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on Technology and Industrial Dynamics |
| By: | Freire Junior, Clovis (United Nations, Division for Sustainable Development, Department of Economic and Social Affairs, and UNU-MERIT, Maastricht University) |
| Abstract: | Economic development is associated with structural transformation and the increase of complexity of production and exports. This paper examines whether strategic diversification is required to increase economic complexity or whether market incentives would be sufficient to drive this process of catching-up. The paper applies empirical methods of the strand of the literature on economic complexity to examine how path dependency and the demand for potential new products affect economic diversification. It argues that strategic diversification is required in cases when demand factors are very likely to create incentives for diversification towards less complex products, which hinders the increase of productive capacities of countries. The paper presents the results of analysis considering 221 economies and shows that less diversified economies would not be able to rely on market incentives alone. They have to strategically diversify towards more complex products, which require the selective promotion of economic activities through the use of targeted industrial, infrastructure, trade, investment and private sector development policies. |
| Keywords: | Diversification, Structural Transformation, Productive Capacities, Industrial Policy, Economic Development |
| JEL: | O11 O14 O33 O38 O53 O57 |
| Date: | 2017–09–05 |
| URL: | http://d.repec.org/n?u=RePEc:unm:unumer:2017037&r=tid |
| By: | Omar Bamieh; Matteo Fiorini; Bernard Hoekman and Adam Jakubik |
| Abstract: | We present evidence that the negative effect of the China shock on US manufacturing employment is lower for industries that use services inputs more intensively. Different potential mechanisms for this finding are analyzed. This reveals significant heterogeneity across different types of services and their potential role in affecting labor demand and supply responses to greater import competition. |
| Keywords: | Manufacturing employment, China shock, import competition, servicification, services |
| JEL: | F16 L8 |
| Date: | 2017–07 |
| URL: | http://d.repec.org/n?u=RePEc:rsc:rsceui:2017/39&r=tid |
| By: | Steff De Visscher; Markus Eberhardt; Gerdie Everaert |
| Abstract: | We develop a new way to estimate cross-country production functions which allows us to parametrize unobserved non-factor inputs (total factor productivity) as a global technology process combined with country-specific time-varying absorptive capacity. The advantage of our approach is that we do not need to adopt proxies for absorptive capacity such as investments in research and development (R&D) or human capital, or specify explicit channels through which global technology can transfer to individual countries, such as trade, foreign direct investment (FDI) or migration: we provide an endogenously-created index for relative absorptive capacity which is easy to interpret and encompasses potential proxies and channels. Our implementation adopts an unobserved component model and uses a Bayesian Markov Chain Monte Carlo (MCMC) algorithm to obtain posterior estimates for all model parameters. This contribution to empirical methodology allows researchers to employ widely-available data for factor inputs (capital, labor) and GDP or value-added in order to arrive at policy-relevant insights for industrial and innovation policy. Applying our methodology to a panel of 31 advanced economies we chart the dynamic evolution of global TFP and country-specific absorptive capacity and then demonstrate the lose relationship between our estimates and salient indicators of growth-enhancing economic policy. |
| Keywords: | total factor productivity, absorptive capacity, common factor model, time-varying parameters, unobserved component model, MCMC |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:not:notgep:17/11&r=tid |
| By: | Fatime Barbara Hegyi (European Commission - JRC); Ruslan Rakhmatullin (European Commission - JRC) |
| Abstract: | This paper offers an overview of policy and economic reasons behind the launch of the new Smart Specialisation Platform for Industrial Modernisation. It is argued that modernisation of the European Industry depends upon multiple innovations across many industrial areas linked to emerging value chains. Some European regions have access to leading R&D and upstream innovation facilities; others have industrial skills needed in downstream testing and industrial upscaling. This paper looks at how the new Industrial Modernisation Platform can help European regions to create and/or join transnational networks of knowledge and expertise, and drive the development of transnational and macro-regional value chains. Cooperation and outward-looking disposition promote an understanding of the competitive position of the country/region with regard to others, and with respect to global value chains. The paper summarises the progress made since the formal launch of the new platform in June 2016 and offers an overview of the existing partnerships that are currently supported by the platform. |
