nep-ino New Economics Papers
on Innovation
Issue of 2022‒12‒12
eight papers chosen by
Uwe Cantner
University of Jena

  1. For the rest of our lives: Flexibility and innovation in Italy. By Dughera, Stefano; Quatraro,Francesco; Ricci,Andrea; Vittori,Claudia
  2. Government Subsidies as a Risk-Sharing Policy Tool in Innovation Investment By Lu, Hao; De Fuentes, Claudia; Milla, Joniada; Ahmadi, Soheil
  3. Firms' Involvement in Standardization and Average Total Costs per Patent Family By Gamarra, Yanis; Friedl, Gunther
  4. Skilled Immigration, Task Allocation and the Innovation of Firms By Mayda, Anna Maria; Orefice, Gianluca; Santoni, Gianluca
  5. Directed technical change and the resource curse By Mads Greaker; Tom-Reiel Heggedal; Knut Einar Rosendahl
  6. Does Updating Education Curricula Accelerate Technology Adoption in the Workplace? Evidence from Dual Vocational Education and Training Curricula in Switzerland By Schultheiss, Tobias; Backes-Gellner, Uschi
  7. R&D and Productivity in Finnish Firms By Valmari, Nelli
  8. What Do R&D Spillovers from Universities and Firms Contribute to Productivity? Plant level productivity and technological and geographic proximity in Japan By René BELDERBOS; IKEUCHI Kenta; FUKAO Kyoji; KIM Young Gak; KWON Hyeog Ug

