nep-tid New Economics Papers
on Technology and Industrial Dynamics
Issue of 2018‒04‒23
fifteen papers chosen by
Fulvio Castellacci
Universitetet i Oslo

  1. Public Procurement, Local Labor Markets and Green Technological Change: Evidence from US Commuting Zones. By Orsatti, Gianluca; Perruchas, François; Consoli, Davide; Quatraro, Francesco
  2. Are European firms falling behind in the global corporate research race? By Reinhilde Veugelers
  3. Threshold Policy Effects and Directed Technical Change in Energy Innovation By Lionel Nesta; Elena Verdolini; Francesco Vona
  4. Knowledge diffusion across regions and countries: evidence from patent citations By Wiljan van den Berge; Jonneke Bolhaar; Roel van Elk
  5. Linking forms of inbound open innovation to a driver-based typology of environmental innovation: Evidence from French manufacturing firms By Jason Li-Ying; Caroline Mothe; Uyen Nguyen-Thi
  6. Resource Misallocation in European Firms: The Role of Constraints, Firm Characteristics and Managerial Decisions By Gorodnichenko, Yuriy; Revoltella, Debora; Svejnar, Jan; Weiss, Christoph T.
  7. Firm Age, Size, and Employment Dynamics: Evidence from Japanese firms By LIU Yang
  8. Corporate scientists as the triggers of transitions towards firms' exploration research strategies By Barge-Gil, Andres; D'Este, Pablo; Herrera, Liliana
  9. The Reallocation Myth By Chang-Tai Hsieh; Peter J. Klenow
  10. International Joint Ventures and Internal versus External Technology Transfer: Evidence from China By Jiang, Kun; Keller, Wolfgang; Qiu, Larry; Ridley, William
  11. How Product Innovation Can Affect Price Collusion By Andrew Smyth
  12. New Perspectives on the Decline of U.S. Manufacturing Employment By Teresa C. Fort; Justin R. Pierce; Peter K. Schott
  13. On the Impact of Structural Reforms on Output and Employment; Evidence from a Cross-country Firm-level Analysis By Luiza Antoun de Almeida; Vybhavi Balasundharam
  14. Missing Growth from Creative Destruction By Philippe Aghion; Antonin Bergeaud; Timo Boppart; Peter J. Klenow; Huiyu Li
  15. Open innovation: the different pathways towards openness By Faïz Gallouj; Faridah Djellal

  1. By: Orsatti, Gianluca; Perruchas, François; Consoli, Davide; Quatraro, Francesco (University of Turin)
    Abstract: The present paper investigates whether and through which channels green public procurement (GPP) stimulates local environmental innovation capacity. To this end, we use detailed data sources on green patents and procurement expenditure at the level of US Commuting Zones for the period 2000-2011. We also check for the moderating effects of local labor market composition in the relation between green public procurement and green innovation capacity. Lastly, we exploit the richness of patent information to test for differential effects of green public procurement on different classes of green technologies. The main finding is that GPP is an important driver in explaining the growth of local green-tech stock. The positive effect of GPP is mainly driven by expenditures for procured green services and is magnified by the local presence of high shares of abstract- intensive occupations. When separately considering diverse kinds of green technologies, we do find evidence of a more pronounced effect of GPP on the growth of local knowledge stocks of mitigation technologies.
    Date: 2018–04
  2. By: Reinhilde Veugelers
    Abstract: Technological progress, such as robotics and artificial intelligence, is often blamed for the loss of jobs and rising income inequality. It is also linked to increasing inequality in the corporate landscape as superstar firms forge ahead in winner-takes-most markets. Our analysis shows that in most sectors there is a high degree of concentration among a few top companies in research and development spending. R&D spending is much more concentrated than sales and employment. In 2015, for example, the top 10 percent biggest spenders on R&D, accounted for 71 percent of the R&D spending of the 2500 companies that spend most on R&D. This concentration is most obvious in the high-tech biopharma and digital sectors, though it is also true for other sectors, such as the vehicles sector. US companies are overrepresented among these R&D superstars, especially in digital sectors where they take up half of the top slots. Over the last decade, there has been little evidence for increasing concentration in the global R&D landscape. On the contrary, a slight decline is discernible. Slight increasing concentration can only be detected in digital sectors, with in particular the top 1 percent of R&D spending firms in these sectors forging ahead. Although the overall concentration of R&D spending among a few leading firms might not be changing much over time, R&D leaders are slowly losing their positions to new R&D-leading firms. Digital Services is the most turbulent high-tech sector. The US and China are more likely to produce new R&D leaders that take over some of the top positions from incumbent R&D leaders. This poses difficult questions for Europe, which is at risk of losing out in terms of R&D leadership in more technologically advanced sectors.
