nep-tid New Economics Papers
on Technology and Industrial Dynamics
Issue of 2019‒01‒07
nine papers chosen by
Fulvio Castellacci
Universitetet i Oslo

  1. The Inverted-U Relationship between Credit Access and Productivity Growth By Philippe Aghion; Antonin Bergeaud; Gilbert Cette; Rémy Lecat; Hélène Maghin
  2. The Role of Obstacles to Innovation on Innovative Activities: an Empirical Analysis By Daniel Goya; Andrés Zahler
  3. Can productivity still grow in service-based economies?: Literature overview and preliminary evidence from OECD countries By Stéphane Sorbe; Peter Gal; Valentine Millot
  4. Eco-Innovation: Drivers, Barriers and Effects – A European Perspective By Sandra M. Leitner
  5. Techies, Trade, and Skill-Biased Productivity By James Harrigan; Ariell Reshef; Farid Toubal
  6. Innovation and Trade Policy in a Globalized World By Ufuk Akcigit; Sina T. Ates; Giammario Impullitti
  7. Does the high-tech enterprise certification policy promote innovation in China? By Liu, Huiling; Fei, Xing; Yakshtas, Kseniya; Li, Bo
  8. Understanding processes of path renewal and creation in thick specialized regional innovation systems. Evidence from two textile districts in Italy and Sweden By Chaminade, Cristina; Bellandi, Marco; Plechero, Monica; Santini, Erica
  9. Is the European automotive industry ready for the global electric vehicle revolution? By Gustav Fredriksson; Alexander Roth; Simone Tagliapietra; Reinhilde Veugelers

  1. By: Philippe Aghion; Antonin Bergeaud; Gilbert Cette; Rémy Lecat; Hélène Maghin
    Abstract: In this paper we identify two counteracting effects of credit access on productivity growth: on the one hand, better access to credit makes it easier for entrepreneurs to innovate; on the other hand, better credit access allows less efficient incumbent firms to remain longer on the market, thereby discouraging entry of new and potentially more efficient innovators. We first develop a simple model of firm dynamics and innovation-base growth with credit constraints, where the above two counteracting effects generate an inverted-U relationship between credit access and productivity growth. Then we test our theory on a comprehensive French manufacturing firm-level dataset. We first show evidence of an inverted-U relationship between credit constraints and productivity growth when we aggregate our data at sectoral level. We then move to firm-level analysis, and show that incumbent firms with easier access to credit experience higher productivity growth, but that they also experienced lower exit rates, particularly the least productive firms among them. To confirm our results, we exploit the 2012 Eurosystem's Additional Credit Claims (ACC) program as a quasi-experiment that generated exogenous extra supply of credits for a subset of incumbent firms.
    Keywords: inverted-u relationship, credit, eurosystem
    Date: 2018–12
  2. By: Daniel Goya; Andrés Zahler
    Abstract: We study the effect of different types of barriers to innovation (financial, demand, knowledge, market, cooperation, and regulatory barriers) on firm level innovation inputs and outputs. Using a pooled sample of three Chilean innovation surveys, based on an instrumental variables approach, we find that the probability of generating innovation outcomes is significantly reduced by demand and financial barriers. Regarding inputs for innovation, we find a clear negative relationship between financial and demand obstacles and the propensity to incur (non-R&D) innovation expenditures, but not with its intensity. We also provide evidence of heterogeneous effects across sectors, finding that knowledge obstacles are relevant for manufacturing and market structure obstacles for services, while demand and financial obstacles appear to matter across the board.
    Keywords: Financial and non-financial barriers to innovation, sectoral heterogeneity in innovation barriers, potential innovators, instrumental variables.
