nep-tid New Economics Papers
on Technology and Industrial Dynamics
Issue of 2017‒02‒05
fourteen papers chosen by
Fulvio Castellacci
Universitetet i Oslo

  1. The Employment Impact of Different Forms of Innovation: Evidence from Italian Community Innovation Survey By Laura Barbieri; Mariacristina Piva; Marco Vivarelli
  2. Understanding External Technology Sourcing in New Product Development Projects: Bilateral vs. unilateral contracts By KANI Masayo; MOTOHASHI Kazuyuki
  3. Incorporation Decisions and Job Creation in New Firms By Susanne Prantl; Frederik Thenée
  4. The effect of institutional ownership on firm innovation: Evidence from Chinese listed firms By Rong, Zhao; Wu, Xiaokai; Boeing, Philipp
  5. Multiproduct firms, firm dynamics, and the productive mix of Brazilian manufacturing firms By Juliana Dias Alves; Mauro Sayar Ferreira
  6. Innovation, public support and productivity in colombia By Isabel Busom; Jorge-Andrés Vélez-Ospina
  7. Is Modern Technology Responsible for Jobless Recoveries? By Graetz, Georg; Michaels, Guy
  8. Are Smaller (Larger) Corporate Headquarters Better? By MIYAJIMA Hideaki; OGAWA Ryo; USHIJIMA Tatsuo
  9. What drives employment growth and social inclusion in EU regions? By Marco Di Cataldo; AndrŽs Rodr’guez-Pose
  10. Econometric Evidence on the R&D Depreciation Rate By Gaétan de Rassenfosse; Adam B. Jaffe
  11. Explaining the industrial variety of newborn firms: The role of cultural and technological diversity By Colombelli, Alessandra; D'Ambrosio, Anna; Meliciani, Valentina; Francesco Quatraro,
  12. The Mystery of TFP By Nicholas Oulton
  13. Evaluating direct and indirect treatment effects in Italian R&D expenditures By Di Gennaro, Daniele; Pellegrini, Guido
  14. Ownership Dynamics and Firm Performance in an Emerging Economy: A Meta-Analysis of the Russian Literature By Ichiro Iwasaki; Satoshi Mizobata; Alexander A. Muravyev

  1. By: Laura Barbieri (Dipartimento di Scienze Economiche e Sociali, Università Cattolica); Mariacristina Piva (Dipartimento di Scienze Economiche e Sociali, Università Cattolica); Marco Vivarelli (Istituto di Politica Economica, Università Cattolica)
    Abstract: This paper explores the employment impact of innovation activity, taking into account both R&D expenditures and embodied technological change (ETC). We use a novel panel dataset covering 265 innovative Italian firms over the period 1998-2010. The main outcome from the proposed fixed effect estimations is a labor-friendly nature of total innovation expenditures; however, this positive effect is barely significant when the sole in-house R&D expenditures are considered and fades away when ETC is included as a proxy for innovation activities. Moreover, the positive employment impacts of innovation activities and R&D expenditures are totally due to firms operating in high-tech industries and large companies, while no job-creation due to technical change is detectable in traditional sectors and SMEs.
    Keywords: Technology, innovation, R&D, embodied technological change, employment
    JEL: O31 O33
    Date: 2016–11
  2. By: KANI Masayo; MOTOHASHI Kazuyuki
    Abstract: This paper provides empirical analyses to understand the management of external technology sourcing using a novel dataset of new product development (NPD) projects in Japanese firms and focusing on the difference between bilateral and unilateral contract-based alliances. External technology sourcing takes various forms that can be divided into two categories: bilateral alliances, such as joint research and development (R&D), and unilateral alliances, such as licensing and commissioned R&D. The former style involves the dynamic process of joint R&D with a partner, whereas the latter involves the straightforward process of technology acquisition from a partner. In the first analysis in this paper, the determinants of the sourcing strategy for each contract type are investigated, and we find that bilateral contracts are more often used for exploratory projects, whereas in-house development is more often used for exploitation projects. Unilateral contracts are more relevant for projects mitigating contractual hazards. The second analysis looks into the relationship between the type of technology sourcing and its performance. We find that bilateral contract-based technology sourcing is more likely to lead to novel innovation than in-house development, but this difference in performance disappears when controlling for the type of NPD project and the firm's managerial resources.
