nep-tid New Economics Papers
on Technology and Industrial Dynamics
Issue of 2018‒04‒30
ten papers chosen by
Fulvio Castellacci
Universitetet i Oslo

  1. Rent creation and sharing: new measures and impacts on TFP By Gilbert Cette; Jimmy Lopez; Jacques Mairesse
  2. The post-crisis TFP growth slowdown in CEE countries: exploring the role of Global Value Chains By Chiacchio, Francesco; Gradeva, Katerina; Lopez-Garcia, Paloma
  3. International Competition and Rent Sharing in French Manufacturing By Lionel Nesta; Stefano Schiavo
  4. Innovation in the German Real Estate Industry: The Role of Firm Innovativeness, External Environment, and Industry Structure By Susanne Hügel
  5. Innovation-based regional structural change: Theoretical reflections, empirical findings and political implications By Koschatzky, Knut
  6. Escaping the Middle-Income Trap: A Cross-Country Analysis on the Patterns of Industrial Upgrading By Wang, Lili; Wen, Yi
  7. Institutions and Determinants of Firm Survival in European Emerging Markets By Baumöhl, Eduard; Iwasaki, Ichiro; Kočenda, Evžen
  8. Do Financial Constraints Hamper Environmental Innovation Diffusion? An Agent-Based Approach By Paola D’Orazio; Marco Valente
  9. Knowledge sources and impacts on subsequent inventions: Do green technologies differ from non-green ones? By Nicolò Barbieri; Alberto Marzucchi; Ugo Rizzo
  10. Academic Inventors and the Antecedents of Green Technologies. A Regional Analysis of Italian Patent Data. By Quatraro, Francesco; Scandura, Alessandra

  1. By: Gilbert Cette; Jimmy Lopez; Jacques Mairesse
    Abstract: This analysis proposes new measures of rent creation or (notional) mark-up and workers’ share of rents on cross-country-industry panel data. While the usual measures of mark-up rate implicitly assume perfect labor markets, our approach relaxes this assumption, and takes into account that part of firms’ rent created in an industry is shared with workers to an extent which can vary with their skills. Our results are based on a cross-country-industry panel covering 14 OECD countries and 19 industries over the 1985-2005 period. In a first part of our analysis we draw on OECD indicators of product and labor market (anticompetitive) regulations to test how they are related to our new measures of mark-up and rent-sharing. We find that anti-competitive Non-Manufacturing Regulations (NMR) affect mark-up rates positively, and hence firms’ rent creation and workers’ share of rent, whereas Employment Protection Legislation (EPL) has no impact on rent creation, but boosts workers’ wages per hour. However, we observe that these wage increases are offset by a negative impact from EPL on hours worked per output unit, leading to a non-significant impact of EPL on workers’ share of rents. The effects of EPL for low-skilled workers appear to be more pronounced than those for medium-skilled workers, both being much greater than for highly-skilled workers. In the second part of our analysis, we estimate the impacts of our new measures on Total Factor Productivity (TFP) in the framework of a straightforward regression model. We use the OECD regulations indicators as relevant instrument to take care of endogeneity and to make sure that the resulting estimates assess the proper regulation impacts of rent creation and sharing without being biased by other confounding effects. We find that less competition in the product and labor markets as assessed by our measures of mark-up and workers’ share of rents have both substantial negative impacts on TFP.
    Keywords: product market regulations, labor market regulations, mark-up, rent-sharing, TFP.
    JEL: E22 E24 O30 L50 O43 O47 C23
    Date: 2018
  2. By: Chiacchio, Francesco; Gradeva, Katerina; Lopez-Garcia, Paloma
    Abstract: Using micro-aggregated firm information for nine Central and Eastern European (CEE) countries and data from input-output tables, we examine the role of Global Value Chains (GVCs) for technology diffusion across EU countries. Our empirical results provide support for a two-stage diffusion process of technology across countries. In the first stage, the most productive firms in the host economy benefit from their direct exposure to new technology created in parent firms as a result of their GVC participation. In the second stage, technology spills over to the rest of firms in the host economy via domestic production networks. In addition, we show that the import of intermediate inputs –i.e. backward linkages- is the main channel of technology diffusion within GVCs. We use these results to explain the pronounced post-crisis drop in Total Factor Productivity (TFP) growth in CEE countries. We show that due to their deep integration in GVCs, CEE countries have been exposed to two recent developments highly correlated with their TFP performance: (i) a slowdown in TFP growth of parent firms located in non-CEE EU countries; and (ii) a global slowdown in the growth rate of GVC participation, which is evident also for CEE countries from 2011 onwards. Moreover, we find that the capacity of host firms in CEE countries to absorb and understand new knowledge has decreased since the crisis. We argue that this is related to the drop in R&D investment in the CEE region during the post-crisis period. JEL Classification: O33, O47, O57, C33
    Keywords: Central and Eastern Europe, Global Value Chains, technology diffusion, TFP growth
    Date: 2018–04
  3. By: Lionel Nesta (Université Côte d'Azur; GREDEG CNRS; OFCE Sciences Po. Paris; SKEMA Business School); Stefano Schiavo (University of Trento; OFCE Sciences Po. Paris)
    Abstract: The paper investigates the impact of import competition on rent-sharing between firms and employees. First, by applying recent advances in the estimation of price-costs margins to a large panel of French manufacturing firms for the period 1993-2007, we are able to classify each firm into labor- and product-market regimes based on the presence/absence of market power. Second, we concentrate on dirms that operate in an efficient bargaining framework to study the effect of import penetration on workers' bargaining power. We find that French imports from other OECD countries have a negative effect on bargaining power, whereas the impact of imports from low wage countries is more muted. By providing firm-level evidence on the relationship between international trade and rent sharing, the paper sheds new light on the effect of trade liberalization on the labor market.