| Keywords: | Regional innovation policy, smart specialisation, industrial policy, trans-regional cooperation, Thematic Smart Specialisation Platform on Industrial Modernisation |
| Date: | 2017–09 |
| URL: | http://d.repec.org/n?u=RePEc:ipt:iptwpa:jrc108028&r=tid |
| By: | Dawid, Herbert (Bielefeld University); Pellegrino, Gabriele (Ecole polytechnique federale de Lausanne); Vivarelli, Marco (UNU-MERIT, Maastricht University, IZA, Bonn, and Universita Cattolica del Sacro Cuore, Institute of Economic Policy, Milano) |
| Abstract: | While the extant innovation literature has provided extensive evidence of the so-called "demand-pull" effect, the possible diverse impact of demand evolution on product vs process innovation activities has not been yet investigated. This paper develops a formal model predicting a larger inducing impact of past sales in fostering product rather than process innovation. This prediction is then tested through a dynamic microeconometric model, controlling for R&D persistence, sample selection, observed and unobservable individual firm effects and time and sectoral peculiarities. Results are consistent with the model and suggest that an expansionary economic policy may benefit the diffusion of new products or even the emergence of entire new sectors. |
| Keywords: | technological change, R&D, demand-pull innovation, dynamic two tobit |
| JEL: | O31 O32 |
| Date: | 2017–09–04 |
| URL: | http://d.repec.org/n?u=RePEc:unm:unumer:2017035&r=tid |
| By: | Buzard, Kristy (Syracuse University); Carlino, Gerald A. (Federal Reserve Bank of Philadelphia); Hunt, Robert M. (Federal Reserve Bank of Philadelphia); Carr, Jake (The Ohio State University); Smith, Tony E. (University of Pennsylvania) |
| Abstract: | Patent citations are a commonly used indicator of knowledge spillovers among inventors, while clusters of research and development labs are locations in which knowledge spillovers are particularly likely to occur. In this paper, we assign patents and citations to newly defined clusters of American R&D labs to capture the geographic extent of knowledge spillovers. Our tests show that the localization of knowledge spillovers, as measured via patent citations, is strongest at small spatial scales and diminishes rapidly with distance. On average, patents within a cluster are about three to six times more likely to cite an inventor in the same cluster than one in a control group. At the same time, the strength of knowledge spillovers varies widely between clusters. The results are robust to the specification of patent technological categories, the method of citation matching and alternate cluster definitions. |
| Keywords: | spatial clustering; geographic concentration; R&D labs; localized knowledge spillovers; patent citations |
| JEL: | O31 R12 |
| Date: | 2017–10–03 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedpwp:17-32&r=tid |
| By: | Fagerberg, Jan (TIK, University of Oslo); Lundvall, Bengt-Åke (Aalborg University); Srholec, Martin (CERGE EI) |
| Abstract: | This paper deals with the role of global value chains (GVC) and other aspects of “openness” for economic development. To analyse the issue a comprehensive framework that allows for the inclusion of a range of relevant factors including not only different form of openness, such as GVC participation, but also technological and social capabilities, is developed. The analysis is based on evidence from 125 countries, including many developing nations, over the period 1997-2013. It is shown that economic growth reflects the strength of the national innovation system and that GVC participation is not the potent driver of economic growth that tends to be assumed. |
| Keywords: | Global value chains; openness; capability; national innovation system; economic development |
| JEL: | F43 O10 O30 O40 O57 |
| Date: | 2017–10–05 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:lucirc:2017_015&r=tid |
| By: | Taro Daiko (OECD); Hélène Dernis (OECD); Mafini Dosso (European Commission - JRC); Petros Gkotsis (European Commission - JRC); Mariagrazia Squicciarini (OECD); Alexander Tuebke (European Commission - JRC); Antonio Vezzani (European Commission - JRC) |
