nep-tid New Economics Papers
on Technology and Industrial Dynamics
Issue of 2016‒07‒30
eight papers chosen by
Fulvio Castellacci
Universitetet i Oslo

  1. Structural transformation in Africa : a historical view By Enache,Maria; Ghani,Syed Ejaz; O'Connell,Stephen
  2. The short-term impact of product market reforms: A cross-country firm-level analysis By Peter Gal; Alexander Hijzen
  3. Innovation and productivity in a S&T intensive sector: the case of Information industries in Spain By Nestor Duch-Brown; Andrea de Panizza; Ibrahim Kholilul Rohman
  4. Modes of ICT Innovation: Evidence from the Community Innovation Survey By Federico Biagi; Annarosa Pesole; Juraj Stancik
  5. Counterfactual Impact Evaluation of Public Funding of Innovation, Investment and R&D By Daniele Bondonio; Federico Biagi; Juraj StanÄ ík
  6. Measures, drivers and effects of green employment : evidence form US local labor markets, 2006-2014 By Francesco Vona; Giovanni Marin
  7. Technological Capabilities, Technological Dynamism and Innovation Offshoring By Schubert, Torben; Baier, Elisabeth; Rammer, Christian
  8. Using the Salop Circle to Study Scale Effects in Schumpeterian Growth Models: Why Inter-sectoral Knowledge Diffusion Matters By Gray, Elie; Grimaud, André

  1. By: Enache,Maria; Ghani,Syed Ejaz; O'Connell,Stephen
    Abstract: This paper presents evidence suggesting that the relationship between income and economic structure is shifting over time, with countries across the income distribution uniformly increasing the share of labor in service sectors and an increasingly less stark relationship between manufacturing intensity and gross value added per capita. The paper then assesses historical patterns of productivity convergence at a more detailed sector disaggregation than has been previously available. The analysis finds suggestive evidence that, at least in recent decades, convergent pressures in services industries are stronger than in manufacturing. Focusing on African economies, the paper presents a country-by-country historical analysis of structural change over the past four decades. Given the varied patterns and trends in structural change across African countries, it is difficult to characterize structural change from a single, continent-wide perspective. Some countries saw an early transition of labor out of agriculture, with manufacturing absorbing this labor in the decades prior to the 1990s, while another group of countries saw a later transition out of agriculture, where the services sector played a large role in labor reallocations in the 1990s and 2000s. Finally, the paper provides a country-by-country structural transformation scorecard to assess patterns of structural change in jobs and growth.
    Date: 2016–07–11
  2. By: Peter Gal; Alexander Hijzen
    Abstract: This paper analyses the effects of product market reforms in the short and medium term across 10 regulated industries and 18 advanced economies for the period 1998-2013 using internationally comparable firm-level data based on Orbis. It provides four key insights. First, product market reforms have positive effects on capital, output and employment and their effects increase over time. After two years, they raise capital by 4%, output by 3% and employment by 1.5%. Second, differences in production technology and the nature of product market regulations across sectors generate important differences in the mechanisms through which reforms operate. In network industries, reforms tend to benefit small firms, while the opposite is observed in retail trade. Product market reforms also promote firm entry, particularly those that reduce entry barriers. Third, credit constraints can play an important role in weakening the positive impact of product market reform on investment. Fourth, product market reforms also tend to have positive effects on firms in downstream sectors—both at home and abroad—that make intensive use of intermediate inputs from deregulated sectors. L'incidence à court terme des réformes des marchés de produits : Une analyse au niveau des entreprises de plusieurs pays Le présent document analyse les effets à court et moyen terme des réformes pratiquées sur les marchés de produits de dix secteurs réglementés dans dix-huit économies avancées sur la période de 1998 à 2013, à partir de données d'entreprises comparables au niveau international issues de la base Orbis. Cette analyse livre quatre grands enseignements. Premièrement, les réformes des marchés de produits ont, sur le capital, la production et l'emploi, des effets positifs qui s'accroissent avec le temps. Après deux ans, l'augmentation constatée est ainsi de 4 % pour le capital, 3 % pour la production et 1.5 % pour l'emploi. Deuxièmement, les différences dans les technologies de production et la nature de la réglementation des marchés de produits d'un secteur à l'autre engendrent d'importantes disparités dans les mécanismes par lesquels les réformes opèrent. Ainsi, dans les industries de réseau, les réformes ont tendance à profiter surtout aux petites entreprises, à l'inverse de ce que l'on observe dans le commerce de détail. Les réformes des marchés de produits favorisent aussi l'entrée d'entreprises sur le marché, en particulier lorsqu'elles ont pour effet de réduire les obstacles à l'entrée. Troisièmement, les restrictions du crédit peuvent jouer un rôle important en affaiblissant l'effet positif des réformes sur l'investissement. Enfin, quatrièmement, les réformes des marchés de produits tendent à avoir des effets positifs sur les entreprises des secteurs d'aval –tant nationaux qu'étrangers – faisant un usage intensif de ressources intermédiaires en provenance de secteurs déréglementés.
