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on Innovation |
| By: | Teresa Fort; Nathan Goldschlag; Jack Liang; Peter K. Schott; Nikolas Zolas |
| Abstract: | Relatively flat US productivity growth versus rising R&D expenditures is often interpreted as evidence that ideas are getting harder to find. We build a new 45-year panel tracking the universe of US firms' patenting to investigate the micro underpinnings of this conclusion, separately examining the relationships between research inputs and ideas (patents) versus ideas and growth. We find that average patents per R&D input are increasing, the elasticity of patents to R&D inputs is flat or rising, and there is not systematic evidence of a secular decline in patenting after controlling for research inputs. We then document a positive, significant, and fairly steady relationship between firms' patent and labor productivity growth rates. Average firm growth after controlling for patent growth, however, declines. Together, these results suggest that firms' innovative efforts play a key role in sustaining growth that has not diminished over the last four decades. |
| Keywords: | innovation, productivity, R&D, patents, firm growth |
| JEL: | O31 O32 O33 O47 D24 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12652 |
| By: | Liang, Yuqi; Meyerhoff-Liang, Jan |
| Abstract: | Innovation research frequently relies on patent data to study technological change, yet empirical coverage of cities in the Global South remains limited. Sequence analysis has gained increasing attention as a method for analysing categorical trajectories in social sciences, but its application to regional innovation studies is constrained by the lack of sequence-ready urban datasets. Moreover, integration of sequence analysis with network analysis is underexplored, despite its potential to jointly capture relational structures and trajectory patterns in innovation processes. This paper introduces a database of sequential patent data for the innovation trajectories of 4, 125 Global South cities. Derived from existing geocoded patent data, the database includes general and technology-specific datasets (computing, environmental technology, and medicine), each available in sequence, network, sequence–network, and panel formats. Spanning from 1980 to 2014 and covering cities from seven countries (Brazil, Chile, China, India, Mexico, South Africa, and Turkey), the database supports analyses of innovation dynamics and helps increase the representation of Global South cities in economic geography, development studies and innovation research. |
| Date: | 2026–05–05 |
| URL: | https://d.repec.org/n?u=RePEc:osf:socarx:9w3ec_v1 |
| By: | Cristelli, Gabriele; Lissoni, Francesco |
| Abstract: | We study the innovation effects of the Agreement on the Free Movement of Persons, signed by Switzerland and the European Union in 1999. We exploit a quasi-experimental setting created by Switzerland’s implementation of the treaty, which initially eased entry restrictions only for commuters from neighboring countries, thereby inducing a large inflow of “cross-border inventors” in regions close to the border. We find that the treaty increased patenting in such regions relative to comparable ones farther away from the border. We find no evidence indicating the displacement of native inventors or a reduction in the patenting activity of Switzerland’s neighboring countries. We also find that incumbent inventors in regions next to the border increased their productivity, thanks to patents in collaboration with cross-border inventors. We provide evidence suggesting that cross-border inventors contributed to Swiss patenting by enabling R&D laboratories to enlarge, albeit without increasing the productivity of local peers outside direct collaborations. |
| Keywords: | immigration; innovation; patents; inventors; free movement of persons |
| JEL: | F22 J61 O31 |
| Date: | 2026–04–10 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:137441 |
| By: | Maria Alsina-Pujols; Isabel Hovdahl |
| Abstract: | We study how complementarity reshapes innovation incentives and the effectiveness of policies aimed at directing technological transitions. By incorporating energy storage into a macro-climate model, we show that when this enabling technology lags behind renewables, advances in renewable technology can paradoxically reduce incentives for clean innovation. We analytically characterize this novel indirect path dependency effect, which provides a new explanation for the post-2010 collapse in renewable patenting. Calibrated to the U.S. economy, we find that omitting storage overestimates climate policy effectiveness, optimal policy should prioritize storage over renewables, and halving the storage productivity gap increases annual welfare by 1%. |
| Keywords: | directed technical change, energy storage, climate policy, path dependency, energy transition |
| JEL: | O33 O44 Q43 Q48 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12664 |
| By: | Daiwei Chen; Pierre-Alexandre Balland |
