nep-tid New Economics Papers
on Technology and Industrial Dynamics
Issue of 2016‒06‒04
ten papers chosen by
Fulvio Castellacci
Universitetet i Oslo

  1. Product Switching and the Business Cycle By Andrew B. Bernard; Toshihiro Okubo
  2. The Productivity Impact of R&D Investment: A Comparison between the EU and the US By Castellani, Davide; Piva, Mariacristina; Schubert, Torben; Vivarelli, Marco
  3. The "Schumpeterian" and the "Keynesian" Stiglitz: Learning, Coordination Hurdles and Growth Trajectories By Giovanni Dosi; Maria Enrica Virgillito
  4. Transition to clean technology By Acemoglu, Daron; Akcigit, Ufuk; Hanley, Douglas; Kerr, William R.
  5. Lock-in of mature innovation systems, The transformation toward clean concrete in the Netherlands By Wesseling, Joeri H.; van der Vooren , Alexander
  6. ‘Better late than never’: a longitudinal quantile regression approach to the interplay between green technology and age for firm growth By Riccardo Leoncini; Alberto Marzucchi; Sandro Montresor; Francesco Rentocchini; Ugo Rizzo
  7. Patent rights, product market reforms, and innovation By Philippe Aghion; Peter Howitt; Susanne Prantl
  8. Aggregate green productivity growth in OECD’s countries By Zhiyang Shen; Jean-Philippe Boussemart
  9. Pushing and Pulling Environmental Innovation: R&D Subsidies and Carbon Taxes By Clancy, Matthew; Moschini, GianCarlo
  10. Intra-firm diffusion of pollution prevention technology: the role of organizational structure By Bi, Xiang; Qian, Lifan

  1. By: Andrew B. Bernard; Toshihiro Okubo
    Abstract: This paper explores role of product adding and dropping within manufacturing firms over the business cycle. While a substantial body of work has explored the importance of the extensive margins of firm entry and exit in employment and output flows, only recently has research begun to examine the adjustment across products within firms and its importance for firm and aggregate output and employment flows. Using a novel, annual firm-product data set covering all Japanese manufacturing firms with more than 4 employees from 1992 to 2006, we provide the first evidence on annual changes in product adding and dropping by continuing firms over the business cycle. We find very high rates of product adding and dropping by continuing firms between the last year of the recession and the first year of the subsequent expansion and offer an explanation and supporting evidence based on a "trapped factors" model of firm behavior.
    Keywords: product adding, product dropping, multi-product firms, trapped factors
    JEL: L11 E32 L21 L25 L60
    Date: 2016–05
  2. By: Castellani, Davide (University of Reading); Piva, Mariacristina (Università Cattolica del Sacro Cuore); Schubert, Torben (Lund University); Vivarelli, Marco (Università Cattolica del Sacro Cuore)
    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
  3. By: Giovanni Dosi; Maria Enrica Virgillito
    Abstract: This work, which shall contribute to the Fest "A Just Society: Honouring Joseph Stiglitz", discusses a major unifying theme in Joe Stiglitz monumental work, namely, the analysis of economies characterised by persistent learning and coordination hurdles. In his analysis Joe is in many respects a "closet evolutionist" who in fact highlighted and explored many evolutionary properties of contemporary economies in a Schumpeterian spirit. And he went further introducing genuinely Keynesian properties e.g. coordination failures and the possibility of path-dependent multiplicity of growth trajectories which are far and beyond Schumpeterian concerns. In this short essay, we shall illustrate this point with reference to some of Stiglitz works, out of many, linking them with significantly overlapping contributions from the evolutionary camp. We group them by two major themes, namely, the consequences of learning and dynamic increasing returns, and "Keynesian" coordination failures with the ensuing possibility of multiple growth paths, fluctuations, small and big crises.
