nep-tid New Economics Papers
on Technology and Industrial Dynamics
Issue of 2018‒04‒16
fourteen papers chosen by
Fulvio Castellacci
Universitetet i Oslo

  1. Demographics and Automation By Daron Acemoglu; Pascual Restrepo
  2. Innovation Networks and Clusters Dynamics By Desmarchelier, Benoît; Zhang, Linjia
  3. Collaboration Networks and Innovation: How to Define Network Boundaries By Galaso, Pablo; Kovářík, Jaromír
  4. Growth and the Geography of Knowledge By Marta Aloi; Joanna Poyago-Theotoky; Frederic Tournemaine
  5. Innovation Networks and Clusters Dynamics By He, Ming; Walheer, Barnabé
  6. Innovation, Productivity Dispersion, and Productivity Growth By Lucia Foster; Cheryl Grim; John C. Haltiwanger; Zoltan Wolf
  7. Investment as a transmission mechanism from weak demand to weak supply and post-crisis productivity slowdown By Patrice Ollivaud; Yvan Guillemette; David Turner
  8. The nature of firm growth By Pugsley, Benjamin W.; Sedlacek, Petr; Sterk, Vincent
  9. Mergers and Demand-Enhancing Innovation By Bourreau, Marc; Jullien, Bruno; Lefouili, Yassine
  10. Trend-analysis of science, technology and innovation policies for BNCTs By Steffi Friedrichs
  11. Context and the role of policies to attract foreign R&D in Europe By Rodríguez-Pose, Andrés; Wilkie, Callum
  12. Employment and growth in Indonesia (1990–2015) By Nomaan, Majid.; Nayantara, Sarma.
  13. Structural Reforms and Firms’ Productivity: Evidence from Developing Countries By Wilfried A. Kouamé; Sampawende J Tapsoba
  14. Public Support to Business R&D and the Economic Crisis: Spanish Evidence By Ascensión Barajas; Elena Huergo; Lourdes Moreno Marín

  1. By: Daron Acemoglu; Pascual Restrepo
    Abstract: We argue theoretically and document empirically that aging leads to greater (industrial) automation, and in particular, to more intensive use and development of robots. Using US data, we document that robots substitute for middle-aged workers (those between the ages of 36 and 55). We then show that demographic change—corresponding to an increasing ratio of older to middle-aged workers—is associated with greater adoption of robots and other automation technologies across countries and with more robotics-related activities across US commuting zones. We also provide evidence of more rapid development of automation technologies in countries undergoing greater demographic change. Our directed technological change model further predicts that the induced adoption of automation technology should be more pronounced in industries that rely more on middle-aged workers and those that present greater opportunities for automation. Both of these predictions receive support from country-industry variation in the adoption of robots. Our model also implies that the productivity implications of aging are ambiguous when technology responds to demographic change, but we should expect productivity to increase and labor share to decline relatively in industries that are most amenable to automation, and this is indeed the pattern we find in the data.
    JEL: J11 J23 J24 O33 O47 O57
    Date: 2018–03
  2. By: Desmarchelier, Benoît (Lille 1 University); Zhang, Linjia (Division of Economics, Xi'an Jiaotong-Liverpool University)
    Abstract: Contributions in terms of clusters life cycle indicate that intense interactions between a variety of agents within the cluster are essential to its success. Despite being accepted by the literature, this view has not yet been confirmed by analyses of large temporal networks of interactions within industrial clusters. This paper proposes to fill this gap by building and studying the innovation networks of three clusters over a 10 years period. We find that clusters’ growth is all but smooth and that low assortativity and preferential attachment among agents can constitute safeguards against clusters decline. Also, we bring evidence that clusters’ innovation networks are resilient to decline. This observation supports contributions advocating for non-deterministic lifecycles in which clusters can still grow, even after a period of pronounced decline.
