nep-tid New Economics Papers
on Technology and Industrial Dynamics
Issue of 2015‒11‒01
ten papers chosen by
Fulvio Castellacci
Universitetet i Oslo

  1. Twenty Challenges for Innovation Studies By Ben R. Martin
  2. Innovation and Top Income Inequality By Ufuk Akcigit; Richard Blundell; David Hemous; Antonin Bergeaud; Philippe Aghion
  3. Relative Prices and Sectoral Productivity By Diego Restuccia; Margarida Duarte
  4. Looking beyond the R&D effects on innovation: The contribution of non-R&D activities to total factor productivity growth in the EU_x0003_ By jesus lopez-rodriguez; Diego Martinez
  5. Determinants of new business formation in China: Regional evidence from a panel data model By Martin Borowiecki; Karl-Heinz Leitner
  6. Regulations and productivity: long run effects and non linear influences By Papaioannou, Sotiris
  7. The impact of firm financing constraints on R&D over the business cycle By Kadri Männasoo; Jaanika Meriküll
  8. The effects of knowledge and innovation on regional growth: Nonparametric evidence By Marcos Sanso-Navarro; Maria Vera-Cabello
  9. Mapping innovation in the global photovoltaic industry: a bibliometric approach to cluster identification and analysis By Marina Van Geenhuizen; Pieter Stek
  10. The Similarity of Global Value Chains: A Network-Based Measure By Zhen Zhu; Greg Morrison; Michelangelo Puliga; Alessandro Chessa; Massimo Riccaboni

  1. By: Ben R. Martin (SPRU (Science Policy Research Unit), School of Business, Management and Economics, University of Sussex, UK)
    Abstract: With the field of innovation studies now half a century old, the occasion has been marked by several studies looking back to identify the main advances made over its lifetime. Starting from a list of 20 advances over the field’s history, this discussion paper sets out 20 challenges for coming decades. The intention is to prompt a debate within the innovation studies community on what are, or should be, the key challenges for us to take up, and more generally on what sort of field we aspire to be. It is argued that the empirical focus of our studies has failed to keep pace with the fast changing world and economy, especially the shift from manufacturing to services and the increasingly urgent need for sustainability. Moreover, the very way we conceptualise, define, operationalise and analyse ‘innovation’ seems somewhat rooted in the past, leaving us less able to grapple with other less visible or ‘dark’ forms of innovation.
    Keywords: innovation studies; science policy; research challenges; dark innovation
    JEL: O30 O32 O38 Q55
    Date: 2015–10
  2. By: Ufuk Akcigit (University of Pennsylvania); Richard Blundell (University College London); David Hemous (INSEAD); Antonin Bergeaud (Banque de France and Ecole polytechnique); Philippe Aghion (Harvard University)
    Abstract: In this paper we use cross-state panel data to show a positive and significant correlation between innovativeness and top income inequality in the United States over the past decades. Our instrumentation at cross-state level suggests that this correlation (partly) reflects a causality from innovativeness to top income inequality. Next, using cross commuting zones (CZ) data, we show that innovativeness is positively and significantly correlated with social mobility, and that this correlation is driven mainly by entrant innovators and less so by incumbent innovators. In addition, the positive effects of innovation on the top 1% income share and on social mobility are both dampened in states with higher lobbying intensity. Overall, our findings are in line with the Schumpeterian view whereby the rise in top income shares in developed countries and particularly in the US over the past decades, is at least partly related to innovation-led growth, where innovation itself fosters social mobility at the top through the process of creative destruction.
    Date: 2015
  3. By: Diego Restuccia (University of Toronto); Margarida Duarte (University of Toronto)
    Abstract: The relative price of services rises with development. A standard interpretation of this fact is that cross-country productivity differences are larger in manufacturing than in services. The service sector comprises heterogeneous categories. We document that the behavior of relative prices is markedly different across two broad classifications of services: traditional services, such as health and education, feature a rising relative price with development and non-traditional services, such as communication and transportation, feature a falling relative price with income. Using a standard model of structural transformation with an input-output structure, we find that cross-country productivity differences are much larger in non-traditional services (a factor of 106.5-fold between rich and poor countries) than in manufacturing (24.5-fold). Moreover, this relative productivity difference is reduced by more than half when abstracting from intermediate inputs. Development requires an emphasis on solving the productivity problem in non-traditional services in poor countries.
