nep-tid New Economics Papers
on Technology and Industrial Dynamics
Issue of 2016‒09‒11
twelve papers chosen by
Fulvio Castellacci
Universitetet i Oslo

  1. Who buys what, where: Reconstruction of the international trade flows by commodity and industry By Yuichi Ikeda; Tsutomu Watanabe
  2. Persistence of innovation and patterns of firm growth By Dario Guarascio; Federico Tamagni
  3. The Impact of Product Market Reforms on Firm Productivity in Italy By Sergi Lanau; Petia Topalova
  4. The Short-Term Impact of Product Market Reforms; A cross-country firm-level analysis By Peter N. Gal; Alexander Hijzen
  5. Equilibrium Type of Competition with Horizontal Product Innovation By Negriu, A.
  6. Technological innovation and employment in derived labour demand models: A hierarchical meta-regression analysis By Ugur, Mehmet; Awaworyi, Sefa; Solomon, Edna
  7. Agglomeration economies: the heterogeneous contribution of human capital and value chains By Dario Diodato; Frank Neffke,; Neave O’Clery
  8. Risk-taking, skill diversity, and the quality of human capital: how insurance affects innovation By Andrea Filippetti; Frederick Guy
  9. The Strategic Management of High-Growth Firms: A Review and Theoretical Conceptualization By Demir, Robert; Wennberg, Karl; McKelvie, Alexander
  10. Substitutability and complementarity of technological knowledge and the inventive performance of semiconductor companies By Ludovic Dibiaggio; Maryam Nasyar; Lionel Nesta
  11. Knowledge Composition, Jacobs Externalities and Innovation Performance in European Regions By Antonelli, Cristiano; Crespi, Francesco; Mongeau, Christian; Scellato, Giuseppe
  12. The Impact of R&D and ICT Investment on Innovation and Productivity in Chilean Firms By Roberto Álvarez

  1. By: Yuichi Ikeda (Graduate School of Advanced Integrated Studies in Human Survivability, Kyoto University); Tsutomu Watanabe (Graduate School of Economics, The University of Tokyo)
    Abstract: We developed a model to reconstruct the international trade network by considering both commodities and industry sectors in order to study the effects of reduced trade costs. First, we estimated trade costs to reproduce WIOD and NBER-UN data. Using these costs, we estimated the trade costs of sector specific trade by types of commodities. We successfully reconstructed sector-specific trade for each types of commodities by maximizing the configuration entropy with the estimated costs. In WIOD, trade is actively conducted between the same industry sectors. On the other hand, in NBER-UN, trade is actively conducted between neighboring countries. This seems like a contradiction. We conducted community analysis for the reconstructed sector-specific trade network by type of commodities. The community analysis showed that products are actively traded among same industry sectors in neighboring countries. Therefore the observed features of the community structure for WIOD and NBER-UN are complementary.
    Date: 2016–09
  2. By: Dario Guarascio; Federico Tamagni
    Abstract: In this work we test if persistent innovators, defined according to different innovation activities (R&D, product and process innovation, patenting) grow more than other firms, and if innovation persistence can contribute to explain the so far little evidence in favor of persistence in growth itself. We exploit a somewhat uniquely long-in-time dataset tracing a representative sample of Spanish manufacturing firms over the period 1990-2012. This allows to overcome the difficulties in the definition of persistent innovators traditionally based on innovation surveys. Our findings, against the expectations, support that persistent innovators do not generally outperform the other firms. First, they do not grow more, and actually we find that, despite some variation across innovation persistence indicators, they even grow less than other firms in the top-quantiles of the growth rates distribution, that is among high-growth firms. Further, persistent innovators do not show higher growth persistence than other firms, in none of the quantiles of the growth rates distribution, independently from the innovation persistence indicator considered.
    Keywords: firm growth, innovation persistence, product and process innovation, R\&D, patents, quantile regressions
    Date: 2016–02–09
  3. By: Sergi Lanau; Petia Topalova
    Abstract: This paper examines the role of removing obstacles to competition in product markets in raising growth and productivity. Using firm-level data from Italy during 2003–13 and OECD measures of product market regulation, we estimate the effect of deregulation in network sectors on value added and productivity of firms in these sectors, as well as firms using these intermediates in their production processes. We find evidence of a significant positive impact. These effects are more pronounced in Italian provinces with more efficient public administration, underscoring the complementarities of advancing public administration and product market reforms simultaneously.
