nep-tid New Economics Papers
on Technology and Industrial Dynamics
Issue of 2015‒10‒17
ten papers chosen by
Fulvio Castellacci
Universitetet i Oslo

  1. Automation, Performance and International Competition: Firm-level Comparisons of Process Innovation By Kromann, Lene; Sørensen, Anders
  2. Micro-evidence on product and labor market regime differences between Chile and France By Dobbelaere S.; Lauterbach R.; Mairesse J.
  3. The paradox of openness revisited : collaborative innovation and patenting by UK innovators By Arora A.; Athreye S.; Huang C.
  4. Foreign direct investment and technology spillovers in low and middle-income countries : a comparative cross-sectoral analysis By Jacob J.; Sasso S.
  5. Endogenous Sector-Biased Technological Change and Industrial Policy By Herrendorf, Berthold; Valentinyi, Akos
  6. A patent search strategy based on machine learning for the emerging field of service robotics By Kreuchauff, Florian; Korzinov, Vladimir
  7. Dynamics of Technology Adoption and Critical Mass: The Case of U.S. Electric Vehicle Market By Shanjun Li; Yiyi Zhou
  8. Technological upgrading in global value chains and clusters and their contribution to sustaining economic growth in low and middle income economies By Kaplinsky R.
  9. Knowledge Spillovers through FDI and Trade: Moderating Role of Quality-Adjusted Human Capital By Muhammad Ali; Uwe Cantner; Ipsita Roy
  10. Deindustrialisation, structural change and sustainable economic growth By Tregenna F.

  1. By: Kromann, Lene (Department of Economics, Copenhagen Business School); Sørensen, Anders (Department of Economics, Copenhagen Business School)
    Abstract: This paper presents new evidence on tradeinduced automation in manufacturing firms using unique data combining a retrospective survey that we have assembled with register data for 2005-2010. In particular, we establish a causal effect where firms that have specialized in product types for which the Chinese exports to the world market has risen sharply invest more in automated capital compared to firms that have specialized in other product types. We also study the relationship between automation and firm performance and find that firms with high increases in scale and scope of automation have faster productivity growth than other firms. Moreover, automation improves the efficiency of all stages of the production process by reducing setup time, run time, and inspection time and increasing uptime and quantity produced per worker. The efficiency improvement varies by type of automation.  
    Keywords: automation; productivity; production theory; efficiency
    JEL: D24 L11 L22 O33
    Date: 2015–10–01
  2. By: Dobbelaere S.; Lauterbach R.; Mairesse J. (UNU-MERIT)
    Abstract: Institutions, social norms and the nature of industrial relations vary greatly between Latin American and Western European countries. Such institutional and organizational differences might shape firms operational environment in general and the type of competition in product and labor markets in particular. Contributing to the literature on estimating simultaneously product and labor market omperfections, this paper quantifies industry differences in both types of imperfections using firm-level data in Chile - a non-OECD member under the considered time period - and France. We rely on two extensions of Halls econometric framework for estimating price-cost margins by nesting three labor market settings perfect competition or right-to-manage bargaining, efficient bargaining and monopsony. Using an unbalanced panel of 1,737 firms over the period 1996-2003 in Chile containing unique data on firm-level output price indices and 14,270 firms over the period 1994-2001 in France, we first classify 20 comparable manufacturing industries in 6 distinct regimes that differ in the type of competition prevailing in product and labor markets. We then investigate industry differences in the estimated product and labor market imperfections. Consistent with differences in institutions and in the industrial relations system in the two countries, we find important regime differences across the two countries. In addition, we observe cross-country differences in the levels of product and labor market imperfections within regimes.
    Keywords: Single Equation Models; Single Variables: Models with Panel Data; Longitudinal Data; Spatial Time Series; Firm Behavior: Theory; Trade Unions: Objectives, Structure, and Effects; Oligopoly and Other Imperfect Markets;
    JEL: C23 D21 J51 L13
    Date: 2015
  3. By: Arora A.; Athreye S.; Huang C. (UNU-MERIT)
    Abstract: We revisit the paradox of openness in the literature which consists of two conflicting views on the link between patenting and open innovation-the spillover prevention and the organisational openness views. We use the data from the Survey of Innovation and Patent Use and the Community Innovation Survey CIS6 in the UK to assess the empirical support for the distinct predictions of these theories. We argue that both patenting and external sourcing openness are jointly-determined decisions made by firms. Their relationship is contingent upon whether the firms are technically superior to their rivals and lead in the market or not. Leading firms are more vulnerable to unintended knowledge spillovers during collaboration as compared to followers, and consequently, the increase in patenting due to openness is higher for leaders than for followers. We develop a simple framework that allows us to formally derive the empirical implications of this hypothesis and test it by estimating whether the reduced form relationship between patenting and collaboration is stronger for leaders than for followers.