    Date: 2018–04
  3. By: Lionel Nesta (Université Côte d'Azur, CNRS, Gredeg, OFCE SciencesPo and SKEMA Business School); Elena Verdolini (FEEM and CMCC); Francesco Vona (OFCE SciencesPo, SKEMA Business School and Université Côte d'Azur (GREDEG))
    Abstract: This paper analyzes the effect of environmental policies on the direction of energy innovation across countries over the period 1990-2012. Our novelty is to use threshold regression models to allow for discontinuities in policy effectiveness depending on a country's relative competencies in renewable and fossil fuel technologies. We show that the dynamic incentives of environmental policies become effective just above the median level of relative competencies. In this critical second regime, market-based policies are moderately effective in promoting renewable innovation, while command-and-control policies depress fossil based innovation. Finally, market-based policies are more effective to consolidate a green comparative advantage in the last regime. We illustrate how our approach can be used for policy design in laggard countries.
    Keywords: Directed Technical Change, Threshold Models, Environmental Policies, Policy Mix
    JEL: Q58 Q55 Q42 Q48 O34
    Date: 2018–02
  4. By: Wiljan van den Berge (CPB Netherlands Bureau for Economic Policy Analysis); Jonneke Bolhaar (CPB Netherlands Bureau for Economic Policy Analysis); Roel van Elk (CPB Netherlands Bureau for Economic Policy Analysis)
    Abstract: We study knowledge spillovers from European universities and other research organizations using data from patent citations at the EPO. Using matching techniques to construct a sample of control patents, we show that the probability to cite a university patent declines with distance. In particular, we fi nd a sharp cut-o ff at around 25 kilometers. For longer distances the probability to cite a university patent is more or less constant. For other research organizations we find no evidence that distance plays a role. Country borders are shown to play an important role in restricting the diff usion of patents of both universities and other research organizations. These results are in line with recent literature for the U.S. and suggest that knowledge spillovers and tacit knowledge are important when using knowledge embodied in university patents.
    JEL: O33 O34 I23
    Date: 2017–04
  5. By: Jason Li-Ying (DTU - Technical University of Denmark [Lyngby]); Caroline Mothe (IREGE - Institut de Recherche en Gestion et en Economie - USMB [Université de Savoie] [Université de Chambéry] - Université Savoie Mont Blanc); Uyen Nguyen-Thi (LISER - Luxembourg Institute of Socio-Economic Research - Luxembourg Institute of Socio-Economic Research)
    Abstract: Environmental innovation research has not yet clarified how different forms of inbound innovation might exert effects. The current article proposes four driver-based EI types according to two main dimensions: compliance versus voluntary and own value capture versus customer value capture. With a problem-solving perspective, we develop links from different forms of inbound innovation to various types of EI and test the related hypotheses with two waves of the French Community Innovation Survey. On a short-term basis, R&D cooperation and technology acquisition correlate positively with all four types of EI, but over time, persistent R&D cooperation and technology acquisition are associated with EI only at the production stage, according to voluntary/strategic or compliance drivers. Inbound innovation enables quick responses to market demands for EI in the final use stage.
