nep-tid New Economics Papers
on Technology and Industrial Dynamics
Issue of 2016‒02‒17
ten papers chosen by
Fulvio Castellacci
Universitetet i Oslo

  1. Firm R&D Investment and Export Market Exposure By Vuong, Van Anh; Peters, Bettina; Roberts, Mark
  2. Is Offshoring Beneficial or Detrimental to Innovation in Developed Countries? By Fritsch, Ursula
  3. Direct and Cross-Scheme Effects in a Research and Development Subsidy Program By Hottenrott, Hanna Leontine; Lopes-Bento, Cindy; Veugelers, Reinhilde
  4. Innovation and Employment Growth in Japan: An empirical analysis based on micro data of the Basic Survey of Business Structure and Activity (Japanese) By YoungGak KIM; IKEUCHI Kenta; KWON Hyeog Ug; FUKAO Kyoji
  5. Endogenous competition exposure: China's rise, intra-industry and intra-firm reallocations By Gampfer, Benjamin; Geishecker, Ingo
  6. Do age complementarities affect labour productivity? Evidence from German firm level data By Peters, Cornelius
  7. Joint R&D subsidies, related variety, and regional innovation By Broekel, Tom; Brachert, Matthias; Duschl, Matthias; Brenner, Thomas
  8. Research Joint Ventures and Technological Proximity By Müller, Aranja; Zaby, Alexandra
  9. Estimating the Local Average Treatment Effect of R&D Subsidies in a Virtual Common Pot By Hünermund, Paul; Czarnitzki, Dirk
  10. Science, Innovation and National Growth By Brenner, Thomas