    Keywords: Management of Technological Innovation and R&D; Intellectual Property Rights;
    JEL: O32 O34
    Date: 2015
  4. By: Jacob J.; Sasso S. (UNU-MERIT)
    Abstract: In this paper we analyse the trends in Foreign Direct Investment FDI flows worldwide across sectors and across value-chain activities, with a particular focus on low- and middle-income countries in comparison with advanced countries. We begin by discussing the growing fragmentation of global production and the opportunities this presents to todays developing countries for benefiting from FDI. Our review of the literature on knowledge spillovers via FDI indicates that spillovers typically occur along the value chain, from foreign firms to their local suppliers or clients but not to their competitors, and that tapping into the technological resources of foreign firms is not an automatic process but hinges on a few host-economy characteristics. Our analysis of worldwide FDI flows during 2008-2013 indicates the growing importance of countries outside the traditional industrialised world, accounting for nearly half of inward greenfield FDI projects. While FDI flows into industrialised economies and emerging industrial economies take place mainly in high- or medium-tech manufacturing, other developing countries and least developed countries tend to attract FDI in medium- and low-tech manufacturing. When we examine FDI flows across value-chain activities, we find that emerging economies are attracting increasingly more knowledge-based FDI, with China and India hosting the highest number of FDI projects in innovation activities. Finally, our analysis suggests that - especially in the manufacturing sector - Multinational Enterprises MNEs tend to invest more in countries where domestic technological efforts are higher, pointing to the importance of indigenous technological capacities in attracting FDI in the first place, but also in ensuring that these investments generate knowledge spillovers that are crucial for technological catching up by developing countries.
    Keywords: International Investment; Long-term Capital Movements; Macroeconomic Analyses of Economic Development; Technological Change: Choices and Consequences; Diffusion Processes;
    JEL: F21 O11 O33
    Date: 2015
  5. By: Herrendorf, Berthold; Valentinyi, Akos
    Abstract: We build a model of structural transformation with endogenous sector-biased technological change. We show that if the return to specialisation is larger in the goods sector than in the service sector, then the equilibrium has the following properties: aggregate growth is balanced; structural transformation takes place from goods to services; the service sector receives more innovation but the goods sector has more productivity growth. We show that compared to the efficient allocation the laissez-faire equilibrium has too much labor in the goods sector. This suggests that optimal industrial policy should aim to increase the pace of structural transformation.
    Keywords: endogenous sector-biased technological change; horizontal innovation; industrial policy; structural transformation
    JEL: O11 O14 O31 O33
    Date: 2015–10
  6. By: Kreuchauff, Florian; Korzinov, Vladimir
    Abstract: Emerging technologies are in the core focus of supra-national innovation policies. These strongly rely on credible data bases for being effective and efficient. However, since emerging technologies are not yet part of any official industry, patent or trademark classification systems, delineating boundaries to measure their early development stage is a nontrivial task. This paper is aimed to present a methodology to automatically classify patents as concerning service robots. We introduce a synergy of a traditional technology identification process, namely keyword extraction and verification by an expert community, with a machine learning algorithm. The result is a novel possibility to allocate patents which (1) reduces expert bias regarding vested interests on lexical query methods, (2) avoids problems with citational approaches, and (3) facilitates evolutionary changes. Based upon a small core set of worldwide service robotics patent applications we derive apt n-gram frequency vectors and train a support vector machine (SVM), relying only on titles, abstracts and IPC categorization of each document. Altering the utilized Kernel functions and respective parameters we reach a recall level of 83% and precision level of 85%.
    Keywords: Service Robotics,Search Strategy,Patent Query,Data Mining,Machine Learning,Support Vector Machine
    JEL: C02 C18 C45
    Date: 2015
  7. By: Shanjun Li (Dyson School of Applied Economics and Management, Cornell University, Ithaca, NY 14853); Yiyi Zhou (Department of Economics, Stony Brook University, Stony Brook, NY 11794)
    Abstract: We examine the dynamics of technology adoption and critical mass in network industries with an application to the U.S. electric vehicle (EVs) market. This market exhibits indirect network effects in that consumer EV adoption and investor deployment of public charging stations are interdependent. In markets with positive indirect network effects, multiple equilibria with different level of technology adoption may exist. The diffuion and ultimately the success of technology depend on the equilibrium structure and property. Under certain market conditions, the issue of critical mass arises and the market needs to pass this critical mass in order to reach the high-adoption equilibrium. Using a data set of quarterly EV sales in 354 U.S. metro areas from 2011 to 2013, we quantify indirect network effects and simulate long-run market outcomes in each of the MSAs. Our analysis provides robust and significant evidence of indirect network effects in this market. Simulations show several different market equilibrium outcomes across the 354 MSAs in the long run with a significant number of them exhibiting multiple equilibria and critical mass. Policy suggestions are provided in order to push these markets to pass the critical mass and move towards the high-adoption equilibrium.
