nep-tid New Economics Papers
on Technology and Industrial Dynamics
Issue of 2015‒09‒18
nine papers chosen by
Fulvio Castellacci
Universitetet i Oslo

  1. How do Native and Migrant Workers Contribute to Innovation? A Study on France, Germany and the UK By Claudio Fassio; Fabio Montobbio; Alessandra Venturini
  2. Market pull instruments and the development of wind power in Europe: a counterfactual analysis By Marc Baudry
  3. Location Determinants of high Growth Firms By Li, Minghao; Goetz, Stephan J.; Partridge, Mark; Fleming, David A.
  4. Job Creation and Trade in Manufactures: Industry Level Analysis Across Countries By Admasu Shiferaw; Måns Söderbom; Eyersusalem Siba; Getnet Alemu
  5. Financial constraints and productivity: evidence from euro area companies By Ferrando, Annalisa; Ruggieri, Alessandro
  6. Assessing the financial and financing conditions of firms in Europe: the financial module in CompNet By Ferrando, Annalisa; Altomonte, Carlo; Blank, Sven; Meinen, Philipp; Iudice, Matteo; Felt, Marie-Hélène; Neugebauer, Katja; Siedschlag, Iulia
  7. Firm Dynamics and Regional Inequality of Productivity in China By Canfei He; Yi Zhou
  8. Does Foreign Entry Spur Innovation? By Yuriy Gorodnichenko; Jan Svejnar; Katherine Terrell
  9. Service innovation for sustainability: paths for greening through service innovation By Faridah Djellal; Faïz Gallouj