    Keywords: firm heterogeneity, import competition, mark-up, wage bargaining
    JEL: F14 F16 J50
    Date: 2018–04
  4. By: Susanne Hügel
    Abstract: In the real estate industry, regulatory interventions increased after the subprime crisis 2007/2008 and were followed by a regulatory shock and, in parts, a restructuring of the industry. In addition, the digitalization has entered industries. New opportunities arise, (production and business) processes transform and the value creation shifts from production to service to software. In the large body of innovation research manufacturing industries and product innovations have been in the focus ever since. Non-manufacturing organizations such as in the real estate industry and transforming manufacturing industries with blurring boundaries fueled by the digital age are currently under-researched. This paper investigates the relationship between firm innovativeness, an organization’s overall potential to innovate, and its innovation output while considering the influential organization’s context. It sheds light on the impact of the external environment and the regulatory interventions that shape the industry structure. To address the heterogeneous subsectors of the real estate industry and to ensure comparability among them, we develop and empirically test a universally applicable measurement model of firm innovativeness that comprehensively captures all relevant aspects on a higher level of abstraction. Furthermore, we have purposely incorporated measures that rely on the respondent’s perception because perception determines reality. Variance-based structural equation modeling (PLS-SEM) is used to analyze the dyadic design of our study including a sample comprised of 241 individuals, i.e., top-level executives and their employees from 76 organizations of the German real estate industry. Results prove validity of the newly developed measure for firm innovativeness and show that environmental heterogeneity moderates the flow from firm innovativeness to new product and service introductions. Highly competitive environments negatively influence the introduction of new products and services directly, and environmental dynamism does not have an impact (for now). Contrary to the expectation, high levels of regulation prove to facilitate organizations to introduce new products and services as well as new internal processes.
    Keywords: external environment; firm innovativeness; industry structure; Innovation; Real Estate Industry; Regulation
    JEL: R3
    Date: 2017–07–01
  5. By: Koschatzky, Knut
    Abstract: The objective of this paper is to broaden the knowledge base on the topic of innovation-based regional structural change and to discuss the possibilities of raising structurally weak regions to a dynamic growth path by means of innovation-promoting measures. The background to this objective are political developments in Germany with regard to the development of a comprehensive German support system for structurally weak regions from 2020 onwards. While regional structural support (ERDF and German regional support) is so far essentially concentrated on regions in the eastern federal states, it should focus in future on structurally weak regions in all federal states and eliminate the differentiation between eastern and western Germany (Deutscher Bundestag 2016, 4). The experience gained in the eastern German states with the focus on innovation as a driver of structural change is intended to provide a starting point here, but taking into account the fact that some structural factors differ markedly between East German and West German regions. Against this background, this paper focuses on the innovation policy component of a system for promoting structural change in structurally weak regions.
    Date: 2018
  6. By: Wang, Lili; Wen, Yi (Federal Reserve Bank of St. Louis)
    Abstract: With rapid industrial upgrading along the global value chain of manufactured goods, China has transformed, within one generation, from an impoverished agrarian society to a middle-income nation as well as the largest manufacturing powerhouse in the world. This article identifies the pattern of China’s industrial upgrading and compares it with those of other successfully industrialized economies and the failed ones. We find that (i) China (since 1978) followed essentially the same path of industrial upgrading as that of Japan and the “Asian Tigers.” These economies succeeded in catching up with the developed western world by going through three developmental stages sequentially; namely, a proto-industrialization in the rural areas, a first industrial revolution featuring mass production of labor-intensive light consumer goods, and then a second industrial revolution featuring mass production of the means of mass production (i.e., capital-intensive heavy industrial good s such as steel, machine tools, electronics, automobiles, communication and transport infrastructures). (ii) In contrast, economies stuck in the low-income trap or middle-income trap did not follow the above sequential stages of industrialization. For example, many Eastern European and Latin American countries after WWII jumped to the stage of heavy industrialization without fully developing their labor-intensive light industries, and thus stagnated in the middle-income trap. Also, there is a clear lack of proto-industrialization in the rural areas for many African economies that have remained in the low-income trap. We believe that laissez-faire and “free market” alone is unable to trigger industrial upgrading. Instead, correct government-led bottom-up industrial policies are the key to escaping the low- and middle-income traps.