    Date: 2016–12
  3. By: Susanne Prantl; Frederik Thenée
    Abstract: The regulation of firms can influence job creation in new firms, and these influences may contribute to long-term effects on the economy-wide distribution of jobs across firms. In this paper, we study the influences on job creation in new firms that follow from incorporation law, specifically the law-induced cost at firm entry. To identify these influences empirically, we allow for endogenous decisions on incorporation and, in addition, exploit a natural experiment in regulation that accompanied German reunification. Our empirical findings are in line with predictions that we derive from the model of Lucas (1978) by integrating incorporation decisions. We show that an increase in incorporation-related entry cost reduces the emergence of incorporated firms in a population of new firms. In addition, such an increase leads to higher initial job creation in incorporated than in unincorporated firms and decreases the mass of the entry size distribution across incorporations relative to the distribution across unincorporated firms in the intermediate range.
    Date: 2017–01–27
  4. By: Rong, Zhao; Wu, Xiaokai; Boeing, Philipp
    Abstract: Monitoring by institutional investors can act as an important mechanism to promote firm innovation. By investigating Chinese listed firms' patenting between 2002 and 2011, we find that the presence of institutional investors enhances firm innovation. Consistent with the monitoring view, we further find that (1) the effect of institutional investors on firm patenting mainly comes from mutual funds; (2) the effect is more pronounced when market competition is more intense; (3) the effect exists among private- and minor state-owned enterprises, but not among major state-owned enterprises. The above findings are robust when innovation quality is examined.
    Keywords: Institutional investor,Firm innovation,Patenting,Mutual funds,China
    JEL: G20 G32 O31 O32 O33
    Date: 2017
  5. By: Juliana Dias Alves (Cedeplar-UFMG); Mauro Sayar Ferreira (Cedeplar-UFMG)
    Abstract: This is a pioneer study on the Brazilian manufacturing sector focused on: i) the role and characteristics of multi-product (MP) plants; and ii) on the determinants and impact of product switching within firms. MP corresponds to 37% of the manufacturing firms, but generates 81% of the output. They employ more workers, are more likely to be exporters, have higher labor productivity and higher TFP. The extensive margin due to adding and retirement of products contributes more to output growth than entry and exit of firms. Among continuing firms, half of the annual output growth (from 2005 to 2009) was originated in firms that switched products. Firms that have net added (dropped) items had higher (smaller) increase in output, in employers, and in the TFP. Higher TFP, more employers, or being exporter increased the probability to only add or only drop items in the future.
    Keywords: Multiproduct, scope, total factor productivity, heterogeneous firms
    JEL: D2 F23 L1 L16 L6
    Date: 2016–06
  6. By: Isabel Busom (Departament d'Economia Aplicada, Universitat Autonoma de Barcelona); Jorge-Andrés Vélez-Ospina (Departament d'Empresa, Universitat Autonoma de Barcelona)
    Abstract: We investigate the association between perceived barriers to innovation and the allocation of public support for innovation in manufacturing and service industries in Colombia, as well as the potential heterogeneity of returns to innovation across the firm-level productivity distribution. We extend the CDM recursive system by including an equation for the allocation of direct support and using quantile regression methods to estimate the productivity equation. We find some differences across manufacturing and service industries. Financing constraints are correlated with obtaining public support in manufacturing and in some services, but in knowledge intensive services (KIS) barriers associated with regulations are more significant. The introduction of innovations increases mostly the productivity of firms below the median of the productivity distribution, especially in services. Increasing human capital would boost productivity of firms in all industries, providing support to the hypothesis that human capital is indeed a bottleneck for productivity growth across the board in Colombia. We conclude that addressing factors that hinder innovation by low productivity firms in all service industries could significantly contribute to increasing productivity and reduce its dispersion.