    Keywords: Environmental innovation,Inbound open innovation,R&D acquisition,R&D cooperation,Technology sourcing,Value creation and capture
    Date: 2017
  6. By: Gorodnichenko, Yuriy (University of California, Berkeley); Revoltella, Debora (European Investment Bank); Svejnar, Jan (Columbia University); Weiss, Christoph T. (European Investment Bank)
    Abstract: Using a new survey, we show that the dispersion of marginal products across firms in the European Union is about twice as large as that in the United States. Reducing it to the US level would increase EU GDP by more than 30 percent. Alternatively, removing barriers between industries and countries would raise EU GDP by at least 25 percent. Firm characteristics, such as demographics, quality of inputs, utilization of resources, and dynamic adjustment of inputs, are predictors of the marginal products of capital and labor. We emphasize that some firm characteristics may reflect compensating differentials rather than constraints and the effect of constraints on the dispersion of marginal products may hence be smaller than has been assumed in the literature. We also show that cross-country differences in the dispersion of marginal products are more due to differences in how the business, institutional and policy environment translates firm characteristics into outcomes than to the differences in firm characteristics per se.
    Keywords: marginal products, resource allocation, firm-specific factors, economic growth
    JEL: O12 O47 O52 D22 D24
    Date: 2018–03
  7. By: LIU Yang
    Abstract: This study examines the effects of firm age and size on employment dynamics based on large scale panel data from Japan. It contributes to the literature by examining age and size effects on firm-level job creation and job destruction, which have not been clear in previous studies. The empirical results indicate that firm age has significantly negative effects on both job creation and destruction rates; however, firm size has a significantly negative effect on job creation while it has a significantly positive effect on job destruction. The theoretical background of this study is the standard theory on job creation and destruction in labor economics theories, which considers that job creation is determined by expected profit from newly created jobs, and job destruction is determined by whether the job is expected to be profitless. The age and size of firms affect their expected profit and therefore lead to effects on the behaviors of job creation and destruction. Finally, the results are similar for manufacturing firms and service firms.
    Date: 2018–02
  8. By: Barge-Gil, Andres; D'Este, Pablo; Herrera, Liliana
    Abstract: Exploration-oriented research strategies represent a critical factor for firms’ innovation performance and long term survival since they influence the capacity of these organizations to develop breakthrough innovations and move up the quality ladder of product development. However, setting in motion and sustaining exploratory research strategies are not straightforward. In this study, we contend that the availability of corporate scientists (i.e. personnel with PhD qualifications in R&D units) is a triggering factor for two critical transitions in firms’ R&D strategies: i) initiation of exploration-oriented research activities (exploration-enacting strategy); and ii) increased commitment to exploration-oriented research activities (exploration-deepening strategy). We conduct our analysis on a large sample of Spanish manufacturing firms. We address endogeneity concerns by using the exogenous supply of PhD graduates as an instrumental variable. Our results show that firms recruiting doctoral graduates (PhDs) to their R&D units increase the likelihood of initiating and strengthening exploration-oriented research strategies. The implications of these findings for innovation management and policy are discussed.
    Keywords: Scientists, exploration research, R&D strategies, PhDs, instrumental variables.
    JEL: M54 O31 O32
    Date: 2018
  9. By: Chang-Tai Hsieh; Peter J. Klenow
    Abstract: There is a widely held view that much of growth in the U.S. can be attributed to reallocation from low to high productivity firms, including from exiting firms to entrants. Declining dynamism — falling rates of reallocation and entry/exit in the U.S. — have therefore been tied to the lackluster growth since 2005. We challenge this view. Gaps in the return to resources do not appear to have narrowed, suggesting that allocative efficiency has not improved in the U.S. in recent decades. Reallocation can also matter if it is a byproduct of innovation. However, we present evidence that most innovation comes from existing firms improving their own products rather than from entrants or fast-growing firms displacing incumbent firms. Length: 26 pages
    Date: 2018–04
  10. By: Jiang, Kun; Keller, Wolfgang; Qiu, Larry; Ridley, William
    Abstract: This paper studies international joint ventures, where foreign direct investment is performed by a foreign and a domestic firm that together set up a new firm, the joint venture. Employing administrative data on all international joint ventures in China from 1998 to 2007-roughly a quarter of all international joint ventures in the world-we find, first, that Chinese firms chosen to be partners of foreign investors tend to be larger, more productive, and more likely subsidized than other Chinese firms. Second, there is substantial technology transfer both to the joint venture and to the Chinese joint venture partner, an external, intergenerational technology transfer effect that this paper introduces. Third, with technology spillovers typically outweighing negative competition effects, joint ventures generate on net positive externalities to other Chinese firms in the same industry. Joint venture externalities are large, perhaps twice the size of wholly-owned FDI spillovers, and it is R&D-intensive firms, including the joint ventures themselves, that benefit most from these externalities. Furthermore, the positive external joint venture effect is larger if the foreign firm is from the U.S. rather than from Japan or Hong Kong, Macau, and Taiwan, while this effect is virtually absent in broad sectors that include economic activities for which China's FDI policy has prohibited joint ventures.