    Keywords: China’s Economic Development; Industrial Revolution; Middle-Income Trap; New Institutional Theory; New Stage Theory; New Structural Economics
    JEL: F02 N10 O11 O40
    Date: 2018–01–16
  7. By: Baumöhl, Eduard; Iwasaki, Ichiro; Kočenda, Evžen
    Abstract: We analyze the impact of institutional quality on firm survival in 15 Central and Eastern European (CEE) countries. We employ the Cox proportional hazards model with a large dataset of firms from 2006–2015 and control for firm-specific determinants and country differences. Our results show that institutional quality (IQ) is a significant preventive factor for firm survival, and the result is robust to different measures of IQ and industry sectors. Furthermore, we document the existence of diminishing productivity of IQ, as the economic effect upon institutions is largest for low-level IQ countries and smallest for high-level IQ countries. In terms of firm-specific controls, ownership structure plays a vital role in strengthening the probability of firm survival. Notably, foreign ownership helps firms survive in all three country groups, and the effect is again larger for countries with low- and mid-level IQs. ROA, profit margin, solvency ratio, and firm age represent additional significant preventive factors, albeit with smaller economic effects.
    Keywords: firm survival, CEE countries, survival and exit determinants, hazards model
    JEL: D22 G01 G33 G34 P34
    Date: 2018–04
  8. By: Paola D’Orazio (Lehrstuhl für Makroökonomik, Faculty of Economics and Management, Fakultät für Wirtschaftswissenschaft, Ruhr-Universität Bochum, Universitätsstraße 150, 44801 Bochum (Germany).); Marco Valente (Dipartimento di Ingegneria Industriale e dell’Informazione e di Economia, University of L’Aquila (Italy); LEM Sant’Anna, Pisa (Italy); SPRU, University of Sussex (UK) and Ruhr-Universität Bochum (Germany).)
    Abstract: We develop a model that combines evolutionary economics concepts and methods with environmental economics concerns. The model is populated by consumers, heterogeneous firms, and a financial sector and is used to investigate the dynamic interactions between the demand and supply side, and the role played by binding financial constraints, in the diffusion of environmental innovations. The aim of the model is to understand how environmental goals can be effectively promoted and achieved in presence of a financial sector whose lending attitude is guided by long-termism rather than shorttermism. We show that financial constraints act as a deterring barrier and affect firms’ innovation strategies as well as the evolution of technological paradigms. When financial constraints are less binding, firms do not perceive hindrances to the adoption of eco-innovation and, as a result, the presence of the average green technology in the market increases.
    Keywords: Environmental Innovation, Agent-based Computational Economics, Financial Barriers, Green Finance, Short-termism, Deterring barriers, Credit constraints.
    Date: 2018–04
  9. By: Nicolò Barbieri (Department of Economics and Management, University of Ferrara (IT)); Alberto Marzucchi (SPRU, Science Policy Research Unit, University of Sussex (UK)); Ugo Rizzo (Department of Economics and Management, University of Ferrara (IT))
    Abstract: The paper contributes to our understanding of the nature and impact of green technological change. We focus on the search and impact spaces of green inventions, scrutinising the knowledge recombination processes leading to the generation of the invention and the impact of the invention on subsequent technological developments. Using a large sample of patents filed during 1980-2012, we analyse a set of established patent indicators that capture different aspects of the invention process. Technological heterogeneity is controlled for by comparing green and non-green technologies within similar narrow technological domains. Green technologies are found to be more complex and radical than non-green ones and to have a larger and more pervasive impact on subsequent inventions. However, the results show a variety of distinctive patterns with respect to the knowledge dimension considered. We derive some important policy implications.
    Keywords: environmental inventions, patent data, knowledge recombination, knowledge impact
    JEL: O33 O34 Q55
    Date: 2018–04
  10. By: Quatraro, Francesco; Scandura, Alessandra (University of Turin)
    Abstract: This work investigates the generation of green technologies (GTs) in Italian NUTS 3 regions across time, by focusing on the knowledge generation mechanisms underlying the creation of green patents. Firstly, we hypothesize that inventions in non-green technological domains positively influence the generation of GTs, because the latter occur as the outcome of a recombination process among a wide array of technological domains. Secondly, we hypothesise that the involvement of academic inventors in patenting activity bears positive effects on the generation of GTs, because they are able to manage the recombination across different technological domains. Thirdly, we explore the interaction effect between academic inventors’ involvement and non-green technologies to investigate whether the former are especially relevant in presence of higher or lower levels of the latter. We estimate zero-inflated negative binomial, spatial durbin and logistic regressions on a dataset of 103 Italian NUTS 3 regions for which we collected patent and regional data for the time span 1998-2009. The results suggest that both academic inventors and spillovers from polluting technologies bear positive direct effects on the generation of GTs; moreover, we find that academic inventors compensate for low levels of spillovers.
    Date: 2018–04

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