    Keywords: Industrial Clusters, Network Science, Dynamics
    Date: 2018–04–01
  3. By: Galaso, Pablo; Kovářík, Jaromír
    Abstract: Numerous studies in management, sociology, and economics have documented that the architecture of collaboration networks affects the innovation performance of individuals, firms, and regions. Little is known though about whether the association between collaboration patterns and innovation outcomes depends on the network geographical boundaries chosen by the researcher. This issue is crucial for both policy-makers and firms that rely on innovation. This article compares the association between collaboration networks and future patenting between regional and country-level collaboration networks. If we relate future innovation to the global, country-wide network our statistical analysis reproduces the findings of the previous literature. However, we find systematically less important effects of regional innovation patterns on subsequent patenting of innovators. Hence, managers and policy makers should choose the boundaries of the innovation networks that they look at carefully, aiming for integration into larger-scale collaboration communities.
    Keywords: innovation, networks, patents, network boundary, boundary specification problem
    JEL: O31 O32 O34 R11
    Date: 2018–03–08
  4. By: Marta Aloi; Joanna Poyago-Theotoky; Frederic Tournemaine
    Abstract: We analyse how spatial disparities in innovation activities, coupled with migration costs, affect economic geography, growth and regional inequality. We provide conditions for existence and uniqueness of a spatial equilibrium, and for the endogenous emergence of industry clusters. Spatial variations in knowledge spillovers lead to spatial concentration of more innovative firms. Migration costs, however, limit the concentration of economic activities in the most productive region. Narrowing the gap in knowledge spillovers across regions raises growth, and reduces regional inequality by making firms more sensitive to wage differentials. The associated change in the spatial concentration of industries has positive welfare effects.
    Keywords: growth, economic geography, geographic labour mobility, innovation, knowledge spillovers, regional economics
    JEL: O41 O31 L13 J61 R32
    Date: 2018
  5. By: He, Ming (Division of Economics, Xi'an Jiaotong-Liverpool); Walheer, Barnabé (Division of Economics, Xi'an Jiaotong-Liverpool University)
    Abstract: CFor several decades, the manufacturing industry has been the pillar industry in terms of economic growth in China. The importance of the manufacturing industry is also highlighted by the numerous policy interventions in favour of this industry. In this paper, we identify the key industrial sectors in terms of technical performances and technological advancements for the period 1999-2007. This represents particular valuable information in the context of policy implementations. The distinguishing features of our study are five-fold. One, we make used of a tailored firm-level database. Two, we distinguish between four types of firm ownership. Three, we consider 30 manufacturing sectors. Four, we extend a well-established methodology to answer our questions. Five, we rely on a robust nonparametric estimation method. Our results confirm that firm ownership is important in explaining technical efficiency and technology gap. We also show that foreign firms set the standard for technical efficiency, and are the leaders in terms of technology advancement; that private firms show technology advancements accompanied by eciency losses; and that China has successfully revitalized state-owned firms, although there is still room for improvement. Finally, we find evidence that China's industrial development plans have been successful in stimulating technology progress in many key sectors; but that the current policy of (re)nationalization may undermine technical efficiency and slow down technology progress.
    Keywords: technology gap; technical eciency; manufacturing industry; China; metafrontier; DEA.
    Date: 2018–04–01
  6. By: Lucia Foster; Cheryl Grim; John C. Haltiwanger; Zoltan Wolf
    Abstract: We examine whether underlying industry innovation dynamics are an important driver of the large dispersion in productivity across firms within narrowly defined sectors. Our hypothesis is that periods of rapid innovation are accompanied by high rates of entry, significant experimentation and, in turn, a high degree of productivity dispersion. Following this experimentation phase, successful innovators and adopters grow while unsuccessful innovators contract and exit yielding productivity growth. We examine the dynamic relationship between entry, productivity dispersion, and productivity growth using a new comprehensive firm-level dataset for the U.S. We find a surge of entry within an industry yields initially an increase in productivity dispersion and then after a significant lag an increase in productivity growth. These patterns are more pronounced for the High Tech sector where we expect there to be more innovative activities. These patterns change over time suggesting other forces are at work during the post-2000 slowdown in aggregate productivity.
