nep-tid New Economics Papers
on Technology and Industrial Dynamics
Issue of 2013‒11‒02
fifteen papers chosen by
Fulvio Castellacci
Norwegian Institute of International Affairs (NUPI)

  1. US Employment Deindustrialization: Insights from History and the International Experience By Robert Z. Lawrence; Lawrence Edwards
  2. Contracting Over the Disclosure of Scientific Knowledge: Intellectual Property and Academic Publication By Joshua S. Gans; Fiona E. Murray; Scott Stern
  3. Succeeding in Innovation: Key Insights on the Role of R&D and Technological Acquisition Drawn from Company Data By Conte, Andrea; Vivarelli, Marco
  4. Cooperation vs. Collusion: How Essentiality Shapes Co-opetition By Rey, Patrick; Tirole, Jean
  5. Processes of firm growth and diversification: theory and evidence By Alex Coad; Christina Guenther
  6. Research into Ambidextrous R&D in Product Development New Product Development at a Precision Device Maker By Mitsuru Kodama; Tomoatsu Shibata
  7. The Skill Complementarity of Broadband Internet By Akerman, Anders; Gaarder, Ingvil; Mogstad, Magne
  8. Coordination of joint search in distributed innovation processes: Lessons from the effects of initial code release in Open Source Software development By Francesco Rullani; Francesco Zirpoli
  9. Breaking Up a Research Consortium By Niedermayer, Andras; Wu, Jianjun
  10. New Firms and New Forms of Work By Andreas Koch; Daniel Pastuh; Jochen Späth
  11. Do Incentive Systems Spur Work Motivation of Inventors in High Tech Firms ? A Group-Based Perspective By Nathalie Lazaric; Alain Raybaut
  12. Understanding demand for skylls after technological trade liberalization By Bruno Funchal; Jandir Soares Junior
  13. Merger, Product Differentiation, and Trade Policy By Cavagnac, Michel; Cheikbossian, Guillaume
  14. M&A and R&D - Asymmetric Effects on Acquirers and Targets? By Florian Szücs
  15. The influence of information sources on inter- and intra-firm diffusion: evidence from UK farming By Waters, James

  1. By: Robert Z. Lawrence (Harvard University and Peterson Institute for International Economics); Lawrence Edwards (University of Cape Town)
    Abstract: International factors, such as the dramatic increase in imports from emerging-market economies, especially China, have been widely blamed for the decline in manufacturing employment in the United States over the past decade. The authors argue, however, that far more important in causing that decline has been the slow overall growth in US employment and powerful historical forces that have affected all advanced economies: a combination of rapid productivity growth and demand that is relatively unresponsive to income growth and lower prices. To be sure, US manufacturing employment can grow in the short run. The labor content of the US manufacturing trade deficit remains significant and a vigorous US and global economic recovery could boost US manufacturing employment. Over the long run, however, absent new product innovations, or a shift in consumer preferences, the basic forces leading to declining manufacturing employment are unlikely to abate.
    Date: 2013–10
  2. By: Joshua S. Gans; Fiona E. Murray; Scott Stern
    Abstract: This paper provides a theoretical investigation of the tension over knowledge disclosure between firms and their scientific employees. While empirical research suggests that scientists exhibit a ‘taste for science,’ such open disclosures can limit a firm’s competitive advantage. To explore how this tension is resolved we focus on the strategic interaction between researchers and firms bargaining over whether (and how) knowledge will be disclosed. We evaluate four disclosure strategies: secrecy, patenting, open science (scientific publication) and patent-paper pairs providing insights into the determinants of the disclosure strategy of a firm. We find that patents and publications are complementary instruments facilitating the disclosure of knowledge and, counter-intuitively, that stronger IP protection regimes are likely to drive openness by firms.
    JEL: M55 O32 O34
    Date: 2013–10
  3. By: Conte, Andrea (European Commission); Vivarelli, Marco (Università Cattolica del Sacro Cuore)
    Abstract: This paper discusses the relationship between a company's investment in innovation and its success in introducing new product and/or process innovations. In doing so, this analysis departs from the standard approach which puts forward a homogenous R&D-based knowledge production function by introducing different types of innovation investments (R&D and technology acquisition) for different sets of companies. Using the Community Innovation Survey (CIS) dataset comprising more than 3000 Italian manufacturing companies, the econometric analysis adopts a set of techniques which allows to control for the sample selection, endogeneity and simultaneity problems which arise when dealing with CIS data. The main findings are summarised as follows: (1) beyond the acknowledged effect of R&D in increasing the probability of success of product innovation, a larger-than-expected role is played by technology acquisition in the innovation process; (2) the relative importance of R&D and technology acquisition varies significantly across different types of companies where crucial dimensions of analysis are company size and the technological domain of a sector.
