nep-tid New Economics Papers
on Technology and Industrial Dynamics
Issue of 2016‒10‒23
twelve papers chosen by
Fulvio Castellacci
Universitetet i Oslo

  1. Cross-Occupation Externalities and Local Industrial Policy By Pierre-Daniel Sarte; Felipe Schwartzman; Esteban Rossi-Hansberg
  2. What drives employment growth and social inclusion in EU regions? By Di Cataldo, Marco; Rodríguez-Pose, Andrés
  3. Do ‘green’ employment effects vary across industries? Implications for green growth By Christine Mee Lie
  4. Emissions trading and productivity: Firm-level evidence from German manufacturing By Lutz, Benjamin Johannes
  5. Firm Subsidies, Wages and Labor Mobility By Maliranta, Mika; Määttänen, Niku; Pajarinen, Mika
  6. Nanothechnology and the emergence of a general purpose technology By Stuart Graham; Maurizio Iacopetta
  7. Technology and Production Fragmentation: Domestic versus Foreign Sourcing By Teresa C. Fort
  8. Firm dynamics with frictional product and labor markets By Bihemo Kimasa; Leo Kaas
  9. Pre-commercial Procurement, Procurement of Innovative Solutions and Innovation Partnerships in the EU: Rationale and Strategy By Elisabetta Iossa, Federico Biagi and Paola Valbonesi
  11. A topological approach to structural change analysis and an application to long-run labor allocation dynamics By Stijepic, Denis
  12. Dancing with the Stars: Interactions and Human Capital Accumulation By Valerio Sterzi; Stefanie Stantcheva; Santiago Caicedo; Ernest Miguelez; Ufuk Akcigit

  1. By: Pierre-Daniel Sarte (Federal Reserve Bank of Richmond); Felipe Schwartzman (Federal Reserve Bank Richmond); Esteban Rossi-Hansberg (Princeton University)
    Abstract: We estimate within city productive spillovers in the U.S. and study their implications for location-based industrial policies. Spillovers arise from the interaction of workers, but the degree of externalities across industries depends on their occupational makeup. Using a structural model of trade across cities, combined with data on output, employment, wages and prices varying across cities, sectors, and occupations, we obtain estimates of both city-specific and sector-specific productivity across 33 sectors and 381 U.S. cities. Moreover, using information on regional price parities, we also obtain estimates of transport costs and trade elasticities for sectors where bilateral trade data is lacking. The extensive set of disaggregated productivities that we construct then allows us, by way of an instrumental variable approach that accounts for the endogenous location decisions of workers, to estimate the extent of productivity spillovers across occupations. Given our estimates of within city productive spillovers and the framework we develop, we study the effectiveness of policies promoting particular industries or occupations within different U.S. cities. In doing so, we assess how the distribution of industries and workers in space influences national output, local development, and the distribution of wages across occupations.
    Date: 2016
  2. By: Di Cataldo, Marco; Rodríguez-Pose, Andrés
    Abstract: The European Union promotes development strategies aimed at producing growth with "a strong emphasis on job creation and poverty reduction" . However, whether the economic conditions in place in EU regions are ideal for the generation of high- and low-skilled employment and labour market inclusion is unclear. This paper assesses how the key factors behind EU growth strategies -infrastructure, human capital, innovation, quality of government- condition employment generation and labour market exclusion in European regions. The findings indicate that the dynamics of employment and social exclusion vary depending on the conditions in place in a region. While higher innovation and education contribute to overall employment generation in some regional contexts, low-skilled employment grows the most in regions with a better quality of government. Regional public institutions, together with the endowment of human capital, emerge as the main factors for the reduction of labour market exclusion - particularly in the less developed regions- and the promotion of inclusive employment growth across Europe.
    Keywords: employment; Europe; regions; skills; social exclusion
    JEL: J64 O52 R23
    Date: 2016–10
  3. By: Christine Mee Lie (TIK Centre, University of Oslo)
    Abstract: This article investigates the impact of green innovation on employment growth, employing firm-level survey data from South Korea. We focus especially on the industry-dimension, investigating whether displacement or compensation effects vary across industries and according to subtypes of green process innovations. Results demonstrate that both green and non-green product innovations are associated with significant employment increases: a 1% increase in sales growth from new products is associated with a less than 1% increase in employment. Finally results are found to vary across industries, especially when simultaneously accounting for subtypes of green process innovations.
