nep-tid New Economics Papers
on Technology and Industrial Dynamics
Issue of 2014‒05‒04
five papers chosen by
Fulvio Castellacci
Norwegian Institute of International Affairs (NUPI)

  1. Structural Change and Innovation as Exit Strategies from the Middle Income Trap By Vivarelli, Marco
  2. Structural change in the economy of Nigeria: By Adeyinka, Adedeji; Salau, Sheu; Vollrath, Dietrich
  3. New Evidence on the Determinants of Industrial Specialisation By Åsa Johansson; Eduardo Olaberria
  4. The Political Economy of Labor Market Regulation with R&D By Palokangas, Tapio K.
  5. The New Empirical Economics of Management By Nicholas Bloom; Renata Lemos; Raffaella Sadun; Daniela Scur; John Van Reenen

  1. By: Vivarelli, Marco (Università Cattolica del Sacro Cuore)
    Abstract: This paper is intended to provide an updated discussion on a series of issues that the relevant literature suggests to be crucial in dealing with the challenges a middle income country may encounter in its attempts to further catch-up a higher income status. In particular, the conventional economic wisdom – ranging from the Lewis-Kuznets model to the endogenous growth approach – will be contrasted with the Schumpeterian and evolutionary views pointing to the role of capabilities and knowledge, considered as key inputs to foster economic growth. Then, attention will be turned to structural change and innovation, trying to map – using the taxonomies put forward by the innovation literature – the concrete ways through which a middle income country can engage a technological catching-up, having in mind that developing countries are deeply involved into globalized markets where domestic innovation has to be complemented by the role played by international technological transfer. Among the ways how a middle income country can foster domestic innovation and structural change in terms of sectoral diversification and product differentiation, a recent stream of literature underscores the potentials of local innovative entrepreneurship, that will also be discussed bridging entrepreneurial studies with the development literature. Finally, the possible consequences of catching-up in terms of jobs and skills will be discussed.
    Keywords: catching-up, structural change, globalization, capabilities, innovation, entrepreneurship
    JEL: O14 O33
    Date: 2014–04
  2. By: Adeyinka, Adedeji; Salau, Sheu; Vollrath, Dietrich
    Abstract: We document that structural change accounts for approximately one-fifth of the total change in labor productivity in Nigeria between 1996 and 2009. Labor moved out of the agricultural and wholesale and retail trade sectors into manufacturing, transportation and communications, business services, and general services. While structural change did occur in this period, significant gains to aggregate labor productivity are still available from further shifts of labor to higher-productivity sectors. We discuss the factors limiting structural change, which include poor agricultural productivity, insufficient infrastruc-ture to support high productivity sectors, and a lack of appropriate skills in the labor force. We calculate that the gains still available to Nigeria from structural change are equivalent to an increase in value-added of 25 percent, given the existing productivity levels of sectors in 2009.
    Keywords: structural change, Agricultural productivity, Labor productivity, sector composition,
    Date: 2013
  3. By: Åsa Johansson; Eduardo Olaberria
    Abstract: Industrial specialization has important implications for economic performance; therefore, understanding its determinants is of key policy relevance. This paper quantifies the relationship between factor endowments, policies and institutions and patterns of industrial specialisation in production using a new cross-country dataset compiled by WIOD that includes 37 OECD and non-OECD countries and 26 sectors. An advantage of this database –as compared with those used by previous studies- is that makes it possible to look at industrial specialization in terms of value added instead of gross exports, covering both services and manufactures in a panel of advanced and developing economies. The empirical methodology is based on the idea that industries vary in the conditions that they need for production, and countries differ in their ability to provide for these industry-specific requirements. We find that not only cross-country differences in factor endowments, such as capital and labour, but also differences in investment in R&D and policies or institutions, such as financial development, tariffs and taxes, and product and labour market regulation, can explain cross-country differences in industrial structure. Nouveaux résultats sur les déterminants de la spécialisation industrielle La spécialisation industrielle a des implications importantes pour les performances économiques. Il est, par conséquent, essentiel d’en comprendre les déterminants. Ce papier quantifie la relation entre les dotations en facteurs, les politiques et institutions et les modèles de spécialisation industrielle dans la production en utilisant une nouvelle base de données internationales compilée par WIOD, qui comprend 37 pays membres et non membres de l'OCDE et 26 secteurs. Un avantage de cette base de données, par rapport à celles utilisées par les études précédentes, est qu’elle permet d'analyser la spécialisation industrielle en termes de valeur ajoutée et non par la valeur des exportations brutes, et aussi qu’elle comprend les services et les produits manufacturés pour un groupe de pays avancés et émergents. La méthodologie empirique est basée sur l’idée que les industries diffèrent dans les conditions requises pour la production, et les pays diffèrent dans leur capacité à répondre à ces exigences spécifiques de l'industrie. Nous constatons que non seulement les dotations en facteurs, comme le capital et le travail, mais aussi les politiques ou les institutions, comme le développement financier, les tarifs et taxes, les investissements en R & D et la réglementation des marchés des produits et du travail, sont les principaux déterminants de la structure industrielle.
    Keywords: trade, intermediate input tariff, droits de douane sur les biens intermédiaires, échanges
    JEL: C23 O57
    Date: 2014–04–18
  4. By: Palokangas, Tapio K. (University of Helsinki)
    Abstract: In this paper, I study the political rationale for labor market regulation. Oligopolists employ raw labor and human capital (i.e. key workers) for production and R&D. There are many jurisdictions, in each of which a self-interested policy maker can regulate/deregulate the local labor market. I show that the observed tendency to labor market deregulation results from labor market policies being set up at the local level. In small jurisdictions, the fall of income due to wage increases is so large that the labor markets are deregulated. With labor market integration, jurisdictions get larger and face less competition from outside. Then, the fall of income due to wage increases is reduced and labor market regulation becomes more attractive to workers' lobbies.
    Keywords: political economy, labour market regulation, R&D, union power
    JEL: F15 J50 O40
    Date: 2014–04
  5. By: Nicholas Bloom; Renata Lemos; Raffaella Sadun; Daniela Scur; John Van Reenen
    Abstract: Over the last decade the World Management Survey (WMS) has collected firm-level management practices data across multiple sectors and countries. We developed the survey to try to explain the large and persistent TFP differences across firms and countries. This review paper discusses what has been learned empirically and theoretically from the WMS and other recent work on management practices. Our preliminary results suggest that about a quarter of cross-country and within-country TFP gaps can be accounted for by management practices. Management seems to matter both qualitatively and quantitatively. Competition, governance, human capital and informational frictions help account for the variation in management. We make some suggestions for both policy and future research.
    Keywords: Management, organization, productivity
    JEL: L2 M2 O14 O32 O33
    Date: 2014–04

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