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on Technology and Industrial Dynamics |
| By: | Victor Kummritz (Graduate Institute of International and Development Studies - Centre for Trade and Economic Integration) |
| Abstract: | Global Value Chains (GVCs) have become a central topic in trade and development policy but little is known about their actual impact on economic performance. Using a new unique set of Inter-Country Input-Output tables with extensive country coverage, I show that an increase in GVC participation leads to higher domestic value added and productivity for all countries independent of their income levels. Causality is established by building a novel value added trade resistance index that combines third country trade costs with industry-specific technological variables leading to an exogenous variation in GVC participation. Based on the preferred IV specification, I find that a 1 percent increase in backward GVC participation leads to 0.11% higher domestic value added in the average industry. Equally, I find for forward linkages that a 1 percent increase in GVC participation leads to 0.60% higher domestic value added and to 0.33% higher labour productivity. |
| Keywords: | Global Value Chains, International Trade, Economic Development |
| JEL: | F13 F14 F15 |
| Date: | 2016–03–23 |
| URL: | http://d.repec.org/n?u=RePEc:gii:cteiwp:ctei-2016-01&r=tid |
| By: | Castellani, Davide (Henley Business School, University of Reading); Piva, Mariacristina (Università Cattolica del Sacro Cuore); Schubert, Torben (CIRCLE, Lund University); Vivarelli, Marco (Università Cattolica del Sacro Cuore, IZA, UNU-MERIT) |
| Abstract: | Using data on the US and EU top R&D spenders from 2004 until 2012, this paper investigates the sources of the US/EU productivity gap. We find robust evidence that US firms have a higher capacity to translate R&D into productivity gains (especially in the high-tech industries), and this contributes to explaining the higher productivity of US firms. Conversely, EU firms are more likely to achieve productivity gains through capital-embodied technological change at least in medium and low-tech sectors. Our results also show that the US/EU productivity gap has worsened during the crisis period, as the EU companies have been more affected by the economic crisis in their capacity to translate R&D investments into productivity. Based on these findings, we make a case for a learning-based and selective R&D funding, which - instead of purely aiming at stimulating higher R&D expenditures - works on improving the firms’ capabilities to transform R&D into productivity gains. |
| Keywords: | R&D; productivity; economic crisis; US; EU |
| JEL: | O33 O51 O52 |
| Date: | 2016–05–09 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:lucirc:2016_015&r=tid |
| By: | Adam Jaffe (Motu Economic and Public Policy Research); Trinh Le (Motu Economic and Public Policy Research); Nathan Chappell (Motu Economic and Public Policy Research) |
| Abstract: | This study draws on firm-level data from the Longitudinal Business Database to examine productivity in the New Zealand construction industry. It finds that over the period 2001–2012, on average labour productivity in this industry grew by 1.7 percent annually and multi-factor productivity by 0.5 percent annually, compared with 0.5 and 0.1 percent annually respectively for firms in the overall measured sector. Within the construction industry, productivity growth rates vary markedly by sub-industry and other firm characteristics. Labour productivity is more widely dispersed across the construction industry than is multi-factor productivity. High-productivity firms tend to be younger, more likely to be a new start-up, to belong to a business group, and to locate in Auckland than low-productivity firms. Working-proprietor-only firms are slightly less productive on average than employing firms, and also exhibit much greater productivity variation. Overall, however, productivity variation or dispersion is no greater in construction than in other industries. We decompose productivity changes over time into that due to changes at continuing firms, to reallocation of output from low- to high-productivity firms, and to entry and exit. In the ‘Building construction’ and ‘Heavy and civil engineering and construction’ industries, productivity was enhanced by net entry and reallocation, but reduced by an overall decline in the productivity of continuing firms. In the ‘Construction services’ industry, net entry, reallocation, and productivity improvement of continuing firms all contributed to positive productivity growth. |
| Keywords: | Construction industry, labour productivity, multi-factor productivity |
| JEL: | D24 L74 |
| Date: | 2016–05 |
| URL: | http://d.repec.org/n?u=RePEc:mtu:wpaper:16_08&r=tid |
| By: | Hünermund, Paul; Czarnitzki, Dirk |
| Abstract: | We investigate the effect of Europe's largest multilateral subsidy program for R&D-performing, small and medium-sized enterprises on firm growth. The program was organized under a specific budget allocation rule, referred to as Virtual Common Pot (VCP), which is designed to avoid cross-subsidization between participating countries. This rule creates exogenous variation in treatment status and allows us to identify the local average treatment effect of public R&D grants. In addition, we compare the program's effect under the VCP rule with the standard situation of a Real Common Pot (RCP), where program authorities allocate a single budget according to uniform project evaluation criteria. Our estimates suggest no average effect of grants on firm growth but treatment effects are heterogeneous and increase with project quality. A Real Common Pot would have reduced the cost of policy-induced job creation by 27%. We discuss the implications of our findings for the coordination of national policy programs within the European Research Area. |
| Keywords: | Joint Programming Iniatives,R&D Policy,Virtual Common Pot,Instrumental Variable Estimation,European Research Area |
| JEL: | O38 H25 C31 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:16039&r=tid |
| By: | Gustafsson, Anders (The Ratio institute and Jönköping School of Economics); Stephan, Andreas (The Ratio institute and Jönköping School of Economics); karlson, Nils (The Ratio institute); Hallman, Alice (The Ratio institute) |
