nep-tid New Economics Papers
on Technology and Industrial Dynamics
Issue of 2014‒12‒29
five papers chosen by
Fulvio Castellacci
Universitetet i Oslo

  1. Transition to Clean Technology By Daron Acemoglu; Ufuk Akcigit; Douglas Hanley; William Kerr
  2. China's R&D subsidies: Allocation and effectiveness By Boeing, Philipp
  3. Innovation and its Effects on Employment Composition: Microeconomic Evidence from Colombian Firms By Juan Felipe Mejía Mejía; Yurani Arias Granada
  4. The Impact of Skilled Foreign Workers on Firms: an Investigation of Publicly Traded U.S. Firms By Anirban Ghosh; Anna Maria Mayda; Francesc Ortega
  5. Deregulation and productivity: selection or within-firm effect? By Oleksandr Shepotylo

  1. By: Daron Acemoglu (Department of Economics, MIT and CIFAR); Ufuk Akcigit (Department of Economics, University of Pennsylvania); Douglas Hanley (Department of Economics, University of Pittsburgh); William Kerr (Harvard Business School, Harvard University)
    Abstract: We develop a microeconomic model of endogenous growth where clean and dirty technologies complete in production and innovation - in the sense that research can be directed to either clean or dirty technologies. If dirty technologies are more advanced to start with, the potential transition to clean technology can be difficult both because clean research must climb several rungs to catch up withdirty technology and because this gap discourages research effort directed towards clean technologies. Carbon taxes and research subsidies may nonetheless encourage production and innovation in clean technologies, though the transition will typically be slow. We characterize certain general properties of the transition path from dirty to clean technology. We then estimate the model using a combination of regression analysis on the relationship between R&D and patents, and simulated method of moments using microdata on employment, production, R&D, firm growth, entry and exit from the US energy sector. The model’s quantitative implications match a range of moments not targeted in the estimation quite well. We then characterize the optimal policy path implied by the model and our estimates. Optimal policy makes heavy use of research subsidies as well as carbon taxes. We use the model to evaluate the welfare consequences of a range of alternative policies.
    Keywords: carbon cycle, directed technological change, environment, innovation, optimal policy
    JEL: O30 O31 O33 C65
    Date: 2014–12–03
  2. By: Boeing, Philipp
    Abstract: This study investigates the allocation of China's R&D subsidies and its effectiveness in stimulating firms' own R&D investments for the population of Chinese listed firms throughout the time period 2001 to 2006. For allocation, we find that firm participation is determined by prior grants, high quality inventions, and minority state-ownership. Provincial variation in China's transition towards a market-driven economy reveals that R&D subsidies are less often distributed by more market-oriented provincial governments and that China's innovation policy is more supportive of firms located in developed provinces. Considering effectiveness, we find that grants instantaneously crowd-out firms' own R&D investments but are neutral in later periods. In 2006, one public RMB reduces own R&D investments made by firms by half a RMB. For repeated recipients, high-tech firms, and minority state-owned firms grants have an insignificant effect.
    Keywords: R&D subsidies,economic transition,China,propensity score matching,difference-in-differences
    JEL: O38 O32
    Date: 2014
  3. By: Juan Felipe Mejía Mejía; Yurani Arias Granada
    Abstract: This study analyses the effects of innovation on employment in Colombian firms for the man- ufacturing and service sectors in two different periods: 2007-2010 for the manufacturing industry, and 2010-2011 for the service industry. Based on the theoretical framework proposed by Harri- son et al.(2014), we test this relationship using instrumental variables techniques. Data proceed from The Annual Manufacturing Survey, The Development and Technological Innovation Indus- trial Survey, and The Development and Technological Innovation Services Survey, all of them collected by the Colombian National Administrative Department of Statistics (DANE).Our em- pirical results show that sales growth due to new products positively affects employment growth, and process innovation has not a displacement effect on employment growth. This is robust to different specifications and the inclusion of control variables.
    Keywords: Employment Growth, Process Innovation, Product Innovation, Colombian Firms
    JEL: O31 O33
    Date: 2014–12–06
  4. By: Anirban Ghosh (Georgetown University); Anna Maria Mayda (Georgetown University); Francesc Ortega (Queens College, CUNY)
    Abstract: Many U.S. businessmen are vocally in favor of an increase in the number of H-1B visas. Is there systematic evidence that this would positively affect firms' productivity, sales, employment or profits? To address these questions we assemble a unique dataset that matches all labor condition applications (LCAs) - the first step towards H-1B visas for skilled foreign-born workers in the U.S. - with firm-level data on publicly traded U.S. firms (from Compustat). Our identification is based on the sharp reduction in the annual H-1B cap that took place in 2004, combined with information on the degree of dependency on H-1B visas at the firm level as in Kerr and Lincoln (2010). The main result of this paper is that if the cap on H-1B visas were relaxed, a subset of firms would experience gains in average labor productivity, firm size, and profits. These are firms that conduct R&D and are heavy users of H-1B workers - they belong to the top quintile among filers of LCAs. These empirical findings are consistent with a heterogeneous- firms model where innovation enhances productivity and is subject to fixed costs.
    Date: 2014–11
  5. By: Oleksandr Shepotylo
    Abstract: In the literature, trade liberalization increases industry productivity through two channels. First, firms increase productivity due to better and wider choice of inputs. In addition, at least theoretically, the mechanism of selection eliminates the least productive firms from the industry. To disentangle the sources of industry productivity increase, we apply the recently developed quantile approach (Combes et al., 2012) to the episode of trade and services liberalization in Ukraine. We modify the methodology in order to study changes in productivity distribution within an industry over time. We start with the Melitz model of an industry with heterogeneous firms. Unlike in the original model, we allow for productivity distribution to change over time as a result of deregulation. By looking at changes in productivity distribution of manufacturing and services firms in Ukraine in 2001-2009, we estimate the left-truncation, dilation, and shift in distribution for each NACE 2 digit sector. We compare relative importance of the within firm channel of productivity increase vis-à-vis the selection channel. We further relate the estimates of the left-truncation, dilation, and shift to industry measures of trade and services liberalization that include input tariffs liberalization and input services liberalization.
    Keywords: selection; productivity; distribution; quantile method
    Date: 2014–11

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