nep-tid New Economics Papers
on Technology and Industrial Dynamics
Issue of 2016‒02‒04
six papers chosen by
Fulvio Castellacci
Universitetet i Oslo

  1. Technical Change, Non-Tariff Barriers, and the Development of the Italian Locomotive Industry, 1850-1913 By Carlo Ciccarelli; Alessandro Nuvolari
  2. A detailed anatomy of factor misallocation in India By Duranton,Gilles; Ghani,Syed Ejaz; Goswami,Arti Grover; Kerr,William Robert
  3. Concentration, Product Variety and Entry-for-Merger: Evidence from New Product Introductions in the U.S. Food Industry By Bhattacharya, Haumanti; Innes, Robert
  4. Supply Chain Design and Adoption of Indivisible Technology By Lu, Liang; Reardon, Thomas; Zilberman, David
  5. A Triple Helix Model of Medical Innovation: Supply, Demand, and Technological Capabilities in terms of Medical Subject Headings By Alexander Petersen; Daniele Rotolo; Loet Leydesdor
  6. On the role of public policies and wage formation for private investment in R&D:A long-run panel analysis By Tim Buyse; Freddy Heylen; Ruben Schoonackers

  1. By: Carlo Ciccarelli; Alessandro Nuvolari
    Abstract: This paper examines the dynamics of technical change in the Italian locomotive industry in the period 1850-1913. From an historical point of view, this industry presents a major point of interest: it was one of the few relatively sophisticated "high-tech" sectors in which Italy, a latecomer country, was able to set foot firmly before 1913. Using technical data on the performance of different vintages of locomotives, we construct a new industry-level index of technical change. Our reassessment reveals the critical role played by non-tariff barriers for the emergence and consolidation of national manufacturers in this field.
    Date: 2014–02–12
  2. By: Duranton,Gilles; Ghani,Syed Ejaz; Goswami,Arti Grover; Kerr,William Robert
    Abstract: This paper complements the results of earlier work on factor misallocation. The paper first expands the methodology and provides two important decompositions for the main indices. The main result is that factor and output misallocation across districts is at least as important as misallocation within districts. Second, the paper provides an exploration of the service sector that complements earlier work on manufacturing. The analysis shows that labor plays a fundamental role for misallocation in services, whereas land is the determining factor in manufacturing. Third, the paper expands our earlier work on the effects of policies on misallocation by looking at a much broader range of policies, and find strong evidence of their effects on misallocation. Finally, the paper take steps towards the identification of the causal effect of misallocation on output per worker by developing a novel instrumental variable approach and a simulation approach that allows for checking the consistency of the empirical results.
    Keywords: Urban Slums Upgrading,Economic Theory&Research,Labor Policies,Emerging Markets,Urban Services to the Poor
    Date: 2016–01–28
  3. By: Bhattacharya, Haumanti; Innes, Robert
    Abstract: Competing theories in industrial organization predict that more concentrated industries will lead to a smaller and more efficient variety of products, or alternately, a larger and less efficient array of products. This paper presents an empirical study of these competing implications that estimates the impact of market concentration on new product introductions in a panel of nine food processing industries over 1983 to 2004. Controlling for industry-level unobservables (using fixed effects) and endogeneity of industry market structure, we find that industry concentration promotes the introduction of new products. Preliminary evidence also suggests that new product introductions spur subsequent food industry mergers. Both conclusions are consistent with the “entry for merger” theory of product variety wherein small firms introduce new products in anticipation of profitable future mergers with concentrated firms.
    Keywords: New Product Introductions, Market Concentration, Mergers, Food Consumption/Nutrition/Food Safety, Food Security and Poverty, L1, L2, L66,
    Date: 2015
  4. By: Lu, Liang; Reardon, Thomas; Zilberman, David
    Abstract: In this paper, we develop a framework to analyze adoption of indivisible technologies by relatively small farms using a threshold diffusion model. It shows that different supply chains may emerge to enable the adoption of indivisible technologies. Independent technology dealers may buy the indivisible equipment and rent it to farmers, when the gain from adoption is not affected by scale or ownership of the technology. Also, larger farmers may buy the technology equipment and rent it (renting the machine per se or providing a set of services that includes use of the machinery for the farmer buying the service) to smaller farmers, especially when there are gains from scale or ownership. The paper derives equilibrium prices and quantities in the output, equipment, and technology rental market. These equilibrium prices and quantities depend on the heterogeneity of farmers and the features of the technology. Introduction of the new indivisible technology will benefit larger adopting farmers and consumers but may hurt non-adopters. We illustrate our conceptual findings with empirical examples.