  1. By: Claudio Fassio; Fabio Montobbio; Alessandra Venturini
    Abstract: This paper uses the French and the UK Labour Force Surveys and the German Microcensus to estimate the effects of different components of the labour force on innovation at the sectoral level between 1994 and 2005. The authors focus, in particular, on the contribution of migrant workers. We adopt a production function approach in which we control for the usual determinants of innovations, such as R&D investments, stock of patents and openness to trade. To address possible endogeneity of migrants we implement instrumental variables strategies using both two-stage least squares with external instruments and GMM-SYS with internal ones. In addition we also account for the possible endogeneity of native workers and instrument them accordingly. Our results show that highly-educated migrants have a positive effect on innovation even if the effect is smaller relative to the positive effect of educated natives. Moreover, this positive effect seems to be confined to the high-tech sectors and among highly-educated migrants from other European countries.
    Keywords: innovation, migration, skills, human capital
    JEL: O31 O33 F22 J61
    Date: 2015–07–31
  2. By: Marc Baudry
    Abstract: Renewable energy technologies are called to play a crucial role in the reduction of greenhouse gas emissions. Since most of these technologies are immature, public policies provide for two types of support: technology push and market pull. The latter aims at creating demand for new technologies and at stimulating their diffusion. Nevertheless, due to the complex self-sustained dynamics of diffusion it is hard to determine whether newly installed capacities are imputable to the impulse effect of instruments at the beginning of the diffusion process or to the current support. The paper addresses this problem. A micro-founded model of technology diffusion is built to estimate the impact of the yearly average Return-on-Investment (RoI) on the yearly count of commissioned wind farms in six European countries over the last decade. A counter-factual analysis is carried out to assess the impact of policy instruments on the RoI and, indirectly, on diffusion.
    Keywords: Renewable energy; technology diffusion; wind power; market pull; technology push.
    JEL: O33 Q42 Q55 H23 C61
    Date: 2015
  3. By: Li, Minghao; Goetz, Stephan J.; Partridge, Mark; Fleming, David A.
    Abstract: County-level location patterns of INC5000 companies provide one map of American entrepreneurship and innovativeness, and understanding the local factors associated with these firms' emergence is important for stimulating regional economic growth and innovation. We draw on the knowledge spillover theory of entrepreneurship to motivate our regression model, and augment this theory with additional regional features that have been found to be important in the firm-location literature. Zero-inflated negative binomial regressions indicate that these firms exist in counties with larger average establishment size, higher educational attainment, and more natural amenities. Income growth, a mix of higher-paying industries, and more banks per capita are associated with a smaller presence of these types of firms, all else equal. We conclude that the local conditions favoring high growth firms are likely to be different from those favoring new firms in general, and that these conditions differ significantly in urban and rural areas and by industrial sectors.
    Keywords: Firm location, Firm revenues, High growth firms, INC5000 firms, Negative Binomial regression
    JEL: L26 R1
    Date: 2015–08–25
  4. By: Admasu Shiferaw (Department of Economics, The College of William and Mary); Måns Söderbom (Economics Department, University of Gothenburg, Sweden); Eyersusalem Siba (Economics Department, University of Gothenburg, Sweden); Getnet Alemu (College of Development Studies, Addis Ababa University, Ethiopia)
    Abstract: This paper examines industry level responses of manufacturing employment in the context of globalization using a large sample of developed, developing and transition economies. We find that developing countries need atypically high rates of value added growth (about 10%) to increase manufacturing employment appreciably (about 4%). The employment benefits of export-orientation are also modest even in “comparative advantage” industries of developing countries. However, diversifying the export basket contributes significantly to employment growth, particularly in the medium- and high-technology industries. Import-competition does not undermine employment growth in low-technology industries of developing countries while it displaces jobs in the same industries in OECD and transition economies. For developing countries, import-induced job losses are higher in the more capital-intensive medium-technology industries. Jobs in high-technology industries are less sensitive to imports with positive relationships observed in the OECD. Investment also complements job creation in lowtechnology industries of developing countries that have yet to industrialize.
    Keywords: Labor Demand; Employment Elasticity; Manufacturing; Export Orientation; Import Competition
    JEL: J21 L60 O14 O25
    Date: 2015–09–02
  5. By: Ferrando, Annalisa; Ruggieri, Alessandro
    Abstract: In this paper we consider the relation between firms’ financial structure, access to external finance and labor productivity using a large dataset of firm-level data for Euro-area countries during the period 1995-2011. Our empirical strategy is twofold. First we develop an indicator of financial constraints at firm level using a classification based on specific firm characteristics and various measures of financial pressure and liquidity. Second we apply this indicator to a firm-level production equation to assess the direct impact of access to finance to firm-level productivity. We estimate the impact of financial constraints on a measure of labor productivity and we find significant and negative effects in the majority of sectors across countries. The impact appears to be significantly higher in sectors like Energy, Gas and Water Supply and R&D, Communication and Information, for small and micro firms, while it is slightly smaller for firms with positive investment rates. From a cross-country perspective, while Germany and Netherlands are the least one, Italy, France, Spain and Portugal are the most affected by financial constraints, with an estimated loss of around 10% of their average real value added due to limited access to finance. JEL Classification: D24, G32, O16
    Keywords: cross-country, financial constraints, productivity, sectoral analysis, SMEs
    Date: 2015–07
  6. By: Ferrando, Annalisa; Altomonte, Carlo; Blank, Sven; Meinen, Philipp; Iudice, Matteo; Felt, Marie-Hélène; Neugebauer, Katja; Siedschlag, Iulia
    Abstract: This paper provides an encompassing description of the various indicators compiled in the financial module of CompNet using balance sheet information of European firms. We investigate whether and to which extent the heterogeneous financial positions of firms have affected firms’ investment decisions, especially during the recent crisis. Our results confirm the relevance of leverage for investment, in addition to other common determinants, such as cash flow or sales growth. In particular, we find evidence that higher levels of indebtedness act as a drag on investment. We investigate cash holding policies and find significant differences across firm sizes and degrees of financial constraints. Furthermore, our data confirm the pro-cyclicality of firm profitability and its negative association with financial constraints. Finally, we exploit the richness of this new dataset to document the relationships between firms’ financial and financing conditions and their productivity. JEL Classification: D22, D24, D92, G32
    Keywords: firm financing conditions and constraints, firm heterogeneity, productivity
    Date: 2015–08
  7. By: Canfei He; Yi Zhou
    Abstract: Industrial change processes are underlying forces that determine the change of regional productivity. In developed market economies, less productive firms are more likely to exit while productive firms have more chance to enter and to survive. As a result, spatial inequality of firm dynamics will directly influence the inequality of regional productivity. This study investigates how firm dynamics would affect regional productivity using firm level data during 1998-2007 in China. We first estimate total factor productivity (TFP) for each firm based on the semi-parametric method proposed by Olley and Pakes (1996). Regional productivity is derived by weighing the firm TFP using gross industrial output. There is considerable spatial inequality of TFP paired with a trend of convergence over the time period of 1999-2007. Decomposition of TFP growth shows that firm entry, exit and survival do contribute to TFP change and their contributions vary across prefectures substantially. The between share holds the largest regional difference, as the most important factor contributing to the spatial inequality of regional TFP. The restructuring of SOEs has critically contributed to the spatial inequality of TFP by raising TFP in the traditional industrial bases and by facilitating the development of productive private and foreign sectors particularly in the coastal region. The finding indicates that resource reallocation across firms with different ownerships is the key mechanism to improve regional productivity.
    Keywords: Firm Dynamics, Regional Inequality, TFP, Decomposition Method, China
    Date: 2015–09
  8. By: Yuriy Gorodnichenko; Jan Svejnar; Katherine Terrell
    Abstract: Our estimates, based on large firm-level and industry-level data sets from eighteen countries, suggest that FDI and trade have strong positive spillover effects on product and technology innovation by domestic firms in emerging markets. The FDI effect is more pronounced for firms from advanced economies. Moreover, our results indicate that the spillover effects can be detected with micro data at the firm-level, but that using linkage variables computed from input-output tables at the industry level yields much weaker, and usually insignificant, estimated effects. These patterns are consistent with spillover effects being rather proximate and localized.
    JEL: F2 M16 O16 P23
    Date: 2015–09
  9. By: Faridah Djellal (CLERSE - Centre lillois d'études et de recherches sociologiques et économiques - CNRS - Université Lille 1 - Sciences et technologies); Faïz Gallouj (CLERSE - Centre lillois d'études et de recherches sociologiques et économiques - CNRS - Université Lille 1 - Sciences et technologies)
    Abstract: The purpose of this work is to examine the extent to which services and service innovation can contribute to sustainable development in its environmental dimension. The supposed immateriality of services seems to argue in favour of their natural sustainability. This is actually just a myth – one we examine the roots of, and which we refute. This calling into question of the naturally-green-servicesmyth does not, however, mean that the greening of the economy cannot rely on services. On the contrary, greening also fundamentally depends on innovation dynamics being implemented in or by services.
    Date: 2015–05

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