    JEL: O31 O32 O33 O40 L8 C30
    Date: 2017–01
  7. By: Graetz, Georg (Uppsala University); Michaels, Guy (London School of Economics)
    Abstract: Since the early 1990s, recoveries from recessions in the US have been plagued by weak employment growth. One possible explanation for these "jobless" recoveries is rooted in technological change: middle-skill jobs, often involving routine tasks, are lost during recessions, and the displaced workers take time to transition into other jobs (Jaimovich and Siu, 2014). But technological replacement of middle-skill workers is not unique to the US – it also takes place in other developed countries (Goos, Manning, and Salomons, 2014). So if jobless recoveries in the US are due to technology, we might expect to also see them elsewhere in the developed world. We test this possibility using data on recoveries from 71 recessions in 28 industries and 17 countries from 1970-2011. We find that though GDP recovered more slowly after recent recessions, employment did not. Industries that used more routine tasks, and those more exposed to robotization, did not recently experience slower employment recoveries. Finally, middle-skill employment did not recover more slowly after recent recessions, and this pattern was no different in routine-intensive industries. Taken together, this evidence suggests that technology is not causing jobless recoveries in developed countries outside the US.
    Keywords: job polarization, jobless recoveries, routine-biased technological change, robots
    JEL: E32 J23 O33
    Date: 2017–01
  8. By: MIYAJIMA Hideaki; OGAWA Ryo; USHIJIMA Tatsuo
    Abstract: This paper investigates the size and performance effect of corporate headquarters for a large sample of Japanese firms. We find that the size of headquarters is systematically associated with firm attributes such as scale, industrial scope, and research and development (R&D) and advertising intensities. We also observe that better governed firms have larger headquarters in contrast to the view that corporate headquarters are apt to be overstaffed due to agency problems. Our analysis of firm value suggests that enlarging headquarters involves a cost that is particularly great for diversified firms. Specifically, as headquarters grow in size, the efficiency of inter-business fund flow declines. This novel finding suggests that downsizing headquarters can improve firm performance by increasing allocative efficiency.
    Date: 2017–01
  9. By: Marco Di Cataldo; AndrŽs Rodr’guez-Pose
    Abstract: The European Union promotes development strategies aimed at producing growth with Òa strong emphasis on job creation and poverty reductionÓ. 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 Ð infrastructure, human capital, innovation, quality of government Ð 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 Ð particularly in the less developed regions Ð and the promotion of inclusive employment growth across Europe. Length:
    Keywords: social exclusion, employment, skills, regions, Europe
    JEL: R23 J64 O52
    Date: 2017–01
  10. By: Gaétan de Rassenfosse; Adam B. Jaffe
    Abstract: This paper presents estimates of the R&D depreciation rate using survey data on Australian inventions. Its novelty is twofold. First, it relies on direct observation of the revenue streams of inventions. This is in sharp contrast with previous studies, which all rely on models based on indirect observation and require strong identifying assumptions. Second, it presents estimates of the effect of patent protection on the depreciation rate. Results suggest that the yearly depreciation rate varies in a range of 1 to 5 per cent, although the depreciation rate is stronger in the first two years of inventions averaging 8–9 per cent. Patent protection slows down the erosion of profits by about 1–2 percentage points.
    JEL: M41 O32 O33 O34
    Date: 2017–01
  11. By: Colombelli, Alessandra; D'Ambrosio, Anna; Meliciani, Valentina; Francesco Quatraro, (University of Turin)
    Abstract: We investigate the determinants of the sectoral variety of newborn firms in different regional contexts. Based on the knowledge spillovers theory of entrepreneurship, we study the role of different dimension of knowledge variety, i.e. technological diversity and cultural diversity. This latter is measured with respect to the nationality of both foreign residents and foreign entrepreneurs. We use a unique dataset stemming from the combination of different sources of information. The results confirm that all the dimensions of knowledge variety are relevant in shaping the sectoral variety of newborn firms and point to the differential contribution of immigrant entrepreneurs in fostering the sectoral diversification in unrelated activities.