    Keywords: Stiglitz, Learning, Coordination Hurdles, Growth Trajectories, Knowledge, Information
    Date: 2016–03–05
  4. By: Acemoglu, Daron; Akcigit, Ufuk; Hanley, Douglas; Kerr, William R.
    Abstract: We develop a microeconomic model of endogenous growth where clean and dirty technologies compete in production and innovation–in the sense that research can be directed to either clean or dirty technologies. If dirty technologies are more advanced to start with, the potential transition to clean technology can be difficult both because clean research must climb several rungs to catch up with dirty technology and because this gap discourages research effort directed towards clean technologies. Carbon taxes and research subsidies may nonetheless encourage production and innovation in clean technologies, though the transition will typically be slow. We characterize certain general properties of the transition path from dirty to clean technology. We then estimate the model using a combination of regression analysis on the relationship between R&D and patents, and simulated method of moments using microdata on employment, production, R&D, firm growth, entry and exit from the US energy sector. The model’s quantitative implications match a range of moments not targeted in the estimation quite well. We then characterize the optimal policy path implied by the model and our estimates. Optimal policy makes heavy use of research subsidies as well as carbon taxes. We use the model to evaluate the welfare consequences of a range of alternative policies.
    Keywords: carbon cycle, directed technological change, environment, innovation, optimal policy
    JEL: O30 O31 O33 C65
    Date: 2015–12–10
  5. By: Wesseling, Joeri H. (CIRCLE, Lund University); van der Vooren , Alexander (Sustainable Development Department, PBL)
    Abstract: Energy-intensive processing industries like the concrete industry form the base of the economy and account for a large part of greenhouse gas emissions. Sectoral transformation to cleaner basic materials is therefore crucial, and institutional pressure to do so is increasing. These sectors have nevertheless been largely omitted by socio-technical studies. This paper therefore sets out to analyze the systemic problems that inhibit the transformation of the mature innovation system of the concrete sector toward the development, diffusion and adoption of clean concrete innovations, for the case of the Netherlands. A coupled structural-functional approach has been frequently applied to identify such systemic problems, but has been limited to emerging technological innovation systems. Consequently, the approach tends to overlook the systemic lock-in that arises from interdependent systemic problems and vested interests that characterize mature innovation systems. This paper analyzes these characteristics to extend the application of the structural-functional approach to the transformation of mature innovation systems. Interviews with 28 stakeholders were conducted and triangulated with reports, websites and other documents. A list of systemic problems was identified that originate within actors, institutions, networks, technology and infrastructure and that impaired the performance of all system functions except knowledge development. Systemic problems are indeed found to be strongly interdependent, leading to systemic lock-in. Through strategic, often collective action, established firms with vested interests were able to reinforce these systemic problems to inhibit clean concrete innovation. The study concludes that systemic lock-in inhibits the sustainability transformation of the mature innovation system of concrete in the Netherlands and confirms that the application of the structural-functional approach can be extended from emerging to mature innovation systems.
    Keywords: system failures; system functions; vested interest; sectoral innovation system; sectoral system of innovation and production; technological innovation system
    JEL: O25 O31 O33 O38 Q01
    Date: 2016–05–13
  6. By: Riccardo Leoncini (University of Bologna (Italy); Freiburg Institute for Advanced Studies (FRIAS), University of Freiburg (Germany); IRCrES-CNR (Italy)); Alberto Marzucchi (Catholic University of Milan (Italy)); Sandro Montresor (Kore University of Enna (Italy)); Francesco Rentocchini (Southampton Business School, University of Southampton (UK)); Ugo Rizzo (University of Ferrara (Italy))
    Abstract: This paper investigates the relationships between green/non-green technologies and firm growth. By combining the literature on eco-innovations with industrial organisation and entrepreneurial studies, this relationship is investigated by considering its dependence on the pace at which firms grow and the moderating role of age. Based on a sample of 5498 manufacturing firms in Italy for the period of 2000-2008, we estimate longitudinal fixed effects quantile models in which age is set to moderate the effects of green and non-green patents on employment growth. The results indicate a positive role of green technologies in growth greater than the effect of non-green technologies. This result is valid with the exception of struggling and rapidly growing firms: the relevance of moderately growing firms thus emerges in contrast to the more celebrated “elite of superstar” growing companies. Age plays a moderating role in the growth effects of green technologies. Not completely inconsistent with the extant literature, this moderation effect is positive, indicating the importance of firm experience in benefiting from green technologies in terms of growth, possibly relative to the complexity of their management.
