nep-tid New Economics Papers
on Technology and Industrial Dynamics
Issue of 2018‒01‒01
twelve papers chosen by
Fulvio Castellacci
Universitetet i Oslo

  1. R&D policy regimes in France: New evidence from spatio-temporal analysis By Montmartin, B.; Herrera, M.; Massard, N.
  2. Does Import Competition Induce R&D Reallocation? Evidence from the U.S. By Rui Xu; Kaiji Gong
  3. Human Capital, Firm Capabilities, and Innovation By Ajay Bhaskarbhatla; Deepak Hegde; Thomas (T.L.P.R.) Peeters
  5. Innovation and Productivity in the service sector of emerging and developing countries By Regis, Paulo José; Desmarchelier, Benoît
  6. Knowledge bases, innovation and multi-scalar relationships - Which kind of territorial boundedness of industrial clusters? By Tödtling, Franz; Auer, Alexander
  7. Declining Labor Share and Innovation By Georges Vivien Houngbonon; Pascal Da-Costa
  8. Technological change, energy, environment and economic growth in Japan By Galina Besstremyannaya; Richard Dasher; Sergei Golovan
  9. The cyclicality of R&D investment revisited By Hans van Ophem; Noud P.A. van Giersbergen; Kees Jan van Garderen; Maurice J.G. Bun
  10. Gibrat's Law and Quantile Regressions: an Application to Firm Growth By Distante, Roberta; Petrella, Ivan; Santoro, Emiliano
  11. Trademarks as an indicator of innovation: towards a fuller picture By Leonardo Costa Ribeiro; Ulisses dos Santos; Valbona Muzaka
  12. Structural Transformation and the Rise of Information Technology By Giovanni Gallipoli; Christos A. Makridis

  1. By: Montmartin, B.; Herrera, M.; Massard, N.
    Abstract: Using a unique database containing information on the amount of R&D tax credits and regional, national and European subsidies received by firms in French NUTS3 regions over the period 2001-2011, we provide new evidence on the efficiency of R&D policies taking into account spatial dependency across regions. By estimating a spatial Durbin model with regimes and fixed effects, we show that in a context of yardstick competition between regions, national subsidies are the only instrument that displays total leverage effect. For other instruments internal and external effects balance each other resulting in insignificant total effects. Structural breaks corresponding to tax credit reforms are also revealed.
    JEL: H25 O31 O38
    Date: 2017
  2. By: Rui Xu; Kaiji Gong
    Abstract: We analyze the impact of rising import competition from China on U.S. innovative activities. Using Compustat data, we find that import competition induces R&D expenditures to be reallocated towards more productive and more profitable firms within each industry. Such reallocation effect has the potential to offset the average drop in firm-level R&D identified in the previous literature. Indeed, our quantitative analysis shows no adverse impact of import competition on aggregate R&D expenditures. Taking the analysis beyond manufacturing, we find that import competition has led to reallocation of researchers towards booming service industries, including business and repairs, personal services, and financial services.
    Keywords: Western Hemisphere;Asia and Pacific;United States;Chinese Import Competition, R&D Expenditures, Reallocation, R&D Expenditures, Country and Industry Studies of Trade, Trade and Labor Market Interactions
    Date: 2017–11–16
  3. By: Ajay Bhaskarbhatla (Erasmus School of Economics, ERIM); Deepak Hegde (New York University); Thomas (T.L.P.R.) Peeters (Erasmus School of Economics, ERIM; Tinbergen Institute, The Netherlands)
    Abstract: Are differences in inventor productivity due to differences in inventors’ skills or differences in the capabilities of the firms they work for? We analyze a 37-year panel that tracks the patenting of U.S. inventors and find strong evidence for serial correlation in inventors’ productivity. We apply an econometric technique developed by Abowd, Kramarz, and Margolis (1999) to decompose the contributions of inventors’ human capital and firm capabilities for productivity. Our estimates suggest human capital is 4-5 times more important than firm capabilities for explaining the variance in inventor productivity. High human capital inventors work for firms that have (i) other high human capital inventors, (ii) superior financial performance, and (iii) weak firm-specific invention capabilities. On the margins, managers should emphasize selecting talent rather than training workers to enhance innovation performance.
