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on Technology and Industrial Dynamics |
|
Issue of 2013‒12‒15
ten papers chosen by Fulvio Castellacci Norwegian Institute of International Affairs (NUPI) |
| By: | Dale W. Jorgenson; Marcel P. Timmer |
| Abstract: | We provide new evidence on patterns of structural change in advanced economies, reconsidering the stylised facts put forward by Kaldor (1963), Kuznets (1971), and Maddison (1980). Since 1980, the services sector has overwhelmingly predominated in the economic activity of the European Union, Japan, and the US, but there is substantial heterogeneity among services. Personal, finance, and business services have low productivity growth and increasing shares in employment and GDP. By contrast, shares of distribution services are constant, and productivity growth is rapid. We find that the labour share in value-added is declining, while the use of ICT capital and skilled labour is increasing in all sectors and regions. |
| URL: | http://d.repec.org/n?u=RePEc:qsh:wpaper:13525&r=tid |
| By: | Marc Melitz; Stephen Redding |
| Abstract: | We examine how firm heterogeneity influences aggregate welfare through endogenous firm selection. We consider a homogeneous firm model that is a special case of a heterogeneous firm model with a degenerate productivity distribution. Keeping all structural parameters besides the productivity distribution the same, we show that the two models have different aggregate welfare implications, with larger welfare gains from reductions in trade costs in the heterogeneous firm model. Calibrating parameters to key U.S. aggregate and firm statistics, we find these differences in aggregate welfare to be quantitatively important (up to a few percentage points of GDP). Under the assumption of a Pareto productivity distribution, the two models can be calibrated to the same observed trade share, trade elasticity with respect to variable trade costs, and hence welfare gains from trade (as shown by Arkolakis, Costinot and Rodriguez-Clare, 2012); but this requires assuming different elasticities of substitution between varieties and different fixed and variable trade costs across the two models. |
| Date: | 2013–01 |
| URL: | http://d.repec.org/n?u=RePEc:qsh:wpaper:65406&r=tid |
| By: | Akcigit, Ufuk (University of Pennsylvania and NBER); Kerr, William R. (Harvard University and NBER) |
| Abstract: | We study how exploration versus exploitation innovations impact economic growth through a tractable endogenous growth framework that contains multiple innovation sizes, multi-product firms, and entry/exit. Firms invest in exploration R&D to acquire new product lines and exploitation R&D to improve their existing product lines. We model and show empirically that exploration R&D does not scale as strongly with firm size as exploitation R&D. The resulting framework conforms to many regularities regarding innovation and growth differences across the firm size distribution. We also incorporate patent citations into our theoretical framework. The framework generates a simple test using patent citations that indicates that entrants and small firms have relatively higher growth spillover effects. |
| Keywords: | endogenous growth; innovation; exploration; exploitation; research and development; patents; citations; scientists; entrepreneurs |
| JEL: | L16 O31 O33 O41 |
| Date: | 2013–11–22 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:bofrdp:2013_028&r=tid |
| By: | Ioannis Bournakis; Sushanta Mallick; David Kernohan; Dimitris A.Tsouknidis |
| Abstract: | This paper examines the direct effects of corporate tax on firm productivity along with the interaction effects of tax policy and R&D activity on productivity at firm level for over 13,062 firms during 2004-2011. Our main findings are first, that there is evidence for productivity convergence and we find that there is a positive robust relationship between R&D and firm productivity, whereas tax policy has a negative distortionary effect on TFP. Second, firms with greater export orientation do not seem to achieve much improvement in productivity, whereas the favourable productivity effect in the case of R&D-based firms suggests that if there are tax incentives in place for R&D type activity, it can promote innovation and drive productivity convergence (lagging firms closing the technology gap with those at the frontier), particularly so when there is a continued decline in overall economic activity. The results also show a significant non-linear effect of tax rate on firm-level productivity, identifying an inverse U-shaped relationship |
| Keywords: | Total Factor Productivity, Catch-Up, Effective Tax Rate, Firm-level Productivity Convergence, UK. |
| JEL: | O3 O4 |
| Date: | 2013–11 |
| URL: | http://d.repec.org/n?u=RePEc:cgs:wpaper:45&r=tid |
| By: | Marc Melitz; Thierry Mayer; Gianmarco I.P. Ottaviano |
| Abstract: | We build a theoretical model of multi-product firms that highlights how competition across market destinations affects both a firm's exported product range and product mix. We show how tougher competition in an export market induces a firm to skew its export sales towards its best performing products. We find very strong confirmation of this competitive effect for French exporters across export market destinations. Theoretically, this within firm change in product mix driven by the trading environment has important repercussions on firm productivity. A calibrated fit to our theoretical model reveals that these productivity effects are potentially quite large. |
| Date: | 2013–01 |
| URL: | http://d.repec.org/n?u=RePEc:qsh:wpaper:64736&r=tid |
| By: | Simeon Djankov; Rafael LaPorta; Florencio Lopez-de-Silanes; Andrei Shleifer |