| Abstract: | The speed, scale and scope of the digital transformation and the widespread use of digital technologies in most aspects of our daily lives are changing the way we work, innovate, produce, interact and live. Knowledge flows almost instantaneously and digitalised information can be infinitely replicated, making the exploitation of knowledge a key factor for competitiveness. At the same time, changes at the local level may have global implications and innovation ecosystems become more and more global. These dynamics challenge policy making, and call for understanding the drivers of change, detecting trends in a timely fashion, and acting in a coordinated manner. The internet of things, digital manufacturing and 3D printing, industry 4.0 and big data are all components and drivers of the digital transformation, but the ways in which this new technological revolution will transform industries, countries and societies remain difficult to fully anticipate. As we become increasingly aware of the opportunities and the challenges of the digital economy, we also need to better understand how these technologies are forged and to identify the key players in such changes. The original data and statistics on the innovation output of the world's top corporate R&D investors presented in this report and its focus on digital technologies represent an important step towards this direction. It results from a long-term collaboration between the European Commission's Joint Research Centre and the Organisation for Economic Co-operation and Development, and their joint efforts to provide up-to-date comparable data and state-of-the-art indicators and analysis. This report is directed at a number of stakeholders, including policy makers, industry representatives, practitioners and the scientific community. By exploiting information on patents, trademarks and designs, this work sheds light on the top R&D investors worldwide in the digital economy, their innovative and creative activities and their branding strategies. It is accompanied by a publicly available database that can be used for further analysis in support of evidence-based policy making. |
| Keywords: | Patent, Trademark, Design, Digital, IP bundle, Scoreboard, Top corporate R&D investors, Industrial |
| Date: | 2017–09 |
| URL: | http://d.repec.org/n?u=RePEc:ipt:iptwpa:jrc107015&r=tid |
| By: | Carlino, Gerald A. (Federal Reserve Bank of Philadelphia); Drautzburg, Thorsten (Federal Reserve Bank of Philadelphia) |
| Abstract: | We investigate the dynamic response of local U.S. labor markets to increased job creation by new firms and compare the effects to overall labor demand shocks. To account for both dynamic and spatial dependence we develop a spatial panel VAR that builds on recent advances in the VAR literature to identify structural shocks using external instruments. We find that startup shocks have a small but persistent effect on local employment through population growth. Population growth, in turn, is largely driven by immigration. We also investigate how the responses differ by local characteristics such as population density. Finally, we show that startups are not closely linked to innovation. |
| Keywords: | Startups; entrepreneurship; local labor markets; proxy VAR; spatial panel VAR |
| Date: | 2017–09–27 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedpwp:17-31&r=tid |
| By: | Dauth, Wolfgang (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]); Findeisen, Sebastian; Südekum, Jens; Wößner, Nicole |
| Abstract: | "We study the impact of rising robot exposure on the careers of individual manufacturing workers, and the equilibrium impact across industries and local labor markets in Germany. We find no evidence that robots cause total job losses, but they do affect the composition of aggregate employment. Every robot destroys two manufacturing jobs. This accounts for almost 23 percent of the overall decline of manufacturing employment in Germany over the period 1994 - 2014, roughly 275,000 jobs. But this loss was fully offset by additional jobs in the service sector. Moreover, robots have not raised the displacement risk for incumbent manufacturing workers. Quite in contrast, more robot exposed workers are even more likely to remain employed in their original workplace, though not necessarily performing the same tasks, and the aggregate manufacturing decline is solely driven by fewer new jobs for young labor market entrants. This enhanced job stability for insiders comes at the cost of lower wages. The negative impact of robots on individual earnings arises mainly for mediumskilled workers in machine-operating occupations, while high-skilled managers gain. In the aggregate, robots raise labor productivity but not wages. Thereby they contribute to the decline of the labor income share." (Author's abstract, IAB-Doku) ((en)) |
| JEL: | J24 O33 F16 R11 |
| Date: | 2017–09–19 |
| URL: | http://d.repec.org/n?u=RePEc:iab:iabdpa:201730&r=tid |
| By: | Grafström, Jonas (The Ratio Institute); Söderholm, Patrik (Luleå University of Technology); Gawel, Erik; Lehmann, Paul; Strunz, Sebastian |
