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on Technology and Industrial Dynamics |
| By: | Dani Rodrik |
| Abstract: | Many of the exports of developing countries are channeled through global value chains (GVCs), which also act as conduits for new technologies. However, new capabilities and productive employment remain limited so far to a tiny sliver of globally integrated firms. GVCs and new technologies exhibit features that limit the upside and may even undermine developing countries’ economic performance. In particular, new technologies present a double whammy to low-income countries. First, they are generally biased towards skills and other capabilities. This bias reduces the comparative advantage of developing countries in traditionally labor-intensive manufacturing (and other) activities, and decreases their gains from trade. Second, GVCs make it harder for low-income countries to use their labor cost advantage to offset their technological disadvantage, by reducing their ability to substitute unskilled labor for other production inputs. These are two independent shocks that compound each other. The evidence to date, on the employment and trade fronts, is that the disadvantages may have more than offset the advantages. |
| Keywords: | GVCs, economic development, international trade |
| JEL: | O33 O40 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_7307&r=tid |
| By: | Michael Landesmann (The Vienna Institute for International Economic Studies, wiiw); Sandra M. Leitner (The Vienna Institute for International Economic Studies, wiiw) |
| Abstract: | Two Forces of ‘Globalisation’ and Their Impact on Labour Markets in Western Europe 2005-2014 This paper investigates with a joint approach the impact of immigration and different measures of ‘offshoring’ on the labour demand and demand elasticities of native workers in four different occupational groups managers/professionals, clerks, craft workers and manual workers. It shows that of all measures of globalisation considered immigration has the most consistent and strongest negative effect on the employment of native workers, particularly on managers/professionals, clerks and manual workers. The employment effects of offshoring differ by the measure used and are positive for craft workers but, in contrast to what is typically found in the literature, negative for the high-skilled group of managers/professionals. Furthermore, immigration and offshoring both impact on natives’ labour demand elasticities but the effect differs by occupational group. Thus, while the immigration of craft workers reduces labour demand elasticities for native craft workers, the immigration of managers/professionals and clerks has the opposite effect on native workers in the same occupations. Furthermore, we test for cross effects of migration and outsourcing between the different occupational groups. |
| Keywords: | offshoring, immigration, labour demand, labour demand elasticity, occupations |
| JEL: | F16 F22 |
| Date: | 2018–11 |
| URL: | http://d.repec.org/n?u=RePEc:wii:wpaper:156&r=tid |
| By: | Michele Battisti; Filippo Belloc; Massimo Del Gatto |
| Abstract: | We investigate the technological dimension of productivity, presenting an empirical methodology based on mixture models to disentangle the labor productivity differences associated with the firm's choice of technology (BTFP) and those related to the rm's ability to exploit the adopted technology (WTFP). The estimation endogenously determines the number of technologies (in the sector) and degree of technology sharing across firms (i.e., for each firm, the probability of using a given technology). By using comparable data for about 35,000 rms worldwide distributed across 22 (two-digit) sectors, we show BTFP to be at least as important as WTFP in explaining the labor productivity gaps across firms. Intra-sectoral and inter-sectoral heterogeneity is substantial and, even in sectors in which BTFP dominates on average, we nd a considerable number of firms for which labor productivity is mostly determined by the ability to use the adopted technology. Hence, dissecting the labor productivity gaps is crucial to achieving more targeted innovation policies. The estimated number of technologies ranges from one (in only three industries) to five, being three in most cases. The suggested estimation strategy takes simultaneity into account. The BTFP measure is unaffected by omitted price bias. The presence of BTFP dispersion can be associated with the action of frictions preventing firms from switching to superior and more productive technologies. Eliminating BTFP does not eliminate misallocation. |
| Keywords: | TFP, technology adoption, production function estimation, mixture models |
| JEL: | D24 O33 C29 |
| Date: | 2018–11 |
| URL: | http://d.repec.org/n?u=RePEc:usi:wpaper:789&r=tid |
| By: | Mattia Di Ubaldo (Economic and Social Research Institute); Martina Lawless (Economic and Social Research Institute); Iulia Siedschlag (Economic and Social Research Institute) |
| Abstract: | As well as their direct effects on output and employment, the attraction of foreign direct investment is sometimes argued to provide further economic benefits through spillover effects that potentially increase the productivity performance of domestic firms. Empirical evidence on these indirect effects has however tended to be mixed. This paper uses Irish firm-level data on both manufacturing and services firms to re-examine and update evidence on intra-industry and intra-region spillovers and then extends the previous research by examining if spillovers are more likely to occur through supply chain linkages. In addition, we consider the heterogeneity of investors and allow the spillover effects to differ for foreign affiliates owned by EU and non-EU based parent companies. Finally, we examine the role of domestic firms’ absorptive capacity in conditioning the effects of spillovers from multinationals on their productivity. Overall, we find limited evidence or a negative link between the presence of foreign-owned firms and the productivity of domestic firms in the same industry or the same region. Examining forward and backward linkages through supply chains indicates that on average, selling to foreign-owned firms had a positive effect while buying from foreign owned firms had a negative effect on the average productivity of domestic firms. Finally, considering the absorptive capacity of domestic firms and allowing the spillover effects to differ depending on the origin of the parent companies, we find that the positive productivity spillovers come from supply chain linkages between domestic firms investing in R&D and foreign affiliates of multinationals with headquarters based outside the EU. |