    Keywords: R&D, product innovation, process innovation, embodied technical change, sample selection, SUR, community innovation survey
    JEL: O31
    Date: 2013–10
  4. By: Rey, Patrick; Tirole, Jean
    Abstract: The paper makes two related contributions. First, and in contrast with the rich body of literature on collusion with (mainly perfect) substitutes, it derives general results on the sustainability of tacit coordination for a class of nested demand functions that allows for the full range between perfect substitutes and perfect complements. Second, it studies the desirability of joint marketing alliances, an alternative to mergers. It shows that a combination of two informationfree regulatory requirements, mandated unbundling by the joint marketing entity and unfettered independent marketing by the firms, makes joint-marketing alliances always socially desirable, whether tacit coordination is feasible or not.
    Keywords: tacit collusion, cooperation, substitutes and complements, essentiality, joint marketing agreements, patent pools, independent licensing, unbundling, co-opetition.
    JEL: D43 L24 L41 O34
    Date: 2013–10–23
  5. By: Alex Coad (SPRU, University of Sussex, UK); Christina Guenther (WHU - Otto Beisheim school of Management, Germany)
    Keywords: Diversification, firm growth, Penrose, Machine tools, Growth process
    JEL: L6 L11 L20 L25
  6. By: Mitsuru Kodama; Tomoatsu Shibata
    Abstract: Through research into new product development processes at a precision device maker, this paper discusses the skilful management of knowledge boundaries that lie between various organizations, and between specialized human skills and functions that make up a project organization, and presents the ways in which new organizational capabilities are brought about for the development of new products, as exploratory activities that dynamically merge and integrated the various knowledge within a company. This paper describes some of the implications derived from analysis and observations of the new organizational forms of the company's ambidextrous R&D management which the company uses to engage in both 'uncertainty management (exploration)' and 'existing product management (exploitation),' through the partnering of its existing formal organizations and dynamic structuring of diverse multifunctional teams formed as projects spanning different specializations and capabilities.
    Date: 2013–05
  7. By: Akerman, Anders (Dept. of Economics, Stockholm University); Gaarder, Ingvil (European University Institute); Mogstad, Magne (University College London & Statistics Norway)
    Abstract: Does adoption of broadband internet in firms enhance labor productivity and increase wages? And is this technological change skill biased or factor neutral? We exploit rich Norwegian data with firm-level information on value added, factor inputs and broadband adoption to answer these questions. We estimate production functions where firms can change their technology by adopting broadband internet. A public program with limited funding rolled out broadband access points, and provides plausibly exogenous variation of broadband adoption in firms. This enables us to address endogeneity of broadband adoption and examine how it shifts the production technology and changes the productivity and labor outcomes of different types of workers. We find that broadband adoption favors skilled labor by increasing its relative productivity. The increase in productivity of skilled labor is especially large for college graduates in fields such as science, technology, engineering and business. By comparison, broadband internet is a substitute for workers without high school diploma, lowering their marginal productivity. Consistent with the estimated changes in labor productivity, wage regressions show the expansion of broadband internet improves (worsens) the labor outcomes of skilled (unskilled) workers. We explore several possible explanations for the skill bias of broadband internet. We find suggestive evidence that broadband internet complements skilled workers in executing nonroutine abstract tasks, and substitutes for unskilled workers in performing routine tasks. When we use our production function estimates to construct measures of firm level productivity, we find that broadband internet accounts for a few percent of the standard deviation in total factor productivity across firms. Taken together, our findings have important implications for the ongoing policy debate over government investment in broadband infrastructure to encourage productivity and wage growth.
    Keywords: Broadband internet; labor productivity; tasks; technological change; skill bias
    JEL: J23 J24 J31 O33
    Date: 2013–10–24
  8. By: Francesco Rullani (Dept. of Business and Management, LUISS Guido Carli Author-Name: Markus C. Becker; Strategic Organization Design Unit, University of Southern Denmark); Francesco Zirpoli (Dept. of Management, Università Ca' Foscari Venice)
    Abstract: This paper casts light on the role of initial code release for providing coordination of joint search processes, i.e., search processes that involve several agents who search together. We develop hypotheses about the role of initial code release for providing coordination, and for whether development projects remain active. We test these hypotheses on a dataset of 5703 open source software projects registered on SourceForge during a two-year period. We find that initial code release is indeed associated with improved coordination, and a higher chance that software development projects will actually release further code subsequently. We contribute to theory on coordination in joint search, common in distributed innovation settings.
    Keywords: artefact, coordination, open source, distributed innovation, innovation process, search process
    JEL: O32 O33 M21
    Date: 2013–10
  9. By: Niedermayer, Andras; Wu, Jianjun
    Abstract: Inter-firm R&D collaborations through contractual arrangements have become increasingly popular, but in many cases they are broken up without any joint discovery. We provide a rationale for the breakup date in R&D collaboration agreements. More specifically, we consider a research consortium initiated by a firm A with a firm B. B has private information about whether it is committed to the project or a free-rider. We show that under fairly general conditions, a breakup date in the contract is a (secondbest) optimal screening device for firm A to screen out free-riders. With the additional constraint of renegotiation proofness, A can only partially screen out free-riders: entry by some free-riders makes sure that A does not have an incentive to renegotiate the contract ex post. We also propose empirical strategies for identifying the three likely causes of a breakup date: adverse selection, moral hazard, and project non-viability.