    Keywords: Business enterprises;Italy;Industry;Services;Total factor productivity;Labor productivity;Markets;Fiscal reforms;Economic sectors;Time series;Econometric models;productivity, growth, structural reforms, product markets
    Date: 2016–06–15
  4. By: Peter N. Gal; Alexander Hijzen
    Abstract: This paper analyzes 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.
    Keywords: Industry;Manufacturing;Services;Markets;Fiscal reforms;Developed countries;Economic sectors;Business enterprises;Cross country analysis;Econometric models;structural reform, competition, credit constraints, firm entry, Orbis
    Date: 2016–06–10
  5. By: Negriu, A. (University of Amsterdam)
    Abstract: Singh and Vives (1984) consider a game where duopolists first commit to a strategic variable, quantity or price, and then compete in selling horizontally differentiated products. Here product substitutability is endogenized by allowing firms to undertake R&D investments to increase differentiation. This has important consequences for the determination of the equilibrium type of competition. Whereas in the original model Cournot competition always ensued in equilibrium, horizontal product innovation allows all types of market competition to be an equilibrium, depending on model parameters. As market size increases, the game of choosing the strategic variable changes structure. For small market size it is a dominance solvable game with Cournot competition as unique outcome. For higher market size, the firms face a Prisoner's Dilemma where Bertrand competition would be Pareto optimal, but Cournot competition is the non-cooperative Nash Equilibrium. As market size further increases, the game of choosing market variables becomes a Hawk-Dove game where, in pure strategy equilibrium, one firm sets quantity and the other sets price. When market size increases even further, setting prices will be the strictly dominant strategy and Bertrand competition is the unique equilibrium outcome for a relatively small parameter-range. Finally, for suffciently high market size all equilibria corresponding to differentiated duopoly abruptly dissappear and the market separates into two monopolies.
    Date: 2015
  6. By: Ugur, Mehmet; Awaworyi, Sefa; Solomon, Edna
    Abstract: The effect of technological innovation on employment is of major concern for workers and their unions, policy-makers and academic researchers. We aim to provide a quantitative synthesis of the evidence base and the extent of heterogeneity therein. Analysing 567 estimates from 35 primary studies that estimate a derived labour demand model we report the following findings: (i) the effect on employment is positive but small and highly heterogeneous; (ii) publication selection bias reflects a tendency to support the twin hypotheses that process innovation is associated with job destruction whereas product innovation is associated with job creation; (iii) the effects of process and product innovations do not conform to theoretical predictions or narrative review findings after selection bias is controlled for; (iv) only a small part of the residual heterogeneity is explained by moderating factors; (v) country-specific effect-size estimates are related to labour-market and product-market regulation in six OECD countries in a U-shaped fashion; and (vi) OLS estimates reflect upward bias whereas those based on time-differenced or within estimators reflect a downward bias. Our findings bridge the evidence gap in the research field and point out to data quality and modeling issues that should be considered in future research.
    Keywords: Innovation, employment, technological change, labour demand, meta-analysis
    JEL: C49 C80 J23 O30 O33
    Date: 2016–07–06
  7. By: Dario Diodato; Frank Neffke,; Neave O’Clery
    Abstract: We document the heterogeneity across sectors in the impact labor and input-output links have on industry agglomeration. Exploiting the available degrees of freedom in coagglomeration patterns, we estimate the industry-specific benefits of sharing labor needs and supply links with local firms. On aggregate, coagglomeration patterns of services are at least as strongly driven by input-output linkages as those of manufacturing, whereas labor linkages are much more potent drivers of coagglomeration in services than in manufacturing. Moreover, the degree to which labor and input-output linkages are reflected in an industry’s coagglomeration patterns is relevant for predicting patterns of city-industry employment growth.