    Date: 2016–10
  4. By: Lutz, Benjamin Johannes
    Abstract: I study the causal effect of the European Union Emissions Trading System (EU ETS) on the productivity of German manufacturing firms. Using administrative firm-level data, I estimate robust production functions for narrowly defined industries. This approach allows for an endogenous dynamic productivity process and corrects for simultaneous changes in input use or productivity after a firm is regulated by the EU ETS. After estimating the firm specific productivity, I employ a difference-in-differences framework in order to identify and quantify the average treatment effect of the EU ETS on the productivity of regulated firms. The results suggest no significant negative effect of the EU ETS on productivity. In contrast, the EU ETS had a positive effect on productivity during the first compliance period. An alternative identification strategy based on a combination of the difference-in-differences framework and nearest neighbor matching supports this finding. A subsample analysis provides evidence that the effect of the EU ETS is heterogeneous across industries.
    Keywords: Control of Externalities,Emissions Trading,Robust Production Function Estimation,Productivity,Difference-in-Differences
    JEL: D22 D24 Q52
    Date: 2016
  5. By: Maliranta, Mika; Määttänen, Niku; Pajarinen, Mika
    Abstract: The bulk of innovation subsidies in Finland are allocated to firms in industries where the employment share of “innovators,” i.e., workers who are specialized in R&D&I, is very high. The average subsidy per employee is typically the highest among young firms. At the firm level, an increase in innovation subsidies is typically associated with an inflow of innovators from high-productivity firms. These findings suggest that innovation subsidies contribute to economic renewal and the diffusion of knowledge between firms. Non-innovation subsidies, in contrast, appear to support established industry structures: a large share of them has been granted to relatively old firms within “traditional” manufacturing industries. Since non-innovation subsidies are systematically allocated to different types of firms than innovation subsidies, they may also crowd out resources from firms that receive innovation subsidies, thereby overriding some of the possible beneficial effects of innovation subsidies.
    Keywords: Firm subsidies, innovation, productivity, labor mobility
    JEL: O31 O33 O38 J62
    Date: 2016–10–13
  6. By: Stuart Graham (Georgia Institute of technology); Maurizio Iacopetta (Observatoire français des conjonctures économiques)
    Abstract: This article examines how closely nanotechnology resembles a general purpose technology (GPT). Using patented nanotechnology inventions during 1975-2006, we test for characteristics of GPTs identified in the prior literature, and find evidence that nanotechnology shows both “pervasive” adoption and “spawning” of follow-on innovation. Offering a methodological contribution, we employ concentration indexes such as the Gini index and Lorenz curve to construct “knowledge dissemination curves” for different technologies, thereby providing evidence that nanotechnology shares relevant characteristics with other GPTs. Using an entirely new dataset, we use three different definitions of a “nanotechnology patent” and calculate patent generality indexes, finding that nanotechnology patents are significantly more likely to be referenced across technology space than are patents in information technology, another widely-adopted GPT. In another contribution, we suggest that innovative materials may demonstrate the characteristics of a GPT, and provide a historical parallel between the advancement of steel technology in the 19th Century with that of nanotechnology in the present day.
    Keywords: Nanotechnology; General Purpose Technology; Patent Analysis
    JEL: O30 O33 O34
    Date: 2014–12
  7. By: Teresa C. Fort
    Abstract: This paper provides direct empirical evidence on the relationship between technology and firms’ global sourcing strategies. Using new data on U.S. firms’ decisions to contract for manufacturing services from domestic or foreign suppliers, I show that a firm’s adoption of communication technology between 2002 to 2007 is associated with a 3.1 point increase in its probability of fragmentation. The effect of firm technology also differs signifcantly across industries; in 2007, it is 20 percent higher, relative to the mean, in industries with production specifcations that are easier to codify in an electronic format. These patterns suggest that technology lowers coordination costs, though its effect is disproportionately higher for domestic rather than foreign sourcing. The larger impact on domestic fragmentation highlights its importance as an alternative to offshoring, and can be explained by complementarities between technology and worker skill. High technology firms and industries are more likely to source from high human capital countries, and the differential impact of technology across industries is strongly increasing in country human capital.
    Keywords: fragmentation, offshoring, technology, contract manufacturing services
    JEL: F14 F23 L23
    Date: 2016–01
  8. By: Bihemo Kimasa (University of Konstanz); Leo Kaas (University of Konstanz)
    Abstract: We examine empirically and theoretically the joint dynamics of prices, output, employment and wages across firms. We first analyze administrative firm data for the German manufacturing sector for which price and quantity information at the nine-digit product level, together with employment, working hours and wages are available. We then develop a dynamic model of heterogeneous firms who compete for workers and customers in frictional labor and product markets. Prices and wages are dispersed across firms, reflecting differences in firm productivity and demand. Productivity and demand shocks have distinct implications for the firms' employment, output and price adjustments. In a quantitative analysis, we evaluate the model predictions against the data.
