|
on Technology and Industrial Dynamics |
| By: | Zhang, Peng (Hong Kong Polytechnic University); Deschenes, Olivier (University of California, Santa Barbara); Meng, Kyle C. (University of California, Santa Barbara); Zhang, Junjie (Duke Kunshan University) |
| Abstract: | This paper uses detailed production data from a half million Chinese manufacturing plants over 1998-2007 to estimate the effects of temperature on firm-level total factor productivity (TFP), factor inputs, and output. We detect an inverted U- shaped relationship between temperature and TFP and show that it primarily drives the temperature-output effect. Both labor- and capital- intensive firms exhibit sensitivity to high temperatures. By mid 21st century, if no additional adaptation were to occur, we project that climate change will reduce Chinese manufacturing output annually by 12%, equivalent to a loss of $39.5 billion in 2007 dollars. This implies substantial local and global economic consequences as the Chinese manufacturing sector produces 32% of national GDP and supplies 12% of global exports. |
| Keywords: | manufacturing, productivity, climate change, China |
| JEL: | Q54 Q56 L60 O14 O44 |
| Date: | 2017–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp11132&r=tid |
| By: | Philips, Robin C. M.; Földvàri, Péter; Van Leeuwen, Bas |
| Abstract: | In this paper, we trace the causes of regional industrial development in the nineteenth century Low Countries by disentangling the complex relationship between industrialisation, technological progress and human capital formation. We use sectoral differences in the application of technology and human capital as the central elements to explain the rise in employment in the manufacturing sector during the nineteenth century, and our findings suggest a re-interpretation of the deskilling debate. To account for differences among manufacturing sectors, we use population and industrial census data, subdivided according to their present-day manufacturing sector equivalents of the International Standard Industrial Classification (ISIC). Instrumental variable regression analysis revealed that employment in the manufacturing sector was influenced by so-called upper- tail knowledge and not by average educational levels, providing empirical proof of a so-called deskilling industrialisation process. However, we find notable differences between manufacturing sectors. The textiles and clothing sectors show few agglomeration effects and limited use of steam-powered engines, and average education levels cannot adequately explain regional industrialisation. In contrast, the location of the fast- growing and innovative machinery-manufacturing sector was more influenced by technology and the availability of human capital, particularly upper-tail knowledge captured by secondary school attendance rates. |
| Keywords: | industrialization; deskilling; human capital; steam engine; labour; economic growth |
| JEL: | J24 L60 N13 N63 O14 O41 |
| Date: | 2017–12–06 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:83304&r=tid |
| By: | Patrick Lehnert (University of Zurich); Curdin Pfister (University of Zurich); Uschi Backes-Gellner (University of Zurich) |
| Abstract: | This paper examines the effect of an R&D-specific labor supply shock produced by the establishment of tertiary vocational education institutions teaching and conducting applied R&D, the Universities of Applied Sciences, on the R&D personnel of private firms. We apply a difference-in-differences model, exploiting a quasi-natural experiment in the 1990s in Switzerland, the staggered establishment of these institutions. Using repeated cross-sectional data from the Swiss Earnings Structure Survey, we can precisely measure the R&D personnel of private firms, i.e., how much R&D personnel a firm employs and how much a firm spends on its R&D personnel in terms of wages. The education-driven labor supply shock has positive effects on both the percentage of R&D personnel and the wages paid to this personnel. Our assessments of effect heterogeneity suggest that these effects are driven by firms with 50 to 99 employees and firms in the manufacturing sector increasing their R&D personnel. |
| Keywords: | Innovation incentives, R&D, research institutions, skills |
| JEL: | I23 J24 O31 O32 |
| Date: | 2017–12 |
| URL: | http://d.repec.org/n?u=RePEc:iso:educat:0141&r=tid |
| By: | Ganguli, Ina (University of Massachusetts–Amherst); Lin, Jeffrey (Federal Reserve Bank of Philadelphia); reynolds, nicholas (brown university) |