  1. By: Vuong, Van Anh; Peters, Bettina; Roberts, Mark
    Abstract: In this paper, we estimate a dynamic structural model of a rm s decision to invest in R&D and use it to measure the expected long-run bene t from R&D investment. We apply the model to German rms in ve high-tech manufacturing industries and distinguish rms by whether they sell in just the domestic market or also export some of their production. We nd that R&D investment leads to a higher rate of product and process innovation among exporting rms and these innovations have a larger impact on productivity improvement in export market sales. As a result, exporting rms have a higher payo from R&D investment, invest in R&D more frequently than rms that only sell in the domestic market, and, subsequently, have higher rates of productivity growth. The endogenous investment in R&D is an important mechanism that leads to a divergence in the long-run performance of rms that di er in their export market exposure.
    JEL: L60 O31 O33
    Date: 2015
  2. By: Fritsch, Ursula
    Abstract: This paper empirically investigates the effects of offshoring on innovation in a sample of 18 developed countries. Offshoring of services relates positively to innovation whereas offshoring of manufacturing depicts a negative relation with innovation. Solely offshoring manufacturing to high-income countries is found to be detrimental to domestic innovation, but not offshoring of manufacturing to emerging countries. These results are robust to an instrumental variables approach. Labor market dynamics can mitigate or even reverse these negative effects of offshoring of manufacturing if skill upgrading takes place simultaneously. This paper documents that innovation effects differ from the positive productivity effects found in earlier research and suggests that policy makers should take these different effects into account when designing a regulatory framework for further trade integration.
    JEL: F14 F16 O30
    Date: 2015
  3. By: Hottenrott, Hanna Leontine; Lopes-Bento, Cindy; Veugelers, Reinhilde
    Abstract: This study investigates the effects of an R&D subsidy scheme on participating firms net R&D investment. Making use of a specific policy design in Belgium that explicitly distinguishes between research and development grants, we estimate direct and cross-scheme effects on research versus development intensities in recipients firms. We find positive direct effects from research (development) subsidies on net research (development) spending. This direct effect is larger for research grants than for development grants. We also find cross-scheme effects that may arise due to complementarity between research and development activities. Finally, we find that the magnitude of the treatment effects depends on firm size and age and that there is a minimum effective grant size, especially for research projects. The results support the view that public subsidies induce higher additional investment particularly in research where market failures are larger, even when the subsidies are targeting development.
    JEL: O38 O32 C14
    Date: 2015
  4. By: YoungGak KIM; IKEUCHI Kenta; KWON Hyeog Ug; FUKAO Kyoji
    Abstract: Using firm level panel data taken from the Basic Survey of Japanese Business Structure and Activities between 1991 and 2010, we examine the relationship between innovation, excessive labor, and employment growth in Japan. The main results of this paper are as follows: (1) There are relatively many firms holding excessive labor. (2) The degree of the excessive labor is serious for large firms. (3)Firms do not adjust employment instantly. If excessive labor for the current term exists, firms gradually reduce employment. This result is consistent with theoretical model considering adjustment cost. (4) Other things being equal, as firms invest aggressively in research and development (R&D), they increase employment. (5) The negative correlation between total factor productivity (TFP) growth and employment growth is observed, whereas TFP growth by R&D has a positive impact on employment. (6) The product innovation that is proxied by R&D positively affects employment in the manufacturing sector. On the other, in the non-manufacturing sector, the process innovation that is proxied by capital formation increases employment.
    Date: 2016–01
  5. By: Gampfer, Benjamin; Geishecker, Ingo
    Abstract: In this paper we analyse the manufacturing sector's capacity to mitigate increasing import competition from China. In our view, competition exposure is endogenous, i.e. influenced by firms' decisions which products are sold and what markets are served. We construct a counterfactual competition measure to assess the importance of different types of adaptation to increased competition: inter- and intra-industry reallocations, firm entry and exit, and product- and destination switching, among others. Combining Danish firm register data with transactional level trade statistics we are able to track product-level competition changes on the domestic as well as on each export market. Between 1997 and 2008 aggregated manufacturing level exposure to Chinese imports increased by 177 per cent but counterfactually would have increased by remarkable 283 per cent had the manufacturing sector not successfully adapted. The mitigation of sector level competition exposure works through all adaptation channels, notably firm entry and exit, and inter-industry reallocations. However, for surviving firms, product and destination switching are very relevant mechanisms to mitigate increased competitive pressure from China.
    JEL: F14 L60
    Date: 2015
  6. By: Peters, Cornelius
    Abstract: In Germany as in many other European countries there will be a shift in the age structure of the workforce in the next decades. The number of older workers will increase whereas the number of young and middle aged workers will decline. This paper provides evidence how the demographic ageing affects labor productivity. It focuses on age complementarities between workers. Using a cross sectional linked employer-employee data set from 2012 translog cost functions are estimated. To maintain consistency with microeconomic theory, several parameter constraints are imposed. To control for the skill level of the workers a nested production structure is applied. In addition, this allows to analyse the complementarities between different age groups by skill level. Based on the estimated parameters pairwise elasticities of complementarity and factor price elasticities are calculated. The results indicate that workers belonging to different age groups are complementary factors. The complementarities especially arise between young and medium aged workers and are higher within groups of high skilled labor. Simulating the expected shift in the age structure due to the demographic ageing indicates that the productivity of younger and middle aged workers will increase whereas the productivity of older workers will decline due to the complementary relationship between the different age groups.
    JEL: C31 D24 J11
    Date: 2015
  7. By: Broekel, Tom; Brachert, Matthias; Duschl, Matthias; Brenner, Thomas
    Abstract: Subsidies for R&D are an important tool of public R&D policy, which motivates extensive scientific analyses and evaluations. The paper adds to this literature by arguing that the effects of R&D subsidies go beyond the extension of organizations monetary resources invested into R&D. It is argued that collaboration induced by subsidized joint R&D projects yield significant effects that are missed in traditional analyses. An empirical study on the level of German labor market regions substantiates this claim showing that collaborative R&D subsidies impact regions innovation growth when providing access to related variety and embedding regions into central positions in cross- regional knowledge networks.
    JEL: L14 O31 R12
    Date: 2015
  8. By: Müller, Aranja; Zaby, Alexandra
    Abstract: We study research joint ventures (RJV) given that knowledge spillovers depend positively on the technological proximity between rms. Possible scenarios differ in the intensity of collaboration, i.e., the (non)coordination of research activities and the extent of knowledge sharing. The investigation of bilateral RJVs in an oligopolistic market allows to distinguish e ects for insider and outsider rms. Our central ndings are (i) RJVs do not generally outperform competitive research with respect to innovative output, and social welfare. (ii) Technological proximity and the intensity of cooperation play a decisive role for the private and social favorability of a RJV. (iii) Joint research combined with complete knowledge sharing outperforms less intensive cooperation forms.
    JEL: D43 L13 O31
    Date: 2015
  9. By: Hünermund, Paul; Czarnitzki, Dirk
    Abstract: We investigate the additionality effects of Eurostars, Europe's largest multilateral subsidy program for R&D-performing small and medium sized enterprises. A specific budget allocation rule serves as an instrument and allows us to identify the local average treatment effect of public R&D grants. This rule, referred to as Virtual Common Pot (VCP), is designed to avoid cross-subsidization between participating countries. We compare the program's effect under a VCP with the counterfactual situation under a Real Common Pot (RCP), where project authorities allocate a single budget according to uniform project evaluation criteria. Our estimates suggest a large positive impact on job creation whereas there is no treatment effect on patenting. In addition, we find a relative inefficiency of 19.4% more jobs which could be created by the program under a RCP.
    JEL: O38 H25 C31
    Date: 2015
  10. By: Brenner, Thomas
    Abstract: This paper studies the effects of public research (publications) and innovation output (patents) on national economic growth with the help of a GMM panel regression including 114 countries. Effects on productivity growth and capital and labor inputs are distinguished. Furthermore, different time lags are examined for the various analyzed effects and two time periods as well as less and more developed countries are studied separately. The results confirm the effect of innovation output on productivity for more developed countries. Simultaneously, innovation output is found to have negative impacts on capital and labor inputs, while public research is found to have positive impacts on labor inputs.
    JEL: O11 O31 C23
    Date: 2015

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