nep-tid New Economics Papers
on Technology and Industrial Dynamics
Issue of 2016‒07‒16
seven papers chosen by
Fulvio Castellacci
Universitetet i Oslo

  1. Global Value Chains and Trade in Value-Added: An Initial Assessment of the Impact on Jobs and Productivity By OECD
  2. The role of innovation and management practices in determining firm productivity in developing economies By Bartz, Wiebke; Mohnen, Pierre; Schweiger, Helena
  3. Internal R&D and External Knowledge Acquisition of Start-up Firms: Exploring the Role of Entrepreneurial Human Capital By Masatoshi Kato
  4. Do diversity, creativity and localized competition promote endogenous firm formation? Evidence from a high-tech US industry By Tsvetkova, Alexandra
  5. Innovation in Clean Coal Technologies: Empirical Evidence from Firm-Level Patent Data By Jürgen Kruse; Heike Wetzel
  6. Measuring patent quality and national technological capacity in cross-country comparison By Boeing, Philipp; Mueller, Elisabeth
  7. One size does not fit all : An analysis of the importance of industry-specific vertical policies for growing high technology industries in India By Mani Sunil

  1. By: OECD
    Abstract: This paper contributes to a better understanding of the impact of global value chains (GVCs) on jobs and productivity by providing new evidence on employment embodied in value-added trade flows. Linking jobs data to the Trade in Value-Added (TiVA) indicators first highlights that a large share of employment in OECD and key partner countries relies on consumption taking place abroad and for most countries this share has increased between 1995 and 2011. There are differences across industries in the share of jobs embodied in exports but in all industries a majority of these jobs originates in the service sector. In almost all countries, the jobs embodied in exports are shifting towards high-skill and medium-skill occupations. Within GVCs, there is also a shift from employment in core manufacturing activities to employment in service support functions such as R&D, distribution, logistics, marketing, sales and customer services. The impact of GVCs on the number of people engaged in each industry is the combination of several factors but related to specialisation patterns and the evolution of productivity. In this assessment, it is important to look at the whole value chain and not to focus only on industries where GVCs are prevalent. Job creation in sectors less exposed to GVCs is the consequence of productivity gains in sectors the most integrated in GVCs.
    Keywords: productivity, trade, employment, trade in tasks, global value chains, occupations
    JEL: F16 F23 J24
    Date: 2016–07–07
  2. By: Bartz, Wiebke (Centre for Development Finance, Frankfurt School of Finance and Management); Mohnen, Pierre (UNU‐MERIT, Maastricht University); Schweiger, Helena (European Bank for Reconstruction and Development)
    Abstract: In this paper, we compare the impacts of management practices and innovation on productivity, using data from a unique firm-level survey covering 30 mostly developing countries in Eastern Europe and Central Asia in the period 2011-2014. We adapt the well-established three-stage model by linking productivity to innovation activities and management practices. Results suggest that both returns to innovation and returns to management practices are important drivers of productivity in developing economies. However, productivity in lower-income economies is affected to a larger extent by management practices than by innovation while the opposite holds in higher-income economies. These results imply that firms operating in less favourable business environments can reap large productivity gains by improving the quality of management practices, before engaging in innovation through imitating and adapting foreign technologies.
    Keywords: innovation, management practices, productivity, developing countries
    JEL: M21 O12 O32
    Date: 2016–06–16
  3. By: Masatoshi Kato (School of Economics, Kwansei Gakuin University)
    Abstract: This study explores internal research and development (R&D) and external knowledge acquisition of firms during the start-up period, using panel data from original questionnaire surveys conducted in Japan. In particular, the study highlights the role of entrepreneurial human capital in the adoption of internal R&D and external knowledge acquisition strategies (licensing-in and joint R&D). Based on estimates of a bivariate probit model, the analysis provides evidence that firms managed by entrepreneurs with a high level of human capital are more likely to engage both in internal R&D and external knowledge acquisition. More specifically, while generic human capital, such as educational attainment, plays a significant role in explaining internal R&D, specific human capital, such as prior work experience in a related field or innovation experience, tends to have a prominent in uence on external knowledge acquisition. As a supplementary analysis, the effectiveness of internal R&D and external knowledge acquisition strategies is assessed by examining the link with innovation outcomes (product innovations and patent applications). The results suggest that the two innovation strategies have positive effects on innovation outcomes.