    JEL: D22 O31 O32
    Date: 2018–12
  3. By: Stéphane Sorbe; Peter Gal; Valentine Millot
    Abstract: Services employ an ever-increasing share of workers in all OECD countries. This trend is likely to continue as it reflects deep structural forces, such as increasing consumption of services with rising incomes and population ageing and the growing role of intangible assets. Services are very diverse, but overall tend to have weaker productivity levels and growth rates than manufacturing. As a result, the shift to services entails a moderate but persistent drag on productivity growth. Still, there are reasons to hope for a pick-up in service productivity in the future, including thanks to new technologies (e.g. digital platforms, artificial intelligence). This concerns both “knowledge intensive” services (e.g. information and communication) and less knowledge intensive ones (e.g. personal transport). Harnessing this productivity potential requires adjusting policies to foster innovation and efficient use of new technologies, enhance competitive forces by reducing information asymmetries, barriers to entry and switching costs, and increase the tradability of services within countries and across borders.
    Keywords: automation, measurement, online platforms, productivity, services, structural change
    JEL: E24 L80 O40
    Date: 2018–12–21
  4. By: Sandra M. Leitner (The Vienna Institute for International Economic Studies, wiiw)
    Abstract: This paper determines the key drivers, barriers and effects of eco-innovation, in comparison to innovation in general. It further distinguishes between different types of eco-innovations to better capture their heterogeneous nature. It uses two different data sets (1) the Community Innovation Survey 2014 (CIS-2014) for a large sample of EU Member States, further split up into three groups in accordance with their eco-innovation performance; (2) the German Mannheim Innovation Panel to address additional drivers the CIS-2014 is unable to capture. Results show that both R&D investments and complementary fixed capital investments are key drivers of eco-innovation, with differences across country groups. Results from the German sample further emphasise that expected future demand, rising costs for energy and other resources and the wish to improve one’s reputation and the need to meet industry standards help spur eco-innovation, while public policy is only of limited importance. In contrast, international market orientation turns out to be a barrier for eco-innovation. By and large, eco‑innovations also have a productivity-enhancing effect which is however lower as compared to innovations in general.
    Keywords: eco-innovation, demand pull, technology push, public policy, Europe
    JEL: Q55 O33 O38
    Date: 2018–12
  5. By: James Harrigan; Ariell Reshef; Farid Toubal
    Abstract: We study the impact of firm level choices of ICT, R&D, exporting and importing on the evolution of productivity and its bias towards skilled occupations. We use a novel measure of the propensity of a firm to engage in technology investment and adoption: its employment of workers with STEM (science, technology, engineering and math) skills and experience who we call “techies”. We develop a methodology for estimating firm level productivity that allows us to measure both Hicks-neutral and skill-augmenting technology differences, and apply this to administrative data on French firms in the entire private sector from 2009 to 2013. We find that techies and importing of intermediate inputs raise skill-biased productivity, while imports also raise Hicks-neutral productivity. We also find that higher firm-level skill biased productivity raises low-skill employment even as it raises the ratio of skilled to unskilled workers. This is because of the cost-reducing effect of higher productivity. The techie and trade effects are large, and can account for much of the aggregate increase in skilled employment from 2009 to 2013.
    Keywords: Productivity;Skill Bias;Skill Augmenting;Labor Demand;Outsourcing;Globalization;R&D;ICT
    JEL: D24 F16 J24
    Date: 2018–12
  6. By: Ufuk Akcigit; Sina T. Ates; Giammario Impullitti
    Abstract: How do import tariffs and R&D subsidies help domestic firms compete globally? How do these policies affect aggregate growth and economic welfare? To answer these questions we build a dynamic general equilibrium growth model where firm innovation endogenously determines the dynamics of technology, market leadership and trade flows, in a world with two large open economies at different stages of development. Firms R&D decisions are driven by (i) the defensive innovation motive, (ii) the expansionary innovation motive, and (iii) technology spillovers. The theoretical investigation illustrates that, statistically, globalization boosts domestic innovation through induced international competition. Accounting for transitional dynamics, we use our model for policy evaluation and compute optimal policies over different time horizons. The model suggests that the introduction of the Research and Experimentation Tax Credit in 1981 proves to be an effective policy response to foreign competition, generating substantial welfare gains in the long run. A counterfactual exercise shows that increasing tariffs as an alternative policy response improves domestic welfare only when the policymaker cares about the very short run, or when there is retaliation by the foreign economy. Protectionist measures generate large dynamic losses by distorting the impact of openness on innovation incentives and productivity growth. Finally our model predicts that a more globalized world entails less government intervention, thanks to innovation-stimulating effects of intensified international competition.
