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on Technology and Industrial Dynamics |
| By: | Francesco Lamperti (Scuola Superiore Sant'Anna, Pisa, Italy); Giovanni Dosi (Scuola Superiore Sant'Anna, Pisa, Italy); Mauro Napoletano (OFCE Sciences Po Paris France); Andrea Roventini (Scuola Superiore Sant'Anna, Pisa, Italy); Alessandro Sapio (Parthenope University of Naples, Naples, Italy) |
| Abstract: | In this paper we develop the first agent-based integrated assessment model, which offers an alternative to standard, computable general-equilibrium frameworks. The Dystopian Schumpeter meeting Keynes (DSK) model is composed of heterogeneous firms belonging to capital-good, consumption-good and energy sectors. Production and energy generation lead to greenhouse gas emissions, which affect temperature dynamics in a non-linear way. Increasing temperature triggers climate damages hitting, at the micro-level, workers’ labor productivity, energy efficiency, capital stock and inventories of firms. In that, aggregate damages are emerging properties of the out-of-equilibrium interactions among heterogeneous and boundedly rational agents. We find the DSK model is able to account for a wide ensemble of micro and macro empirical regularities concerning both economic and climate dynamics. Moreover, different types of shocks have heterogeneous impact on output growth, unemployment rate, and the likelihood of economic crises. Finally, we show that the magnitude and the uncertainty associated to climate change impacts increase over time, and that climate damages much larger than those estimated through standard IAMs. Our results point to the presence of tipping points and irreversible trajectories, thereby suggesting the need of urgent policy interventions |
| Keywords: | Climate change , agent-based models, integrated assessment, macroeconomics dynamics, climate damages. |
| JEL: | C63 Q40 Q50 Q54 |
| Date: | 2017–04 |
| URL: | http://d.repec.org/n?u=RePEc:fce:doctra:1710&r=tid |
| By: | Ariel Burstein (UCLA) |
| Abstract: | We extend the model firm dynamics of Garcia-Macia, Hsieh, and Klenow (2016) to include a description of the costs of innovative investments as in the model of Klette and Kortum (2004). In this model, aggregate productivity (TFP) grows as a result of innovative investment by incumbent and entering firms in improving continuing products and acquiring new products to the firm. This model serves as a useful benchmark because it nests both Quality-Ladders based Neo-Shumpeterian models and Expanding Varieties models commonly used in the literature and, at the same time, it provides a rich model of firm dynamics as described in GHK. We show how data on firm dynamics and firm value can be used to infer the elasticities of aggregate productivity growth with respect to changes in incumbent firms' investments in improving their incumbent products, incumbent firms' investments in acquiring products new to the firm, and entering firms' investments in acquiring new products. As discussed in Atkeson and Burstein (2015), these elasticities are a crucial input in evaluating the extent to which it is possible to alter the medium term growth path of the macroeconomy through policies aimed at stimulating innovative investments by firms. We use these methods to provide quantitative estimates of these elasticities of aggregate TFP growth with respect to changes in each of the three categories of innovative investment in the model as well as of the rate of social depreciation of innovation expenditures. |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:red:sed017:917&r=tid |
| By: | Berlingieri, Giuseppe; Blanchenay, Patrick; Criscuolo, Chiara |
| Abstract: | This report provides new evidence on the increasing dispersion in wages and productivity using novel micro-aggregated firm-level data from 16 countries. First, the report documents an increase in wage and productivity dispersions, for both manufacturing and market services (excluding the financial sector). Second, it shows that these trends are driven by differences within rather than across sectors, and that the increase in dispersion is mainly driven by the bottom of the distribution, while divergence at the top occurs only in the service sector, and only after 2005. Third, it suggests that between-firm wage dispersion is linked to increasing differences between high and low productivity firms. Fourth, it suggests that both globalisation and digitalisation imply higher wage divergence, but strengthen the link between productivity and wage dispersion. Finally, it offers preliminary analysis of the impact of minimum wage, employment protection legislation, trade union density, and coordination in wage setting on wage dispersion and its link to productivity dispersion. |
| Keywords: | dispersion; productivity; sorting; wages |
| JEL: | R14 J01 |
| Date: | 2017–06 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:83625&r=tid |
| By: | Rita K. Almeida (World Bank & IZA); Ana M. Fernandes (World Bank); Mariana Viollaz (CEDLAS-FCE-UNLP) |
| Abstract: | A major concern with the rapid spread of technology is that it replaces some jobs, displacing workers. However, technology may raise firm productivity, generating more jobs. The paper contributes to this debate by exploiting a novel panel data set for Chilean firms in all sectors between 2007 and 2013. While previous studies examine the impacts of automation on the use of routine tasks by middle-educated workers. This study focuses on a measure of complex software that is typically used by more educated workers in cognitive and nonroutine tasks for client, production, and business management. The instrumental variables estimates show that in the medium run, firms’ adoption of complex software affects firms’ employment decisions and the skill content of occupations. The adoption of complex software reallocates employment from skilled workers to administrative and unskilled production workers. This reallocation leads to an increase in the use of routine and manual tasks and a reduction in the use of abstract tasks within firms. Interestingly, the impacts tend to be concentrated in sectors with a less educated workforce, suggesting that technology can constrain job creation for the more skilled workers there. The paper concludes that the type of technology matters for understanding the impacts of technology adoption on the labor market. |