    JEL: E24 L26 M13 O31
    Date: 2018–03
  7. By: Patrice Ollivaud; Yvan Guillemette; David Turner
    Abstract: Current weak labour productivity growth in many OECD countries reflects historically weak contributions from both total factor productivity (TFP) growth and capital deepening. The slowdown in trend productivity growth in the pre-crisis period is mostly explained by a long-established slowdown in TFP growth, but since the crisis the further deceleration is mainly due to weak capital deepening, a development apparent in practically every OECD country. Much of the weakness in the growth of the capital stock since the financial crisis can be explained by an accelerator response of investment to continued demand weakness, leading in turn to a deterioration of potential output via a hysteresis-like effect. For the most severely affected economies, the financial crisis is estimated to have reduced potential output by more than 2% via this transmission mechanism. In many OECD countries, declining government investment as a share of GDP has further exacerbated post-crisis weakness in capital stock growth, both directly and probably indirectly via adverse spillover effects on business investment. Finally, over a period when the use of conventional macro policy instruments was constrained, the slower pace of structural reform represents a missed opportunity, not least because more competition-friendly product market regulation could have boosted both investment and potential growth.
    Keywords: accelerator effect, capacity, capital stock, financial crisis, global financial crisis, hysteresis, investment, potential output
    JEL: E22 E27 E32 E65 E66
    Date: 2018–04–16
  8. By: Pugsley, Benjamin W.; Sedlacek, Petr; Sterk, Vincent
    Abstract: Only half of all startups survive past the age of ve and surviving businesses grow at vastly di erent speeds. Using micro data on employment in the population of U.S. businesses, we estimate that the lion's share of these differences is driven by ex-ante heterogeneity across fi rms, rather than by ex-post shocks. We embed such heterogeneity in a fi rm dynamics model and study how ex-ante differences shape the distribution of fi rm size, "up-or-out" dynamics, and the associated gains in aggregate output. "Gazelles" - a small subset of startups with particularly high growth potential - emerge as key drivers of these outcomes. Analyzing changes in the distribution of ex-ante fi rm heterogeneity over time reveals that gazelles are driven towards extinction, creating substantial aggregate losses.
    Keywords: firm dynamics; startups; macroeconomics; big data
    JEL: E23 E24
    Date: 2017–11
  9. By: Bourreau, Marc; Jullien, Bruno; Lefouili, Yassine
    Abstract: This paper investigates the impact of horizontal mergers on firms' incentives to invest in demand-enhancing innovation. In our baseline model, we identify three key effects of a merger on the merging firms' incentives to innovate: the margin expansion effect, the demand expansion effect, and the innovation diversion effect. The first effect is negative, while the second is positive and the third can be either positive or negative depending on the nature of the innovation. We show that the overall impact of a merger on innovation can be either positive or negative and provide sufficient conditions and specific models under which each of these two scenarios arises. Finally, we extend our model to incorporate spillovers and synergies in R&D.
    Keywords: Horizontal Mergers; Innovation; Competition
    JEL: D43 L13 L40
    Date: 2018–03
  10. By: Steffi Friedrichs
    Abstract: This “Trend-Analysis of Science, Technology and Innovation Policies for BNCTs” aims to analyse policies pertaining to nanotechnology and biotechnology over the past years with regard to their directionality and technology-specificity.The analysis provides some evidence that technology-push policies are favoured for young technology fields, while application-pull policies tend to be applied to more mature fields. In technology-specific policies, the percentage of pure application-pull policies is much lower than that observed for general STI policies. Most individual STI policies are technology-specific in their title or description. Most general STI policies also mention a specific technology and are thus applicable to both the field of general STI and the field of the respective technology. In the case of biotechnology, nanotechnology and ICT, by contrast, at least one third of the policies are unique to the respective field, and only up to a quarter are shared with any other technology field.