    Keywords: Human Capital; Capabilities; Innovation; Matching; Competitive Advantage
    JEL: O30 O31 O32 J24
    Date: 2017–12–08
  4. By: Valeria Costantini; Francesco Crespi; Elena Paglialunga
    Abstract: This paper investigates the effects of private and public actions for energy efficiency on EU employment dynamics, relying on an econometric analysis on a sector-based panel dataset for 15 EU countries (1995-2009). Results show that after accounting for the sectoral output growth, investment and innovation activities, sectoral energy efficiency gains display a negative effect on employment growth, especially in energy intensive industries. Conversely, public actions towards energy efficiency may produce positive effects on employment dynamics. Indeed, the higher incidence of taxation on energy costs, the energy efficiency gains realized in the public sector industries and the implementation of a comprehensive policy mix at the country level, are factors positively influencing employment growth. This evidence highlights the complexity of the nexus between energy efficiency and employment dynamics, suggesting that superior employment performances can be achieved when complementarity effects between productivity enhancing activities and energy efficiency actions are realized.
    Keywords: Energy Efficiency, Public Policies, Employment, Manufacturing Sectors, Eco- Innovation, European Union
    JEL: C23 L60 O33 Q52
    Date: 2017–12
  5. By: Regis, Paulo José (Division of Economics, Xi'an Jiaotong-Liverpool University); Desmarchelier, Benoît (Lille 1 University)
    Abstract: This paper conducts a large cross-country study of innovation decisions and its effect on the productivity of the firms in the service sectors in developing countries. A structural model relating innovation and productivity is fitted with data from 97 emerging and developing countries. We find that R&D generates gains in labor productivity as well as in terms of an aggregate measure of capital and total factor productivity. However, the introduction of new products does not seem to have relevant impact on productivity measures. From a policy perspective, we find that tax burden and difficulties to access credit are significant obstacles to innovation in services. Considering the positive relationship between service innovation and productivity, these obstacles should be on top of policy agenda in the countries under study. Finally, competition from the international market and from the informal sector are both fostering innovation in services.
    Keywords: innovation, productivity, services sector, developing countries
    JEL: L80 O31 O33 C34 O14
    Date: 2018–01–01
  6. By: Tödtling, Franz; Auer, Alexander
    Abstract: Innovation is nowadays a highly interdependent process where firms rely on distributed knowledge sources at various spatial scales. It has been argued that innovation interactions are shifting increasingly from local/regional towards global scales and that the region as a space for supporting innovation and competitiveness of firms is losing in importance. We suggest, however, that firms and clusters rely on various kinds of knowledge bases and factors for their development that differ in their geographical mobility and territorial boundedness. Whereas codified knowledge as well as many kinds of goods and services, investment capital, and people have become mobile at a global scale due to improvements of transport- and communication technologies and a lowering of trade barriers, we find other factors that are still territorially bound, such as tacit knowledge that is exchanged in local and social networks, and certain kinds institutions and regulations that are territorially confined. We investigate therefore for different types of industries to what extent and which kind of driving factors for cluster development and innovation have become non-local or footlose, or remain territorially bound to regions or countries. This also has relevance for regional and innovation policies that try to enhance the competitiveness of clusters and regional economies.
    Date: 2017
  7. By: Georges Vivien Houngbonon (LGI - Laboratoire de Genie Industriel - CentraleSupélec); Pascal Da-Costa (LGI - Laboratoire Génie Industriel - EA 2606 - CentraleSupélec)
    Abstract: In this paper, we document declining labor share using a sample of international companies from developed economies. While this trend makes internal funds available for financing innovation, we find that R&D expenditures fall alike. Firm-level fixed effects estimation , controlling for the intensity of competition and financial constraints, confirms a positive correlation between labor share and R&D expenditures. A counterfactual analysis shows that a percentage point fall in labor share reduces output growth by 0.01 percentage point in the short run, and up to 0.02 percentage point in the long run, due to declining innovation.
    Keywords: Innovation,Labor share
    Date: 2017–12–01
  8. By: Galina Besstremyannaya (CEFIR at New Economic School); Richard Dasher (Stanford University); Sergei Golovan (New Economic School)
    Abstract: A considerable amount of research has shown that that carbon tax combined with research subsidy may be regarded as an optimal policy in view of diffusing low carbon technologies for the benefit of the society. The paper exploits the macro economic approach of the endogenous growth models with technological change for a comparative assessment of these policy measures on the economic growth in the US and Japan in the medium and the long run. The results of our micro estimates reveal several important differences across the Japanese and US energy firms: lower elasticity of innovation production function in R&D expenditure, lower probability of a radical innovation, and larger advances of dirty technologies in Japan. This may explain our quantitative findings of stronger reliance on carbon tax than on research subsidies in Japan relative to the US.
