nep-tid New Economics Papers
on Technology and Industrial Dynamics
Issue of 2015‒06‒20
six papers chosen by
Fulvio Castellacci
Universitetet i Oslo

  1. Inverted-U relationship between innovation and survival: Evidence from firm-level UK data By Guidi, Francesco; Solomon, Edna; Trushin, Eshref; Ugur, Mehmet
  2. Determinants of R&D intensity and its impact on firm value in an innovative economy in which family business groups are dominant: The case of South Korea By Byung S. Min; Russell Smyth
  3. How Important are ICT and R&D Investments for Value Added in the Swedish Business Sector? By Edquist, Harald; Henrekson, Magnus
  4. Identifying High Growth Firms in India: An Alternative Approach By Aradhna Aggarwal; Takahiro Sato
  5. Characterizing the policy mix and its impact on eco-innovation in energy-efficient technologies. By Valeria Costantini; Francesco Crespi; Alessandro Palma
  6. Do green jobs differ from non-green jobs in terms of skills and human capital? By Davide Consoli; Giovanni Marin; Alberto Marzucchi; Francesco Vona

  1. By: Guidi, Francesco; Solomon, Edna; Trushin, Eshref; Ugur, Mehmet
    Abstract: Theoretical and empirical work on innovation and firm survival has produced varied and often conflicting findings. In this paper, we draw on Schumpeterian models of competition and innovation and stochastic models of firm dynamics to demonstrate that the conflicting findings may be due to linear specifications of the innovation-survival relationship. We demonstrate that a quadratic specification is appropriate theoretically and fits the data well. Our findings from an unbalanced panel of 39,705 UK firms from 1997-2012 indicate that an inverted-U relationship holds for different types of R&D expenditures and sources of funding. We also report that R&D intensity is more likely to increase survival when firms are in more concentrated industries and in Pavitt technology classes consisting of specialized suppliers of technology and scale-intensive industries. Finally, we report that the effects of firm and industry characteristics as well as macroeconomic environment indicators are all consistent with prior findings. The results are robust to step-wise modeling, controlling for left truncation and use of lagged values to address potential simultaneity bias.
    Keywords: innovation,R&D,firm dynamics,survival anaysis
    JEL: C41 D21 D22 L1 O3
    Date: 2015–06–15
  2. By: Byung S. Min; Russell Smyth
    Abstract: We examine both the determinants of corporate research and development (R&D) intensity, and its impact on firm value, in Korea, a country in which family business groups are dominant and in which corporate-funded R&D intensity is one of the highest in the world. We find that growth opportunities, size of the firm and payment to executive board members have a positive effect on R&D intensity, while leverage has a negative effect on R&D intensity. When leverage is at an extremely high level, the relationship between growth opportunities and R&D intensity turns from positive to negative. The positive effect of firm size on R&D intensity is larger, the greater the number of subsidiaries the firm has, consistent with the firm engaging in cross-subsidisation. The positive effect of payments to executive board members on R&D intensity is smaller for chaebol affiliates than for stand-alone firms. Using instrument variables we find that R&D generates an increase in firm value.
    Keywords: family business; R&D; innovative economy; firm value; chaebol
    Date: 2015–04
  3. By: Edquist, Harald (Ericsson Research); Henrekson, Magnus (Research Institute of Industrial Economics (IFN))
    Abstract: Since the mid-1990s value added has grown faster in the Swedish business sector than in the business sector of most other OECD countries. We investigate the association between ICT and R&D capital and value added in the Swedish non-farm business sector. By estimating neoclassical production function models on data for 47 different industries for the period 1993–2012 we show that ICT and R&D capital are significantly associated with value added for most specifications. When controlling for economic shocks the results show that on average, if ICT capital increases by 10 percent, value added increases by 1.8 percent. We also divide ICT capital into hardware and software capital. To our knowledge, this distinction has not been made in any previous study at the industry level. In this case only the estimated elasticity of software is significantly different from zero. One possible explanation could be that all industries invest in hardware, but only the ones that successfully invest in and implement software enjoy positive effects from ICT.
