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on Technology and Industrial Dynamics |
| By: | Ana Fontoura Gouveia (Ministry of Finance, Portugal); Sílvia Santos (Banco de Portugal); Inês Gonçalves (Instituto Nacional de Estatística) |
| Abstract: | In recent years, literature has linked structural reforms with productivity growth. Considering Portugal’s recent comprehensive reform agenda, this topic acquires particular relevance. Using data for Portuguese firms for the period 2006-2014, this paper assesses the impact of structural reforms on firms’ productivity. In line with existing literature, the analysis shows that most reforms entail long-term gains, despite, in some reform areas, the existence of short-term costs. In general, there are important differences across reform areas and across firms, namely when comparing firms with different productivity levels. The firms’ distance to the technological frontier mediates the impact of reforms, either by potentiating its effects or by curbing them, depending on the reform area. |
| Keywords: | Distance to frontier, Growth, Structural reforms, Total Factor Productivity |
| JEL: | D04 D22 D24 O33 |
| Date: | 2017–05–09 |
| URL: | http://d.repec.org/n?u=RePEc:oec:ecoaac:8-en&r=tid |
| By: | José-María Da-Rocha; Marina Mendes Tavares; Diego Restuccia |
| Abstract: | What accounts for differences in output per capita and total factor productivity (TFP) across countries? Empirical evidence points to resource misallocation across heterogeneous production units as an important factor. We study resource misallocation in a model where establishment-level productivity is endogenous and responds to the same policy distortions that create misallocation. In this framework, policy distortions not only misallocate resources across a given set of productive units (static effect), but also create disincentives for productivity improvement (dynamic effect) thereby affecting the productivity distribution and further contributing to lower aggregate output and productivity. The dynamic effect is substantial quantitatively. Reducing the dispersion in revenue productivity in the model by 25 percentage points to the level of the U.S. benchmark implies an increase in aggregate output and TFP by a factor of 2.9-fold. Improved resource allocation accounts for 42 percent of the gain, whereas the change in the productivity distribution accounts for the remaining 58 percent. |
| JEL: | E0 E1 O1 O4 |
| Date: | 2017–04 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:23339&r=tid |
| By: | Asheim, Bjørn (CIRCLE, Lund University); Moodysson, Jerker (Jönköping International Business School, Jönköping University) |
| Abstract: | This paper provides an overview of the Swedish innovation system and the main strategies for Swedish innovation policy, with specific focus on VINNOVA’s place-based support to specialised areas integrating competences from different sectors in society. The overview reveals a recent shift from place-based specialisation to thematic areas underpinned by a societal challenge driven logic to policy intervention. The analysis indicates that a strong focus on R&D and science-driven innovation serves as a barrier for successful transition, and that the recent shift implies a greater need for policy coordination across different fields and scales. This makes agencies like VINNOVA less autonomous with regard to design as well as implementation of innovation policy and points to the need for reaching a balance between demand-oriented and supply-led strategies in which place-specific context matters and innovation policy must be attuned to and embedded in the particularities of the regional and national economies it aims to target. Linking smart specialisation strategies (S3), EU’s overall industrial and innovation policy for regional diversification and restructuring, with VINNOVAs new system innovation policy approach would be one way of doing this. |
| Keywords: | Innovation system; innovation policy; Sweden |
| JEL: | O25 O31 O52 |
| Date: | 2017–04–27 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:lucirc:2017_005&r=tid |
| By: | Tadashi Ito (Faculty of International Social Science, Gakushuin University); Toshiyuki Matsuura (Keio Economic Observatory, Keio University) |
| Abstract: | Welfare gain through international trade is a cornerstone of international economics literature. However, it is only recently that the data and the methodologies become available to empirically assess such welfare gain. Building on the recently developed methodologies of estimating elasticity of substitution and computing welfare gains from trade, we estimate welfare gains of Japan from its trade liberalization in manufacturing sector. To do this as precisely as possible, the elasticities of substitution for HS 9-digit product code are estimated for various periods of time. The analyses show that Japan's welfare gains from trade liberalization took place especially from the 1990s, and reached eleven percent vis-a-vis the autarky situation. |
| Keywords: | Trade Liberalization, Welfare gains, Japan |
| JEL: | F14 |
| Date: | 2017–01–14 |
| URL: | http://d.repec.org/n?u=RePEc:keo:dpaper:2017-002&r=tid |