    Keywords: firm entry, structural reforms, Orbis, competition, credit constraints, Orbis, réforme structurelle, compétition, restrictions du crédit, entrée d'entreprises sur le marché
    JEL: D04 D22 L43 L51 L8 L9
    Date: 2016–07–26
  3. By: Nestor Duch-Brown (European Commission – JRC); Andrea de Panizza (European Commission – JRC); Ibrahim Kholilul Rohman (European Commission – JRC)
    Abstract: This paper adds to the empirical literature on the relationships between R&D, innovation and productivity at the firm level. The focus is on Spanish enterprises in Information industries, which are acknowledged to be at the forefront for both innovative activity and R&D performance. The analysis is performed on ca. 1800 enterprises included in the PITEC database (the Spanish source of the EU Community Innovation Survey) for the period 2004-2013. Using a three-stage "CDM" model we consider: (i) factors affecting the decision to conduct R&D, including the role of perceived importance of innovation on firm's R&D performance, (ii) the impact of the predicted R&D effort on companies' effective undertaking of product, process, organisational and marketing innovations, as well as their simultaneous occurrence and (iii) whether and to what extent such innovations boost productivity. In the specific context of this R&D intensive array of industries, the decision of undertaking R&D appears to be strongly influenced by the importance attributed to enhancing existing products or creating new ones, as well as by the size of the company, the fact of being young and local, and the availability public funding. These elements also greatly impact on enterprises' R&D effort, thus providing some arguments in favour of R&D promotion policies, in particularly addressed to start-ups. Expected R&D performance, in turn, appears to be strongly related to the actual achievement of such innovations, including non-technical ones. By focusing on innovation patterns, it was possible to ascertain a strong complementarity between different families of innovation (as expected, given these industries' specificities), as well as to qualify existing evidence on the innovation-productivity conundrum. Indeed, we show that results depend on the way innovation types are modelled and combined. Controlling for complementarities, enterprises performing focused non-technical innovations and joint technical and non-technical ones (mixed-mode innovators) are likely to be more productive (in terms of sales per capita) than their peers, while stand-alone technical innovations give inconclusive results.