| Abstract: | China’s high-speed rail (HSR) network, initiated in 2008, now covers nearly all regionsof the country. This paper analyzes the effect of HSR connection on inter-city scientific collaboration and examines whether this e!ect varies systematically with the complexity of scientific fields. Combining the universe of HSR openings between 2008 and 2020 with OpenAlex publication records, we construct a panel spanning 33, 793 Chinese city pairs. Using a staggered difference-in-differences estimator, we find that HSR increases co-publications among city-pairs with existing collaborative ties by 35.2 percent at the city-pair level. Disaggregating across twenty scientific fields, we show that this effect is quite heterogeneous. Field-level treatment e!ects range from 19.8 to 45.1 percent, and their magnitude is positively and significantly correlated with average team size -a proxy of the fields’ complexity. These results are consistent with the view that face-to-face interaction is still important for knowledge production requiring deep divisions of cognitive labour, and they carry direct implications for the design of transportation and innovation policy. |
| Keywords: | High-Speed Rail (HSR), Scientific Collaboration, Knowledge Complexity, Face-to-Face Interaction |
| JEL: | O33 O38 R11 R58 |
| Date: | 2026–05 |
| URL: | https://d.repec.org/n?u=RePEc:egu:wpaper:2605 |
| By: | Gábor Kátay; Pálma Mosberger; Francesco Tucci |
| Abstract: | The paper evaluates the impact of the European Commission’s Seventh Framework Pro-gramme (FP7) grants on profit-oriented firms’ post-treatment performance. Using a robust quasi-experimental design and a dataset covering applicants from 46 countries, we find that FP7 grants increase firms’ sales and labour productivity by about 18%. However, there is no significant impact on employment levels, pointing to potential growth barriers that prevent firms from scaling production despite improved productivity. The effectiveness of these grants varies significantly based on factors such as financial constraints, project risk profiles, market structure, and the innovation environment. Smaller, less productive firms with tighter financial constraints in technology-intensive sectors operating in concentrated markets and favourable innovation environments, particularly those undertaking longer and riskier projects, tend to benefit more. |
| JEL: | C31 G28 H57 O31 |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:euf:dispap:238 |
| By: | Otaviano Canuto |
| Abstract: | The U.S.–China technological rivalry has become a central axis of global economic and geopolitical competition. While the United States continues to lead in frontier innovation—most notably in advanced semiconductors and artificial intelligence (AI)—China has consolidated strengths in large-scale implementation, manufacturing capacity, and control over critical segments of global supply chains. These advantages are especially visible in clean energy technologies and in the processing and refinement of critical minerals and rare earths. The rivalry now unfolds across multiple frontlines, extending beyond innovation itself to encompass infrastructure, energy availability, and technology deployment across the New South. Its outcome will depend less on breakthrough inventions alone than on each country’s capacity to integrate technology, industrial policy, and energy systems into cohesive national strategies. |
| Date: | 2026–02 |
| URL: | https://d.repec.org/n?u=RePEc:ocp:pbcoen:pb07_26 |
| By: | Giordano MION (ESSEC Business School); Aminata SISSOKO (European Commission) |
| Abstract: | In this paper, we have conducted an econometric analysis of the impacts of the Accelerator scheme of the European Innovation Council (EIC), with a particular focus on the EU Blended Finance providing for the first time grant and direct equity - quasi-equity investment, by means of a difference-in-difference framework combined with propensity score matching and using firms who obtained a Seal of Excellence as control group. Our analysis highlights a number of significant impacts of the EIC Accelerator on firm performance measures like sales, capital stock, wage bill, average wage, employment and value of deals. The analysis also highlights the payment of the EIC direct equity investment as a key root of heterogeneous impacts on firm production factors and output and the lack of a differential impact for projects related to health. |
| Keywords: | company growth, direct investment, EU investment, EIC fund, innovation, research and development, start-up |
| JEL: | O31 O33 L26 M13 G24 O38 |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:eug:wpaper:ki-01-26-025-en-n |
| By: | Juraj Å imÄ isko; Å tefan Rehák |
| Abstract: | Patenting is strongly concentrated in cities, and innovation-related outputs tend to scale superlinearly with urban population. Yet the interpretation of this relationship remains contested. This paper examines whether the superlinear scaling of patenting persists once the endogeneity of city size is addressed. Using across-section of 362 European Functional Urban Areas, we estimate the elasticity of patent output with respect to population using ordinary least squares and two-stage least squares. Contemporary population is instrumented by terrain ruggedness and historical rural population in 1770. The results confirm that patenting scales super-linearly with city size, and that instrumental-variable estimates are substantially larger than the corresponding OLS estimates. These findings suggest that the urban scaling of patenting in Europe is consistent with a positive e!ect of urban scaleon innovation. The paper contributes to the urban scaling literature by providing instrumental-variable evidence for the European context. |