    Date: 2015
  4. By: jesus lopez-rodriguez; Diego Martinez
    Abstract: Although non-R&D innovation activities account for a significant portion of innovation efforts carried out across very heterogeneous economies in Europe, how to incorporate them in to economic models is not always straightforward. For instance, the traditional macro approach to estimating the determinants of total factor productivity (TFP) does not handle them well. To counter these problems, this paper proposes applying an augmented macro-theoretical model to estimate the determinants of TFP by jointly considering the effects of R&D and the impact of non-R&D innova- tion activities on the productivity levels of ?firms. Estimations from a model of a sample of EU-26 countries covering the period 2004-2008 show that the distinction between R&D and non-R&D e¤ects is significant for a number of diffffrent issues. First, the results show a sizable impact on TFP growth, as the impact of R&D is twice that of non-R&D. Second, absorptive capacity is only linked to R&D endowments. And third, the two types of endowments cannot strictly been seen as complementary, at least for the case of countries with high R&D intensities or high non-R&D intensities.
    Keywords: TFP; R&D; non-R&D expenditures; EU countries.
    JEL: O0 O3 O4
    Date: 2015–10
  5. By: Martin Borowiecki; Karl-Heinz Leitner
    Abstract: Using a panel data model, we study the effects of regional and industry-level traits on new business formation (NBF) for 164 industries across 266 Chinese prefectures between 1998 and 2007. The objective is to provide empirical estimates on effects of prefecture traits on entry rates, and in particular on effects of prefecture knowledge capital stocks on R&D-intensive new business formation. In line with literature on knowledge spillovers, we find extensive evidence of a positive prefecture knowledge capital stock effect on R&D-intensive NBF rates, whereas knowledge capital stocks do not predict non R&D-intensive entry rates. Among regional and industry-level characteristics, we find that prefecture supplier and customer market strength are strongly linked to higher business entry rates. Our results for China contrast with recent findings on the effects of regional traits on firm entry rates in India and the US, indicating distinct regional patterns of Chinese entrepreneurship.
    Keywords: Entrepreneurship; knowledge spillovers; agglomeration; development; China
    JEL: L26 L60 M13 O10 O14 O33 R00 R10 R12
    Date: 2015–10
  6. By: Papaioannou, Sotiris
    Abstract: This study estimates the impact of product market regulations on Total Factor Productivity (TFP) and distinguishes between its short run and long run effects. It also explores whether regulatory changes exert a nonlinear influence on TFP growth. The obtained empirical evidence reveals that in the long run lower regulations exert a significantly positive effect on TFP of OECD countries. Short run effects of regulation are not always statistically significant. The influence of regulatory changes is higher in countries with high levels of regulation. Also, the damaging effects of regulation are more intense in countries with low technology gaps. These results hold across a wide array of econometric specifications and variables that measure regulation and TFP.
    Keywords: Regulations; Total factor productivity; Lon run effects; Non linearities
    JEL: O30 O47 O50
    Date: 2015–10–30
  7. By: Kadri Männasoo; Jaanika Meriküll
    Abstract: The paper studies financing constraints for R&D over the latest boom and bust episode in Central and Eastern Europe (CEE). Given that financial and venture capital markets in CEE are thin in comparison to those in high-income economies and that many of CEE countries experienced a credit crunch during the last recession, it is proposed that financing constraints have a significant adverse effect on R&D activity in these countries. The paper uses two complementary firm-level data-sources from ten CEE countries. The results suggest that the role of financing constraints for R&D expenditures in CEE countries is substantial, as the probability of credit constrained firms undertaking R&D activities is around 70% lower and firms’ R&D expenditure cash flow sensitivity is very high. Despite the severity of the crisis, the adverse effect of financing constraints for R&D did not increase in the financial crisis. It is also confirmed that, conditional on credit constraints, firms’ R&D activity is higher in a recession.
    Keywords: R&D financing constraints, credit constraints, business cycle, Central and Eastern Europe
    JEL: O16 O32 O52 E32 P23
    Date: 2015–07
  8. By: Marcos Sanso-Navarro; Maria Vera-Cabello
    Abstract: This paper deals with the relationship between knowledge, innovation and regional growth. The study is carried out through the application of nonparametric estimation methods to European data at NUTS2 level. We provide evidence that the share of innovative ...firms plays a more relevant role in explaining regional growth than R&D expenditures. Further, inward FDI turns out to be a robust growth determinant. Our results also suggest that the effects induced by these variables are of a heterogeneous nature. As a byproduct of the analysis, we show that the estimation results from a local-linear kernel regression can be used for the identi...cation of spatial patterns. In this respect, we ...find a cluster of innovation-driven labour productivity growth in Germany.
