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on Technology and Industrial Dynamics |
| By: | Venky Venkateswaran (NYU Stern School of Business); Hugo A. Hopenhayn (UCLA); Joel David (USC) |
| Abstract: | We propose a theory linking imperfect information to resource misallocation and hence to aggregate productivity and output. In our setup, firms learn from both private sources and imperfectly informative stock market prices. We devise a novel calibration strategy that uses a combination of firm-level production and stock market data to pin down the information structure in the economy. Applying this methodology to data from the US, China, and India reveals substantial losses in productivity and output due to informational frictions - even when only one factor, namely capital, is subject to the friction. Our estimates for these losses range from 5-19% for productivity and 8-28% for output in China and India, and are smaller, though still significant, in the US. Losses are substantially higher when labor decisions are also made under imperfect information. Private learning plays a significant role in mitigating uncertainty and improving aggregate outcomes; learning from financial markets contributes little, even in the US. |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:red:sed014:526&r=tid |
| By: | Ugur, Mehmet; Guidi, Francesco; Solomon, Edna; Trushin, Eshref |
| Abstract: | The volume of work on productivity effects of research and development (R&D) investment has expanded significantly following the contributions of Zvi Griliches and others to microeconometric work in late 1970s and early 1980s. This study aims to meta-analyse the research findings based on OECD firm and industry data, with a view to establish where the balance of the evidence lies and what factors may explain the variation in reported evidence. Drawing on 1,262 estimates from 64 primary studies, we report that the average effect of R&D capital on productivity and the average rate of return on R&D investment are both positive, but smaller than the summary measures reported in previous narrative reviews and meta-analysis studies. We also report that a range of moderating factors have significant effects on the variation among productivity and rates-of-return estimates reported in primary studies. Moderating factors with significant effects include: (i) measurement of inputs and output; (ii) model specifications; (iii) estimation methods; (iv) levels of analysis; (v) countries covered; and (vi) publication type among others. |
| Keywords: | Research and Development (R&D), Innovation, Productivity, Firm, Industry, OECD, Meta-Analysis |
| JEL: | C49 C80 D24 O30 O32 O33 |
| Date: | 2014–08–10 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:59686&r=tid |
| By: | Bruno Amable (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris I - Panthéon-Sorbonne, CEPREMAP - Centre pour la recherche économique et ses applications - Centre pour la recherche économique et ses applications, IUF - Institut Universitaire de France - Ministère de l'Enseignement Supérieur et de la Recherche Scientifique); Ivan Ledezma (LEDa - Université Paris-Dauphine, IRD - DIAL - UMR 225); Stéphane Robin (PRISM - Pôle de recherche interdisciplinaire en sciences du management - Université Paris I - Panthéon-Sorbonne : EA4101) |
| Abstract: | Several recent policy and academic contributions consider that liberalising product markets would foster innovation and growth. This paper analyses the innovation-productivity relationship at the industry-level for a sample of OECD manufacturing industries. We pay particular attention to the vertically-induced influence of product market regulation (PMR) of key input sectors of the economy on the innovative process of manufacturing and its consequences on productivity. We test for a differentiated effect of this type of PMR depending on whether countries are technological leaders or laggards in a given industry and for a given time period. Contrary to the most widespread policy claims, the innovation-boosting effects of liberalisation policies at the leading edge are systematically not supported by the data. These findings question the relevance of a research and innovation policy based on liberalisation. |
| Keywords: | Product market regulation; innovation; productivity; growth |
| Date: | 2014–03 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:halshs-00973947&r=tid |
| By: | Drivas, Kyriakos; Fafaliou, Irene; Fampiou, Elpiniki; Yannelis, Demetrius |
| Abstract: | This paper examines whether patents increase the geographic reach of the market for ideas. By employing a dataset of 25,127 US patents traded between US located firms, we find that patents sold during application phase are less likely to be traded outside the seller‟s state than patents that have been issued. To tackle the endogeneity issues we employ coarsened exact matching techniques. We find that patent grant increases the likelihood of a patent to be traded across boundaries of the state. This evidence is stronger for patents originating from the less innovative US states. |
| Keywords: | patent grant, patent applications, market for patents, geographic reach of technology, coarsened exact matching |
| JEL: | O32 O33 |
| Date: | 2014–11–21 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:60099&r=tid |
| By: | Paul O'Sullivan (Economics, National University of Ireland, Maynooth); |
| Abstract: | This paper examines the effect of R&D leadership on Research Joint Venture formation. If firms compete in R&D, there is a first (second)-mover advantage, when spillovers are relatively low (high). RJV profits exceed those of R&D leadership, except for a very narrow range of low unit R&D costs and spillovers. For a leader, preventing follower activity is only profitable if unit R&D costs and spillovers are relatively low. If unit R&D costs are sufficiently low, preventing the follower from becoming active may be welfare dominant but not profit maximizing, possibly justifying a role for government policy to subsidise R&D investment |
| JEL: | D21 L13 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:may:mayecw:n251-14.pdf&r=tid |
| By: | William R. Kerr; Ramana Nanda |
| Abstract: | We review the recent literature on the financing of innovation, inclusive of large companies and new startups. This research strand has been very active over the past five years, generating important new findings, questioning some long-held beliefs, and creating its own puzzles. Our review outlines the growing body of work that documents a role for debt financing related to innovation. We highlight the new literature on learning and experimentation across multi-stage innovation projects and how this impacts optimal financing design. We further highlight the strong interaction between financing choices for innovation and changing external conditions, especially reduced experimentation costs. |
| JEL: | G21 G24 L26 M13 O31 O32 |
| Date: | 2014–11 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:20676&r=tid |