    Keywords: endogenous growth, technological change, innovation, carbon tax, energy
    JEL: O11 O13 O47 Q43 Q49
    Date: 2017–12
  9. By: Hans van Ophem (University of Amsterdam); Noud P.A. van Giersbergen; Kees Jan van Garderen; Maurice J.G. Bun
    Abstract: In Fabrizio and Tsolmon (2014) and Barlevy (2007) it is concluded that R&D investments are procyclical. Fabrizio and Tsolmon (2014) utilize a model based on Barlevy (2007), but differs in some respects and allows for more heterogeneity. However, we doubt whether their implied trends are intended. Fabrizio and Tsolman also set missing values for R&D equal to zero leading to unrealistic jumps in investment and its first differences. We reconcile and replicate both the Fabrizio and Tsolmon and Barlevy papers by considering extensions that encompass both models. Furthermore, we treat missing values more appropriately to check robustness of the results. Procyclicality is confirmed, but we find much less heterogeneity than Fabrizio and Tsolmon (2014) do. In particular obsolescence and patent effectiveness are no longer important but external financing is.
    Date: 2017–12–21
  10. By: Distante, Roberta (University of Copenhagen); Petrella, Ivan (Warwick Business School and CEPR); Santoro, Emiliano (University of Copenhagen)
    Abstract: The nexus between firm growth, size and age in U.S. manufacturing is examined through the lens of quantile regression models. This methodology allows us to overcome serious shortcomings entailed by linear regression models employed by much of the existing literature, unveiling a number of important properties. Size pushes both low and high performing firms towards the median rate of growth, while age is never advantageous, and more so as firms are relatively small and grow faster. These findings support theoretical generalizations of Gibrat's law that allow size to affect the variance of the growth process, but not its mean.
    Keywords: firm growth ; size ; age ; conditional quantiles JEL Classification Numbers: D22 ; L11 ; C21 ;
    Date: 2017
  11. By: Leonardo Costa Ribeiro (Instituto Nacional de Metrologia Qualidade e Tecnologia); Ulisses dos Santos (Universidade Federal de Minas Gerais); Valbona Muzaka (King’s College London)
    Abstract: Encouraged by the emergence of a new but still rather modest literature on the use of trademark data as a complementary indicator of innovation, this paper strengthen the case for such use by offering both qualitative and quantitative evidence in its support. Based on large trademark and patent databases built for this purpose, the paper makes the argument that changes in the economic profile of advanced economies, as well as changes in the global economy more broadly, necessitate the use of trademark data in order to gain a better understanding of innovation across all sectors of the economy.
    Keywords: Trademarks, Innovation, Non-Technological Innovation
    JEL: O31 O33
    Date: 2017–12
  12. By: Giovanni Gallipoli (Vancouver School of Economics, University of British Columbia, Canada; The Rimini Centre for Economic Analysis); Christos A. Makridis (Department of Management Science & Engineering, Department of Economics, Stanford University, USA)
    Abstract: Has the emergence of information technology changed the structure of employment and earnings in the US? We propose a new index of occupation-level IT intensity and document several long-term changes in the occupational landscape over the past decades. Using Census micro-data between 1970 and 2015, we show that: (i) the share of workers in IT-intensive jobs has expanded significantly, with little or no pause; (ii) IT jobs enjoy a large and growing earnings premium, even after controlling for general task requirements (e.g., cognitive, non-routine); and (iii) the rise of the IT employment share is closely associated with declines in the manufacturing employment share. Although the earnings premia for college-educated and high cognitive/non-routine skilled workers have declined in the aggregate since 2000, we show that they have continued growing in IT jobs. We subsequently introduce an equilibrium model of occupational sorting based on comparative advantage between IT and non-IT jobs to quantify the contribution of IT jobs towards accelerating the pace of structural transformation. Our results suggest that technological growth among IT jobs has played a major role in accounting for the surge in high tech service labor productivity since 1980.
    Date: 2017–12

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