| Abstract: | Bottom-up processes of policy convergence are increasingly discussed as a substitute for the absence of supranational energy policy coordination and harmonization in the EU. The overall objective of this paper is to analyse the development of government support to renewable energy R&D across EU countries over time: does the empirical evidence suggest bottom-up convergence? In order to answer this question, we first construct country-specific R&D-based knowledge stocks, and then investigate whether the developments of these stocks tend to converge or diverge across EU countries. A data set covering 12 EU Member States over the time period 1990-2012 is employed to test for the presence of conditional -convergence using a bias-corrected dynamic panel data estimator. The empirical results are overall robust and suggest divergence in terms of public R&D-based knowledge build-up in renewable energy technology. This finding is consistent with free-riding behavior on the part of some Member States, and the presence of industrial policy motives in other States in combination with agglomeration effects in the renewable energy sector. Energy import dependence and electricity regulation are found to influence the growth of the R&D-based knowledge stock, and the deregulation of the EU electricity markets has tended to contribute to a lower speed of divergence. |
| Keywords: | renewable energy sources; public R&D support; convergence; European Union |
| JEL: | O44 Q40 Q55 |
| Date: | 2017–09–25 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:ratioi:0292&r=tid |
| By: | Michele Battisti (University of Palermo, Italy; CeLEG LUISS Guido Carli, Italy; The Rimini Centre for Economic Analysis); Filippo Belloc (“G.d’Annunzio” University, Italy); Massimo Del Gatto (“G.d’Annunzio” University, Italy; CRENoS, Italy) |
| Abstract: | We rely on mixture models to estimate technology-specific production functions avoiding any type of ex-ante assumption on the degree of technological sharing across firms and leaving the number of available technologies unconstrained. Internationally comparable firm-level data are used, to potentially capture all possible technologies available worldwide. Differently from conventional TFP estimates, where the terms “TFP”, “productivity” and “technology” are often used interchangeably, our approach enables us to isolate the contribution to labour productivity stemming from technology (i.e. between-technology TFP) from the contribution associated to idiosyncratic productivity shocks not related to technology (i.e. within-technology TFP). While we find the former to be much larger than the latter in most sectors, the relative role of these two dimensions varies considerably across firms, being often reversed. We also find that the firm-level gaps are non-linearly correlated with the international flows of technology, as measured by the OECD country-sector technology payments and receipts. In particular, we show higher incoming (outcoming) flows of technology to be associated to higher (lower) average and dispersion of the between-technology TFP gaps. This stresses the growing importance of the availability of internationally comparable data in dealing with the technological dimension of firm-level productivity. |
| Keywords: | TFP, technology adoption, production function estimation, mixture models |
| JEL: | D24 C29 |
| Date: | 2017–10 |
| URL: | http://d.repec.org/n?u=RePEc:rim:rimwps:17-26&r=tid |
| By: | Alexander Konon (German Institute for Economic Research (DIW Berlin)); Michael Fritsch (FSU Jena); Alexander Kritikos (German Institute for Economic Research (DIW Berlin), University of Potsdam, IZA, and IAB) |
| Abstract: | We analyze whether start-up rates in different industries systematically change with business cycle variables. We mostly find correlations that are consistent with counter-cyclical influences of the business cycle on entries in both innovative and non-innovative industries. Entries into the large-scale industries, including the innovative part of the manufacturing sector, are more strongly influenced by changes in the cyclical component of unemployment, while entries into small-scale industries, like the knowledge intensive services, are merely influenced by changes in the cyclical component of GDP. Business formation may therefore have a stabilizing effect on the economy. |
| Keywords: | New business formation, Entrepreneurship, business cycle, manu- facturing, services, innovative industries |
| JEL: | L26 E32 L16 R11 |
| Date: | 2017–10–04 |
| URL: | http://d.repec.org/n?u=RePEc:jrp:jrpwrp:2017-013&r=tid |
| By: | Gustavsson Tingvall, Patrik (The Ratio Institute); Videnord, Josefin (The Ratio Institite) |
| Abstract: | This paper explores regional variation in the effects of publicly sponsored R&D grants on SME performance. The results suggest that there is no guarantee that the grants will impact firm growth, either positive or negative. Studying the heterogeneity of the results, positive growth effects are most likely to be found for publicly sponsored R&D grants targeting SMEs located in regions abundant with skilled labor, whereas the opposite is found for SMEs located in regions with a limited supply of skilled workers. |
| Keywords: | R&D grants; SME; Economic growth; Regional growth; Selective policies |
| JEL: | H81 O18 O38 O40 R11 R58 |
| Date: | 2017–04–18 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:ratioi:0289&r=tid |
| By: | Bakker, Gerben (London School of Economics); Crafts, Nicholas (University of Warwick); Woltjer, Pieter (University of Groningen) |