    Keywords: Regional growth; knowledge; innovation; nonparametric methods; nonlinearities
    JEL: C14 C20 O18 R11
    Date: 2015–10
  9. By: Marina Van Geenhuizen; Pieter Stek
    Abstract: The photovoltaic industry acts as a key force in the transition toward a sustainable energy production model. Only a niche market a few years ago, photovoltaic panels and installations are now becoming a mainstream electricity provider. As a highly dynamic, multi-technology and globally distributed industry it is a challenge to identify and quantify its appearance in regional clusters. This challenge is even greater for its critically important innovation activities, including reaching higher efficiency of the cells, and increasing (other) functional and design qualities, like flexibility and color, as well as developing cheaper production methods. Yet because of the industry?s important role in securing a sustainable energy supply and in contributing to the regional economies in which it is established, a deeper understanding of the its global presence and activities is of significant scientific importance and policy relevance. This research follows the approach of 'paper trail' of the industry's innovation process as revealed in patents and scientific publications. By using these documents as sources from which to extract indicators for innovative activity, inputs, outputs and collaboration networks, a detailed picture of the photovoltaic industry innovation and its constituent regional clusters is constructed. This allows not only for the identification and analysis of major regional changes and global shifts of the industry and variation in cluster types, but also enables the estimation of models to identify at least some of the critical factors in photovoltaic clusters' innovation growth pattern, in so far as they can be revealed by bibliometric indicators. In order to select the relevant documents, we first determine which technologies are involved in the photovoltaic industry, like concerning the materials of the cells and shape of the panels, and derive this from expert opinion. We use the USPTO patent database and the Scopus database to retrieve relevant data published between 2005 and 2014. This data is used to carry out a multiple regression model estimation. Providing an understanding of the global location changes and growth and underlying factors in photovoltaic cluster's innovation development is new. The analysis exemplifies the currently increasing scientific attention to the role of cities and regions in transitions of socio-technical systems towards higher levels of sustainability, while referring to local seedbed conditions, including knowledge spillovers, and to networking power of technology actors like multinational companies and universities. The results offer insights to policy makers who aim to avoid barriers to innovation arising from global shifts.
    Keywords: photovoltaic industry; global shift; clusters; innovation; bibliometric approach
    JEL: F23 O14 O33 Q42
    Date: 2015–10
  10. By: Zhen Zhu (IMT Institute for Advanced Studies Lucca); Greg Morrison (IMT Institute for Advanced Studies Lucca); Michelangelo Puliga (IMT Institute for Advanced Studies Lucca); Alessandro Chessa (IMT Institute for Advanced Studies Lucca); Massimo Riccaboni (IMT Institute for Advanced Studies Lucca and DMSI, K.U. Leuven, Leuven, Belgium)
    Abstract: International trade has been increasingly organized in the form of global value chains (GVCs) where different stages of production are located in different countries. This recent phenomenon has substantial consequences for both trade policy design at the national or regional level and business decision making at the firm level. In this paper, we provide a new method for comparing GVCs across countries and over time. First, we use the World Input-Output Database (WIOD) to construct both the upstream and downstream global value networks, where the nodes are individual sectors in different countries and the links are the value-added contribution relationships. Second, we introduce a network-based measure of node similarity to compare the GVCs between any pair of countries for each sector and each year available in the WIOD. Our networkbased similarity is a better measure for node comparison than the existing ones because it takes into account all the direct and indirect relationships between country-sector pairs, is applicable to both directed and weighted networks with self-loops, and takes into account externally defined node attributes. As a result, our measure of similarity reveals the most intensive interactions among the GVCs across countries and over time. From 1995 to 2011, the average similarity between sectors and countries have clear increasing trends, which are temporarily interrupted by the recent economic crisis. This measure of the similarity of GVCs provides quantitative answers to important questions about dependency, sustainability, risk, and competition in the global production system.
    Keywords: Networks, Node Similarity, Input-Output Analysis, Global Value Chains, Vertical Specialization, International Trade
    JEL: C67 F10 F15
    Date: 2015–09

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