exports, poor high technology exports, outdated equipment, and other such factors. As a theoretical framework for understanding the innovative society, I apply the ‘market quality theory’, in that market quality determines the content of innovation institutions and barriers they face. Market quality can be measured by institutional arrangements (infrastructure, strength of the ‘rule of game’, and its enforcement), institutional complementarities, and transaction costs. The specificity of the Russian market indirectly characterizes its weakness in market quality, as seen in international rankings such as the Global Competitiveness Index, Corruption Index, and so on. Thus, Russia’s innovation institutions have their specificities and instabilities, and owing to the weak market quality, misuse of institutions, and government failure, its innovation policy has become ‘governmentalized’ instead of following the path of marketization with high quality. Market quality and state/government quality are one and the same. The quality of its state/government is poor owing to its present form of governance and social mistrust. In order to overcome these barriers, I stress on the need for social innovation as a key measure for enhancing the quality of the market/state.
    Keywords: Privatization, innovation, market quality, policy, institution, path-dependent, Russia, government, infrastructure
    JEL: D40 E61 O31 O32 O38 O57 P16
    Date: 2017–02
  8. By: Tania Babina; Paige Ouimet; Rebecca Zarutskie
    Abstract: Using matched employee-employer US Census data, we examine the effect of a successful initial public offering (IPO) on employee departures to startups. Accounting for the endogeneity of a firm’s choice to go public, we find strong evidence that going public induces employees to leave for start-ups. Moreover, we document that the increase in turnover following an IPO is driven by employees departing to start-ups; we find no change in the rate of employee departures for established firms. We present evidence that, following an IPO, many employees who received stock grants experience a positive shock to their wealth which allows them to better tolerate the risks associated with joining a startup or to obtain funding. Our results suggest that the recent declines in IPO activity and new firm creation in the US may be causally linked. The recent decline in IPOs means fewer workers may move to startups, decreasing overall new firm creation in the economy.
    Date: 2017–01
  9. By: Reinhilde Veugelers
    Abstract: This contribution takes a closer look at innovation in ICT sectors and the failing ability of young innovative firms in Europe to grow into leading world innovators in these sectors. The analysis suggests that Europe might be missing strong digital regional clusters with a symbiotic relationship between young ICT innovators and incumbent ICT leading companies.
    Keywords: Young digital innovators, eco‐systems, regional clusters
    Date: 2017–03–02
  10. By: Bialek, Sylwia
    Abstract: The paper investigates markets ridden by problems of common pool resources and asks how monopoly rights for inputs into those markets affect the welfare. The analysis rests upon the example of anit-pest innovations. The quintessential feature of such innovations is the possibility of them losing their effectiveness. Their application exerts evolutionary pressure on pests that eventually leads to them devoloping resistance to the innovation. The ensuing perishability of the innovation makes its common pool resource character visible. The paper develops a model of agricultural markets and discusses how monopolies, despite their underprovision of output may lead to increased welfare compared to generic industries. In this context, the optimal patent length is investigated.
    JEL: Q58 Q16 L50
    Date: 2016
  11. By: Antelo, Manel; Antonio, Sampayo
    Abstract: This paper examines the licensing of an innovation—by a patent holder to one or more users—when the innovation’s value (high or low) is known, after the contract is signed, by each user. In this setup, we analyze the patent holder’s joint decision concerning the number of licenses and the type of contracts. Our first main finding is that, depending on how uncertain is the efficiency of users exploiting the innovation, both shut-down contracts and screening contracts can emerge in equilibrium. Second, shut-down contracts amount to fixed fees under exclusive licensing but are two-part contracts under non-exclusive licensing. Third, there is distorted production at the bottom of the innovation value’s distribution under exclusive licensing as well as distortion at both the bottom and the top of that distribution under non-exclusive licensing. Fourth, asymmetric information favors the latter (i.e., issuing multiple licenses) except when the patent holder uses a screening contract, since then the need to distort production at both the bottom and the top renders non-exclusive licensing less profitable. Our final result is that the number of licenses issued by the patent holder is more likely to maximize aggregate surplus under asymmetric information than under symmetric information.