    Keywords: R&D, innovation, ICT sector, productivity, firm level data, panel
    JEL: O00 O31 O32 O47
    Date: 2016–07
  4. By: Federico Biagi (European Commission - JRC); Annarosa Pesole (European Commission - JRC); Juraj Stancik (European Commission - JRC)
    Abstract: This report was prepared in the context of the three-year research project on European Innovation Policies for the Digital Shift (EURIPIDIS). This project was jointly launched in 2013 by JRC-IPTS and DG CONNECT of the European Commission. It aims to improve understanding of innovation in the ICT sector and ICT-enabled innovation in the rest of the economy. In the context of the EURIPIDIS project, this report analyses innovative activities by ICT-producing firms and provides evidence on innovative activity in the ICT sector, compared to the overall economy. This analysis, based on a set of different indicators, aims to provide a deeper understanding of the modes of innovation adopted by ICT producing firms. To carry out the analysis, we created a panel dataset which matched the information collected by different Community Innovation Survey (CIS) waves from 2004 up to 2012 in twenty EU Member States. We then investigated the major innovation patterns that emerged, and compared the ICT sector to the whole economy. The main findings show that, in general, firms in the ICT sector tend to innovate more with respect to the economy as a whole: the shares of both innovators and technological innovators are consistently higher within the ICT sector than they are in the economy as a whole. Moreover, the ICT sector has a higher share of innovative firms which perform R&D and a higher share of Framework Programme-funded innovative firms. In order to capture the modes of innovation of ICT-producing firms, we used "complex" indicators that condense information from more than one measure and allow us to make multi-dimensional phenomena uni-dimensional. These complex indicators indicate that the share of international and domestic innovators is higher among ICT firms than it is in the economy as a whole. In other words, ICT firms tend to have a higher than average in-house R&D capability and are more likely to introduce new-to-the-market product or process innovations in both international and domestic markets. Looking at international or domestic "modifiers" (i.e. firms that mainly adopt and/or modify innovation made by others), we find no evidence that ICT-producing firms are more likely than the average firm to modify or adopt innovations developed elsewhere.
    Keywords: ICT sector, ICT-enabled innovation, ICT Innovation System, Community Innovation Survey
    Date: 2016–07
  5. By: Daniele Bondonio (Universita'del Piemonte Orientale); Federico Biagi (European Commission - JRC); Juraj StanÄ ík (European Commission - JRC)
    Abstract: This report uses data from Efige and from Bureau Van Dijk’s Amadeus and Orbis to estimate the effect of funding from the EU and national programmes on firms’ employment, sales, added value, productivity and innovativeness. It also looks at the impact of subsidies to investment and R&D (irrespective of the source of funding) on the same variables. In the first part of the report we use only the Efige dataset (covering the years 2007- 2009) and we look at (contemporaneous) correlation between public support (from national and EU sources) and product and process innovation. Our results indicate that national and EU funding are equally important in stimulating product innovation. However, EU funding has a higher correlation with process innovation. We also find a positive correlation between public support to private R&D and product innovation (but no significant correlation between the former and process innovation). On the other hand, public support to private investment (including ICT capital) is positively associated with process innovation but not with product innovation. In the second part of the report we perform a proper counterfactual analysis, where we merge the Efige dataset with the Bureau Van Dijk’s Amadeus (years 2001-2012) and Orbis (2006-2012) databases. This allows us to test whether firms funded between years 2007 and 2009 have a significantly different economic performance (measured in terms of employment, sales, and value added) in the years 2009-2012, while controlling for firms characteristics measured prior to 2007 (i.e. in the pre-treatment period). Our results indicate that receiving public support from national funds generates positive increments in employment, sales and added value, compared to the counterfactual status of the absence of public intervention. We do not find evidence that EU funds have additional impacts on employment, sales or value added (relative to firms receiving only national funding or no funding). This result is most likely due to the small sample size of firms receiving EU funds, which does not allow us to precisely estimate the impact of EU funding alone or in conjunction with national funding. It is also likely to depend upon the features of EU funding, which is geared towards research that produces results over a longer time horizon than the one observable in our data. We also find that generic support to firm-level investment projects has positive impacts on employment and added value. However, no statistically significant impacts are estimated for subsidies which support R&D expenditures exclusively (possibly due to the nature of R&D support policies, which often require more time to yield noticeable impacts on general firm-level performance).
