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on Innovation |
| By: | Antonin Bergeaud (HEC Paris, CEP-LSE, CEPR); Max Deter (University of Potsdam); Maria Greve (Utrecht University); Michael Wyrwich (Groningen University) |
| Abstract: | We investigate the causal relationship between inventor migration and regional innovation in the context of the large-scale migration shock from East to West Germany between World War II and the construction of the Berlin Wall in 1961. Leveraging a newly constructed, century-spanning dataset on German patents and inventors, along with an innovative identification strategy based on surname proximity, we trace the trajectories of East German inventors and quantify their impact on innovation in West Germany. Our findings demonstrate a significant and persistent boost to patenting activities in regions with higher inflows of East German inventors, predominantly driven by advancements in chemistry and physics. We further validate the robustness of our identification strategy against alternative plausible mechanisms. We show in particular that the effect is stronger than the one caused by the migration of other high skilled workers and scientists. |
| Keywords: | patents, migration, Germany, Iron Curtain, innovation |
| JEL: | H10 N44 P20 D31 |
| Date: | 2025–01 |
| URL: | https://d.repec.org/n?u=RePEc:pot:cepadp:84 |
| By: | Domenico Delli Gatti; Roberta Terranova; Enrico Maria Turco |
| Abstract: | Can standard measures of industrial policy such as R&D subsidies or financial support for machine replacement be effective tools to reverse the current pattern of increasing market power and declining business dynamism? To answer this question we explore the effects of various industrial policy instruments in a macroeconomic agent-based model calibrated to reproduce the decline in US business dynamism over the last half-century. Our results indicate that R&D subsidies alone are insufficient to address the underlying causes of declining dynamism. They become effective, however, when combined in a policy mix with knowledge diffusion policies, particularly those favoring advanced technology adoption by small firms. In this case, industrial policy fosters growth by closing the productivity gap between leaders and laggards, and thereby curbing market power. These findings suggests a two-pronged approach to the design of industrial policy, integrating firm-level subsidies with knowledge diffusion measures and therefore ensuring that innovation and competition policies advance together. |
| Keywords: | macroeconomic dynamics, innovation, knowledge diffusion, market power, industrial policy, agent-based model |
| JEL: | C63 E32 L10 L52 O31 O33 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11544 |
| By: | Hege, Ulrich; Li, Kai; Zhang, Yifei |
| Abstract: | We study the effect of climate-related innovation on carbon emissions by analyzing supply chain networks. We find that climate innovation reduces carbon emissions at customer firms, driven by product innovations. The effect is economically significant, dominated by the most emission-intensive customer firms, gradually increases over a five-year horizon, and is significant for Scope 1 and Scope 2 emissions. We then look at the diffusion of climate innovation to new customers. We find that customers ex-hibit a strong preference for suppliers with new climate patents, that climate patents allow suppliers to attract new customers, especially customers with high environmental ratings or a large carbon footprint, and that these new customers subsequently also reduce their emissions. We use the quasi-random assignment of patent examiners and the exogenous technological obsolescence of climate patents as instruments to suggest a causal interpretation of the main findings. |
| Keywords: | climate innovation; supply chains; new customer firms; business stealing; carbon emissions; environmental scores; patent examiner leniency; technology obsoles-cence. |
| JEL: | L14 O31 O33 Q54 Q55 |
| Date: | 2025–01 |
| URL: | https://d.repec.org/n?u=RePEc:tse:wpaper:130108 |
| By: | Esther Ann Bøler; Katinka Holtsmark; Karen Helene Ulltveit-Moe; Katinka Kristine Holtsmark |
| Abstract: | We analyze how a major negative shock to the producers of fossil fuels may lead to a shift from dirty to clean R&D along the supply chain. First, we develop a theoretical framework of directed technical change, showing that adjustment costs in R&D activity can lead fossil energy sector suppliers to shift their R&D activity towards clean innovation more than other firms, as a consequence of a negative oil price shock. Second, we investigate the impact of a major drop in the oil price in 2014 on clean R&D. Relying on rich firm level trade data, we propose a novel method of identifying firms’ exposure to the price shock. We find that more exposed firms increased their clean R&D investments more than less exposed firms. Our findings contribute to the understanding of the drivers of clean technological change, which is vital to assess the effectiveness of different climate policy measures, including carbon pricing. |
| Keywords: | clean innovation, supply chains, carbon pricing |
| JEL: | D25 F18 O31 Q55 Q58 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11550 |
| By: | Marc Bourreau; Axel Gautier |
