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on Technology and Industrial Dynamics |
| By: | Livio Romano (Centro Studi Confindustria, Italy) |
| Abstract: | This paper provides first empirical evidence of the joint effects that innovation strategies and human resource management practices exert on firm growth. By exploiting unique information from a large sample of Italian manufacturing companies in the very recent years, it shows that investing in technology and implementing performance-based pay policies are both positively associated with a significant turnover, employment and labor productivity growth premium. However, their joint adoption does not necessarily sum the two effects. In particular, performance-based rewards boost growth of non-innovators and of firms pursuing relatively simple innovation strategies, centered around the acquisition of embodied technology. For firms strongly relying on R&D as an additional lever for product and process upgrading, the estimated effect of having in place monetary incentive mechanisms is null or even negative. |
| Keywords: | Heterogeneity, Innovation, Management Practices, Firm Growth |
| Date: | 2018–04 |
| URL: | http://d.repec.org/n?u=RePEc:ipt:wpaper:201803&r=tid |
| By: | Giovanni Dosi (Laboratory of Economics and Management); Andrea Roventini (Laboratory of Economics and Management (LEM)); Emmanuele Russo (Scuola Superiore Sant'Anna) |
| Abstract: | In this paper we present a multi-country, multi-industry agent-based model investigating the different growth patterns of interdependent economies. Each country features a Schumpeterian engine of endogenous technical change which interacts with Keyneasian/Kaldorian demand generation mechanisms. National growth trajectories are driven by firms’ accumulation of technological knowledge, which in turn also leads to emergent specialization patterns in different industries. Interactions among economies occur via trade flows, stemming from the competition of firms in international markets. Simulation results show the emergence of persistent income divergence among countries leading to polarization and club formation. Moreover, each country experiences a structural transformation of its productive structure during the development process. Such dynamics results from firm-level virtuous (or vicious) cycles between knowledge accumulation, trade performances, and growth dynamics. The model accounts for a rich ensemble of empirical regularities at macro, meso and micro levels of aggregation. |
| Keywords: | Endogenous growth; Structural change ; Technology gaps; Global divergence; Absolute advantages; Agent based models |
| JEL: | F41 F43 O4 O3 |
| Date: | 2018–01 |
| URL: | http://d.repec.org/n?u=RePEc:spo:wpmain:info:hdl:2441/46k9rkvut99i7qnn4vqm25t53b&r=tid |
| By: | Kun Jiang; Wolfgang Keller; Larry D. Qiu; William Ridley |
| 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. |
| JEL: | F23 O31 O34 |
| Date: | 2018–03 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:24455&r=tid |
| By: | Lionel Nesta (Observatoire français des conjonctures économiques); Elena Verdolini; Francesco Vona (Observatoire français des conjonctures économiques) |
| 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 commandand-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: | 2018–01 |
| URL: | http://d.repec.org/n?u=RePEc:spo:wpmain:info:hdl:2441/2qaasbmk6u8cj8maoa30ls1roi&r=tid |
| By: | Benjamin Montmartin (Observatoire français des conjonctures économiques); Marcos Herrera (National University of Salta (Argentine) (CONICET)); Nadine Massard (Université Grenoble Alpes (UGA)) |
| Abstract: | Based on a spatial extension of an R&D investment model, this paper measures the macroeconomic impact of the French R&D policy mix on business R&D using regional data. Our measure takes into account not only the direct effect of policies but also indirect effects generated by the existence of spatial interaction between regions. Using a unique database containing information on the levels of various R&D policy instruments received by firms in French NUTS3 regions over the period 2001-2011, our estimates of a spatial Durbin model with structural breaks and fixed effects reveal the existence of a negative spatial dependence among R&D investments in regions. In this context, while a-spatial estimates would conclude that all instruments have a crowding-in effect, we show that national subsidies are the only instrument that is able to generate significant crowding-in effects. On the contrary, it seems that the design, size and spatial allocation of funds from the other instruments (tax credits, local subsidies, European subsidies) lead them to act (in the French context) as beggar-thy-neighbor policies. |
| Keywords: | Policy mix evaluation; R&D investment; Spatial panel; French Nuts3 regions |
| JEL: | H25 O31 O38 |
| Date: | 2018–03 |
| URL: | http://d.repec.org/n?u=RePEc:spo:wpmain:info:hdl:2441/7rrsl07p559bjr85tr7hsft1o9&r=tid |
| By: | Emin M. Dinlersoz; Nathan Goldschlag; Amanda Myers; Nikolas Zolas |