    Date: 2016–08
  8. By: Andrea Filippetti; Frederick Guy
    Abstract: We argue that human capital does a better job of fostering innovation when an economy has a diverse portfolio of specialist skills to draw on. While such a diverse portfolio is beneficial for a country, it includes many individual skill packages that are subject to considerable labour market risk. In the absence of strong income insurance (job security or unemployment insurance), the flight to safety in human capital investments will produce a national skill portfolio which is poorly diversified and less conducive to innovation. Using country-level data for 25 OECD countries from 1985 to 2009, we find evidence that income insurance raises the marginal effect of human capital on innovation, with the latter measured by patenting. At the same time, we find a direct negative effect of insurance on patenting; at low-medium levels of human capital, the direct negative effect more than offsets the positive indirect effect, while at high levels of human capital the indirect positive effect dominates. We draw implications for income insurance and education policy.
    Date: 2016–08
  9. By: Demir, Robert (The Ratio Institute and Lancaster University Management School); Wennberg, Karl (The Ratio Institute and Linköping University); McKelvie, Alexander (Syracuse university)
    Abstract: Scholars’ knowledge of the factors behind high-growth firms remains fragmented. This paper provides a systematic review of the empirical literature concerning high-growth firms with a focus on the strategic aspects contributing to growth. Based on our review of 39 articles, we identify five drivers of high growth: human capital, strategy, human resource management, innovation, and capabilities. These drivers are combined to develop a conceptual model of high-growth firms that includes potential contingency factors among the five drivers. We also propose a research agenda to deepen the study of high-growth firms in strategic management.
    Keywords: High-Growth Firms; Strategy; Innovation; Human Capital; HRM; Capabilities; Literature Review
    JEL: L25 L26 M13
    Date: 2016–09–05
  10. By: Ludovic Dibiaggio (Histoire et Critique des Arts - Centre d'étude et de recherche d'archéologie méditerranéenne et atlantique. UHB); Maryam Nasyar; Lionel Nesta (Observatoire français des conjonctures économiques)
    Abstract: This paper analyses whether complementarity and substitutability of knowledge elements are key determinants of the firm's inventive performance, in addition to the more conventional measures of knowledge stock and diversity. Using patent data from 1968 to 2002 in the semiconductor industry, we find that the overall level of complementarity between knowledge components positively contributes to firms’ inventive capability, whereas the overall level of substitutability between knowledge components generally has the opposite effect. Yet a relatively high level of substitutability is found to be beneficial for explorative inventions. These results suggest that a firm's inventive capacity significantly depends on its ability to align its inventive strategies and knowledge base structure.
    Keywords: Knowledge base; Complementarity; Substitutability; Invention
    Date: 2014–11
  11. By: Antonelli, Cristiano; Crespi, Francesco; Mongeau, Christian; Scellato, Giuseppe (University of Turin)
    Abstract: This paper analyses the role of the composition of the regional stock of knowledge in explaining innovation performance. The paper provides three main contributions. First, it investigates the relevance of Jacobs knowledge externalities in characterizing the technological capabilities at the regional level. Second, it applies the Hidalgo-Hausmann (HH) methodology to analyze knowledge composition by looking at patent data of 214 regions, located in 27 state members of the European Union (EU) during the years 1994- 2008. Third, it econometrically assesses the role of knowledge base composition in a knowledge generation function. The results of the empirical analysis confirm that the characterization of regional knowledge base through the HH indicators provides interesting information to understanding its composition and to qualify it as a provider of the Jacobs knowledge externalities that account for the dynamics of regional innovative performance.
    Date: 2016–07
  12. By: Roberto Álvarez
    Abstract: This paper examines the impact of information and communication technology (ICT) and research and development (R&D) investment on innovation and productivity in Chilean firms, in particular those in the services industry. It provides new evidence on this topic for a developing country and also for firms in the services sector, areas in which existing evidence is limited. The findings for services industries are relevant because this sector in Latin America has a large productivity gap when compared to the sector in developed countries. The results show that ICT contributes positively to innovation and productivity in both the total sample and the services industry. They also confirm that ICT investment increases productivity directly and not only through innovation, suggesting that this investment would have additional effects on productivity.
    Date: 2016–09

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