    Keywords: competition effects; Foreign direct investment; international joint ventures; partner selection; technology spillovers
    JEL: F14 F23 O34
    Date: 2018–03
  11. By: Andrew Smyth (Department of Economics, Marquette University and Economic Science Institute, Chapman University)
    Abstract: Price conspiracies appear endemic in many markets. This paper conjectures that low expected returns from product innovation can affect price collusion in certain markets. This conjecture is tested—and supported—by both archival and experimental data. In particular, average market prices in low innovation experiments are significantly greater than those in high innovation, but otherwise identical experiments, because price collusion is more successful in the low innovation experiments.
    Keywords: price collusion, product innovation, antitrust, experimental economics
    JEL: L41 L10 O33 C92
    Date: 2017
  12. By: Teresa C. Fort; Justin R. Pierce; Peter K. Schott
    Abstract: We use relatively unexplored dimensions of US microdata to examine how US manufacturing employment has evolved across industries, rms, establishments, and regions. We show that these data provide support for both trade- and technology-based explanations of the overall decline of employment over this period, while also highlighting the di-culties of estimating an overall contribution for each mechanism. Toward that end, we discuss how further analysis of these trends might yield sharper insights.
    Date: 2018–04
  13. By: Luiza Antoun de Almeida; Vybhavi Balasundharam
    Abstract: This paper analyzes the effects of selected structural reforms on output and employment in the short and medium term. It uses a comprehensive cross-country firm-level dataset covering both advanced and emerging market economies over the period 2003-2014. In line with previous studies, it finds that structural reforms have in general a positive impact on output and employment in the medium term. Furthermore, the paper also assesses whether the impact of structural reforms varies with firm-specific characteristics, such as size, leverage, profitability, and sector. We find evidence that firm characteristics do influence the effectiveness of structural reforms. These findings have relevant policy implications as they help policymakers tailor the design of structural reforms to maximize their payoffs, taking into account their heterogeneous impact on firms.
    Date: 2018–04–06
  14. By: Philippe Aghion; Antonin Bergeaud; Timo Boppart; Peter J. Klenow; Huiyu Li
    Abstract: Statistical agencies typically impute inflation for disappearing products based on surviving products, which may result in overstated inflation and understated growth. Using U.S. Census data, we apply two ways of assessing the magnitude of “missing growth” for private nonfarm businesses from 1983–2013. The first approach exploits information on the market share of surviving plants. The second approach applies indirect inference to firm-level data. We find: (i) missing growth from imputation is substantial — at least 0.6 percentage points per year; and (ii) most of the missing growth is due to creative destruction (as opposed to new varieties).
    Date: 2018–04
  15. By: Faïz Gallouj (CLERSE - Centre Lillois d’Études et de Recherches Sociologiques et Économiques - UMR 8019 - Université de Lille, Sciences et Technologies - ULCO - Université du Littoral Côte d'Opale - CNRS - Centre National de la Recherche Scientifique); Faridah Djellal (CLERSE - Centre Lillois d’Études et de Recherches Sociologiques et Économiques - UMR 8019 - Université de Lille, Sciences et Technologies - ULCO - Université du Littoral Côte d'Opale - CNRS - Centre National de la Recherche Scientifique)
    Abstract: Innovation is a condition for the survival of businesses, companies, territories and nations. This entry builds on the concept of "open innovation" to review a number of key aspects of the innovation issue. This metaphor is used to try to report on the major contemporary openings made by experts in "innovation studies", and in so doing, a number of important concepts in this field are reviewed. The openings in question concern not only the modalities of organization and implementation of innovation as implied by the concept of open innovation but also the content and forms of innovation as well as the sectors that engage in these activities.
    Date: 2017

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