nep-knm New Economics Papers
on Knowledge Management and Knowledge Economy
Issue of 2023‒02‒13
five papers chosen by
Laura Nicola-Gavrila
Centrul European de Studii Manageriale în Administrarea Afacerilor

  1. Structural change within versus across firms: evidence from the United States By Ding, Xiang; Fort, Teresa C.; Redding, Stephen J.; Schott, Peter K.
  2. Knowledge Networks and their Implications for the Growth of Industrial Innovation Clusters By Kim, Jisoo; Byeon, Chang-Uk
  3. Air Pollution and Firm-Level Human Capital, Knowledge and Innovation By Tiago Cavalcanti; Kamiar Mohaddes; Hongyu Nian; Haitao Yin
  4. The research university, invention and industry: evidence from German history By Dittmar, Jeremiah; Meisenzahl, Ralf R.
  5. Knowledge, Interest Rates, and Asset Price Bubbles By Daniel Graydon Stephenson

  1. By: Ding, Xiang; Fort, Teresa C.; Redding, Stephen J.; Schott, Peter K.
    Abstract: We document the role of intangible capital in manufacturing firms' substantial contribution to non-manufacturing employment growth from 1977-2019. Exploiting data on firms' "auxiliary" establishments, we develop a novel measure of proprietary in-house knowledge and show that it is associated with increased growth and industry switching. We rationalize this reallocation in a model where firms combine physical and knowledge inputs as complements, and where producing the latter in-house confers a sector-neutral productivity advantage facilitating within-firm structural transformation. Consistent with the model, manufacturing firms with auxiliary employment pivot towards services in response to a plausibly exogenous decline in their physical input prices.
    Keywords: structural transformation; professional services; intangible knowledge; economic growth
    JEL: D24 L16 O47
    Date: 2022–06–01
  2. By: Kim, Jisoo (Korea Institute for Industrial Economics and Trade); Byeon, Chang-Uk (Korea Institute for Industrial Economics and Trade)
    Abstract: A cluster is a geographic concentration of interconnected companies and associated institutions in a particular field. It is widely accepted that clusters generate better economic performance than simple aggregations of companies, as mutual influence between clustered firms makes knowledge sharing and diffusion much easier. In this process, the novelty and diversity of accumulated knowledge is an important source of sustainable innovation and growth for the cluster. The more diversified the combined knowledge, the greater the scope and possibility of new knowledge creation. This study focuses on the relationship between cluster growth, knowledge heterogeneity and knowledge networks. First, we measure the degree of knowledge heterogeneity for each regional cluster, and verify the relationship between cluster growth and heterogeneity through empirical analysis. By analyzing this relationship for each life-cycle of a cluster, we place particular emphasis on understanding the development factor of the cluster. Second, we investigate the role of knowledge networks in cluster evolution by identifying the structural characteristics of networks. The structural characteristics cover the scope, strength, and closeness of the relationships among the network members as well as a quantitative scale. This approach will provide meaningful information in seeking cluster growth policies in terms of the formation and development of knowledge relations.
    Keywords: regional clusters; knowledge heterogeneity; cluster growth
    JEL: O32 O38 R58
    Date: 2023–01–08
  3. By: Tiago Cavalcanti; Kamiar Mohaddes; Hongyu Nian; Haitao Yin
    Abstract: This paper investigates the long-run effects of prolonged air pollution on firm-level human capital, knowledge and innovation composition. Using a novel firm-level dataset covering almost all industrial firms engaged in science and technology activities in China, and employing a regression discontinuity design, we show that prolonged pollution significantly diminishes both the quantity and the quality of human capital at the firm level. More specifically, we show that air pollution affects firm-level human capital composition by reducing the share of employees with a PhD degree and master’s degree, but instead increasing the share of employees with bachelor’s degree. Moreover, the difference in the composition of human capital materially change the knowledge and innovation structure of the firms, with our estimates showing that pollution decreases innovations that demand a high level of creativity, such as publications and inventions, while increasing innovations with a relatively low level of creativity, such as design patents. Quantitatively, on the intensive margin, one μg/m3 increase in the annual average PM2.5 concentration leads to a 0.188 loss in the number of innovations per R&D employee. Overall, we show that air pollution has created a gap in human capital, knowledge, and innovation between firms in the north and south of China, highlighting the importance of environmental quality as a significant factor for productivity and welfare.
    Keywords: Pollution, human capital, knowledge, innovation and China
    JEL: O15 O30 O44 Q51 Q56
    Date: 2023–01
  4. By: Dittmar, Jeremiah; Meisenzahl, Ralf R.
    Abstract: We examine the role of universities in knowledge production and industrial change using historical evidence. Political shocks led to a profound pro-science shift in German universities around 1800. To study the consequences, we construct novel microdata. We find that invention and manufacturing developed similarly in cities closer to and farther from universities in the 1700s and shifted towards universities and accelerated in the early 1800s. The shift in manufacturing was strongest in new and high knowledge industries. After 1800, the adoption of mechanized technology and the number and share of firms winning international awards for innovation were higher near universities.
    Keywords: industrialization; invention; universities; cities
    JEL: O14 O18 O30 N13 R10
    Date: 2022–06–30
  5. By: Daniel Graydon Stephenson (Department of Economics, VCU School of Business)
    Abstract: An outcome is said to be rationalizable if it is consistent with the assumption that agents possess common knowledge of rationality. We show that shorter investment horizons and lower interest rates produce larger larger deviations from the unique rationalizable price path in continuous-time asset markets. If investors possess common knowledge of rationality, prices converge on fundamentals as quickly as possible. Conversely, if investors possess only finite order knowledge of rational- ity, prices exhibit bubbles and crashes that deviate from the rational- izable price path. Shorter investment horizons and lower interest rates are shown to amplify bubbles and crashes.
    JEL: C73 D80 D84 E30

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