nep-tid New Economics Papers
on Technology and Industrial Dynamics
Issue of 2015‒11‒21
seven papers chosen by
Fulvio Castellacci
Universitetet i Oslo

  1. The Employment Impact of Innovation: Evidence from European Patenting Companies By Vincent Van Roy; Daniel Vertesy; Marco Vivarelli
  2. Innovation, Spillovers and Productivity Growth: A Dynamic Panel Data Approach By Christopher F Baum; Hans Lööf; Pardis Nabavi
  3. Multinational Production and the Scope of Innovation By Sasan Bakhtiari; Antonio Minniti; Alireza Naghavi
  4. UK and EU subsidies and private R&D investment: Is there input additionality? By Ugur, Mehmet; Trushin, Eshref; Solomon, Edna
  5. R&D subsidies and firms' cost of debt By Demeulemeester, Sarah; Hottenrott, Hanna
  6. Effects of foreign acquisitions on R&D and high-skill activities By Eliasson, Kent; Hansson, Pär; Lindvert, Markus
  7. Vertical Educational Diversity and Innovation Performance By Thomas Bolli; Ursula Renold; Martin Wörter

  1. By: Vincent Van Roy (European Commission, Joint Research Centre, Ispra, Varese, Italy); Daniel Vertesy (European Commission, Joint Research Centre, Ispra, Varese, Italy); Marco Vivarelli (DISCE, Università Cattolica - SPRU, University of Sussex - Institute for the Study of Labour (IZA), Bonn)
    Abstract: This paper explores the possible job creation effect of innovation activity. We analyze a unique panel dataset covering almost 20,000 patenting firms from Europe over the period 2003-2012. The main outcome from the proposed GMM-SYS estimations is the labour-friendly nature of innovation, which we measure in terms of forward-citation weighted patents. However, this positive impact of innovation is statistically significant only for firms in the high-tech manufacturing sectors, while not significant in low-tech manufacturing and services.
    Keywords: Technological change, innovation, patents, employment, GMM-SYS
    JEL: O31 O33
    Date: 2015–10
  2. By: Christopher F Baum (Boston College; DIW Berlin); Hans Lööf (Royal Institute of Technology, Stockholm); Pardis Nabavi (Royal Institute of Technology, Stockholm)
    Abstract: This paper examines variations in productivity growth due to innovation within a given location and between different locations. Implementing a dynamic panel data approach on Swedish micro data, we test the sepa- rate and complementary effects of internal innovation efforts and spillovers from the local milieu. Measuring the potential knowledge spillover by ac- cess to knowledgeintensive services, the estimation results produce strong evidence of differences in the capacity to benefit from external knowledge among persistent innovators, temporary innovators and non-innovators. The results are consistent regardless of whether innovation efforts are measured in terms of the frequency of patent applications or the rate of R&D investment.
    Keywords: Innovation, spillovers, TFP growth, panel data
    JEL: C23 O31 O32
    Date: 2015–11–01
  3. By: Sasan Bakhtiari (Australian National University); Antonio Minniti (University of Bologna); Alireza Naghavi (University of Bologna and Centro Studi Luca d'Agliano)
    Abstract: This research sheds light on the role of multinational production on the type of innovation per-formed by firms. We construct matched firm-patent data to measure the scope of innovation, that is the extent to which the output of R&D can be spread across different product lines. We focus on two features of multinational production: (i)core knowledge is geographically more difficult to transfer abroad to foreign production sites, (ii) learning spillovers can occur from international op-erations. The results reveal that the second effect is more likely to dominate when a firm is active in more product lines. We argue that a more diversified portfolio of products increases a firm’s span of learning from international operations, thereby enhancing its ability to engage in more fundamental research. In contrast, firms with fewer product lines that geographically separate production from innovation focus on more specialized types of R&D.
    Keywords: Multinational production, Fundamental innovation, Multiproduct firms, Knowledge spillovers
    JEL: F12 F23 O31 O32
  4. By: Ugur, Mehmet; Trushin, Eshref; Solomon, Edna