    Date: 2016
  9. By: Elisabetta Iossa, Federico Biagi and Paola Valbonesi
    Abstract: We consider alternative European public procurement mechanisms for acquiring R&D services and innovative solutions, focusing on Pre-commercial Procurement, Public Procurement of Innovative Solutions and Innovation Partnerships. For each of these mechanisms, we identify conceptually strengths and weaknesses. We highlight the role played by (i) economies of scope and externalities between R&D and large-scale production; (ii) degree of specificity of the innovation; (iii) role of SMEs in the market and level of market competition; (iv) risk of market foreclosure and supplier lock-in. This article contributes to the literature on incentives in demand-side innovation policy by tapping into the contractual design features and by offering relevant implications for academics and policy makers.
    Keywords: Innovation, Demand-side policies, Incentives, Pre-commercial Procurement, Public Procurement of Innovative Solutions, Innovation Partnership.
    JEL: O31 O32 O38 H57
    Date: 2016
  10. By: K L KRISHNA (Department of Economics, Delhi School of Economics, University of Delhi,); DEB KUSUM DAS (Department of Economics, Ramjas College, University of Delhi); ABDUL A ERUMBAN (The Conference Board and University of Groningen); SURESH AGGARWAL (Department of Business Economics, University of Delhi, South Campus); PILU CHANDRA DAS (Dyal Singh Evening College, University of Delhi,)
    Abstract: The rapid rise of service sector in India, as in its developing counterparts in Asia, follows the pattern of skipped industrialization and raises concern for sustaining economic growth in India. While the share of services in India’s GDP has risen over much of the post-independence period, the economic liberalization in the 1990s paved the way for the emergence of service sector as a key player in India’s growth story. The present paper examines the productivity dynamics in service sector at detailed industry level—the India KLEMS (K = capital, L = labor, E = energy, M = materials, and S = services) panel dataset version 2015. Our results suggest that labor productivity in Indian service sector has been growing substantially over decades, and much of this productivity gain is accruing through acceleration in market services labor productivity. This observed productivity gain in market services, and in particular information and communications technology (ICT) intense services, might indicate the role of increasing ICT in contributing to labor productivity growth. The labor reallocation effect is positive for the period 1980–2011 and has increased in the 2000s, suggesting a structural transformation which is growth enhancing. The paper also examines the dynamics of total factor productivity in the service sector, measured using KLEMS growth accounting framework. The observed growth pattern in the service sector has not been uniform across all services in India. The performance of market-based ICT intensive sectors is impressive, especially in telecommunications and financial services. However, by and large, we find a dominance of capital deepening in accounting for growth.
    Keywords: 041; 047; 053
    Date: 2016–10
  11. By: Stijepic, Denis
    Abstract: A great part of economic literature deals with structural changes, i.e. long-run changes in the structure of economic aggregates. While the standard literature relies on the mathematical branches of analysis and algebra for modeling structural change and describing the relevant empirical evidence, we choose a topological approach, which relies on the notions of self-intersection and mutual intersection of trajectories. We discuss all the methodological and mathematical aspects of this approach and show that it is applicable to a wide range of classical topics and papers of growth and development theory. Then, we apply it for studying a specific type of structural change, namely, the long-run labor re-allocation across sectors: we (a) elaborate new empirical evidence stating that mutual intersection and non-self-intersection are stylized facts of long-run labor re-allocation, (b) suggest and discuss theoretical explanations of non-self-intersection, and (c) discuss mathematical methods for explaining mutual intersection by using standard structural change models. Overall, our approach generates new evidence, new critique points of the previous structural change literature, new theoretical arguments, and a wide range of new research topics.
    Keywords: structural change; dynamics; long run; trajectory; intersection; self-intersection; differential equations; geometry; topology; labor; allocation; savings; functional income distribution
    JEL: C61 C65 O41
    Date: 2016–10–09
  12. By: Valerio Sterzi (Université de Bordeaux); Stefanie Stantcheva (Harvard University); Santiago Caicedo (University of Chicago); Ernest Miguelez (Université de Bordeaux); Ufuk Akcigit (University of Chicago)
    Abstract: Does interacting with others contribute to human capital accumulation? We try to answer this question by using a novel panel dataset on European inventors matched to their employers. Our panel data comes from the European Patent Offices since the 1980s and contains information on inventors, their employers, and their patents. More interactions are very strongly correlated with higher subsequent productivities of inventors, as measured by their number and quality of patents. Using variation in labor market regulations and flexibility across sectors, countries and time as instruments, we document a causal link between interactions and productivity or human capital accumulation of inventors.
    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.
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