| Abstract: | This paper reports on the construction of a new dataset that combines data on trademark applications and registrations from the U.S. Patent and Trademark Office with data on firms from the U.S. Census Bureau. The resulting dataset allows tracking of various activity related to trademark use and protection over the life-cycle of firms, such as the first application for a trademark registration, the first use of a trademark, and the renewal, assignment, and cancellation of trademark registrations. Facts about firm-level trademark activity are documented, including the incidence and timing of trademark registration filings over the firm life-cycle and the connection between firm characteristics and trademark applications. We also explore the relation of trademark application filing to firm employment and revenue growth, and to firm innovative activity as measured by R&D and patents. |
| Date: | 2018–04 |
| URL: | http://d.repec.org/n?u=RePEc:cen:wpaper:18-22&r=tid |
| By: | Pierre Azoulay; Benjamin F. Jones; J. Daniel Kim; Javier Miranda |
| Abstract: | Many observers, and many investors, believe that young people are especially likely to produce the most successful new firms. We use administrative data at the U.S. Census Bureau to study the ages of founders of growth-oriented start-ups in the past decade. Our primary finding is that successful entrepreneurs are middle-aged, not young. The mean founder age for the 1 in 1,000 fastest growing new ventures is 45.0. The findings are broadly similar when considering high-technology sectors, entrepreneurial hubs, and successful firm exits. Prior experience in the specific industry predicts much greater rates of entrepreneurial success. These findings strongly reject common hypotheses that emphasize youth as a key trait of successful entrepreneurs. |
| Date: | 2018–04 |
| URL: | http://d.repec.org/n?u=RePEc:cen:wpaper:18-23&r=tid |
| By: | Gorodnichenko, Yuriy; Revoltella, Debora; Svejnar, Jan; Weiss, Christoph |
| 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: | economic growth.; firm-specific factors; Marginal products; resource allocation |
| JEL: | D22 D24 O12 O47 O52 |
| Date: | 2018–03 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:12821&r=tid |
| By: | Alexander Konon; Michael Fritsch; Alexander S. Kritikos |
| Abstract: | We analyze whether start-up rates in different industries systematically change with business cycle variables. Using a unique data set at the industry level, we mostly find correlations that are consistent with counter-cyclical influences of the business cycle on entries in both innovative and non-innovative industries. Entries into the largescale industries, including the innovative part of manufacturing, are only influenced by changes in the cyclical component of unemployment, while entries into small-scale industries, like knowledge intensive services, are mostly influenced by changes in the cyclical component of GDP. Thus, our analysis suggests that favorable conditions in terms of high GDP might not be germane for start-ups. Given that both innovative and non-innovative businesses react counter-cyclically in ‘regular’ recessions, business formation may have a stabilizing effect on the economy. |
| Keywords: | New business formation, entrepreneurship, business cycle, manufacturing, services, innovative industries |
| JEL: | E32 L16 L26 R11 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwwpp:dp1732&r=tid |
| 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, firms, 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 difficulties of estimating an overall contribution for each mechanism. Toward that end, we discuss how further analysis of these trends might yield sharper insights. |
| JEL: | F1 J2 J6 O33 |
| Date: | 2018–04 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:24490&r=tid |
| By: | Czarnitzki, Dirk; van Criekingen, Kristof |
| Abstract: | We contribute to the economic literature on patent litigation by taking a new perspective. In the past, scholars mostly focused on specific litigation cases at the patent level and related technological characteristics to the event of litigation. However, observing IP disputes suggests that not only technological characteristics may trigger litigation suits, but also the market positions of firms, and that firms dispute not only about single patents but often about portfolios. Consequently, this paper examines the occurrence of IP litigation cases in Belgian firms using the 2013 Community Innovation Survey with supplemental information on IP litigation and patent portfolios. The rich survey information regarding firms' general innovation strategies enables us to introduce market-related variables such as sales with new products as well as sales based mainly on imitation and incremental innovation. Our results indicate that when controlling for firms' IP portfolio, the composition of turnover in terms of innovations and imitations has additional explanatory power regarding litigation propensities. Firms with a high turnover from innovations are more likely to become plaintiffs in court. Contrastingly, firms with a high turnover from incremental innovation and imitation are more likely to become defendants in court, and, moreover, are more likely to negotiate settlements outside of court. |
| Keywords: | IP litigation,patenting,innovation,imitation |
| JEL: | O31 O34 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:18018&r=tid |
| By: | Martin Backfisch (DHBW CAS) |