    Keywords: economic growth, short- and long-run gains from globalization, foreign technological catching-up, innovation policy, trade policy, competition
    JEL: F13 F43 O40
    Date: 2018–12
  7. By: Liu, Huiling; Fei, Xing; Yakshtas, Kseniya; Li, Bo
    Abstract: This study investigates the impacts of Chinese high-tech enterprise certification policy on enterprise innovation by exploiting the unique data of listed companies and their affiliates from 2006 to 2015. The authors exclude firms certified after year 2009 from the sample, because they may have exhibited R&D manipulation. The results show that high-tech enterprise certification can promote Chinese enterprise innovation, especially the innovation captured by invention patents. The results of a rich set of robustness tests all support this conclusion. Regarding the underlying mechanism, high-tech enterprise certification can influence enterprise innovation through tangible and intangible channels. The heterogeneity analysis shows that private enterprises, enterprises in industries with more competition, and equity-inspired enterprises benefit most from high-tech enterprise certification. This paper helps to scientifically evaluate the validity of Chinese innovation policy and contributes to a more comprehensive understanding of enterprise innovation's driving forces as well as the inconclusive relationship between government support and enterprise innovation.
    Keywords: high-tech enterprise certification,innovation,R&D manipulation
    JEL: O31 O32 O38
    Date: 2018
  8. By: Chaminade, Cristina (Lund University); Bellandi, Marco (University of Florence); Plechero, Monica (University of Florence); Santini, Erica (Fondazione per la Ricerca e l’Innovazione)
    Abstract: The type of regional innovation system (RIS) strongly affects possibilities of paths of industrial transformation. This paper argues that traditional manufacturing districts, corresponding to specialized RISs and characterised by various nuclei of specialization and know-how, may foster different trajectories in combination with extra-regional networks. In particular, the paper analyses the interplay between regional and national innovation systems, providing an overview of the effect that different multilevel dynamics have on local trajectories. The cases of the textile districts in Prato (Italy) and Borås (Sweden) show SRISs can display not only path extension but also path renewal and creation strategies.
    Keywords: path development; regional innovation system; textile; knowledge nuclei; innovation policy; industrial district
    JEL: O19 O30 R11 R12
    Date: 2018–12–13
  9. By: Gustav Fredriksson; Alexander Roth; Simone Tagliapietra; Reinhilde Veugelers
    Abstract: The automotive sector is currently at the centre of a global transformation, driven by four key trends - electrification, autonomous driving, sharing and connected cars. While each of these interconnected trends is already visible in daily life, their full deployment is not yet guaranteed, nor is the speed of take-up. This Policy Contribution investigates the position of the European automotive industry in a scenario in which electrification substantially progresses. The results are encouraging for Europe - EU companies entered the global electric vehicle race late, but on the basis of our analysis it is not yet too late for them to catch up and make the best of this change. European car manufacturers can rely on a large internal market, long experience in automotive manufacturing and a portfolio of research and development projects and patents that is diversified across various power-train technologies. But if Europe wants to succeed in the global electric vehicle race, its automotive industry will have to move into higher gear to meet the global – notably Chinese – competition. Nevertheless, industry needs the proper framework conditions as the basis for more ambitious investments in electrification – as examples such as Norway or China demonstrate. This Policy Contribution formulates a broad policy framework for deployment and production of electric vehicles in Europe, combining demand and supply-side instruments. Europe cannot follow China in the adoption of centrally-planned industrial policy measures. But it certainly can and should do more to stimulate the transformation of its automotive industry through more ambitious policies. On February 12, Bruegel is hosting an event on electric vehicles in European automotive industry, which will feature among others a presentation from the authors of this Policy Contribution. Click here to register.
    Date: 2018–12

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