    Date: 2018–04–13
  11. By: Rodríguez-Pose, Andrés; Wilkie, Callum
    Abstract: This paper explores the effectiveness of policies ‘in’ attracting the foreign research and development (R&D) of multinational enterprises (MNEs) to specific countries in Europe. We develop a macroeconomic investigation covering 29 European countries during the period between 1990 and 2012 in order to address: (a) whether the provision of direct financial support for business R&D is effective for the attraction of foreign R&D; (b) whether direct support is more effective than indirect support for this purpose and (c) whether the link between direct financial support for business R&D and the foreign R&D of MNEs is conditioned by the context within which the support is provided. The results of the analysis show that, first, the provision of direct financial support is generally effective for the attraction of foreign R&D by MNEs. Second, direct support for business R&D is more effective for this purpose than indirect support. Third, the provision of direct financial support for business R&D yields greater returns in contexts that are more socio-economically suitable for knowledge-intensive, innovative activity.
    Keywords: foreign R&D; multinational enterprises (MNEs); direct and indirect support; knowledge flows; innovation; Europe
    JEL: N0
    Date: 2016–09–20
  12. By: Nomaan, Majid.; Nayantara, Sarma.
    Abstract: This paper examines the employment situation in Indonesia during and in the aftermath of the Asian Financial Crisis and the Great Recession, including importantly how the quality of work responded to the changing composition of Indonesia’s growth process. The authors find that many labour market indicators have moved in an encouraging direction, but a decomposition of labour productivity indicates that productivity growth has been driven primarily from efficiencies “within” sectors rather than the allocation of labour across sectors. Facilitating and managing the structural transformation process in a fair and inclusive manner can further support Indonesia’s socioeconomic development.
    Keywords: employment, economic growth, economic recovery, poverty alleviation, Indonesia
    Date: 2018
  13. By: Wilfried A. Kouamé; Sampawende J Tapsoba
    Abstract: This paper assesses the effects of structural reforms on firm-level productivity for 37 developing countries from 2006 to 2014 period. It takes advantage of the IMF Monitoring of Fund Arrangements dataset for reform indexes and the World Bank Enterprise Surveys for firm-level productivity. The paper highlights the following results. Structural reforms such as financial, fiscal, real sector, and trade reforms, significantly improve firm-level productivity. Interestingly, real sector reforms have the most sizeable effects on firm-level productivity. The relationship between structural reforms and firm-level productivity is nonlinear and shaped by some firms’ characteristics such as the financial access, the distortionary environment, and the size of firms. The pace of structural reforms matters since being a “strong reformer” is associated with a clear productivity dividend for firms. Finally, except for financial and trade reforms, all structural reforms under consideration are bilaterally complementary in improving firm-level productivity. These findings are robust to several sensitivity checks.
    Date: 2018–03–19
  14. By: Ascensión Barajas (Unit of Impact Assessment, CDTI, Centro para el Desarrollo Tecnológico Industrial. Universidad Autónoma de Madrid); Elena Huergo (GRIPICO (Group for Research in Productivity, Innovation and Competition). Department of Economic Analysis, Universidad Complutense de Madrid.); Lourdes Moreno Marín (GRIPICO (Group for Research in Productivity, Innovation and Competition). Department of Economic Analysis, Universidad Complutense de Madrid.)
    Abstract: The objective of the present study is to compare the effect of public support of business R&D on technological inputs and outputs before and during the recent economic crisis. To do so, we use information provided by the Centre for the Development for Industrial Technology (CDTI), which is the main public agency in Spain that grants financial aid of its own to companies for the execution of R&D projects. Specifically, we consider firms supported through CDTI programmes for periods the 2002-2005 and 2010-2012. Impact assessment is conducted using "matching" techniques. Our preliminary results suggest that, during the crisis, public support continued to have positive effects on the resources devoted to R&D activities, and also increased the technological outputs obtained from these resources.
    Keywords: Impact assessment, Economic crisis, Public aid, Business R&D.
    JEL: H81 L2 O3
    Date: 2017

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