| Abstract: | We show evidence of localized knowledge spillovers using a new database of multiple invention from U.S. patent interferences terminated between 1998 and 2014. Patent interferences resulted when two or more independent parties simultaneously submitted identical claims of invention to the U.S. Patent Office. Following the idea that inventors of identical inventions share common knowledge inputs, interferences provide a new method for measuring spillovers of tacit knowledge compared with existing (and noisy) measures such as citation links. Using matched pairs of inventors to control for other factors contributing to the geography of invention and distance-based methods, we find that interfering inventor pairs are 1.4 to 4 times more likely to live in the same city or region. These results are not driven exclusively by observed social ties among interfering inventor pairs. Interfering inventors are also more geographically concentrated than inventors who cite the same prior patent. Our results emphasize geographic distance as a barrier to tacit knowledge flows. |
| Keywords: | Localized knowledge spillovers; multiple invention; patents; interferences |
| JEL: | O30 R12 |
| Date: | 2017–12–21 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedpwp:17-44&r=tid |
| By: | Philippe Aghion; Ufuk Akcigit; Ari Hyytinen; Otto Toivanen |
| Abstract: | In this paper we merge three datasets - individual income data, patenting data, and IQ data - to analyze the determinants of an individual's probability of inventing. We find that: (i) parental income matters even after controlling for other background variables and for IQ, yet the estimated impact of parental income is greatly diminished once parental education and the individual's IQ are controlled for; (ii) IQ has both a direct effect on the probability of inventing an indirect impact through education. The effect of IQ is larger for inventors than for medical doctors or lawyers. The impact of IQ is robust to controlling for unobserved family characteristics by focusing on potential inventors with brothers close in age. We also provide evidence on the importance of social family interactions, by looking at biological versus non-biological parents. Finally, we find a positive and significant interaction effect between IQ and father income, which suggests a misallocation of talents to innovation. |
| JEL: | I24 J18 J24 O31 |
| Date: | 2017–12 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:24110&r=tid |
| By: | Alex Bell; Raj Chetty; Xavier Jaravel; Neviana Petkova; John Van Reenen |
| Abstract: | We characterize the factors that determine who becomes an inventor in America by using de-identified data on 1.2 million inventors from patent records linked to tax records. We establish three sets of results. First, children from high-income (top 1%) families are ten times as likely to become inventors as those from below-median income families. There are similarly large gaps by race and gender. Differences in innate ability, as measured by test scores in early childhood, explain relatively little of these gaps. Second, exposure to innovation during childhood has significant causal effects on children's propensities to become inventors. Growing up in a neighborhood or family with a high innovation rate in a specific technology class leads to a higher probability of patenting in exactly the same technology class. These exposure effects are gender-specific: girls are more likely to become inventors in a particular technology class if they grow up in an area with more female inventors in that technology class. Third, the financial returns to inventions are extremely skewed and highly correlated with their scientific impact, as measured by citations. Consistent with the importance of exposure effects and contrary to standard models of career selection, women and disadvantaged youth are as under-represented among high-impact inventors as they are among inventors as a whole. We develop a simple model of inventors' careers that matches these empirical results. The model implies that increasing exposure to innovation in childhood may have larger impacts on innovation than increasing the financial incentives to innovate, for instance by cutting tax rates. In particular, there are many "lost Einsteins" - individuals who would have had highly impactful inventions had they been exposed to innovation. |
| Keywords: | inventor, America, innovation |
| Date: | 2017–12 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp1519&r=tid |
| By: | Giebel, Marek; Kraft, Kornelius |
| Abstract: | We investigate the effect of individual banks' liquidity shocks during the recent financial crisis of 2008/2009 on the innovation activities of their business customers. Individual banks' liquidity shocks are identified by the degree of interbank market usage. We use a difference-in-differences approach to identify the effect of interbank reliance during the crisis on total innovation expenditures in comparison to the periods before. Our results imply that those firms which have a business relation to a bank with higher interbank market reliance reduce their innovation activities during the financial crisis to a higher degree than other firms. |
| Keywords: | financial crisis,financial constraints of banks,financing of innovation,innovation activity |
| JEL: | G01 G21 G30 O16 O30 O31 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:17064&r=tid |