| Date: | 2026–05 |
| URL: | https://d.repec.org/n?u=RePEc:egu:wpaper:2604 |
| By: | Wulong Gu; Alla Lileeva; Daniel Trefler |
| Abstract: | Conventional wisdom holds that offshoring intermediates to China stimulates innovation. This is not entirely compelling. On the one hand, (a) offshoring lowers marginal costs and expands sales, thereby increasing the returns to innovation, especially for large firms. On the other hand, (b) offshoring low-quality intermediates reduces the costs of older-generation products, thereby reducing the returns to innovating into newer generations. We examine these two opposing forces over 2002-2011 for 6, 024 Canadian firms. Our empirical strategy regresses measures of innovation, such as R&D, on imports of intermediate inputs. To address endogeneity, we construct a model-consistent shift-share instrument whose shocks are the often-dramatic improvements in the quality of HS6 Chinese intermediate inputs. We find that greater offshoring reduced R&D spending over 2002-2011 by 15% as (1) firms engaged in R&D in 2002 reduced their expenditures, and (2) firms not initially engaged in R&D were discouraged from starting up new R&D projects. Our model explains these findings: Rising quality of Chinese intermediates is a positive supply shock (rather than a negative China shock) that raises profits for all offshorers, raises innovation for the largest offshorers (channel a above), and lowers innovation for all other offshorers (channel b). These predictions are confirmed in the data. |
| JEL: | F1 F14 O3 |
| Date: | 2026–05 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:35167 |
| By: | Nicola Cortinovis; ; |
| Abstract: | Crowdfunding (CF) has emerged as a novel source of entrepreneurial finance, yet its role in shaping regional industrial dynamics remains poorly understood. Adopting an evolutionary economic geography perspective and exploiting a newly developed database, this paper examines the relationship between crowdfunding activity and the emergence of new local industrial specializations. The analysis shows that industries receiving funds through CF are more likely to become part of local specialization patterns, especially when they are related to the existing industrial structure. Moreover, these associations are stronger in counties characterized by higher levels of credit insecurity. |
| Keywords: | Crowdfunding, industrial diversification, relatedness, credit insecurity, US |
| JEL: | O14 O31 |
| Date: | 2026–05 |
| URL: | https://d.repec.org/n?u=RePEc:egu:wpaper:2607 |
| By: | Filippo Boeri; Olmo Silva |
| Abstract: | In the late nineteenth century, Alfred Marshall identified three micro-foundations of agglomeration economies: labour pooling (LP), input sharing (IO), and knowledge spillovers (KS). An extensive literature has tested the existence of the three Marshallian forces in modern economies. However, there is limited quantitative evidence on the existence of such forces at the times of Marshall. To shed light on these issues, we exploit novel geo-localised census-level data on entrepreneurs and business proprietors retrieved from six consecutive UK Censuses (1851-1911), coupled with census-level workers' data, information on historical patents and historical IO tables. We estimate co-agglomeration models to assess the relative importance of LP, IO, and KS in explaining industrial clustering during Britain's industrialisation. Our results point to a strong role for KS and LP, but only limited evidence for IO. We also show that the strength of the three forces increased over time, and that there is considerable heterogeneity across industries with different characteristics. |
| Keywords: | agglomeration economies, Alfred Marshall, economic history, historical censuses |
| Date: | 2026–04–30 |
| URL: | https://d.repec.org/n?u=RePEc:cep:cepdps:dp2174 |
| By: | Compano Ramon (European Commission - JRC); Johanyak Csaba; Testa Giuseppina; Zhen Ni; Testa Giuseppina; Tuebke Alexander (European Commission - JRC) |
| Abstract: | This paper examines whether, and under which conditions, regional entrepreneurial ecosystems mitigate spatial frictions in cross-regional venture capital (VC) investments. Using a dyadic panel of VC flows across 267 European NUTS-2 regions over 2008-2022, we estimate gravity-style regressions with high-dimensional fixed effects, distinguishing investments by stage and investor origin. Our results show that spatial frictions, particularly geographic and economic distance, remain important determinants of VC allocation. At the same time, regions with stronger entrepreneurial ecosystems attract higher VC inflows and exhibit lower sensitivity to institutional and structural differences. Differences across investor origins suggest that ecosystem legibility is most valuable when institutional uncertainty is high, such as for cross-border investors. |
| Date: | 2026–04 |
| URL: | https://d.repec.org/n?u=RePEc:ipt:wpaper:202601 |
| By: | Abendroth Dias Kulani (European Commission - JRC); Soguero Escuer Jorge (European Commission - JRC); De Prato Giuditta (European Commission - JRC) |