| Abstract: | We present new data on the regulation of entry of start-up firms in 85 countries. The data cover the number of procedures, official time, and official cost that a start-up must bear before it can operate legally. The official costs of entry are extremely high in most countries. Countries with heavier regulation of entry have higher corruption and larger unofficial economies, but not better quality of public or private goods. Countries with more democratic and limited governments have lighter regulation of entry. The evidence is inconsistent with public interest theories of regulation, but supports the public choice view that entry regulation benefits politicians and bureaucrats. |
| URL: | http://d.repec.org/n?u=RePEc:qsh:wpaper:19462&r=tid |
| By: | Marit E. Klemetsen; Brita Bye; Arvid Raknerud (Statistics Norway) |
| Abstract: | This paper provides new evidence on the role of non-market based (“command-and-control”) regulations in relation to innovations in environmental technologies. While pricing is generally considered the first-best policy instrument, non-market regulations, such as technology standards and non-tradable emission quotas, are common when a regulator faces multiple emission types and targets, heterogeneous recipients, or uncertainty with regard to marginal damages. Knowing whether these regulations spur or hinder innovation is of great importance to environmental policy. Using a unique Norwegian panel data set that includes information about the type and number of patent applications, technology standards, non-tradable emission quotas, and a large number of control variables for almost all large and medium-sized Norwegian incorporated firms, we are able to conduct a comprehensive study of the effect of non-market based regulations on environmental patenting. Unlike previous studies that are typically conducted at the industry level, we are able to take firm heterogeneiry into account, and thereby reduce the common problem of omitted variable bias in our analysis. We empirically identify strong and significant effects on innovations from implicit regulatory costs associated with the threat that a firm will be sanctioned for violating an emission permit. |
| Keywords: | Command-and-control regulations; Technology standards; Non-tradable emission quotas; Patents; Innovation; Environmental technologies; Random effects ordered probit model. |
| JEL: | C23 O34 Q52 Q53 Q55 Q58 |
| Date: | 2013–09 |
| URL: | http://d.repec.org/n?u=RePEc:ssb:dispap:754&r=tid |
| By: | Elizabeth J. Altman (Harvard Business School); Frank Nagle (Harvard Business School); Michael L. Tushman (Harvard Business School, Organizational Behavior Unit) |
| Abstract: | Innovation has traditionally taken place within an organization's boundaries and/or with selected partners. This Chandlerian approach to innovation has been rooted in transaction costs, organizational boundaries, and information processing challenges associated with distant search. Information processing, storage, and communication costs have long been an important constraint on innovation and a reason for innovative activities to take place inside the boundaries of an organization. However, exponential technological progress has led to a dramatic decrease in information constraints. In a range of contexts, information costs approach zero. In this chapter, we discuss how sharply reduced information costs enable organizations to engage with communities of developers, professionals, and users for core innovative activities, frequently through platform-based businesses and ecosystems and by incorporating user innovation. We then examine how this ease of external engagement impacts the organization and its strategic activities. Specifically, we consider how this shift in information processing costs affects organization boundaries, business models, interdependence, leadership, identity, search, and intellectual property. We suggest that much of the received wisdom in these areas of organization theory requires revisiting. We then discuss the implications for an organization's management of innovation and conclude with research opportunities. |
| Keywords: | Managing Innovation, Information Costs, Information Constraints, Communities, Organization Boundaries, Technological Progress, Platforms and Ecosystems, User Innovation |
| Date: | 2013–11 |
| URL: | http://d.repec.org/n?u=RePEc:hbs:wpaper:14-043&r=tid |
| By: | Viral V. Acharya; Zhaoxia Xu |
| Abstract: | This paper examines the relationship between innovation and firms' dependence on external capital by analyzing the innovation activities of privately-held and publicly-traded firms. We find that public firms in external finance dependent industries generate patents of higher quantity, quality, and novelty compared to their private counterparts, while public firms in internal finance dependent industries do not have a significantly better innovation profile than matched private firms. The results are robust to various empirical strategies that address selection bias. The findings suggest that public listing is beneficial to the innovation of firms in industries with a greater need for external capital. |
| JEL: | G31 G32 O16 O30 |
| Date: | 2013–12 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:19708&r=tid |
| By: | Fleisher, Belton M. (Ohio State University); McGuire, William H. (University of Washington Tacoma); Smith, Adam Nicholas (Ohio State University); Zhou, Mi (Agricultural Bank of China) |
| Abstract: | Intangible knowledge capital (IKC) – technology produced by workers but not embodied in them – can offset the "middle income trap" as China exhausts the benefits of international technology transfer. IKC is productivity-enhancing among Chinese enterprises – more so in domestically owned than in foreign invested enterprises. Consistent with other research, we find that China's IKC generates patents in China, but fewer than in major industrialized economies. Among domestically owned enterprises, IKC growth has flowed more toward higher-tech, export-oriented industries, while among foreign invested enterprises, it has been oriented more toward domestic sales. |
| Keywords: | intellectual capital, technology, economic growth, intellectual property, Asia, China |
| JEL: | O31 O33 O34 O43 P33 |
| Date: | 2013–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp7798&r=tid |