| By: | Aghion, Philippe; Bloom, Nicholas; Lucking, Brian; Sadun, Raffaella; Van Reenen, John |
| Abstract: | What is the optimal form of firm organization during "bad times"? Using two large micro datasets on firm decentralization from US administrative data and 10 OECD countries, we find that firms that delegated more power from the Central Headquarters to local plant managers prior to the Great Recession out-performed their centralized counterparts in sectors that were hardest hit by the subsequent crisis. We present a model where higher turbulence benefits decentralized firms because the value of local information and urgent action increases. Since turbulence rises in severe downturns, decentralized firms do relatively better. We show that the data support our model over alternative explanations such as recession-induced reduction in agency costs (due to managerial fears of bankruptcy) and changing coordination costs. Countries with more decentralized firms (like the US) weathered the 2008-09 Great Recession better: these organizational differences could account for about 16% of international differences in post-crisis GDP growth. |
| Keywords: | Decentralization; great recession; growth; turbulence |
| JEL: | F23 O31 O32 O33 |
| Date: | 2017–04 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:11979&r=tid |
| By: | Victor Aguirregabiria; Margaret Slade |
| Abstract: | We review important developments in Empirical Industrial Organization (IO) over the last three decades. The paper is organized around six topics: collusion, demand, productivity, industry dynamics, interfirm contracts, and auctions. We present models that are workhorses in empirical IO, and describe applications. For each topic, we discuss at least one empirical application using Canadian data. |
| Keywords: | Empirical Industrial Organization; Collusion; Demand for differentiated products; Production functions; Dynamic structural models; Interfirm contracts; Empirical auction models |
| JEL: | C57 L10 L20 L30 L40 L50 |
| Date: | 2017–04–25 |
| URL: | http://d.repec.org/n?u=RePEc:tor:tecipa:tecipa-580&r=tid |
| By: | Deguilhem, Thibaud; Berrou, Jean-Philippe; Combarnous, François |
| Abstract: | This article examines the effect of social networks through the use of family, friends or relatives ties on quality of employment (QoE). Drawing from the socioeconomic literature on social networks and labor market, we propose an original and multidimensional measure of QoE, and a fruitful estimation approach of the effect of social networks on QoE that allows to deal with complex inter-groups heterogeneity. Using the Great Integrated Houshold Survey (GIHS) and a sample on Bogota's workers in 2013, we find evidence proving that the use of ties has high negative effects on QoE index for those who are in the lower quality of employment range. Likewise, the use of social networks has very low negative effects on QoE index for individuals who are in the better quality of employment range. Complemented by focus groups interviews, these empirical results raise questions about the difference prevailing in relational practices between necessity networks for precarious workers and opportunity networks for protected workers. |
| Keywords: | Social networks, Quality of employment, Finite Mixture Regression Model, Colombia |
| JEL: | J42 L14 O54 Z13 |
| Date: | 2017–04 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:78628&r=tid |
| By: | Kühn, Stefan.; Viegelahn, Christian, |
| Abstract: | This paper studies the impact of foreign barriers to goods and services trade on domestic jobs that are directly or indirectly related to trade flows. Using the ILO’s recently published estimates of the number of jobs in global supply chains, the empirical analysis in this paper largely confirms predictions derived from a theoretical model closely calibrated to actual data from international input-output tables. First, it identifies a sizeable cross- border impact of barriers to manufacturing trade not only on manufacturing jobs, but also on services jobs. Second, service trade barriers affect the number of jobs in both services and manufacturing. Third, spill-over effects of trade policy in one sector to jobs in other sectors have become more important over time. Based on this evidence, the paper shows the labour market consequences of the increased interconnectedness of countries and sectors through global supply chains, suggesting that trade policy can have significant external effects on foreign labour markets. |
| Keywords: | value chains, globalization, trade policy, employment |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:ilo:ilowps:994952392602676&r=tid |
| By: | Fernandez, Cristina; García, Roberto; Lopez-Garcia, Paloma; Marzinotto, Benedicta; Serafini, Roberta; Vanhala, Juuso; Wintr, Ladislav |