    Keywords: Optimal R&D contracts; adverse selection; breakup date; R&D collaboration
    JEL: C72 D82 L20
    Date: 2013–05–14
  10. By: Andreas Koch; Daniel Pastuh; Jochen Späth
    Abstract: The present contribution examines whether and how young firms and incumbents differ with regard to selected aspects of work forms and work organization in order to assess their roles for the qualitative changes of work in industrialized countries. Conceptually, we emanate from the approach of negotiated order and we empirically ground our research upon guided interviews conducted with employers and employees in about 50 firms in four distinct industries in Germany. According to our results, new forms of work are particularly widespread in new firms. Most of the young companies in our sample practice autonomous work forms like working on one’s own responsibility and team working more frequently than incumbents, they are more prone to revert to functional flexibility (e.g. changing tasks and duties) and their working time arrangements tend to be more flexible. Altogether, firm age turns out to be an important parameter of new work forms and organization, though it is not the only one. Our results show that also the general and industry-specific framework conditions, a firm’s internal characteristics (e.g. innovation intensity, hierarchies and routines), the relevant actors (management, workforce) and particularly the coaction of these elements are important drivers shaping the overall feature of a firm.
    Keywords: Young firms, Negotiated Order, Quality of Work, Working Time, Autonomy, Work Organization, Germany, Guided Interviews
    JEL: J21 L23 L26
    Date: 2013–10
  11. By: Nathalie Lazaric (GREDEG CNRS); Alain Raybaut (GREDEG CNRS)
    Abstract: In this paper, we explore with a model the potential tensions between the incentive system of groups of inventors and knowledge diversity in a high tech firm. We show that, when all groups are rewarded and able to interact freely with their peers, extrinsic and intrinsic motives are mutually self-reinforcing, leading to crowding in effects. As a result, the level of created knowledge increases in each group, reinforcing the diversity of the firm’s knowledge base. By contrast, competitive rewards and constrained autonomy are likely to produce motivating effects in a small number of groups, limiting knowledge creation to the firm’s core competencies. In this case, the firm can suffer from crowding out effects by the other groups, leading eventually to the extinction of creation in their fields and reduced diversity in the long run. The results are illustrated with empirical findings from a case study of a French high tech firm.
    Keywords: work motivation, groups of inventors, knowledge creation, knowledge diversity
    JEL: O31 O32 L20 D83 J30
    Date: 2013–10
  12. By: Bruno Funchal (FUCAPE Business School); Jandir Soares Junior (Katholiek Universiteit Leuven)
    Abstract: This paper investigates the effects of the reduction of barriers to trade in the computer technology sector on the Brazilian labor market. We show that the adoption of computers affected labor demand in favor of non-routine tasks, which are complementary to labor, as opposed to routine ones, which are substitutes. Using the end of the non-tariff barriers in Brazil ("Informatics Law") as an instrument, and relying on detailed information on sectors and occupations, we found evidence that industries and occupations intensive in computer use displayed greater shifts toward non-routine and away from routine tasks for most educational group and genders.
    Keywords: Labor demand; skills; trade and labor market interactions; technological change.
    Date: 2013–10
  13. By: Cavagnac, Michel; Cheikbossian, Guillaume
    Abstract: In a two-stage game with three firms and two countries, we study the profitability of a domestic merger in the context of an international oligopoly game with differentiated products and in a strategic trade policy environment. In contrast to a completely unregulated economy, we show that the domestic merger under Cournot competition is always profitable to the host country irrespective of the degree of product differentiation. Furthermore, it is also profitable to the competing country - hosting one firm only if products are sufficiently differentiated. Under Bertrand competition the merger is always profitable to both countries independently of the product range rivalry. But in a strategic trade environment it is more profitable to the country in which the merger occurs than to the other country.
    Keywords: ,
    JEL: D43 F12 F13 L13
    Date: 2013–04
  14. By: Florian Szücs
    Abstract: We evaluate the impact of M&A activity on the growth of R&D spending and R&D intensity of 265 acquiring firms and 133 merger targets between 1990 and 2009. We use different matching techniques to construct separate control groups for acquirers and targets and use appropriate difference-in-difference estimation methods to single out the causal effect of mergers on R&D growth and intensity. We find that target firms substantially decrease their R&D efforts after a merger, while the R&D intensity of acquirers drops due to a sharp increase in sales.
    Keywords: Mergers, R&D growth, R&D intensity, propensity-score matching, difference in difference estimation
    JEL: D22 G34 O3
    Date: 2013
  15. By: Waters, James
    Abstract: We study the effect of different information sources on diffusion between and within companies. Our model of economically optimising farmers replicates results from dual process persuasion theory, and predicts that inter-firm diffusion will be primarily affected by reliable, easily accessible information while intra-firm diffusion will be influenced by technical information. The results are tested on UK farming data. Consistent with our model, information from agents, suppliers, farmers, and agricultural magazines influences inter-firm adoption, from buyers influences intra-firm adoption, and from crop consultants, academics, government, and an industry body influences both.
    Keywords: Innovation; Intra-firm diffusion; Information acquisition; Organic farming; Dual process persuasion theory
    JEL: D83 O33 Q12 Q16
    Date: 2013–10–25

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