    Abstract: This paper investigates the effects of UK and EU subsidies on privately-funded R&D intensity of a sample of 39,730 UK firms. The sample consists of R&D-active firms surveyed in at least one year from 1998-2012. The results are obtained from 4 different estimators, with different degrees of control for selection and time-constant fixed effects: (i) pooled OLS without selection correction; (ii) fixed-effect (within-group) estimation without selection correction; (iii) pooled OLS with selection correction; and (iv) fixed-effect estimation with selection correction. We report that UK subsidies are not associated with additionality in privately -funded R&D intensity in the full sample, and the additionality effect in manufacturing is too small to be conomically significant. In contrast, EU subsidy is associated with an additionality effect of 2% in both samples. Ordered-Heckman estimations of leverage indicate that an increase in UK subsidy intensity (subsidy/total R&D) is not likely to make a difference to private R&D effort in any of the subsidy intensity classes demarcated by 4 quartiles of the intensity distribution. However, an increase in EU subsidy intensity is associated with leverage in subsidy intensity class 3, which corresponds to subsidy intensity values within the 3rd quartile of the distribution.
    Keywords: Innovation, R&D, subsidies, additionality
    JEL: C41 D22 L1 O21 O3
    Date: 2015–11–04
  5. By: Demeulemeester, Sarah; Hottenrott, Hanna
    Abstract: Financing research and development (R&D) through loans is usually a costly endeavor. Information asymmetry, outcome uncertainty and low collateral value tend to increase the cost of debt. Based on a large panel of heterogeneous firms, this study shows that recipients of public R&D grants, on average, face lower costs of debt. The findings also suggest that a process of certification in which the subsidy signals the quality of the firm's R&D to external lenders rather than a 'resource effect', i.e. the direct liquidity impact of the subsidy, explains this observation. The comparison between young and established firms shows that the certification effect for young firms primarily stems from subsidies for basic research, that is, for the stage of R&D in which outcome uncertainty and information asymmetries are typically larger. In addition, young firms seem to benefit from a 'formation effect' through learning from the subsidy application process. Application experience may improve young firms' R&D project plans in a way that reduces information asymmetries between firms and lenders.
    Keywords: Innovation policy,Research & Development,R&D subsidies,cost of debt,financial constraints
    JEL: O31 O38 G30
    Date: 2015
  6. By: Eliasson, Kent (Umeå University and Growth Analysis); Hansson, Pär (Örebro University School of Business); Lindvert, Markus (Growth Analysis)
    Abstract: Using Swedish micro data we find no evidence for the concerns circulating in the public debate that foreign acquisitions lead to reductions in R&D expenditures and high-skilled activities in targeted domestic firms, neither in MNEs nor in non-MNEs. Previous studies have only focused on larger firms. In this paper we are able to study the impact on smaller firms (less than 50 employees). This is important since 90 percent of the firms acquired by foreign enterprises have less than 50 employees. For this group of firms there is no information on R&D, but by using the register of educational attainment we have data on the share of high-skilled labor in all Swedish firms, irrespective of size. Interestingly, we find that among smaller firms foreign enterprises tend to acquire high-productive, skill-intensive firms (cherry-picking) and after the acquisitions skill upgrading appears in acquired smaller, non- MNE firms.
    Keywords: foreign acquisitions; skill upgrading; R&D; intensity; propensity score matching
    JEL: F23 J24 O32 O33
    Date: 2015–11–17
  7. By: Thomas Bolli (KOF Swiss Economic Institute, ETH Zurich, Switzerland); Ursula Renold (KOF Swiss Economic Institute, ETH Zurich, Switzerland); Martin Wörter (KOF Swiss Economic Institute, ETH Zurich, Switzerland)
    Abstract: This paper uses panel data of Swiss firms to analyze the impact of education-level diversity in the workforce on innovation performance, addressing endogeneity by exploiting within-firm variation as well as variation in labor supply across regions. We find that vertical educational diversity increases the extensive margin of R&D and product innovation, particularly new product innovation. However, the relationship with process innovation, R&D intensity, and product innovation intensity is insignificant or even negative. These results are in line with the idea that vertical educational diversity enhances the creative moment of the invention phase, while it might affect the commercialization phase negatively due to the dominance of coordination and communication costs relative to the gains in creativity.
    Keywords: Vertical educational diversity, innovation performance, R&D, product innovation, process innovation
    JEL: O3
    Date: 2015–10

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