| Abstract: | This paper illustrates the main features of the Labour Module of the CompNet dataset which provides indicators of firm growth over the period 1995-2012 across 17 EU (13 euro area) countries and 9 macro-sectors. It also includes information on a large set of micro-aggregated characteristics of firms growing at different speed such as their financial position and labour and total factor productivity. The paper shows that during the Great Recession the share of shrinking firms sharply increased in countries under stress, while firm growth slowed down in non-stressed countries. In the former, the construction sector suffered the most, while in the latter manufacturing and services related to transportation and storage were mainly affected, possibly as a result of the trade collapse. While we find that, all else equal, more productive firms had a higher probability of growing, the process of productivity-enhancing reallocation was muted during the Great Recession. JEL Classification: J23, L11, L25 |
| Keywords: | cross-country analysis, firm growth, micro-aggregated data |
| Date: | 2017–04 |
| URL: | http://d.repec.org/n?u=RePEc:ecb:ecbwps:20172048&r=tid |
| By: | Junichi Yamasaki |
| Abstract: | Railroad access can accelerate the technological progress in the industrial sector and therefore induce structural change and urbanization, the two common features of modern economic growth. I examine this particular mechanism in the context of Japanese railroad network expansion and modern economic growth in the late 19th century and early 20th centuries. By digitizing a novel data set that measures the use of steam engines at the factory level, allowing me to directly observe the diffusion of steam power, I analyze the effect of railroad access on the adoption of steam power. To overcome the endogeneity prob- lem, I determine the cost-minimizing path between destinations, and use this to construct an instrument for railroad access. I find that railroad access led to an increased adoption of steam power by factories, which in turn reallocated labor from the agricultural to the industrial sector, thereby inducing structural change. Railroad network also broke mean reversion in population growth, eventually leading to urban- ization. My results support the view that railroad network construction was key to the modern economic growth in pre-First World War Japan. |
| Date: | 2017–04 |
| URL: | http://d.repec.org/n?u=RePEc:dpr:wpaper:1000&r=tid |
| By: | Joan Farre-Mensa; Deepak Hegde; Alexander Ljungqvist |
| Abstract: | We provide evidence on the value of patents to startups by leveraging the random assignment of applications to examiners with different propensities to grant patents. Using unique data on all first-time applications filed at the U.S. Patent Office since 2001, we find that startups that win the patent “lottery” by drawing lenient examiners have, on average, 55% higher employment growth and 80% higher sales growth five years later. Patent winners also pursue more, and higher quality, follow-on innovation. Winning a first patent boosts a startup’s subsequent growth and innovation by facilitating access to funding from VCs, banks, and public investors. |
| JEL: | D23 G24 L26 O34 |
| Date: | 2017–03 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:23268&r=tid |
| By: | Desmet, Klaus; Greif, Avner; Parente, Stephen L. |
| Abstract: | Why do some countries industrialize much earlier than others? One widely-accepted answer is that markets need to be large enough for producers to find it profitable to bear the fixed cost of introducing modern technologies. This insight, however, has limited explanatory power, as illustrated by England having industrialized nearly two centuries before China. This paper argues that a market-size-only theory is insufficient because it ignores that many of the modern technologies associated with the Industrial Revolution were fiercely resisted by skilled craftsmen who expected a reduction in earnings. Once we take into account the incentives to resist by factor suppliers' organizations such as craft guilds, we theoretically show that industrialization no longer depends on market size, but on the degree of spatial competition between the guilds' jurisdictions. We substantiate the relevance of our theory for the timing of industrialization in England and China (i) by providing historical and empirical evidence on the relation between spatial competition, craft guilds and innovation, and (ii) by showing that a model of our theory calibrated to historical data on spatial competition correctly predicts the timing of industrialization in both countries. The theory can therefore account for both the Industrial Revolution and the Great Divergence. |
| Keywords: | adoption of technology; craft guilds; endogenous institutions; Great Divergence; industrial revolution; innovation; inter-city competition; market size; spatial competition |
| JEL: | N10 O11 O14 O31 O43 |
| Date: | 2017–04 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:11976&r=tid |
| By: | Grillitsch, Markus (CIRCLE, Lund University); Nilsson, Magnus (CIRCLE, Lund University) |
| Abstract: | Knowledge externalities affect high and low growth firms differently. The paper develops two theoretical arguments. The knowledge equilibrium argument postulates that knowledge externalities weaken high growth firms for the benefit of low growth firms until performance differences vanish. The knowledge competition argument claims that high growth firms are in a better position to identify, attract, and integrate knowledge, thereby benefiting more from knowledge externalities than low growth firms. Based on 188,936 observations of 32,736 Swedish firms from 2004 to 2011, it is analyzed whether knowledge centers enable high growth firms to surge ahead or low growth firms to catch up. |