    Keywords: ICT; R&D; Industrial change; Panel data
    JEL: O14 O32 O33 O47
    Date: 2015–06–08
  4. By: Aradhna Aggarwal (Indian Studies at Asia Research Center, Department of International Economics and Management at Copenhagen Business School); Takahiro Sato (Research Institute for Economics & Business Administration (RIEB), Kobe University, Japan)
    Abstract: Over the past two decades, considerable interest has grown in high growth firms (HGFs). However, the concept of HGFs still remains controversial. One of the most controversial issues is size and age of these firms. The present study argues that the current literature on HGFs may offer little help in addressing this issue given the constantly changing population of HGFs. This study uses an alternative conceptual framework and proposes a concept of ‘High Impact Group of Firms’ (HIGF). It explains the HIGFs in the framework of a new stream of literature that focuses on business dynamics, productivity growth and industry evolution, formulates testable hypotheses, and uses a novel methodology to identify it. The empirical analysis is based on the plant level panel data of 22 manufacturing industries in Indian manufacturing during the period 2000-01 to 2005-06. Our empirical results reveal that much depends on the industry/sector specific characteristics.
    JEL: L25 L26 O14 O33 O53
    Date: 2015–03
  5. By: Valeria Costantini (Department of Economics, Roma Tre University, Rome (Italy)); Francesco Crespi (Department of Economics, Roma Tre University, Rome (Italy)); Alessandro Palma (Department of Economics, Roma Tre University, Rome (Italy))
    Abstract: This paper provides an empirical investigation of the role played by selected characteristics of the policy mix in inducing innovation in energy efficiency technologies. An original dataset covering 23 OECD countries over the period 1990-2010 combines the full set of policies in the energy efficiency domain for the residential sector with data on patents applied over the same period in this specific technological sector. The evidence of a positive policy inducement effect on innovation dynamics is enriched by the following main results: i) policy mix comprehensiveness is influential since countries adopting different instruments show a relatively higher positive inducement effect; ii) inconsistency problems between the different tools forming the policy mix may negatively influence innovation activities when the variety of policy instruments becomes excessive; iii) the different instruments forming the policy mix need to be well balanced in their relative strength in order to reduce potential negative lock-in effects; iv) the greater the external balance of the national policy strategy with the policy setting of other similar countries, the higher the inducement effect on the technological dynamics of the investigated country. Several suggestions for implementing effective policy strategies can be made in this case study that can be potentially extended to other technology domains.
    Keywords: eco-innovation, policy mix, policy spillovers, energy efficiency, residential sector.
    JEL: O31 O38 Q48 Q55 Q58
    Date: 2015–06
  6. By: Davide Consoli (INGENIO CSIC-UPV, Valencia (Spain)); Giovanni Marin (IRCrES-CNR, Milano (Italy); OFCE-SciencesPo, Sophia Antipolis (France)); Alberto Marzucchi (Catholic University of Milan (Italy), SPRU, University of Sussex, Brighton (UK)); Francesco Vona (OFCE-SciencesPo, Sophia Antipolis (France), SKEMA Business School, Sophia Antipolis (France))
    Abstract: This paper elaborates an empirical analysis of labour force characteristics associated to environmental sustainability. Using data on the United States we compare green and non-green occupations to detect differences in terms of skill content and of human capital. Our empirical profiling reveals that green jobs use high-level abstract skills significantly more than non-green jobs. Moreover, green occupations exhibit higher levels of education, work experience and on-the-job training. While preliminary, this exploratory exercise calls attention to an underdeveloped theme, namely the labour market implications associated with the transition towards green growth.
    Keywords: Skills, Green Jobs, Task Model, Human Capital
    JEL: J21 J24 O31 O33 Q20 Q40
    Date: 2015–05

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