    Keywords: exclusive and non-exclusive licensing, symmetric and asymmetric information, screening, fixed-fee and two-part contracts, welfare analysis
    JEL: D43 D82 L24
    Date: 2017–03–02
  12. By: Wetzel, Heike; Kruse, Jürgen
    Abstract: This article empirically analyzes supply-side and demand-side factors expected to affect innovation in clean coal technologies. Patent data from 93 national and international patent offices is used to construct new firm-level panel data on 3,648 clean coal innovators over the time period 1978 to 2009. The results indicate that on the supply-side a firm’s history in clean coal patenting and overall propensity to patent positively affects clean coal innovation. On the demand-side we find strong evidence that environmental regulation of emissions, that is CO2, NOX and SO2 , induces innovation in both efficiency improving combustion and after pollution control technologies.
    JEL: C33 O31 Q55
    Date: 2016
  13. By: Raphael Calel; Antoine Dechezlepretre
    Abstract: This paper investigates the impact of the European Union Emissions Trading System (EU ETS) on technological change, exploiting installations-level inclusion criteria to estimate the System's causal impact on firms' patenting. We find that the EU ETS has increased low-carbon innovation among regulated firms by as much as 10%, while not crowding out patenting for other technologies. We also find evidence that the EU ETS has not impacted patenting beyond the set of regulated companies. These results imply that the EU ETS accounts for nearly a 1% increase in European low-carbon patenting compared to a counterfactual scenario.
    Keywords: directed technological change; EU emissions trading system; policy evaluation
    JEL: C14 O3 Q55 Q58
    Date: 2016–03
  14. By: Piva, Mariacristina; Vivarelli, Marco
    Abstract: Using a unique firm-level database comprising the top European R&D investors over the period 2002-2013 and running LSDVC estimates, this study finds a significant labourfriendly impact of R&D expenditures. However, this positive employment effect appears limited in magnitude and entirely due to the medium-and high-tech sectors, while no effect can be detected in the low-tech industries. From a policy point of view, this outcome is supporting the EU2020 strategy, but - taking into account that most of European economies are specialized in low-tech activities - is also worrying in terms of future perspectives of the European labour market.
    Keywords: R&D,innovation,employment,firm-level analysis,EU
    JEL: O33
    Date: 2017
  15. By: Letina, Igor; Benkert, Jean-Michel
    Abstract: This paper considers the optimal design of dynamic research tournaments when the buyer can set time-dependent prizes. We derive the buyer-optimal tournament and show that it entails an increasing prize schedule. Remarkably, this allows the buyer to implement a global stopping rule. In particular, the optimal tournament attains the first-best. More generally, we show that global stopping rules can be implemented robustly and compare them to individual stopping rules which have been analyzed in the existing literature. We conclude by discussing policy implications of our findings and highlight that global stopping rules combine the best aspects of innovation races and fixed prize tournaments.
    JEL: O32 D02 L19
    Date: 2016
  16. By: Murmann, Martin
    Abstract: Existing management research has so far dealt with the consequences of labor turnover for established firms, but has not addressed its effect on young entrepreneurial businesses. In this paper I assess, both theoretically and empirically, the productivity effects of worker replacement in young firms. Worker replacement isolates labor turnover due to employee replacement as a separate category of turnover and has been shown to positively affect the productivity of established firms in previous research. Using a large and representative sample of German start-ups, I show that worker replacement has negative effects on young firms' productivity that remain even when controlling for moderating factors. These effects are even more negative when the founder does not have prior managerial experience.
    Keywords: Firm productivity,Labour turnover,Churning,Entrepreneurship
    JEL: L26 M13 J24 J63 D22
    Date: 2017
  17. By: Piva, Mariacristina; Tani, Massimiliano; Vivarelli, Marco
    Abstract: The aim of this paper is to investigate the productivity impact of business visits, relative to traditional drivers of productivity enhancement, namely capital formation and R&D. To carry out the analysis, we combine unique and novel data on business visits sourced from the U.S. National Business Travel Association with OECD data on R&D and capital formation. The resulting unbalanced panel covers on average 16 sectors per year in 10 countries during the period 1998-2011 (2,262 observations). Our results suggest that mobility through business visits is an effective mechanism to improve productivity. The estimated effect is about half as large as investing in R&D, supporting viewing business visits as a form of long-term investment rather than pure consumption expenditure. In a nutshell, our outcomes support the need to recognize the private and social value of business mobility.