| Abstract: | The governments of most advanced countries offer some type of financial subsidy to encourage firm innovation and productivity. This paper analyzes the effects of innovation subsidies using a unique Swedish database that contains firm level data for the period 1997-2011, specifically information on firm subsidies over a broad range of programs. Applying causal treatment effect analysis based on matching and a diff-in-diff approach combined with a qualitative case study of Swedish innovation subsidy programs, we test whether such subsidies have positive effects on firm performance. Our results indicate a lack of positive performance effects in the long run for the majority of firms, albeit there are positive short-run effects on human capital investments and also positive short-term productivity effects for the smallest firms. These findings are interpreted from a robust political economy perspective that reveals that the problems of acquiring correct information and designing appropriate incentives are so complex that the absence of significant positive long-run effects on firm performance for the majority of firms is not surprising. |
| Keywords: | Innovation subsidies; market failures; causal treatment effect evaluation; firm performance; CEM; robust political economy |
| JEL: | H25 O38 P16 |
| Date: | 2016–04–25 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:ratioi:0270&r=tid |
| By: | Ernest Miguélez (GREThA, University of Bordeaux & AQR Research Group-IREA. University of Barcelona); Rosina Moreno (AQR Research Group-IREA. University of Barcelona) |
| Abstract: | This paper has two main objectives. First, it estimates the impact of related and unrelated variety of European regions’ knowledge structure on their patenting activity. Second, it looks at the role of technological relatedness and extra-local knowledge acquisitions for local innovative activity. Specifically, it assesses how external technological relatedness affects regional innovation performance. Results confirm the strong relevance of related variety for regional innovation; whereas the impact of unrelated variety seems relevant only for the generation of breakthrough innovations. The study also shows that external knowledge flows have a higher impact, the higher the similarity between these flows and the extant local knowledge base. |
| Keywords: | Variety; Patents; Patent citationsM Relatedness; Knowledge production function. JEL classification: O18; O31; O33; R11 |
| Date: | 2016–04 |
| URL: | http://d.repec.org/n?u=RePEc:ira:wpaper:201603&r=tid |
| By: | Michael Fritsch (School of Economics and Business Administration, Friedrich-Schiller-University Jena); Sandra Kublina (School of Economics and Business Administration, Friedrich-Schiller-University Jena) |
| Abstract: | This paper investigates the effect of related and unrelated variety on regional growth in West Germany. In particular, we analyze the role of regional absorptive capacity and new business formation for these effects. We find that West German regions benefit from both types of varieties. The positive effect of unrelated variety on growth is more pronounced in regions with higher levels of absorptive capacity in terms of R&D activities and with higher levels of new business formation. Such moderating effects cannot be found for related variety. |
| Keywords: | Related variety, unrelated variety, knowledge spillovers, regional absorptive capacity, entrepreneurship, regional growth |
| JEL: | R11 R12 D62 |
| Date: | 2016–05–10 |
| URL: | http://d.repec.org/n?u=RePEc:jrp:jrpwrp:2016-009&r=tid |
| By: | Raghbendra Jha; Sadia Afrin |
| Abstract: | This paper models the evolution and determinants of the shares of agricultural, manufacturing and services sectors’ value added for 53 African countries for 1970-2014 years. A number of alternative estimation techniques were used. These included pooled OLS with clustered standard errors, quantile regressions and panel data techniques. However, the quantile regressions do not provide much additional traction over and above the OLS estimates. There are large gaps in the data for many countries for several variables. Policy conclusions are derived from the viewpoint of increasing the shares of the services and, particularly, the manufacturing sector in value added. |
| Keywords: | Africa, Structural Transformation, Pooled OLS, Quantile regression, Panel |
| JEL: | C22 C23 O11 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:pas:papers:2016-01&r=tid |
| By: | Antonio Musolesi; Jean Pierre Huiban; Camilla Mastromarco; Michel Simioni |
| Abstract: | This paper attempts to estimate the impact of pollution abatement investments on the production technology of firms by pursuing two new directions. First, we take advantage of recent econometric developments in productivity and efficiency analysis and compare the results obtained with two complementary approaches: parametric stochastic frontier analysis and conditional nonparametric frontier analysis. Second, we focus not only on the average effect but also on its heterogeneity across firms and over time and search for potential nonlinearities. We provide new results suggesting that such an effect is heterogeneous both within firms and over time and indicating that the effect of pollution abatement investments on the production process is not monotonic. These results have relevant implications both for modeling and for the purposes of advice on environmentally friendly policy. |
| Keywords: | Pollution abatement investments; technology; stochastic frontier analysis; conditional nonparametric frontier analysis; generalized product kernels; eneralized local polynomial kernel regression |
| JEL: | C14 C23 D24 Q50 |
| Date: | 2016–05–09 |
| URL: | http://d.repec.org/n?u=RePEc:udf:wpaper:2016025&r=tid |
| By: | Gaétan de Rassenfosse; Adam B. Jaffe; Elizabeth Webster |
| Abstract: | Low-quality patents are of considerable concern to businesses operating in patent-dense markets. There are two pathways by which low-quality patents may be issued: the patent office may apply systematically a standard that is too lenient (low inventive step threshold); or the patent office may grant patents that are, in fact, below its own threshold (so-called ‘weak’ patents). This paper uses novel data from inventions that have been examined at the five largest patent offices and an explicit model of the grant process to derive first-of-their-kind office-specific estimates of the height of the inventive step threshold and the prevalence of weak patents. The empirical analysis is based on patent applications granted at one office but refused at another office. We estimate that the fraction of patent grants associated with a patent standard that is lower than that of other countries ranges from 2-15%, with Japan having the tightest standard and the United States and China the loosest. The fraction of grants that are inconsistent with the office’s own standard ranges from 2-6 per cent. The fraction of grants that are inconsistent in this sense is generally higher in newer fields such as software and biotechnology, and lower in traditional fields such as mechanical engineering. Our estimates of invalidity are much lower than those that have been derived from litigation studies, consistent with litigated patents being highly non-representative of the population. |
| JEL: | K41 L43 O34 |
| Date: | 2016–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:22244&r=tid |