| JEL: | J23 J24 O33 |
| Date: | 2017–07 |
| URL: | http://d.repec.org/n?u=RePEc:dls:wpaper:0214&r=tid |
| By: | Aghion, Philippe; Bloom, Nick; 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; growth; turbulence; great recession |
| JEL: | J50 |
| Date: | 2017–04 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:83613&r=tid |
| By: | Autor, David; Dorn, David; Katz, Lawrence F.; Patterson, Christina; Van Reenen, John |
| Abstract: | The fall of labor's share of GDP in the United States and many other countries in recent decades is well documented but its causes remain uncertain. Existing empirical assessments of trends in labor's share typically have relied on industry or macro data, obscuring heterogeneity among firms. In this paper, we analyze micro panel data from the U.S. Economic Census since 1982 and international sources and document empirical patterns to assess a new interpretation of the fall in the labor share based on the rise of \superstar firms." If globalization or technological changes advantage the most productive firms in each industry, product market concentration will rise as industries become increasingly dominated by superstar firms with high profits and a low share of labor in firm value-added and sales. As the importance of superstar firms increases, the aggregate labor share will tend to fall. Our hypothesis offers several testable predictions: industry sales will increasingly concentrate in a small number of firms; industries where concentration rises most will have the largest declines in the labor share; the fall in the labor share will be driven largely by between-firm reallocation rather than (primarily) a fall in the unweighted mean labor share within firms; the between-firm reallocation component of the fall in the labor share will be greatest in the sectors with the largest increases in market concentration; and finally, such patterns will be observed not only in U.S. firms, but also internationally. We find support for all of these predictions. |
| Keywords: | labour share; concentration; superstar firms |
| JEL: | R14 J01 |
| Date: | 2017–05 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:83616&r=tid |
| By: | Fumihiko Isada (The Faculty of Informatics, Kansai University); Yuriko Isada (School of Policy Studies, Kwansei Gakuin University) |
| Abstract: | The sharp rise in health-care costs is compressing the public finance in various countries today, and an increase in the efficiency of the research and development of pharmaceutical products is required. In order to increase the efficiency of drug development, open innovation through external cooperation between drug manufacturing companies is attracting attention. However, the research findings on previous researches are not necessarily the same regarding the size of the effect of external cooperation between drug manufacturing companies. It is assumed that differences in the kinds of pharmaceutical products and in the mode of inter-organisational relations are two of the causes of the variation in the research findings. For example, with regard to the mode of inter-organisational relation, the operational efficiency of a horizontal international specialization style is high in the IT industry, and the operational efficiency of a vertical integration style is high in the motor industry. Thus, in this research, the pharmaceutical products were classified appropriately and the inter-organisational relation fit for each was clarified empirically. As a method of research, from the intellectual-property database, the joint-application patents for the past ten years were extracted, and the inter-organisational relation was analysed by using the method of social network analysis. As a result, when the pharmaceutical products were classified with the conventional polymer formulation, the bio-drug development and the dosage-form development, the effect of external cooperation changed with differences in product characteristics. In addition, it became clear that the modes of external cooperation fit for each differ. (This work was supported by JSPS KAKENHI Grant Number 16K03916.) |
| Keywords: | inter-organisational relation, social network analysis, joint-application patent, pharmaceutical product |
| JEL: | O32 |
| Date: | 2017–10 |
| URL: | http://d.repec.org/n?u=RePEc:sek:iacpro:5808060&r=tid |
| By: | Crescenzi, Riccardo; Jaax, Alexander |
| Abstract: | The debate on Russia’s innovation performance has paid little attention to the role of geography. This paper addresses this gap by integrating an evolutionary dimension in an ‘augmented’ regional knowledge production function framework to examine the territorial dynamics of knowledge creation in Russia. The empirical analysis identifies a strong link between regional R&D expenditure and patenting performance. However, R&D appears inadequately connected to regional human capital. Conversely, Multinational Enterprises (MNEs) play a fundamental role as ‘global knowledge pipelines’. The incorporation of historical variables reveals that the Russian case is a striking example of long-term pathdependency in regional patterns of knowledge generation. Endowment with Soviet-founded science cities remains a strong predictor of current patenting. However, current innovation drivers and policies also concur to enhance (or hinder) innovation performance in all regions. The alignment of regional innovation efforts, exposure to localised knowledge flows and injections of ‘foreign’ knowledge channelled by MNEs make path-renewal and pathcreation possible, opening new windows of locational opportunity. |
| Keywords: | innovation; R&D; evolutionary economic geography; regions; BRICS; Russia |
| JEL: | O32 O33 R11 R12 |