    Keywords: Business visits,labour mobility,knowledge,R&D,productivity
    JEL: O33
    Date: 2017
  18. By: Nadia Benomar; Joanne Castonguay; Marie-Hélène Jobin; François Lespérance
    Abstract: Le CIRANO et le Pôle santé – HEC Montréal publient un deuxième rapport de recherche dont l’objectif est de proposer des recommandations pour améliorer l’implantation des innovations en santé. À la lumière de ces études, on constate qu’il existe une faille importante dans la chaîne de valeur de l’innovation, c’est-à-dire entre l’offre d’innovation et la demande pour celle-ci. Traditionnellement, les politiques d’innovation portent sur la facilitation de l’offre, par exemple par du financement de la recherche et de ses infrastructures jusqu’au soutien à la commercialisation. Pourtant, les obstacles à l’intégration des innovations dans la pratique proviennent du peu de demande pour des innovations en santé. Les prestataires et gestionnaires des services de santé n’étant pas imputables quant à l’efficience du système, ils n’ont pas ou peu de motivation et de moyens pour l’améliorer. Plus encore, le système étant principalement orienté vers le contrôle des coûts, ses mécanismes freinent, voire empêchent, toute amélioration de la valeur des services, c’est-à-dire toute innovation. Ainsi, malgré des investissements de plusieurs centaines de millions de dollars en R&D, les données révèlent que la productivité de notre système de santé est en décroissance.
    Date: 2017–02–27
  19. By: Haile, Getinet; Srour, Ilina; Vivarelli, Marco
    Abstract: There is a dearth of research on the impact of technological change over employment in least developed countries (LDCs) embarking on globalization and consequent international technological transfer. Using a panel of 1,940 Ethiopian firms over the period 1996–2004 and deploying GMMSYS estimates, this paper aims to establish the role played by trade, FDI and technology in affecting employment and skills. The results obtained lend support to a labour–augmenting effect. Moreover, the implemented two-equation dynamic framework provides evidence of a skill-bias specific to those enterprises with higher share of foreign ownership and located in the vicinity of the capital city.
    Keywords: Employment,skills,globalization,FDI,trade,technological change,Ethiopia
    JEL: J21 O33 J24
    Date: 2017
  20. By: Piva, Mariacristina (Università Cattolica del Sacro Cuore); Vivarelli, Marco (Università Cattolica del Sacro Cuore)
    Abstract: Using a unique firm-level database comprising the top European R&D investors over the period 2002-2013 and running LSDVC estimates, this study finds a significant labour-friendly impact of R&D expenditures. However, this positive employment effect appears limited in magnitude and entirely due to the medium-and high-tech sectors, while no effect can be detected in the low-tech industries. From a policy point of view, this outcome is supporting the EU2020 strategy, but – taking into account that most of European economies are specialized in low-tech activities – is also worrying in terms of future perspectives of the European labour market.
    Keywords: R&D, innovation, employment, firm-level analysis, EU
    JEL: O33
    Date: 2017–02
  21. By: Gehringer, Agnieszka; Prettner, Klaus
    Abstract: We analyze the impact of increasing longevity on technological progress within a simple R&D-based growth framework with overlapping generations and test the model's implication on OECD data from 1960 to 2011. The central hypothesis derived in the theoretical part is that - by raising the incentives of households to invest in physical capital and in R&D - decreasing mortality positively impacts upon technological progress and productivity growth. The empirical results clearly confirm the theoretical prediction. This implies that the demographic changes we observed in industrialized economies over the last decades were not detrimental to economic prosperity, at least as far as technological progress and productivity growth are concerned.
    JEL: J11 O11 O41
    Date: 2016
  22. By: Franck, Raphael; Galor, Oded
    Abstract: The research explores the effect of industrialization on human capital formation. Exploiting exogenous regional variations in the adoption of steam engines across France, the study establishes that, in contrast to conventional wisdom that views early industrialization as a predominantly deskilling process, the industrial revolution was conducive for human capital formation, generating wide-ranging gains in literacy rates and educational attainment.
    Keywords: Economic Growth; Human Capital; Industrialization; Steam Engine.; Technology-Skill Complementarity
    JEL: N33 N34 O14 O33
    Date: 2017–02
  23. By: Paolo Finaldi Russo (Banca d'Italia); Silvia Magri (Banca d'Italia); Cristiana Rampazzi (Banca d'Italia)
    Abstract: In 2012 the Italian Parliament introduced into Italian law a special section in the Companies Register and a large number of financial incentives to create a favorable environment for the development of ‘innovative start-ups’ (ISUPs). In this paper we compare ISUPs with other start-ups. In accordance with the eligibility criteria established by law, ISUPs show a striking capacity for innovation apparent in a higher incidence of intangible assets and the longer time it takes to begin selling their products. ISUPs also report higher investment rates and stronger growth in sales and assets, while their financial structures are characterized by higher capitalization and greater availability of liquid assets. Based on propensity score matching, we also highlight some direct effects of the 2012 law on their financial structures, almost exclusively on ISUPs operating in the service sectors: their external funding, either debt or equity, increases more than for other similar firms; higher investment rates are specifically associated with a stronger upsurge in their capital.