| Abstract: | Within the last decades, there have been many technological and regulatory changes in the pharmaceutical industry. Some of these developments facilitate the innovative activities of large firms, while others foster small firms. It is therefore surprising that the implications of these changes in the pharmaceutical industry have not often been studied empirically. We contribute to the question of firm size and innovativeness in the pharmaceutical industry in presenting a brief review of the literature on innovative activities with a focus on the relation of different firm sizes in the pharmaceutical industry and present own empirical findings. Our results with project data from a broad range of firms show that the innovative activities of small firms measured by the share of their projects on all research projects have been rising strongly between 1989 and 2010. Further, the share of small firms on new drugs has been constantly increasing in this period. On the other hand, project success rates are lowest for small firms, while the rate of projects already discontinued in the preclinical phase is highest for them. We discuss these results and find that the reasons behind these developments are crucial to understand the innovative performance of the industry within the last 20 years. |
| Keywords: | pharmaceutical R&D; drug development; success rates; firm size |
| JEL: | O32 L65 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:mar:magkse:201813&r=tid |
| By: | Arouri, Hassan; Ben Youssef, Adel; Quatraro, Francesco; Vivarelli, Marco |
| Abstract: | The aim of this paper is to investigate the growth dynamics of young small firms (in contrast with larger and older incumbents) in a developing country context, using a unique and comprehensive dataset of non-agricultural Tunisian companies. Our results suggest that significant differences between young and mature firms can be found as far as the drivers of their growth are concerned. The key finding being that - while consistently with the extant literature Gibrat’s law is overall rejected - the negative impact of the initial size is significantly larger for young than mature firms. This result has interesting policy implications: since smaller young firms are particularly conducive to employment generation, they can be considered good candidate for targeted accompanying policies addressed to sustain their post-entry growth. |
| Keywords: | firm’s growth,young firms,Gibrat’s law,Tunisia |
| JEL: | O12 L26 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:glodps:197&r=tid |
| By: | Iain M. Cockburn; Rebecca Henderson; Scott Stern |
| Abstract: | Artificial intelligence may greatly increase the efficiency of the existing economy. But it may have an even larger impact by serving as a new general-purpose “method of invention” that can reshape the nature of the innovation process and the organization of R&D. We distinguish between automation-oriented applications such as robotics and the potential for recent developments in “deep learning” to serve as a general-purpose method of invention, finding strong evidence of a “shift” in the importance of application-oriented learning research since 2009. We suggest that this is likely to lead to a significant substitution away from more routinized labor-intensive research towards research that takes advantage of the interplay between passively generated large datasets and enhanced prediction algorithms. At the same time, the potential commercial rewards from mastering this mode of research are likely to usher in a period of racing, driven by powerful incentives for individual companies to acquire and control critical large datasets and application-specific algorithms. We suggest that policies which encourage transparency and sharing of core datasets across both public and private actors may be critical tools for stimulating research productivity and innovation-oriented competition going forward. |
| JEL: | L1 |
| Date: | 2018–03 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:24449&r=tid |
| By: | Gianluca Orsatti; Valerio Sterzi |
| Abstract: | The recent upsurge of patent litigation cases initiated by patent assertion entities (PAEs) in the U.S. has led to an intense debate about their effect on innovation performances and on the IP system functioning. We contribute to this debate by providing original evidence based on the patenting activity of PAEs in Europe, a region where the patent assertion landscape is growing rapidly and the imminent introduction of the Unified Patent Court and the Unitary Patent will upset the current schemes. Relying on EPO (European Patent Office) data on patent transfers and patent citations, our results show that PAEs acquire patents with high average technological quality. They may thus increase liquidity in the patent market and enhance its efficiency. However, after a transfer occurs, patents transferred to PAEs receive significantly fewer citations. This suggests that producing companies whose business makes their technologies close to the ones acquired by PAEs may perceive an augmented risk of being sued. As a consequence, they reduce their innovative effort in fields populated by PAEs and this reflects into lower citations flowing towards PAEs’ acquired patents. These results are robust to different measures of citations considered and to different econometric techniques. |
| Keywords: | Market for technology; Patent assertion entities; Patent trolls; Patent intermediaries; Patent citations; Innovation. |
| JEL: | O31 O34 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:grt:wpegrt:2018-08&r=tid |