    Keywords: Counterfactual impact evaluation; public funding; innovation; Framework programme
    Date: 2016–07
  6. By: Francesco Vona (Observatoire français des conjonctures économiques); Giovanni Marin (Scuola Superiore Sant'Anna)
    Abstract: This paper explores the nature and the key empirical regularities ofgreen employment in US local labor markets between 2006 and 2014. Weconstruct a new measure of green employment based on the task contentof occupations. Descriptive analysis reveals the following: 1. the share of green employment oscillates between 2 and 3 percent, and its trend isstrongly pro-cyclical; 2. green jobs yield a 4 percent wage premium; 3.despite moderate catching-up across areas, green jobs remain more geographically concentrated than similar non-green jobs; and 4. the top greenareas are mostly high-tech. As regards the drivers, changes in environmental regulation are a secondary force compared to the local endowment of green knowledge and resilience in the face of the great recession. To assess the impact of moving to greener activities, we estimate that one additional green job is associated with 4.2 (2.4 in the crisis period) newjobs in non-tradable activities in the local economies.
    Keywords: Green employment; Local labor markets; Environmental regulation; Environmental technologies; Local multipliers
    JEL: J23 O33 Q52 R23
    Date: 2016–07
  7. By: Schubert, Torben (CIRCLE, Lund University); Baier, Elisabeth (Hochschule für Wirtschaft, Technik und Kultur (HWTK)); Rammer, Christian (Centre for European Economic Research (ZEW))
    Abstract: In this paper we analyze the conditions under which firms decide to offshore innovation. We consider the role of internal technological capabilities and technological dynamism in the firm environment, distinguishing speed and uncertainty of technological change. Using unique data from the German Innovation Survey we find that while high speed of technological change tends to drive innovation offshoring, high uncertainty about future technology developments results in more innovation offshoring only for firms with low internal technological capabilities. Firms with high technological capabilities instead are less likely to offshore innovation when uncertainty is high. We argue that these differences in offshoring behaviour reflect differing strategic objectives. We show that for firms with low technological capabilities asset augmentation is more important while for firms with high technological capabilities asset exploitation is more important. When faced by high technological uncertainty firms with low technological capabilities offshore innovation strategically in order to reduce uncertainty by augmenting their asset base. For firms with high technological capabilities asset augmentation is less important. When faced by high technological uncertainty, they prefer to innovate onshore in order to keep stronger control of their key assets.
    Keywords: offshoring; R&D; uncertainty; competition; technological change; speed
    JEL: F21 F23 L22 O32
    Date: 2016–07–25
  8. By: Gray, Elie; Grimaud, André
    Abstract: This paper analyzes the link between the fact that fully endogenous growth models exhibit (or not) the non-desirable scale effects property and assumptions regarding the intensity of knowledge diffusion. In that respect, we extend a standard Schumpeterian growth model by introducing explicitly knowledge diffusion over a Salop (1979) circle: a continuum of sectors simultaneously sending and receiving knowledge is located over the circle. The link between knowledge diffusion and scale effects stems from the fact that the more diffusion spreads with the size of the economy, the larger the pools of knowledge used by each sector’s R&D activity are, the higher the marginal productivity of labor in R&D is, and eventually the higher the growth rate is. The paper tackles the apparent following paradox. Knowledge diffusion seems to lead to scale effects; however, the former is empirically desirable while the latter is not. Our first basic result is that a sufficient condition to have a scale-invariant fully endogenous growth model is to assume no inter-sectoral knowledge diffusion. However, this assumption is not empirically reasonable. We overcome the aforementioned paradox by showing that the absence of diffusion is not a necessary condition to suppress scale effects. More precisely, we determine sets of reasonable assumptions on knowledge diffusion under which one can obtain fully endogenous growth models complying with most undeniable empirical facts - namely the absence of significant scale effects, the impact of public policies on the growth rate, and somehow realistic interactions among sectors R&D activities (including the occurrence of GPTs).
    Keywords: Schumpeterian growth theory / Scale effects / Inter-sectoral knowledge diffusion / Knowledge spillovers / Non rivalry
    JEL: O30 O31 O33 O40 O41
    Date: 2016–07

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