| Keywords: | knowledge spillovers; externalities; firm growth; competitiveness; core-periphery |
| JEL: | O18 O30 P48 R10 R12 |
| Date: | 2017–04–27 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:lucirc:2017_006&r=tid |
| By: | Antonelli, Cristiano (University of Turin) |
| Abstract: | The introduction of information and communication technologies (ICT) has changed in depth the organization of the generation of knowledge reducing significantly knowledge absorption cost and improving knowledge interactions. The digital generation of knowledge relies on the systematic access and use of the stock of quasi-public knowledge. ICT enable to reconsider the knowledge appropriability trade-off as it helps to better appreciate the positive role of knowledge spillovers in the recombinant generation of new knowledge, next to the well-known negative effects of the limited appropriability of knowledge on revenues and hence incentives to innovate. This new analytical framework calls for an augmented role of telecommunications policy that should take into account the positive effects of knowledge connectivity on the generation of knowledge. |
| Date: | 2017–03 |
| URL: | http://d.repec.org/n?u=RePEc:uto:labeco:201705&r=tid |
| By: | Martin, Roman (University of Gothenburg); Wiig Aslesen, Heidi (BI Norwegian Business School); Grillitsch, Markus (CIRCLE, Lund University); Herstad, Sverre (Inland Norway University of Applied Sciences) |
| Abstract: | The literature on regional innovation systems emphasizes the role of the region as locus for interactive learning and knowledge exchange, stressing the importance of (geographical) proximity for innovation (Asheim and Gertler 2005). Even though the importance of extra-regional knowledge is widely acknowledged (Trippl et al. 2015), there has been only little emphasis on the particular role and the nature of global knowledge flows. The aim of this chapter is to explore the differentiated nature of global knowledge flows in regional innovation systems. We provide an overview of the different ways firms can gain access to global knowledge sources. Identified knowledge sourcing channels include international R&D collaborations, foreign direct investments, personally embedded relationships, international mobility of skilled labour, virtual communities and online platforms, and the participation in temporary clusters such as fairs, exhibitions, and conferences (Maskell et al. 2006, Aslesen and Sardo 2016). Depending on regional innovation system preconditions, firms use and combine different knowledge sourcing channels to access global knowledge. Firms in organisationally thick and diversified regional innovation systems have a geographical advantage in accessing knowledge globally, but even firms in peripheral areas can exchange knowledge worldwide, due to improved means of transport and communication at distance. Furthermore, not only multinational companies that are dominated by analytical or synthetic knowledge bases, but even small and medium sized enterprises in symbolic industries are often deeply involved in global knowledge sourcing activities. We illustrate our arguments with interview data collected among New Media firms in southern Sweden and in the Oslo Region in Norway. |
| Keywords: | regional innovation systems; globalisation of innovation; knowledge sourcing; new media |
| JEL: | L82 L86 O19 O33 |
| Date: | 2017–04–27 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:lucirc:2017_007&r=tid |
| By: | Antonelli, Cristiano; Ferraris, Gianluigi (University of Turin) |
| Abstract: | The paper elaborates an agent based simulation model (ABM) to explore the endogenous long-term dynamics of knowledge externalities. ABMs, as a form of artificial cliometrics, allow the analysis of the effects of the reactivity of firms caught in out-of-equilibrium conditions conditional on the levels of endogenous knowledge externalities stemming from the levels of knowledge connectivity of the system. The simulation results confirm the powerful effects of endogenous knowledge externalities. At the micro-level, the reactions of firms caught in out-ofequilibrium conditions yield successful effects in the form of productivity enhancing innovations, only in the presence of high levels of knowledge connectivity and strong pecuniary knowledge externalities. At the meso-level, the introduction of innovations changes the structural characteristics of the system in terms of knowledge connectivity that affect the availability of knowledge externalities. Endogenous centrifugal and centripetal forces continually reshape the structure of the system and its knowledge connectivity. At the macro system level, an out-of-equilibrium process leads to a step-wise increase in productivity combined with non-linear patterns of output growth characterized by significant oscillations typical of the long waves in Schumpeterian business cycles. |
| Date: | 2017–03 |
| URL: | http://d.repec.org/n?u=RePEc:uto:labeco:201708&r=tid |