nep-tid New Economics Papers
on Technology and Industrial Dynamics
Issue of 2016‒02‒12
ten papers chosen by
Fulvio Castellacci
Universitetet i Oslo

  1. Innovation Strategies and Firm Growth By Stefano Bianchini; Gabriele Pellegrino; Federico Tamagni
  2. Routine jobs, employment and technological innovation in global value chains By Luca Marcolin; Sébastien Miroudot; Mariagrazia Squicciarini
  3. Growth and innovation in the presence of knowledge and R&D accumulation dynamics By Verba, M.
  4. Technical Change Biased Toward the Traded Sector and Labor Market Frictions By Luisito Bertinelli; Olivier Cardi; Romain Restout
  5. Structural change and the ability to sustain growth By Foster-McGregor, Neil; Kaba, Ibrahima; Szirmai, Adam
  6. Impact of R&D Activities of Firms on Productivity: Findings from an Econometric Study of the Turkish Manufacturing Sector By Elif Dayar; Mehmet Teoman Pamukçu
  7. The dynamics of profits and wages: technology, offshoring and demand By Francesco Bogliacino; Dario Guarascio; Valeria Cirillo
  8. The role of start-ups in structural transformation By Dent, Robert C.; Karahan, Fatih; Pugsley, Benjamin; Sahin, Aysegul
  9. Patent litigation in Europe By Katrin Cremers; Max Ernicke; Fabian Gaessler; Dietmar Harhoff; Christian Helmers; Luke Mc Donagh; Paula Schliessler; Nicolas van Zeebroeck
  10. Wage dispersion and technology: A firm-level analysis on European data By Valeria Cirillo; Matteo Sostero; Federico Tamagni

  1. By: Stefano Bianchini; Gabriele Pellegrino; Federico Tamagni
    Abstract: In this work, we explore the relations between sales growth and a set of innovation indicators that capture the different sources, modes and results of the innovative activity undertaken within firms. We exploit a rich panel on innovation activity of Spanish manufacturing firms, reporting detailed CIS-type information continuously over the period 2004-2011. Standard GMM-panel estimates of the average effect of innovation activities reveal significant and positive effect for internal R&D, while no effect is found for external sourcing of knowledge (external R&D, acquisition of embodied and disembodied technologies) as well as for output of innovation (process and product innovation). However, fixed-effects quantile regressions reveal that innovation activities, apart from process innovation and disembodied technical change, display a positive effect on high-growth performance. Finally, we find evidence of super-modularity of the growth function, revealing complementarities of internal R&D with product innovation, and between product and process innovation.
    Keywords: firm growth, product and process innovation, internal and external R&D, embodied and disembodied technical change, fixed-effects quantile regressions, complementarity
    Date: 2016–03–02
  2. By: Luca Marcolin; Sébastien Miroudot; Mariagrazia Squicciarini
    Abstract: This work addresses the role of global value chains (GVCs), workforce skills, ICT, innovation and industry structure in explaining employment levels of routine and non-routine occupations. The analysis encompasses 28 OECD countries over the period 2000-2011. It relies on a new country-specific measure of routine intensity built using individual-level information from the OECD Programme for the International Assessment of Adult Competencies (PIAAC) survey, as well as on new industry-level Trade in Value Added (TiVA) indicators of offshoring, domestic outsourcing, and the services content of manufacturing. The results suggest that comparatively higher skills are associated with higher employment in non-routine (NR) and low routine-intensive (LR) occupations. Also, employment in all types of occupations, both routine and non-routine ones, shows to positively relate to innovation, as measured by patents. A generally positive relationship also emerges between employment and the ICT intensity of industries, with the notable exception of jobs in high-routine occupations, where ICTs seemingly displace workers. With respect to offshoring patterns, a positive correlation is observed between the offshoring of inputs and domestic outsourcing with more routine-intensive jobs. Conversely, the offshoring of final assembly in manufacturing leads to the shedding of jobs in NR occupations and a relatively higher service content of manufacturing relates negatively with employment in HR occupations. Taken together, the results point to the existence of complex interactions between the routine content of occupations, skills, technology, industry structure and trade, which do not allow for a neat identification of “winners” and “losers” in a GVC context. While the effects appear heterogeneous across quartiles of routine intensity, a persistent and positive role of skills and innovative output for employment is found across all quartiles of routine intensive occupations.