| Keywords: | absorptive capacity, Foreign direct investment, productivity spillovers |
| JEL: | D22 F23 O33 |
| Date: | 2018–11–30 |
| URL: | http://d.repec.org/n?u=RePEc:oec:ecoaac:16-en&r=tid |
| By: | Lars Mewes |
| Abstract: | Cities are epicenters for invention. Scaling analyses have verified the productivity of cities and demonstrate a super-linear relationship between cities? population size and invention performance. However, little is known about what kinds of inventions correlate with city size. Is the productivity of cities only limited to invention quantity? We shift the focus on the quality of idea creation by investigating how cities influence the art of knowledge combination. Atypical combinations introduce novel and unexpected linkages between knowledge domains. They express creativity in inventions and are particularly important for technological breakthroughs. Our study of 174 years of invention history in metropolitan areas in the United States (US) reveals a super-linear scaling of atypical combination with population size. The observed scaling grows over time indicating a geographic shift towards cities since the early 20th century. The productivity of large cities is thus not only restricted to quantity, but also includes quality in invention processes. |
| Keywords: | Atypical Knowledge Combination, Cities, Historic Patent Data, Invention; Scaling Analysis |
| JEL: | O30 O31 O33 R11 |
| Date: | 2018–11 |
| URL: | http://d.repec.org/n?u=RePEc:egu:wpaper:1841&r=tid |
| By: | Andrea Morrison |
| Abstract: | In this paper we study the impact of spinoff generation events on the performance of parent organizations. Using data from the Italian motorcycle industry (1893-1993), we find that parents have higher survival chances after a spinoff generation event, confirming results from previous studies about other manufacturing industries. We also show that these enhanced survival patterns differ across time and space, and we link these effects to institutional differences: spinoff generation did not determine any survival advantage for parent firms in the Fascist era and in the Turin cluster, while it had an additional positive effect in the Motorvalley cluster. The paper contributes to the literature on spinoff generation and employee mobility and adds to the debate on the role of institutions in evolutionary economic geography, by showing the importance of contextual factors for the performance of parent firms. |
| Keywords: | Spinoffs, Employee entrepreneurship, Parents, Institutions, Evolutionary economic geography |
| JEL: | B52 L26 O18 R11 |
| Date: | 2018–11 |
| URL: | http://d.repec.org/n?u=RePEc:egu:wpaper:1840&r=tid |
| By: | Onno Kuik (IVM, VU Amsterdam); FrŽdŽric Branger (CIRED); Philippe Quirion (CIRED, CNRS) |
| Abstract: | Pioneering domestic environmental regulation may foster the creation of new eco-industries. These industries could benefit from a competitive advantage in the global market place. This article examines empirical evidence of the impact of domestic renewable energy policies on the export performance of renewable energy products (wind and solar PV). We use a gravity model of international trade with a balanced dataset of 49 (for wind) and 40 (for PV) countries covering the period 1995-2013. The stringency of renewable energy policies are proxied by installed capacities. Our econometric model shows evidence of competitive advantage positively correlated with domestic renewable energy policies, sustained in the wind industry but brief in the solar PV industry. We suggest that the reason for the dynamic difference lies in the underlying technologies involved in the two industries. |
| Keywords: | Competitive Advantage, Gravity Model, Wind Industry, Solar PV Industry, Green Growth |
| JEL: | F14 K32 Q42 |
| Date: | 2018–10 |
| URL: | http://d.repec.org/n?u=RePEc:fae:ppaper:2018.07&r=tid |
| By: | Dominique Guellec (OECD); Caroline Paunov (OECD) |
| Abstract: | This paper looks at how digitalisation is transforming innovation, and the consequent need for innovation policies to adapt. The paper shows that the digital transformation affects the economics of information and knowledge, in particular pricing and allocation. The reduced costs of producing and handling information and knowledge and the increased fluidity change innovation dynamics. Data have become a core input for innovation. Other changes include more opportunities for versioning; an acceleration in innovation, more experimentation and collaboration; servitisation; and higher risk associated with these general purpose technologies. The digital transformation also has economy-wide effects in terms of business dynamics, market structures and distribution. In view of this transformation, changes to innovation policy are required in the digital age. Innovation policies need to address data access issues; become more agile; promote open science, data sharing and co-operation among innovators; and review competition for innovation and intellectual property policy frameworks. |
| Keywords: | acceleration of innovation, digital innovation, digital technologies, economics of knowledge and information, innovation policy, market structures, servitisation |
| JEL: | L20 O31 O33 |
| Date: | 2018–11–13 |
| URL: | http://d.repec.org/n?u=RePEc:oec:stiaac:59-en&r=tid |