| Abstract: | We develop new aggregate and sectoral Total Factor Productivity (TFP) estimates for the United States between 1899 and 1941 through better coverage of sectors and better-measured labor quality, and find TFP-growth was lower than previously thought, broadly based across sectors, and strongly variant intertemporally. We then test and reject three prominent claims. First, the 1930s did not have the highest TFP-growth of the twentieth century. Second, TFP-growth was not predominantly caused by four ‘great inventions’. Third, TFP-growth was not driven indirectly by spillovers from great inventions such as electricity. Instead, the creative-destruction-friendly American innovation system was the main productivity driver. |
| Keywords: | productivity growth; total factor productivity; great inventions; spillovers; United States — history JEL Classification: N11, N12, O47, O51. |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:cge:wacage:341&r=tid |
| By: | Halvarsson, Daniel (The Ratio Institute); Tingvall, Patrik (The Ratio Institute) |
| Abstract: | Educational mismatch in the form of over- and under-educated workers has long been studied in relation to labor market outcomes for individual workers. While its consequences for individual workers and society are dire, we have only anecdotal evidence of its consequences for firms' competitiveness. To bridge this gap, this paper studies the impact of mismatch on firm productivity, wages and profit. The results suggest an asymmetric effect from employing over- and under-educated workers. We find that while employing over-educated workers add to wage cost, there are no matching productivity gains, By contrast, the performance of under-educated workers more than compensates for their wage costs, leading to increased profits at the firm level. The net effect, therefore, in the form of gross operating surplus is significantly negative (positive) when firms employ over- (under-)educated workers. The results suggest that the positive effects primarily stem from under-educated young workers, whereas the losses can be traced to over-educated older workers. |
| Keywords: | Educational; mismatch; ·; Productivity; ·; Labor; cost; ·; Profits; ·; Proxy; variable |
| JEL: | J24 L25 L60 |
| Date: | 2017–09–21 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:ratioi:0291&r=tid |
| By: | Andrea Ariu (Economics Department, LMU University Munich, Germany; IFO, Germany; CRENOS); Holger Breinlich (School of Economics, University of Nottingham, UK, CEP, UK and CEPR, UK); Gregory Corcos (CREST and Economics Department, Ecole polytechnique, France.); Giordano Mion (Department of Economics, University of Sussex, UK; CEP, UK; CEPR, UK and CESifo, Germany.) |
| Abstract: | In this paper we study how international trade in goods and services interact at the firm level. Using a rich dataset on Belgian firms during the period 1995-2005, we show that: i) firms are much more likely to source services and goods inputs from the same origin country rather than from different ones; ii) increases in barriers to imports of goods reduce firm-level imports of services from the same market, and conversely. We build upon a discrete-choice model of goods and services input sourcing that can reproduce these facts to design our econometric strategy. The results suggest that a liberalization of service trade has direct and sizable effects on goods trade and vice-versa. Moreover, sourcing goods and services from the same origin brings substantial complementarities to both. |
| Keywords: | Trade in Services; Trade in Goods; Complementarity; Firm-level Analysis; Discrete Choice Models. |
| JEL: | F10 F13 F14 L60 L80 |
| Date: | 2017–10 |
| URL: | http://d.repec.org/n?u=RePEc:nbb:reswpp:201710-329&r=tid |
| By: | Andrea Ariu (University of Geneva, Switzerland,Georgetown University, USA and CRENOS, Italy); Elena Biewen (Deutsche Bundesbank); Sven Blank (Deutsche Bundesbank); Guillaume Gaulier (Banque de France and CEPII); María Jesus González, (Banco de España); Philipp Meinen, (Deutsche Bundesbank); Daniel Mirza (University François Rabelais de Tours, LEO-CNRS (Orleans), Banque de France and CEPII.); Cesar Martín, (Banco de España); Patry Tello (Banco de España) |
| Abstract: | This paper uses detailed micro data on service exports at the firm-destination-service level to analyse the role of firm heterogeneity in shaping aggregate service exports in Belgium, France,Germany and Spain from 2003 to 2007. We decompose the level and the growth of aggregate service exports into different trade margins paying special attention to firm heterogeneity within countries. We find that the weak export growth of France is at least partly due to poor performance by small exporters. By contrast, small exporters are the most dynamic contributors to the aggregate exports of Belgium, Germany and Spain. Our results highlight the importance of firm heterogeneity in understanding aggregate export growth. |
| Keywords: | service exports, firm heterogeneity, cross-country micro data study |
| JEL: | F14 |
| Date: | 2017–09 |
| URL: | http://d.repec.org/n?u=RePEc:nbb:reswpp:201709-328&r=tid |