nep-tid New Economics Papers
on Technology and Industrial Dynamics
Issue of 2019‒02‒04
ten papers chosen by
Fulvio Castellacci
Universitetet i Oslo

  1. Structural Changes and Sustainability. A Selected Review of the Empirical Evidence By Maria Savona; Tommaso Ciarli
  2. The Impact of Automation in Developed Countries By Alejandro Micco
  3. Technological Unemployment Revisited: Automation in a Search and Matching Framework By Cords, Dario; Prettner, Klaus
  4. Sources and determinants of responsible innovations: occupational health and safety in italian firms By Marialuisa Divella; Alessandro Sterlacchini
  5. Timing of R&D Decisions and Output Subsidies in a Mixed Duopoly with Spillovers By Lee, Sang-Ho; Muminov, Timur; Chen, Jiaqi
  6. What do we know about changing economic activity of firms? By Pandey, Radhika; Sapre. Amey; Sinha, Pramod
  7. Relatedness and the Resource Curse - Is there a liability of relatedness? By Rune Dahl Fitjar; Bram Timmermans
  8. The Economic Complexity of US Metropolitan Areas By Benedikt S. L. Fritz; Robert A. Manduca
  9. Predicting innovative firms using web mining and deep learning By Kinne, Jan; Lenz, David
  10. CONDITIONS FOR INNOVATION IN KIBS: EVIDENCE FROM RUSSIA By Nikolay Chichkanov; Ian Miles; Veronika Belousova

  1. By: Maria Savona (SPRU, University of Sussex, UK); Tommaso Ciarli (SPRU, Univeristy of Sussex, UK)
    Abstract: The paper offers a review of selected topics in the empirical literature on structural change and sustainability. We focus on aspects of structural change that directly affect emissions and energy intensity: changes of the sectoral composition of economies, trade and international fragmentation of production, technological change and innovation, and demand. We identify several empirical facts. First, only a few countries have experienced a decoupling between growth and emissions, due to proportionately faster growth rather than greater energy efficiency. Second, the long-term shift from manufacturing to services has not led, in all cases, to the de-materialisation of economies and a lower environmental burden. Exploitation of energy efficiency increases depends on the ability of the service sectors to incorporate technical changes to reduce energy intensity. Third, global trade and energy and emissions intensity trends support the pollution haven hypothesis, which predicts displacement of the environmental burden from developed to emerging countries. The pursuit by developing countries of a long-term strategy of trading jobs for emissions is likely to exacerbate the asymmetry related to emissions intensities between developed and less developed economies. The review should inform debate on environmental policy within the broader context of innovation and development policies. Classification-JEL; O3; O44; Q55
    Keywords: Structural change; sustainable development; tertiarisation; de-materialisation; pollution haven hypothesis
    Date: 2019–01
  2. By: Alejandro Micco
    Abstract: The digital era is reshaping labor markets. Until now, this has been a developed country type of development. Developing countries, and in particular, Latin American economies are behind in terms of the adoption of labor-replacing technologies. But this delay does not mean these technologies are not having an impact on LAC. New technologies are reshaping trade, and therefore are already affecting developing countries through this channel. We study the impact of automation process in 19 lead countries on Latin American Exports to these nations. We find that imports of lead countries in sectors prone to adopt labor-replacing technologies grew around 40% less than others sectoral imports from LAC in the last 14 years.
    Date: 2019–01
  3. By: Cords, Dario; Prettner, Klaus
    Abstract: Will low-skilled workers be replaced by automation? To answer this question, we set up a search and matching model that features two skill types of workers and includes automation capital as an additional production factor. Automation capital is a perfect substitute for low-skilled workers and an imperfect substitute for high-skilled workers. Using this type of model, we show that the accumulation of automation capital decreases the labor market tightness in the low-skilled labor market and increases the labor market tightness in the high-skilled labor market. This leads to a rising unemployment rate and falling wages of low-skilled workers and a falling unemployment rate and rising wages of high-skilled workers. In a cali- bration to German data, we show that one additional industrial robot causes a loss of 1.66 low-skilled manufacturing jobs, whereas the additional robot creates 3.42 high-skilled manufacturing jobs. Thus, overall employment even rises with automation.