| Date: | 2017–08–03 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:66948&r=tid |
| By: | Bakker, Gerben; Crafts, Nicholas; Woltjer, Pieter |
| 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 TFPgrowth 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, TFPgrowth was not driven indirectly by spillovers from great inventions such as electricity. Instead, the creativedestruction-friendly American innovation system was the main productivity driver |
| Keywords: | productivity growth; total factor productivity; great inventions; spillovers; United States — history |
| JEL: | O51 N0 |
| Date: | 2017–10 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:wpaper:85081&r=tid |
| By: | Chenyu Yang (University of Rochester) |
| Abstract: | This paper studies the effects of vertical integration on innovation in the chipset and smartphone industries. I formulate and estimate a dynamic structural model of the upstream chipset maker Qualcomm and downstream smartphone handset makers. The two sides make dynamic investment decisions and negotiate chipset prices via Nash bargaining. Using the estimates, I simulate market outcomes should Qualcomm merge with a downstream handset maker. I find that the vertical merger would increase innovation rates and social welfare, driven primarily by the investment coordination of the two merged firms. |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:red:sed017:908&r=tid |
| By: | Shai Bernstein; Timothy McQuade; Richard R. Townsend |
| Abstract: | Do household wealth shocks affect employee productivity? We examine this question through the lens of technological innovation, by comparing employees that worked at the same firm and lived in the same metropolitan area, but experienced different housing wealth declines during the 2008 crisis. Following a housing wealth shock, employees are less likely to successfully pursue innovative projects, particularly ones that are high impact, complex, or exploratory in nature. Consistent with employee concerns about financial distress, the effects are more pronounced among those who had little equity in their house before the crisis and among those with fewer outside labor market opportunities. Moreover, run-ups in housing prices before the crisis did not affect employee innovation. The results highlight a “bottom-up” view of innovation, in which individual employees influence the quantity and nature of innovation produced within firms. |
| JEL: | G01 O3 O31 O32 |
| Date: | 2017–11 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:24011&r=tid |
| By: | Atulan Guha (Indian Institute of Management Kashipur) |
| Abstract: | The GDP growth structure of India is dominated by the growth in service sector. The Baumol?s theory predicts that the primary mover sector behind this growth pattern should have the highest productivity. The sector with highest productivity will pay highest wages. Hence, it will attract labour from low productivity sector; resulting in decline of the low productivity sectors. To prevent the labours to shift the job, the low productivity sector can pay higher wages, but then price of the commodities has to be increased. Unless these sector?s demand is very little sensitive to price increase, the wage increase will not make these low productive sectors sustainable. This paper argues that Baumol?s theory is inadequate to explain sectoral structure of the Indian growth. It is primarily because of domination of traditional service sector, like trade, transport etc in service sector growth, little linkages between wages and productivity and disintegrated labour market causing weak wage transmission mechanism across the sectors. |
| Keywords: | Growth, Services, India, productivity |
| JEL: | O14 O53 O40 |
| Date: | 2017–10 |
| URL: | http://d.repec.org/n?u=RePEc:sek:iacpro:5808245&r=tid |
| By: | Kyritsis, Evangelos (Dept. of Business and Management Science, Norwegian School of Economics); Serletis, Apostolos (Dept. of Economics, University of Calgary) |
| Abstract: | Energy security, climate change, and growing energy demand issues are moving up on the global political agenda, and contribute to the rapid growth of the renewable energy sector. In this paper we investigate the effects of oil price shocks, and also of uncertainty about oil prices, on the stock returns of clean energy and technology companies. In doing so, we use monthly data that span the period from May 1983 to December 2016, and a bivariate structural VAR model that is modified to accommodate GARCH-in-mean errors, and it is used to generate impulse response functions. Moreover, we examine the asymmetry of stock responses to oil price shocks and compare them accounting for oil price uncertainty, while effects of oil price shocks of different magnitude are also investigated. Our evidence indicates that oil price uncertainty has no statistically significant effect on stock returns, and that the relationship between oil prices and stock returns is symmetric. Our results are robust to alternative model specifications and stock prices of clean energy companies. |
| Keywords: | Renewable energy; Transition; Oil prices; Uncertainty; GARCH-in-Mean model; Asymmetric responses |
| JEL: | C32 G15 Q42 |
| Date: | 2017–11–14 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:nhhfms:2017_015&r=tid |
| By: | Hutter, Christian (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]); Weber, Enzo (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]) |
| Abstract: | "In a structural macroeconometric analysis based on comprehensive micro data, we examine the role of skill-biased technical change for the flattening of productivity growth and effects on hours worked. The results show that more than 60 percent of the slowdown in productivity growth in Germany since the early 2000s can be explained by the SBTC development. Furthermore, skill-biased technology shocks reduce hours worked, while skill-neutral technology shocks have a positive effect in the long run." (Author's abstract, IAB-Doku) ((en)) |
| JEL: | C32 E24 J24 |
| Date: | 2017–11–16 |
| URL: | http://d.repec.org/n?u=RePEc:iab:iabdpa:201732&r=tid |