  1. By: Dughera, Stefano; Quatraro,Francesco; Ricci,Andrea; Vittori,Claudia (University of Turin)
    Abstract: We study the effect of temporary workers on innovation both theoretically and empirically. First, we develop a model where a representative firm chooses between different types of projects (routine vs innovative) and different types of labor contracts (temporary vs permanent). In doing so, it considers the effect of these different strategies on the workers’ incentives to invest in firm-specific skills. Our key finding is that firms offering temporary contracts are less likely to invest in innovative projects, and that this is effect is stronger in industries characterized by a “garage-business” innovation regime. Second, we test our hypotheses using firm-level data on employment composition and patent filing. Consistently with our theoretical predictions, we find that temporary workers are detrimental to innovation, and that this effect is mitigated by the concentration of patent-filing at the industry-level.
    Date: 2021–09
  2. By: Lu, Hao (Saint Mary’s University); De Fuentes, Claudia (Saint Mary’s University); Milla, Joniada (Saint Mary’s University); Ahmadi, Soheil (Saint Mary’s University)
    Abstract: Current literature on the impact assessment of government innovation subsidies is mainly empirical driven and lacks an overarching theoretical model to explain the conditions under which government subsidies create positive additionalities on private R&D investment. In this paper, we present a theoretical model that treats government subsidies as a risk-sharing vehicle for private R&D activities. More importantly, we argue that positive additionalities will be more likely to occur when the subsidies are allocated based on the risk-reward condition of the project. In addition, we show that the risk-sharing effect of government subsidies is influenced by a firm's absorptive capacity and the asset specificity of the project. By showing the conditions under which subsidies create positive additionality, we provide guidance to policymakers on how to improve the effectiveness of government support for innovation.
    Keywords: government subsidy, additionality, R&D and innovation, the risk-sharing model, absorptive capacity, asset specificity
    JEL: D50 H81 O31 O38
    Date: 2022–11
  3. By: Gamarra, Yanis; Friedl, Gunther
    Abstract: Technology standards such as the Wi-Fi or 5G mobile communication standard rely on standard-essential patents (SEPs). Increasing licensing revenues and several disputes between owners and users of SEPs raise the question about the patenting behavior of firms developing standardized technologies. A better understanding of this patenting behavior can help to improve the standard-setting process and standard adoption. We propose the average total costs per patent family as an economic assessment criterion and an indicator of patenting behavior for technology standards. Using this criterion, we examine how increasing SEP family portfolios and their ownership concentration are associated with firms' patenting behavior. We find that increasing ownership concentration of SEP families is negatively associated with firms' average total costs per patent family, suggesting that decreasing competition around SEP families might decrease firms' investments per patent family. We conclude that policy makers and standardsetting organizations (SSOs) should discourage blanket declarations since increasing SEP transparency could improve comparability across standard-setting processes and reduce uncertainties in subsequent standard adoption for SEP holders and implementers. SSOs should further closely monitor how increasing (decreasing) ownership concentration of SEPs affects their standard-setting processes.
    Keywords: Average total costs,standardization,standard-essential patents,patenting,R&D
    JEL: L15 L96 O32 O34
    Date: 2022
  4. By: Mayda, Anna Maria (Georgetown University); Orefice, Gianluca (Université Paris-Dauphine); Santoni, Gianluca (CEPII, Paris)
    Abstract: This paper analyses the impact of skilled migrants on the innovation (patenting) activity of French firms between 1995 and 2010, and investigates the underlying mechanism. We present districtlevel and firm-level estimates and address endogeneity using a modified version of the shift-share instrument. Skilled migrants increase the number of patents at both the district and firm level. Large, high-productivity and capital-intensive firms benefit the most, in terms of innovation activity, from skilled immigrant workers. Importantly, we provide evidence that one channel through which the effect works is task specialization (as in Peri and Sparber, 2009). The arrival of skilled immigrants drives French skilled workers towards language-intensive, managerial tasks while foreign skilled workers specialize in technical, research-oriented tasks. This mechanism manifests itself in the estimated increase in the share of foreign inventors in patenting teams as a consequence of skilled migration. Through this channel, greater innovation is the result of productivity gains from specialization.
    Keywords: skilled immigration, innovation, patents
    JEL: F22 J61
    Date: 2022–11
  5. By: Mads Greaker; Tom-Reiel Heggedal; Knut Einar Rosendahl (Statistics Norway)
    Abstract: The "resource curse" is a potential threat to all countries relying on export income from abundant natural resources such as fossil fuels. The early literature hypothesized that easily accessible natural resources would lead to lack of technological progress. In this article we instead propose that abundance of fossil fuels can lead to the wrong type of technological progress. In order to inquire into our research question, we build a model of a small, open economy having specialized in export of fossil fuels. R&D in fossil fuel extraction technology competes with R&D in clean energy technologies. Moreover, technological progress is path dependent as current R&D within a technology type depends on past R&D within the same type. Finally, global climate policy may reduce the future value of fossil fuel export. We find that global climate policy may either lead to a resource curse or help the country escaping a potential resource curse. The ripeness of the clean energy technologies is essential for the outcomes: If the clean technology level is not too far beyond the fossil fuel technology, a shift to exporting clean energy is optimal independent of global climate policy and climate policy can accelerate this shift. While if the clean technology is far behind, a shift should only happen as a response to global climate policy, and the government should intervene to accelerate this shift.
    Keywords: Environment; Directed technological change; Innovation policy; Resource curse
    JEL: O30 O31 O33
    Date: 2022–09
  6. By: Schultheiss, Tobias (University of Zurich); Backes-Gellner, Uschi (University of Zurich)
    Abstract: In an environment of accelerating technological change and increasing digitalization, firms need to adopt new technologies faster than ever before to stay competitive. This paper examines whether updates of education curricula help to bring new technologies faster into firms' workplaces. We study technology changes and curriculum updates from an early wave of digitalization (i.e., computernumerically controlled machinery, computer-aided design, and desktop publishing software). We take a text-as-data approach and tap into two novel data sources to measure change in educational content and the use of technology at the workplace: first, vocational education curricula and, second, firms' job advertisements. To examine the causal effects of adding new technology skills to curricula on the diffusion of these technologies in firms' workplaces (measured by job advertisements), we use an event study design. Our results show that curriculum updates substantially shorten the time it takes for new technologies to arrive in firms' workplaces, especially for mainstream firms.
    Keywords: technological change, digitalization, curricula updates, technology diffusion, text-as-data
    JEL: O33 I25 J23
    Date: 2022–10
  7. By: Valmari, Nelli
    Abstract: Abstract Productivity of the Finnish private sector decreased during the financial crisis of 2008–2009 and, since then, productivity growth has not reached the level preceding the crisis. A key factor underlying productivity growth is R&D. The population of Finnish firms, excluding Nokia, have increased their R&D inputs since the financial crisis. Therefore, it is worthwhile considering whether changes in productivity effects of R&D, instead of changes in volumes of R&D inputs, may explain the slowdown in productivity growth. This paper estimates productivity effects of Finnish firms’ R&D inputs in several industries for the years 2001–2009 and 2010–2018. The estimates are used to find out whether the productivity effects of R&D have decreased after the financial crisis. The empirical strategy (Doraszelski and Jaumandreu, 2013) allows for productivity effects that are nonlinear and heterogeneous across firms. For most of the industries studied, there is no statistical evidence that the productivity effects of R&D are lower for the years 2010–2018 than for the years 2001–2009. Instead, there is evidence that, in some industries, the productivity effects of R&D increased after the financial crisis. In other words, low productivity growth after the financial crisis does not seem to be caused by a decrease in the productivity effects of R&D.
    Keywords: R&D, Productivity, Production function estimation
    JEL: D24 L60 O30
    Date: 2022–11–28
  8. By: René BELDERBOS; IKEUCHI Kenta; FUKAO Kyoji; KIM Young Gak; KWON Hyeog Ug
    Abstract: We examine the simultaneous effects of spillovers due to R&D by universities and by firms on total factor productivity in a panel of over 20,000 Japanese manufacturing plants. Estimating geographic decay functions based on the location of the universe of manufacturing plants run by R&D conducting firms and public research institutions in Japan, we find a positive influence of both private and public technologically proximate-R&D stocks, which decay in distance and become negligible at around 500 kilometers. Decomposition analyses show that declining R&D spillovers are responsible for a substantial part of the decline in the rate of TFP growth in Japanese manufacturing. The exit of geographically proximate plants operated by R&D intensive firms, which may be associated with a relocation of manufacturing activity overseas, plays a notable role in this process and is an important phenomenon in major industrial agglomerations such as Tokyo and Osaka.
    Date: 2022–11

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