    Keywords: Supply chain, Technology adoption, Threshold model, Agricultural services, Farm mechanization, Agribusiness, Agricultural and Food Policy, Research and Development/Tech Change/Emerging Technologies, Q12, Q18,
    Date: 2015
  5. By: Alexander Petersen (Laboratory for the Analysis of Complex Economic Systems, IMT Institute for Advanced Studies, Lucca, Italy); Daniele Rotolo (SPRU, Science Policy Research Unit, University of Sussex, Brighton, United Kingdom); Loet Leydesdor (Amsterdam School of Communication Research (ASCoR), University of Amsterdam, Amsterdam, Netherlands)
    Abstract: We develop a model of innovation that enables us to trace the interplay among three key dimensions of the innovation process: (i) demand of and (ii) supply for innovation, and (iii) technological capabil- ities available to generate innovation in the forms of products, processes, and services. Building on triple helix research, we use entropy statistics to elaborate an indicator of mutual information among these dimensions that can provide indication of reduction of uncertainty. To do so, we focus on the medical context, where uncertainty poses signi cant challenges to the governance of innovation. We use the Medical Subject Headings (MeSH) of MEDLINE/PubMed to identify publications classi ed within the categories \Diseases" (C), \Drugs and Chemicals" (D), \Analytic, Diagnostic, and Ther- apeutic Techniques and Equipment" (E) and use these as knowledge representations of demand, supply, and technological capabilities, respectively. Three case-studies of medical research areas are used as representative 'entry perspectives' of the medical innovation process. These are: (i) human papilloma virus, (ii) RNA interference, and (iii) magnetic resonance imaging. We nd statistically signi cant periods of synergy among demand, supply, and technological capabilities (C??D??E) that point to three-dimensional interactions as a fundamental perspective for the understanding and gov- ernance of the uncertainty associated with medical innovation. Among the pairwise con gurations in these contexts, the demand-technological capabilities (C??E) provided the strongest link, followed by the supply-demand (D ?? C) and the supply-technological capabilities (D ?? E) channels.
    Keywords: triple helix; Medical Subject Headings; MEDLINE/PubMed; synergy; innovation; knowledge order; mutual information; dynamic vocabulary; redundancy.
    JEL: O32 O33
    Date: 2016–01
  6. By: Tim Buyse (Ghent University and SHERPPA); Freddy Heylen (Ghent University and SHERPPA); Ruben Schoonackers (National Bank of Belgium, Research Department, Ghent University)
    Abstract: This paper studies the drivers of business funded and performed R&D in a panel of 14 OECD countries since 1981. More specifically, we investigate the effects of public R&D related policies and wage formation. Following Pesaran (Econometrica, 2006) and Kapetanios et al. (Journal of Econometrics, 2011), our empirical strategy allows for cross-sectionally correlated error terms due to the presence of unobserved common factors, which are otentially non-stationary. We find that tax incentives are effective. Public funding (subsidization) of R&D performed by firms can also be effective if subsidies are not too low, neither too high. R&D performed within the government sector and within institutions of higher education is basically neutral with respect to business R&D. We find no evidence for crowding out, nor for complementarity. The higher education sector may, however, indirectly be of great significance. Our results reveal human capital accumulation at the tertiary level as a key driver of business R&D in the OECD during the last decades. As to the impact of wage formation, using an indicator for wage pres- sure developed by Blanchard (Economic Policy, 2006), we find that wage moderation may contribute to innovation, but only in fairly closed economies and in economies with flexible labour markets. In highly open economies and economies with rigid labour markets rather the opposite holds. In these economies high wage pressure may enhance creative destruction and force firms to innovate as a competitive strategy. Our results show that a careful treatment of the properties of the data is crucial.
    Keywords: R&D, technology policy, wage formation, panel cointegration
    JEL: E22 J30 O31 O38 O57
    Date: 2016–01

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