    Date: 2016–01–14
  3. By: Verba, M. (UNU-MERIT)
    Abstract: This article develops a model of growth and innovation in which accumulation dynamics of knowledge and R&D are explicitly considered. The model is based on a more general knowledge production process than commonly used in Endogenous Growth Theory and R&D productivity literatures, reconciling as special cases of a broader framework disparate analytical approaches. The model of knowledge dynamics highlights the role of human capital, physical capital, and accumulation in the creation of innovations and establishes the theoretical possibility of long-run idea-driven growth without the razor-edge assumption of Romer (1990) and in the absence of growth in R&D employment stipulated by Jones (1995). This analysis also predicts the structure of estimation biases that can result from omission of relevant factors and failure to take into account the accumulation dynamics of knowledge and R&D. Empirical estimation supports these predictions. Findings provide recommendations for future empirical studies aiming to explain innovation.
    Keywords: Growth theory, innovation, R&D, productivity, knowledge, production function, accumulation
    JEL: O30 O31 O32 O40
    Date: 2015–12–04
  4. By: Luisito Bertinelli (CREA - Centre de recherche en épistémologie appliquée - CNRS - Centre National de la Recherche Scientifique - Polytechnique - X, Faculty of Law, Economics and Finance - University of Luxembourg [Luxembourg]); Olivier Cardi (Université François Rabelais - Tours, LEO - Laboratoire d'économie d'Orleans - UO - Université d'Orléans - CNRS - Centre National de la Recherche Scientifique); Romain Restout (BETA - Bureau d'Economie Théorique et Appliquée - Université de Strasbourg - UL - Université de Lorraine - CNRS - Centre National de la Recherche Scientifique, UCL - Université Catholique de Louvain)
    Abstract: This paper investigates the relative wage and the relative price effects of higher productivity growth in tradables relative to non tradables in a two-sector open economy model with search unemployment. Applying cointegration methods to a panel of eighteen OECD countries over the period 1970-2007, our estimates reveal that a 1 percentage point increase in the productivity differential between tradables and non tradables lowers the non traded wage relative to the traded wage (relative wage) by 0.22% and appreciates the relative price of non tradables by 0.64%. While the decline in the relative wage reveals the presence of mobility costs preventing from the wage equalization across sectors, the relative wage responses to a productivity differential display a large dispersion across countries, thus suggesting that labor market frictions vary substantially across OECD economies. Using a set of indicators capturing the heterogeneity of labor market frictions across economies, we find that the relative wage significantly declines more in countries where labor market regulation is more pronounced. These empirical findings can be rationalized in a two-sector open economy model with search in the labor market and an endogenous labor force participation. In line with our estimates, our quantitative analysis reveals that the relative wage falls more in countries where unemployment benefits are more generous, firing cost is high, the worker bargaining power is large, and/or the labor force is less responsive at the extensive margin. When calibrating the model to each OECD economy, our numerical results reveal that the model predicts the relative wage response fairly well, and to a lesser extent the relative price response.
    Keywords: Productivity growth, Sectoral wages, Relative price of non tradables, Search theory, Unemployment
    Date: 2015
  5. By: Foster-McGregor, Neil (UNU-MERIT); Kaba, Ibrahima (UNU-MERIT); Szirmai, Adam (UNU-MERIT)
    Abstract: This paper examines the relationships between structural characteristics and the ability to sustain growth. The analysis is based on a novel dataset of sectoral shares in GDP and growth rates for 108 countries from 1960 to 2010. Rather than focusing exclusively on average growth rates, the paper examines the characteristics of positive growth episodes. Dependent variables include the duration of positive growth episodes and the risk that such growth episodes come to an end. Structural characteristics include the degree of sectoral specialisation, the share of manufacturing and the share of the modern sector in GDP. We find that higher shares of manufacturing, high and increasing shares of the modern sector and a more diversified structure of production contribute to longer duration of growth episodes and reduced volatility of growth patterns. The effects of these same variables on average growth rates are much more ambiguous.
    Keywords: economic growth, sustainable growth, growth rate, duration of growth, duration, volatility, specialisation, diversification, structure, structural change, structural transformation
    JEL: O40 O14 L16
    Date: 2015–12–01
  6. By: Elif Dayar (Department of Economics, Atilim University); Mehmet Teoman Pamukçu (TEKPOL, Science and Technology Policy Studies, Middle East Technical University)
    Abstract: In this paper we are investigating the following question for Turkey: “How does the increase in R&D capital stock and how do foreign knowledge spillovers affect labor productivity?” Our sample is composed of R&D performers only, hence the Heckman two stage procedure with the instrumental variables technique for panel data is implemented (Semykina and Wooldridge, 2010). Appropriate instruments are used in regressions for the endogenous variables. Our findings signal that the indigenous efforts of R&D performers and their physical capital stock intensity exert a positive effect on firm-level labor productivity. However, neither foreign ownership nor foreign knowledge spillovers are found to affect R&D performers’ labor productivity positively. On the other hand, skill exerts a strong positive impact on productivity, pointing to the significant role of educated staff in R&D performing firms. We can conclude that Turkish R&D performers are dependent on their accumulated physical capital stock intensity and their own R&D efforts when it comes to increasing labor productivity.