| Abstract: | In this paper, we consider two platforms that compete for the development of a new product to integrate into their ecosystems. The new product can be developed either inhouse by the platforms or by an independent startup active only in the technology market. The presence of the startup affects the platforms’ R&D efforts through an insurance effect, which reduces the cost of failure in innovation, and a competition effect, which diminishes the returns to innovation. The magnitude of these effects depends on the attitude of the competition authorities towards the acquisition of the startup by one of the platforms. We show that allowing acquisitions stimulates platform innovation, but at the cost of a more concentrated market structure. We also compare the funding of the startup by independent venture capitalists or by the platforms themselves, and investigate how the merger regime influences the direction of the startup’s innovation. |
| Keywords: | innovation, startup acquisitions, mergers, digital, big tech, competition policy |
| JEL: | D43 G34 K21 L40 L86 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11569 |
| By: | da Cruz, Nuno F.; Ellaway, Louise; Hamilton-Jones, Imogen; Heeckt, Catarina; Rogers, Ben |
| Abstract: | This new report, led by LSE Cities and developed in partnership with Bloomberg Philanthropies and Eurocities, is based on a Eurocities Pulse survey of 65 European cities and seven deep-dive case studies. It maps the landscape of government innovation capacity in Europe’s cities, and asks what’s working, what can cities learn from each other, and where they need more support to meet the challenges of the 21st century through city government innovation. Cities across Europe, like those around the world, are grappling with unprecedented challenges – whether it’s addressing the climate crisis, managing disruptive technologies, fostering more inclusive economies, or supporting rapidly ageing populations. The scale and urgency of these challenges mean cities are confronted, as perhaps never before, with the need to innovate. Public sector innovation – from mission-driven policies to citizens’ assemblies or new cross-sector leadership roles – is increasingly being recognised as a necessity rather than a ‘nice-to-have’. But innovation in city governments does not happen by magic. City governments must build up their innovation muscles – their capacity to generate new ideas, test them and learn the lessons. Building on work by the OECD and others, this report identifies four key components that make up a city’s capacity to innovate: leadership capabilities, organisational capabilities, analytical capabilities, partnership capabilities. This report describes how European cities are working to build their innovation capacity across these four components. |
| JEL: | N0 J50 |
| Date: | 2024–11–12 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:126115 |
| By: | Mitsch, Frieder; Hassel, Anke; Soskice, David |
| Abstract: | This paper examines Germany’s distinctive path toward the knowledge economy, emphasizing the role of regional innovation dynamics and governance, with a focus on Southern Germany’s high-innovation clusters. Unlike other advanced economies that pivoted toward high-tech services, Germany has prioritized digital advancements within its manufacturing base, creating a model driven by smart manufacturing and Industry 4.0. We argue that regional growth coalitions, formed by firms, social partners, and local governments, foster institutional configurations supporting knowledge-based and innovation-focused competition. This regionalized governance has enabled Southern Germany to capitalize on Germany’s innovation agenda, a success that other regions have struggled to replicate. By analysing multi-scalar dynamics—interactions across regional, national, and EU levels—our study expands evolutionary economic geography (EEG) and political economy literature, challenging traditional, nation-centric frameworks. Our findings highlight that cohesive regional governance can enhance national and supranational innovation strategies, underscoring the importance of regional institutions in advancing and sustaining knowledge economy innovation. |
| JEL: | O33 R11 L52 O18 |
| Date: | 2024–12–05 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:126264 |
| By: | Avendano, Rolando (Asian Development Bank); Tani, Massimiliano (University of New South Wales); Tolin, Lovely C. (Asian Development Bank) |
| Abstract: | In this paper, we examine whether, and if so how, an economy's deliberate policy choices of regional cooperation and integration influence underlying determinants of economic growth. Building on models of growth and innovation, we analyze the role of regional integration on labor productivity and firms' probability to innovate using data from a panel of 170 economies and 60, 000 firms over a period of two decades. Our results suggest that regionalism, as captured by metrics of regional cooperation and integration, can positively contribute to labor productivity and innovation, in addition to known factors of production. |
| Keywords: | regional integration, productivity, innovation, Asia |
| JEL: | F02 F15 O4 O30 |
| Date: | 2024–12 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17495 |
| By: | Berlingieri, Giuseppe; Calligaris, Sara; Criscuolo, Chiara; Verlhac, Rudy |
| Abstract: | Using a unique microaggregated data set on firm-level productivity in 13 countries from 1995 to 2014, this article provides new evidence on technology- and knowledge-diffusion barriers for laggard firms. We show that, although the least productive firms benefit from a catch-up effect, their speed of catchup is lower in digital- and skill-intensive industries. This is especially true in countries with high skill mismatch, high financing frictions, and low absorptive capacity. These barriers to diffusion, combined with the rising importance of tacit knowledge and intangibles, could help explain the productivity growth slowdown observed in the last decades. |
| JEL: | D24 O33 L25 O47 |
| Date: | 2024–11–19 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:126229 |