| Abstract: | Virtual worlds are reshaping the boundaries of human interaction and reality and impacting production process and business models. This report provides a comprehensive analysis of the global and European Union (EU) virtual worlds ecosystem, mapping over 88, 000 activities across business, innovation, and research domains led by 68, 000 players, including firms, research institutions, and government organisations. The EU is the global leader in virtual world related research publications. The EU’s strengths in foundational research paired with strategies to accelerate innovation-to-market pipelines could foster cross-sector collaboration and address regional fragmentation. Globally, venture capital funding into virtual worlds reveals stark disparities. The US predictably dominates the landscape with over 9 billion invested in virtual worlds. China ranks second worldwide with more than 5.8 billion invested. While the EU accounts for 16% of the global share of virtual worlds deals, ahead of China (9%) and second to only the US (40%), it comes in fourth behind the UK in terms of the total amount invested. Public funding and cross-border ownership patterns highlight the EU’s growing role as both an investor and recipient of foreign capital. The report identifies significant concentrations of virtual world activities across industrial ecosystems, with Creative Cultural Industries, Tourism, and Retail leading adoption both in the EU and worldwide. However, critical industries like Healthcare, Aerospace & Defence, and Energy-Intensive Industries remain underutilised with opportunities for EU expansion, despite research on their potential impact across these industries. The report also presents the matrix of key enabling technologies like Extended Reality (XR), AI and IoT that comprise global activity in virtual worlds. By leveraging its research capabilities and fostering strategic alliances, the EU can strengthen its global competitiveness to shape the next generation of virtual worlds. |
| Date: | 2026–04 |
| URL: | https://d.repec.org/n?u=RePEc:ipt:iptwpa:jrc146046 |
| By: | Lillian Derr; Mark A. Wynne |
| Abstract: | Artificial intelligence offers the potential to improve people’s living standards. Such advances can be approximated by changes in GDP per capita over time. Using that common measure, AI could enhance longstanding productivity gains or, alternatively, drastically alter the economy in relatively short order. |
| Keywords: | artificial intelligence (AI); innovation; productivity; technology |
| Date: | 2025–06–24 |
| URL: | https://d.repec.org/n?u=RePEc:fip:d00001:101231 |
| By: | Rodriguez Müller Paula (European Commission - JRC); André Antoine-alexandre; Tangi Luca (European Commission - JRC); Jugel Laura; Schade Sven (European Commission - JRC); Sanchez Ignacio (European Commission - JRC); De Longueville Bertrand (European Commission - JRC); Gomez Emilia (European Commission - JRC); Fernandez Llorca David (European Commission - JRC) |
| Abstract: | Today, the EU's approach has reached a consolidated status, characterised by a comprehensive governance framework and a set of concrete instruments covering regulation, capability-building and AI adoption. This brief traces the path that led here, and the balance between fostering excellence and ensuring trust that has shaped it throughout. Through a chronological lens, it identifies three main phases – exploration, transition, and maturation - that together explain the EU's approach to AI policy and the EU responses to emerging and disruptive innovations. |
| Date: | 2026–04 |
| URL: | https://d.repec.org/n?u=RePEc:ipt:iptwpa:jrc146313 |
| By: | Domnick Clemens (European Commission - JRC); Compano Ramon (European Commission - JRC); Ponferrada Víctor (European Commission - JRC); Bodgan Tofan; Colombo Massimo; Quas Anita |
| Abstract: | ‣ Relocation of European startups raises concerns about weakening the EU’s innovation ecosystem. A new JRC report provides new evidence on the magnitude and type of startups relocation among European venture capital (VC) backed firms. ‣ The relocation rate of European VC-backed startups is in the order of 3.3% - 4.3%. This number drops down to 0.3% - 0.5% for comparable non-VC backed startups. ‣ Relocation patterns i) differ among startups’ home countries, ii) are higher for asset-light than for manufacturing firms, and iii) happen often in the first years of a startup’s life. ‣ The United States is the dominant destination for relocating startups, in particular the more developed entrepreneurial ecosystems such as San Francisco, Boston, and New York. ‣ Most migrations are not ‘complete’ relocations: 97% of the VC-backed companies that relocate are doing it only partially, i.e., they keep operations in the home country. Only about three-quarters of the CEOs move physically to the new destination when startups relocate. ‣ Startup relocation can be beneficial or detrimental for the country of origin, depending on the context of the firm and its ecosystem. For instance, a ‘virtual’ relocation to tap into VC markets abroad might be positive for firm growth, while losing all activities would be detrimental. Polices ought to accompany startups in their drive to expand to foreign markets, while aiming to retain high-value activities (e.g., R&D) in Europe. These foreign ties will enable positive spillovers to the ecosystem of origin. ‣ To reduce the probability of losing high-value activities framework conditions need to improve. Examples include facilitating access to adequate finance, the supply of skilled human resources, decreasing regulatory complexity, and completing the EU Single Market. |
| Date: | 2026–04 |
| URL: | https://d.repec.org/n?u=RePEc:ipt:iptwpa:jrc146239 |