| By: | Laura Alfaro (Harvard Business School, Business, Government and the International Economy Unit); Nicholas Bloom (Stanford University); Paola Conconi (ECARES, Université Libre de Bruxelles); Harald Fadinger (University of Mannheim); Patrick Legros (ECARES, Université Libre de Bruxelles); Andrew F. Newman (Boston University); Raffaella Sadun (Harvard Business School, Strategy Unit); John Van Reenen (Massachusetts Institute of Technology) |
| Abstract: | Little is known theoretically, and even less empirically, about the relationship between firm boundaries and the allocation of decision rights within firms. We develop a model in which firms choose which suppliers to integrate and whether to delegate decisions to integrated suppliers or keep them centralized. We test the predictions of this model using a novel dataset that combines measures of vertical integration and delegation for a large set of firms operating in many countries and industries. In line with the model's predictions, we find that integration and delegation co-vary positively, and that producers are more likely to integrate suppliers in input sectors with greater productivity variation. |
| Keywords: | Vertical integration, delegation, real options. |
| Date: | 2017–12 |
| URL: | http://d.repec.org/n?u=RePEc:hbs:wpaper:18-051&r=tid |
| By: | Marcin Bielecki (Faculty of Economic Sciences, University of Warsaw; Narodowy Bank Polski) |
| Abstract: | This paper proposes a microfounded model featuring frictional labor markets that generates procyclical R&D expenditures as a result of optimizing behavior by heterogeneous monopolistically competitive firms. This allows to show that business cycle fluctuations affect the aggregate endogenous growth rate of the economy. Consequently, transitory shocks leave lasting level effects. This mechanism is responsible for economically significant hysteresis effects that increase the welfare cost of business cycles by two orders of magnitude relative to the exogenous growth model. I show that this has serious policy implications and creates ample space for policy intervention. I find that several static and countercyclical subsidy schemes are welfare improving. |
| Keywords: | business cycles, firm dynamics, search and matching, innovation, endogenous growth |
| JEL: | E32 J63 J64 O3 O40 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:war:wpaper:2017-26&r=tid |
| By: | Santosh Kumar Sahu (Assistant Professor, Madras School of Economics); Sunder Ramaswamy (Visiting Distinguished Professor of Economics, Madras School of Economics); Abishek Choutagunta (Institute of Law and Economics, Universität Hamburg) |
| Abstract: | This study re-examines the relationship between export performance and productivity in manufacturing firms in India for the period 2003-2015, using firm level information. Departing from the earlier studies on India economy, we argue that product innovations boost export performance of the economy. The hypothesis being that, in the post-economic-reforms era competitive export market scenario, productivity alone, without product innovation and participation in R and D cannot drive export performance. We observe that the argument of highly productive firms entering the export market without reallocating resources towards innovation and R and D seems to be invalid in our sample. Nevertheless, we find in our sample, that productivity as a selection criterion coupled with advertising and marketing strategies explains participation in R and D in boosting exports. |
| Keywords: | Export Performance, Innovation, Productivity, Manufacturing firms, India |
| JEL: | D20 D24 L16 L6 L60 |
| URL: | http://d.repec.org/n?u=RePEc:mad:wpaper:2017-159&r=tid |
| By: | Kozo Kiyota (Keio Economic Observatory, Keio University); Sawako Maruyama (Graduate School of Economics, Kobe University) |
| Abstract: | In light of the increasing importance of female labor participation in Japan, this paper examines the determinants of the demand for female workers. One of the contributions of this paper is that we shed light on the role of information and communication technology (ICT) and offshoring as determinants of female labor demand. Estimating a system of variable factor demands for manufacturing industries between 1980 and 2011, we find that, while the ICT capital stock has significantly positive effects on the demand for low, middle-high, and high skilled female workers, it has significantly negative effects on the demand for middle-low skilled female workers. In contrast, offshoring has insignificant effects on the demand for female workers. The results suggest that offshoring is at least neutral on the demand for female workers. A part of the increasing demand for female workers can be attributable to ICT, which contributes to narrow the gender wage gap in Japan. |
| Keywords: | Labor demand, Female Workers, Offshoring, Information and Communication Technology, Skills |
| JEL: | F14 J23 |
| Date: | 2017–11–20 |
| URL: | http://d.repec.org/n?u=RePEc:keo:dpaper:2017-027&r=tid |