    Keywords: R&D
    Date: 2014–12
  7. By: Francesco Bogliacino; Dario Guarascio; Valeria Cirillo
    Abstract: This article explores the impact of innovation, offshoring and demand on profits and wage dynamics. The growing relevance of functional distribution in terms of explaining personal distribution underscores the importance of our results for understanding recent increases in inequality. The empirical analysis performed herein involves a panel of 38 manufacturing and service sectors over four time periods (1995 to 2010) across five European countries (Germany, France, Italy, Spain and United Kingdom). Our identification strategy relies on instrumental variables and recently proposed heteroskedasticity-based instruments (Lewbel, 2012). Additionally, we perform sensitivity analysis to account for omitted variables bias, following the recent theoretical results of Oster (2015). The main results of our study can be summed up in three points. First, it highlights the contrasting effects of R&D and offshoring as wage determinants: the former exerts a positive effect while the latter exert a negative effect. Second, it shows that external demand is a key variable driving profits growth. Third. it provides evidence of noteworthy results stemming from the categorization of workers according to skill level, such as: high-skilled workers are favored by both innovation and offshoring, offshoring exerts downward pressure primarily on low-skilled wages (not on mediumskilled wages as predicted by SBTC) and profits are positively correlated with high-skill wages, negatively correlated with medium-skill wages and not correlated with low-skill wages.
    Keywords: rent; surplus; distribution; inequality; skills; offshoring; R&D
    Date: 2016–03–02
  8. By: Dent, Robert C. (Federal Reserve Bank of New York); Karahan, Fatih (Federal Reserve Bank of New York); Pugsley, Benjamin (Federal Reserve Bank of New York); Sahin, Aysegul (Federal Reserve Bank of New York)
    Abstract: The U.S. economy has been going through a striking structural transformation—the secular reallocation of employment across sectors—over the past several decades. We propose a decomposition framework to assess the contributions of various margins of firm dynamics to this shift. Using firm-level data, we find that at least 50 percent of the adjustment has been taking place along the entry margin, owing to sectors receiving shares of start-up employment that differ from their overall employment shares. The rest is mostly the result of life cycle differences across sectors. Declining overall entry has a small but growing effect of dampening structural transformation.
    Keywords: structural transformation; employment dynamics; sectoral reallocation
    JEL: E24 J00 J23 L25
    Date: 2016–01–01
  9. By: Katrin Cremers; Max Ernicke; Fabian Gaessler; Dietmar Harhoff; Christian Helmers; Luke Mc Donagh; Paula Schliessler; Nicolas van Zeebroeck
    Abstract: We compare patent litigation cases across four European jurisdictions – Germany, France, the Netherlands, and the UK – covering cases filed during the period 2000-2008. For our analysis, we assemble a new dataset that contains detailed information at the case, litigant, and patent level for patent cases filed at the major courts in the four jurisdictions. We find substantial differences across jurisdictions in terms of case loads. Courts in Germany hear by far the largest number of cases in absolute terms, but also when taking country size into account. We also find important between-country differences in terms of outcomes, the share of cases that is appealed, as well as the characteristics of litigants and litigated patents. A considerable number of patents are litigated in multiple jurisdictions, but the majority of patents are subject to litigation only in one of the four jurisdictions.
    JEL: O34 K11 K41
    Date: 2016
  10. By: Valeria Cirillo; Matteo Sostero; Federico Tamagni
    Abstract: Within-firm wage dispersion represents a relevant dimension of the overall wage inequality. A large stream of literature has analysed the wage-technology link without explicitly taking into account within-firm wage dispersion. In this work we aim to empirically investigate how technology affects within-firm wage dispersion and how it changes according to employer size. By exploiting employer-employee data from a survey of European firms (Eurostat's Structure of Earnings Survey - 2010) matched with information on sector innovation derived from the Community Innovation Survey, we look at the impact of innovation across small and medium-large firms, both on the average wages paid by firms and on the degree of within-firm wage inequality. Furthermore, we distinguish between high-paying and low-paying firms and more equal and unequal firms by means of a quantile regression approach.
    Keywords: wage inequalities, innovation, quantile regressions, employer-employee matched data
    Date: 2016–03–02

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