    Date: 2016–05
  12. By: Nicholas Oulton (Centre for Macroeconomics (CFM); National Institute of Economic and Social Research (NIESR))
    Abstract: I analyse TFP growth at the sectoral and aggregate level, using data for 10 industry groups covering the market sector for 18 countries over the period 1970-2007 drawn from the EU KLEMS dataset. TFP growth displays persistence at the aggregate level but not at the industry level, suggesting industry outputs are measured with error. In all countries resources have been shifting away from industries with high TFP growth towards industries with low TFP growth. Nevertheless I find that structural change (as measured by changes in value added shares) has favoured growth in most countries. Errors in measuring capital or in measuring the elasticity of output with respect to capital are unlikely to substantially reduce the role of TFP in explaining growth. The pattern of growth in these 18 countries is more consistent with an underlying two-sector model than with the one-sector (Solow) model. Standard theory suggests that TFP growth induces capital accumulation, at least in the long run. This is not the case with the raw EU KLEMS data used here. But standard theory finds some support when the data are smoothed to remove cyclical effects.
    Date: 2017–01
  13. By: Di Gennaro, Daniele; Pellegrini, Guido
    Abstract: During the last decades SUTVA has represented the "gold standard" for the identification and evaluation of causal effects. However, the presence of interferences in causal analysis requires a substantial review of the SUTVA hypothesis. This paper proposes a framework for causal inference in presence of spatial interactions within a new spatial hierarchical Difference-in-Differences model (SH-DID). The novel approach decomposes the ATE, allowing the identification of direct (ADTE) and indirect treatment effects. In addition, our approach permits the identification of different indirect causal impact both on treated (AITET) and on controls (AITENT). The performances of the SH-DID are evaluated by a Montecarlo Simulation. The results confirm how omitting the presence of interferences produces biased parameters of direct and indirect effects, even though the estimates of the ATE in the traditional model are correct. Conversely, the SH-DID provides unbiased estimates of both total, direct and indirect effects. On this basis, we provide empirical evidence on the effectiveness of public policies in Italy. The estimates show the additionality of the policies on R&D expenditures. Decomposing the ATE, we demonstrate positive and significant direct effects, while the indirect impact is negative and meaningful, even if limited to the treated.
    Keywords: policy evaluation; spatial interferences; spillover effects; spatial hierarchical approach
    JEL: O38 R12 R15 R38
    Date: 2016–12–20
  14. By: Ichiro Iwasaki (Institute of Economic Research, Hitotsubashi University); Satoshi Mizobata (Institute of Economic Research, Kyoto University); Alexander A. Muravyev (Department of Economics, Higher School of Economics in St. Petersburg, Russia Institute of Labor Economics (IZA))
    Abstract: This paper provides a meta-analysis of studies on the effect of ownership on the performance of Russian firms over 20 years of rapid institutional and economic changes. We review 29 studies extracted from the EconLit and Web of Science databases with a total of 877 relevant estimates. We find that the government negatively affects company management regardless of its administrative level. In contrast, private ownership is positively associated with firm performance. The effect size and statistical significance are notably varied among different types of private ownership. While the effect of insider (employee and management) ownership is comparable to that of foreign investors, the effect of domestic outsider investors is considerably smaller. Our assessment of publication selection bias reveals that the existing literature does not contain genuine evidence for a series of ownership types and, therefore, some of the findings have certain limitations.
    Keywords: Privatization, Corporate Ownership, Firm Performance, Meta-analysis, Publication Selection Bias, Russia
    Date: 2017–01

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