    Keywords: green technology; firm growth; age; quantile fixed effects
    JEL: L26 O33 Q55
    Date: 2016–05
  7. By: Philippe Aghion; Peter Howitt; Susanne Prantl
    Keywords: intellectual property rights; competition; innovation
    JEL: L1 L5 O3 O4
    Date: 2015–09
  8. By: Zhiyang Shen (IESEG School of Management (LEM 9221-CNRS)); Jean-Philippe Boussemart (University of Lille 3 and IESEG School of Management (LEM 9221-CNRS); CNRS-LEM 9221 and IESEG School of Management)
    Abstract: Most of previous research about Total Factor Productivity (TFP) at the macro level only emphasizes technical effect and technological progress at the country level, but it ignores structural effect for a group of countries at the aggregate level. This paper attempts to measure the green productivity evolution incorporating carbon dioxide emissions based on the Luenberger TFP indicator for a group of 30 OECD countries over the period of 1971-2011. We propose a novel decomposition for green productivity growth at the aggregate level which separates TFP changes into three components: technological progress, technical efficiency change, and structural efficiency change. The structural effect captures the heterogeneity in the combination of input and output mixes among countries that can impact TFP growth at a more aggregate level. In the literature, this effect has not been quantified for a group of nations such as the OECD countries. Our results indicate that the traditional TFP index underestimates green growth which is motivated by the effective and efficient environmental policies of the OECD. The green productivity growth is mainly driven by technology progress which has become a dominant force in the 21st century.
    Keywords: Undesirable Output; Carbon Dioxide Emissions; Total Factor Productivity; Weak Disposability
    JEL: O44 O47 Q50 D24
    Date: 2015–12
  9. By: Clancy, Matthew; Moschini, GianCarlo
    Abstract: We use a novel modeling framework that incorporates free entry into the R&D sector and uncertainty about technological opportunity to evaluate three policy regimes (relative to laissez faire) designed to address a market with negative environmental externalities: a carbon tax, an R&D subsidy, and a mix of the two instruments. We show carbon taxes on their own are sufficient to obtain most of the welfare gains achieved by an optimal policy mix, and that the optimal carbon tax level is relatively robust to changing modeling assumptions, in contrast to optimal R&D subsidies. We also show R&D subsidies tend to produce more disperse outcomes than a carbon tax: either more R&D entrants (when technological opportunity is favorable) or none at all (when technological opportunity is unfavorable).
    Keywords: Carbon tax, Incentive, Innovation, Renewable energy, R&D subsidy, Welfare, Environmental Economics and Policy, Industrial Organization, Research and Development/Tech Change/Emerging Technologies, H23, O31, Q42, Q55, Q58,
    Date: 2016
  10. By: Bi, Xiang; Qian, Lifan
    Abstract: This paper empirically examines the extent to which organization characteristics promote the diffusion of pollution prevention technologies within a firm (parent company). We use panel data on more than 5000 facilities reporting to the Toxics Release Inventory over the period of 1991 to 2011 to examine the number of pollution prevention technologies adopted by a facility with respect to its size, previous experience in adoption, its distances to its sibling facilities and firm’s headquarter, and regional density. We use a two-part hurdle model to estimate the likelihood of adoption and the rate of adoption, while controlling for public and regulatory pressures that may have affected the adoption of pollution prevention technologies. We find that a facility that was located in the same city with its firm’s headquarter were more likely to adopt pollution prevention technologies. Past experience in adoption of pollution prevention technology and firm’s knowledge stock on pollution prevention technology increased both the likelihood and rate of adoption.
    Keywords: Pollution prevention, technology adoption, intra-firm diffusion, organizational structure, Toxics Release Inventory (TRI)., Environmental Economics and Policy, Industrial Organization, L22, O33, Q52, Q55,
    Date: 2016

This nep-tid issue is ©2016 by Fulvio Castellacci. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.