    Keywords: Start-up, entrepreneur, internal R&D, external knowledge acquisition, generic human capital, specific human capital
    JEL: M13 L26 O32
    Date: 2016–07
  4. By: Tsvetkova, Alexandra
    Abstract: This paper tests the effect of diversity, creativity and localized competition on firm formation in US computer and electronic product manufacturing within the knowledge spillover theory of entrepreneurship (KSTE) framework. Fixed effects instrumental variable estimation results support the KSTE contention of a positive relationship between knowledge and entrepreneurship. Industrial diversity and diversity of knowledge tend to promote endogenous firm entry, whereas evidence on other factors is mixed. This points to sensitivity of conclusions in the KSTE literature to regional and industrial environments and calls for caution in interpreting and generalizing findings obtained in various settings.
    Keywords: innovation, entrepreneurship, firm formation, knowledge spillover theory of entrepreneurship, computer and electronic product manufacturing
    JEL: O1 O3 R1 R11
    Date: 2016–04–19
  5. By: Jürgen Kruse (University of Cologne); Heike Wetzel (University of Kassel)
    Abstract: This article empirically analyzes supply-side and demand-side factors expected to affect innovation in clean coal technologies. Patent data from 93 national and international patent offices is used to construct new firm-level panel data on 3,648 clean coal innovators over the time period 1978 to 2009. The results indicate that on the supply-side a firm’s history in clean coal patenting and overall propensity to patent positively affects clean coal innovation. On the demand-side we find strong evidence that environmental regulation of emissions, that is, CO2, NOX and SO2, induces innovation in both efficiency improving combustion and after pollution control technologies.
    Keywords: clean coal technologies, innovation, patents, technological change
    JEL: C33 O31 Q40 Q55
    Date: 2016
  6. By: Boeing, Philipp; Mueller, Elisabeth
    Abstract: China recently surpassed the USA as the greatest global source of patent applications. However, without internationally comparable measures of patent quality it remains questionable whether China's patent expansion constitutes the rise of a new technological superpower. Our novel quality index is based on citations from international search reports and provides internationally comparable, quality-adjusted figures for applications made under the Patent Cooperation Treaty (PCT). We show that China's patent expansion has taken place to the detriment of patent quality. Weighting national PCT counts with our index reveals a widening gap between the technological capacities of China and the leading USA.
    Keywords: patent quality,national technological capacity,cross-country comparison
    JEL: O32 O34
    Date: 2016
  7. By: Mani Sunil (National Graduate Institute for Policy Studies, Centre for Development Studies, Trivandrum, KeralaCentre for Development Studies, Trivandrum, Kerala, India)
    Abstract: India is one of the fastest growing countries of the world at present. Currently she is attempting to raise the share of her manufacturing sector to at least a quarter of her GDP by 2022 through variety of proactive industrial policies. This has led to a debate of sorts on the role of industrial policies when the economy is moving towards a free market economy where the discretionary role of government is reduced to a minimum. India's small manufacturing sector, although now sixth largest in the world, is slowly moving towards high and medium technology industries, both in terms of manufacturing value added and in terms of share of manufactured exports. India is now slowly becoming an important player in selected high and medium high technology sectors such as aerospace, pharmaceuticals, and automobiles while her attempts at developing a telecommunications equipment manufacturing industry has failed. The paper identifies the vertical policies that have been crucial for the development or lack of it of each of these four high tech industries. While these vertical policies are shown to be one of the necessary conditions for the growth of these high technology sectors, the sufficient conditions depend on the existence of firm strategies that can take advantage of these proactive vertical policies. The paper thus underscores the importance of specific vertical policies be it is the case of the offset policy in the case of the aerospace industry, the patent policy in the case of the pharmaceutical industry and so on.
    Date: 2016–06

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.