    Keywords: unemployment,automation,job search,technological progress,inequality,skill premium
    JEL: C78 J63 J64 O33
    Date: 2019
  4. By: Marialuisa Divella (Department of Economics and Social Sciences, Universita' Politecnica delle Marche); Alessandro Sterlacchini (Department of Economics and Social Sciences, Universita' Politecnica delle Marche)
    Abstract: This paper provides a micro-econometric analysis of the factors facilitating the introduction of responsible innovations by firms, with a focus on those aimed at improving occupational health and safety. These innovations have been rarely investigated with quantitative methods, especially if compared to those aimed at protecting the environment. Accordingly, we also assess whether firms pursuing health and safety innovations are also those ascribing high importance to the reduction of environmental impacts. The evidence provided by using firm-level data taken from the Italian Community Innovation Surveys highlights the key role played by some external sources of knowledge and internal human resource practices for the achievement of responsible innovations. Many similarities but also important differences between firms emerge, according to whether they are committed to health and safety or environmental innovation.
    Keywords: responsible innovation, occupational health and safety; environment protection.
    JEL: O31 Q55
    Date: 2019–01
  5. By: Lee, Sang-Ho; Muminov, Timur; Chen, Jiaqi
    Abstract: This study considers a mixed duopoly with research spillovers and examines the interplay between firms’ R&D decisions and government’s output subsidies. We investigate and compare the timing of the game between ex-ante R&D and ex-post R&D decisions where the R&D decisions are chosen before the output subsidy is determined in the former case while the order is reversed in the latter case. We show that the equilibrium outcomes can be opposite between the two cases because both public and private firms have different objectives in choosing R&D investments, but the spillovers rate is a key factor that determines their incentives. In particular, we show that the output subsidy is smaller (larger) and the welfare is larger (smaller) under the ex-ante R&D decisions for a higher (lower) degree of spillovers rate. Finally, privatization increases the welfare in both cases only when spillovers rate is weak.
    Keywords: Mixed duopoly; Research spillovers, Ex-ante R&D; Ex-post R&D, Output subsidy
    JEL: H21 L13 L32
    Date: 2019–01–14
  6. By: Pandey, Radhika (National Institute of Public Finance and Policy); Sapre. Amey (National Institute of Public Finance and Policy); Sinha, Pramod (National Institute of Public Finance and Policy)
    Abstract: Identifiation of primary economic activity of firms is a prerequisite for compiling several macro aggregates. In this paper we take a statistical approach to understand the extent of changes in primary economic activity of firms over time and across different industries. We use the history of economic activity of over 46000 firms spread over 25 years from CMIE Prowess to identify the number of times firms change the nature of their business. Using the count of changes, we estimate Poisson and Negative Binomial regression models to gain predictability over changing economic activity across industry groups. We show that a Poisson model accurately characterizes the distribution of count of changes across industries and that firms with a long history are more likely to have changed their primary economic activity over the years. Findings show that classification can be a crucial problem in a large dataset like the MCA21 and can even lead to distortions in value addition estimates at the industry level.