    Keywords: start-ups, financing innovation, equity, financial structure. Classification-JEL: G24, G32, H81, O38
    Date: 2016–07
  24. By: Tania Babina
    Abstract: Using US Census employer-employee matched data, I show that employer financial distress accelerates the exit of employees to found start-ups. This effect is particularly evident when distressed firms are less able to enforce contracts restricting employee mobility into competing firms. Entrepreneurs exiting financially distressed employers earn higher wages prior to the exit and after founding start-ups, compared to entrepreneurs exiting non-distressed firms. Consistent with distressed firms losing higher-quality workers, their start-ups have higher average employment and payroll growth. The results suggest that the social costs of distress might be lower than the private costs to financially distressed firms.
    Date: 2017–01
  25. By: Francois Lafond; Daniel Kim
    Abstract: Almost by definition, radical innovations create a need to revise existing classification systems. As a result, the evolution of technological classification systems reflects technological evolution. We present three sets of findings regarding classification volatility in the U.S. Patent Classification System. First, we study the evolution of the number of distinct classes. Reconstructed time series based on the current classification scheme are very different from historical data. This suggests that using the current classification to analyze the past produces a distorted view of the evolution of the system. Second, we study the relative sizes of classes. The size distribution is exponential so classes can be of quite different sizes, but the largest classes are not necessarily the oldest. To explain this pattern with a simple stochastic growth model, we introduce the assumption that classes have a regular chance to be split. Third, we study reclassification. The share of patents that are in a different class now than they were at birth can be quite high. Reclassification mostly occurs across classes belonging to the same 1-digit NBER category, but not always. We also document that reclassified patents tend to be more cited than non-reclassified ones, even after controlling for grant year and class of origin. More generally we argue that classification changes and patent reclassification are quite common, reveal interesting information about technological evolution, and must be taken into account when using classification as a basis for forecasting.
    Date: 2017–02
  26. By: Richter, Wolfram F.; Breuer, Markus
    Abstract: Taxing intellectual property effectively is a challenging task. With its BEPS initiative the OECD (2013) aims at taxing intangibles in accordance with value creation although difficulties in determining the jurisdiction in which value creation occurs are acknowledged. The European Commission promotes the introduction of a Common Consolidated Corporate Tax Base (CCCTB) to neutralize profit shifting. The drawback of this proposal is that incentives are set to relocate R&D activities to low-tax countries. This is the background against which the present paper pleads for a regulated and internationally coordinated split of the profits earned with licensed know-how.
    JEL: H25 O34 M48
    Date: 2016
  27. By: Powell, Jerome H. (Board of Governors of the Federal Reserve System (U.S.))
    Date: 2017–03–03
  28. By: Baldanzi, Annarita; Bucci, Alberto; Prettner, Klaus
    Abstract: We analyze the effects of children's health on human capital accumulation and on long-run economic growth. For this purpose we design an R&D-based growth model in which the stock of human capital of the next generation is determined by parental education and health investments. We show that i) there is a complementarity between education and health: if parents want to have better educated children, they also raise health investments and vice versa; ii) parental health investments exert an unambiguously positive effect on long-run economic growth, iii) faster population growth reduces long-run economic growth. These results are consistent with the empirical evidence for modern economies in the twentieth century.
    Keywords: Children's Health,Education,Fertility,Economic Growth,Technological Progress,Long-run Economic Development
    JEL: I15 I25 J10 O30 O41
    Date: 2017
  29. By: Georg Graetz; Guy Michaels
    Abstract: Since the early 1990s, the United States has been plagued by weak employment growth when emerging from recessions - so-called 'jobless recoveries'. Georg Graetz and Guy Michaels look at multiple recoveries elsewhere in the world over a 40-year period to see if the same applies - and whether modern technology is responsible.
    Keywords: job polarization, jobless recoveries, routine-biased technological change, robots
    JEL: E32 J23 O33
    Date: 2017–03

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