    Keywords: electric vehicles; indirect network effects; critical mass
    JEL: Q4 Q5 R4
    Date: 2015–10
  8. By: Kaplinsky R. (UNU-MERIT)
    Abstract: This paper begins with a discussion of the role played by upgrading in the promotion of sustainable growth. Upgrading is discussed in two different contexts, that of industrial clusters and that of global value chains GVCs. Drawing on global and African experiences, the paper addresses the upgrading agenda required to enable dynamic clusters to meet both domestic needs and progressively also needs in external markets. In the discussion of value chains, the paper distinguishes between vertically specialised and additive GVCs and shows how the upgrading agenda necessarily varies between these two families of GVCs. The paper concludes by briefly discussing two issues. The first is to distinguish between the upgrading agenda which is essential for sustaining economic growth and that which addresses the inclusivity and thus sustainability of the growth path. The second addresses the circumstances in which it may be possible to pursue these varied upgrading strategies simultaneously.
    Keywords: Empirical Studies of Trade; Globalization: General; Economic Development: General; Technological Change: Choices and Consequences; Diffusion Processes;
    JEL: O10 O33 F14
    Date: 2015
  9. By: Muhammad Ali (School of Economics and Business Administration, Friedrich-Schiller-University Jena); Uwe Cantner (School of Economics and Business Administration, Friedrich-Schiller-University Jena); Ipsita Roy
    Abstract: The paper extends the findings of Coe and Helpman (1995) model of R&D spillovers by considering foreign direct investment (FDI) as a channel for knowl- edge spillovers in addition to imports. Deeper insights on the issue are provided by examining inter-relationship between knowledge spillovers from imports and inward FDI. Moreover, human capital is added to the discussion as one of the appropri- ability conditions for knowledge spillovers. However, in comparison to most studies that rely on physical, monetary or indicator-based measures of human capital, the current study proposes a quality-based indicator of human capital that allows for better comparison of human capital stock across countries. Quality adjusted hu- man capital is derived by weighting human capital data based on average years of schooling using journal publications in science and technology and patent ap- plications. Using cointegration estimation method on 20 European countries from 1995 to 2010, the direct effects of FDI-related as well as import-related spillovers on domestic productivity are confirmed. Furthermore, a strong complementary rela- tionship is found between knowledge spillovers through the channels of imports and inward FDI implying strong joint effect on domestic productivity. When consider- ing quality-adjusted human capital, countries with better human capital are found to benefit not only from direct productivity effects, but also from absorption and transmission of international knowledge spillovers through imports and inward FDI. Finally, technological distance with the frontier does not appear to play a role in the absorption of knowledge spillovers.
    Keywords: Knowledge spillovers, foreign direct investment, international trade, human capital
    JEL: F14 I25 J24
    Date: 2015–10–08
  10. By: Tregenna F. (UNU-MERIT)
    Abstract: This paper reviews the literature and empirical evidence on deindustrialisation, with a focus on premature deindustrialisation. Structural change and industrialisation have long been considered important for developing countries to catch up. However, there has been widespread deindustrialisation over the past few decades, which is setting in at lower levels of income per capita and lower shares of manufacturing in the employment or GDP than earlier. Premature deindustrialisation can be defined as deindustrialisation that begins at a lower level of GDP per capita and/or at a lower level of manufacturing as a share of total employment and GDP, than is typically the case internationally. Many of the cases of premature deindustrialisation are in sub-Saharan Africa, in some instances taking the form of pre-industrialisation deindustrialisation. It is argued here that premature deindustrialisation is likely to have especially negative effects on growth. In addition to being influenced by the level of income per capita and share of manufacturing in the economy when deindustrialisation begins, the effects of deindustrialisation on growth are also expected to depend on whether or not it is policy induced and the nature of the activities that are relatively contracting and expanding. The paper concludes by exploring the implications for policymakers facing deindustrialisation.
    Keywords: Labor Force and Employment, Size, and Structure; Industrial Organization and Macroeconomics: Industrial Structure and Structural Change; Industrial Price Indices; Industrialization; Manufacturing and Service Industries; Choice of Technology; Industrial Policy;
    JEL: L16 J21 O14 O25
    Date: 2015

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