    Keywords: Economic Activity ; Manufacturing ; India ; Poisson Distribution
    JEL: E00 E01
    Date: 2019–01
  7. By: Rune Dahl Fitjar; Bram Timmermans
    Abstract: The literature on relatedness emphasizes the benefits of co-location with related industries, as knowledge spillovers promote innovation and regional branching. However, resource competition between industries which rely on related capabilities has not largely been considered. The resource curse literature argues that resource competition produces adverse effects for other industries when extractive industries expand. However, this literature has not considered whether this depends on the relatedness between the resource industry and these other industries. This paper brings together these two strands of literature. We examine the relationship between the oil and gas industry in Norway and its related industries during a period of rising oil prices and an expansion of the oil and gas industries. We conduct the analysis at the national scale, as well as in the most oil-specialised region of Stavanger, in order to examine how these dynamics play out at a regional, as well as national level. An analysis of the labor flow between the petroleum and related industries using a Norwegian linked employer-employee database reveals that higher wages increase the likelihood of moving from related industries into petroleum, but reduce the likelihood of moving in the opposite direction. The petroleum industry recruits the most productive workers from related industries and returns its least productive workers. Consequently, we argue that relatedness is not an even playing field: There may be losers, as well as winners, from relatedness.
    Keywords: Relatedness, resource curse, petroleum, labour mobility, Norway
    JEL: R11
    Date: 2019–01
  8. By: Benedikt S. L. Fritz; Robert A. Manduca
    Abstract: We calculate measures of economic complexity for US metropolitan areas for the years 2007-2015 based on industry employment data. We show that the concept of economic complexity translates well from the cross-country to the regional setting, and is able to incorporate local as well as traded industries. The largest cities and the Northeast of the US have the highest average complexity, while traded industries are more complex than local-serving ones on average, but with some exceptions. On average, regions with higher complexity have a higher income per capita, but those regions also were more affected by the financial crisis. Finally, economic complexity is a significant predictor of within-decreases in income per capita and population. Our findings highlight the importance of subnational regions, and particularly metropolitan areas, as units of economic geography.
    Date: 2019–01
  9. By: Kinne, Jan; Lenz, David
    Abstract: Innovation is considered as a main driver of economic growth. Promoting the development of innovation through STI (science, technology and innovation) policies requires accurate indicators of innovation. Traditional indicators often lack coverage, granularity as well as timeliness and involve high data collection costs, especially when conducted at a large scale. In this paper, we propose a novel approach on how to create firm-level innovation indicators at the scale of millions of firms. We use traditional firm-level innovation indicators from the questionnaire-based Community Innovation Survey (CIS) survey to train an artificial neural network classification model on labelled (innovative/non-innovative) web texts of surveyed firms. Subsequently, we apply this classification model to the web texts of hundreds of thousands of firms in Germany to predict their innovation status. Our results show that this approach produces credible predictions and has the potential to be a valuable and highly cost-efficient addition to the existing set of innovation indicators, especially due to its coverage and regional granularity. The predicted firm-level probabilities can also directly be interpreted as a continuous measure of innovativeness, opening up additional advantages over traditional binary innovation indicators.
    Keywords: Web Mining,Web Scraping,R&D,R&I,STI,Innovation,Indicators,Text Mining,Natural Language Processing,NLP,Deep Learning
    JEL: O30 C81 C83
    Date: 2019
  10. By: Nikolay Chichkanov (National Research University Higher School of Economics); Ian Miles (National Research University Higher School of Economics); Veronika Belousova (National Research University Higher School of Economics)
    Abstract: The development of service industries in emerging economies has been attracting more attention in recent years, but to date there have been few studies of knowledge-intensive business services (KIBS) in these countries. (The main exception is the case of a specific sector – software and related Information Technology services, with most focus here being on India. KIBS as a whole have received little examination.) This paper aims to study how conditions for innovation influence innovation activities in KIBS in one of the largest emerging countries, Russia. The study draws on survey data from firms belonging to ten KIBS subsectors, based in major Russian cities in 2015. The results contrast with those generally reported in Western developed economies. In this particular emerging economy, firms experiencing negative market and knowledge conditions are actually more liable to undertake nontechnological innovations. We consider various explanations for this apparent anomaly. The institutional framework appears to be less essential for KIBS than has been earlier documented for manufacturing enterprises in Russia. Implications for innovation management and policy are outlined: both government and corporate, strategies here would benefit from more attention to these sectors
    Keywords: KIBS, conditions for innovation, emerging economies
    JEL: O30 O31
    Date: 2019

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