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on Technology and Industrial Dynamics |
| By: | Joelle Noailly; Roger Smeets |
| Abstract: | The objective of this study is to examine the impact of firms’ financing constraints on innovation activities in renewable (REN) versus fossil-fuel (FF) technologies. Our empirical methodology relies on the construction of a firm-level dataset for 1,300 European firms over the 1995-2009 period combining balance-sheet information linked with patenting activities in REN and FF technologies. We estimate the importance of the different types of financing (e.g. cash flow, long-term debt, and stock issues) on firms’ patenting activities for the different samples of firms. We use count estimation techniques commonly used for models with patent data and control for a large set of firm-specific controls and market developments in REN and FF technologies. We find evidence for a positive impact of internal finance on patenting activities for the sample of firms specialized in REN innovation, while we find no evidence of this link for other firms, such as firms conducting FF innovation or large mixed firms conducting both REN and FF innovation. Hence, financing constraints matter for firms specialized in REN innovation but not for other firms. Our results have important implications for policymaking as the results emphasize that small innovative newcomers in the field of renewable energy are particularly vulnerable to financing constraints. |
| Keywords: | R&D;.; Financing constraints; renewable energy |
| JEL: | O14 O33 Q41 Q42 |
| Date: | 2019–01–31 |
| URL: | http://d.repec.org/n?u=RePEc:gii:ciesrp:cies_rp_58&r=all |
| By: | Peter Gal; Giuseppe Nicoletti; Theodore Renault; Stéphane Sorbe; Christina Timiliotis |
| Abstract: | This paper assesses how the adoption of a range of digital technologies affects firm productivity. It combines cross-country firm-level data on productivity and industry-level data on digital technology adoption in an empirical framework that accounts for firm heterogeneity. The results provide robust evidence that digital adoption in an industry is associated to productivity gains at the firm level. Effects are relatively stronger in manufacturing and routine-intensive activities. They also tend to be stronger for more productive firms and weaker in presence of skill shortages, which may relate to the complementarities between digital technologies and other forms of capital (e.g. skills, organisation, or intangibles). As a result, digital technologies may have contributed to the growing dispersion in productivity performance across firms. Hence, policies to support digital adoption should go hand in hand with creating the conditions to enable the catch-up of lagging firms, notably by easing access to skills. |
| Keywords: | cloud computing, digitalisation, high-speed internet, ICT, productivity, skills |
| JEL: | D24 J24 O33 |
| Date: | 2019–02–12 |
| URL: | http://d.repec.org/n?u=RePEc:oec:ecoaaa:1533-en&r=all |
| 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 firm'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 firms 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 find 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: | 2019–01 |
| URL: | http://d.repec.org/n?u=RePEc:nsr:escoed:escoe-dp-2019-02&r=all |
| By: | Paulo Cesar Morceiro; Joaquim Jose Martins Guilhoto |
| Abstract: | In Brazil and in the world, diagnoses of deindustrialization are concentrated in aggregate manufacturing, so policies can be ineffective if deindustrialization has a sector-specific component. This study quantifies and analyzes deindustrialization for the individualized manufacturing sectors. In order to do so, unpublished series from 1970 to 2016 of the manufacturing sectors' share in the Brazilian GDP were created based on official IBGE data. The results show that the manufacturing sectors have deindustrialized at different intensities and periods of aggregate manufacturing, and a sectoral approach reveals traces ignored by the literature on the quality of deindustrialization. It is concluded that the Brazilian deindustrialization is normal (and expected) for the labor-intensive manufacturing sectors, but premature (and undesirable) for the technology-intensive sectors. Therefore, it has negative consequences for the future scientific and technological development of the country. |
| Keywords: | Sectoral deindustrialization, industrial development, sectoral heterogeneity, structural change |
| JEL: | O14 L6 L16 |
| Date: | 2019–01–30 |
| URL: | http://d.repec.org/n?u=RePEc:spa:wpaper:2019wpecon1&r=all |
| By: | Jan Witajewski-Baltvilks; Carolyn Fischer |
| Abstract: | If one region of the world switches its research effort from dirty to clean technologies, will other regions follow? To investigate this question we built a North-South model that combines insights from directed technological change and quality ladder endogenous growth models. We allow researchers in the South to create business-stealing innovations. We found that (i) after the North switches from dirty to clean technologies, the growing value of clean markets will motivate technology firms in the South to follow the switch; however this result is conditional on the North being sufficiently large. (ii) If the two regions invest research effort to different sectors and the outputs of the two sectors are gross substitutes, then the long run growth rates in both regions are smaller than if the global research effort were to be invested in one sector. (iii) If the North switches to R&D in clean technologies, the benevolent central planner in the South would ensure that all South R&D switches too, unless the planner’s discount rate is high. |
| Keywords: | directed technological change, green growth, endogenous growth model, cross-country spillovers, unilateral climate policy, green R&D subsidies |
| JEL: | O33 O41 O44 Q55 Q56 |
| Date: | 2018–12 |
| URL: | http://d.repec.org/n?u=RePEc:ibt:wpaper:wp102018&r=all |
| By: | Konrad Adler; JaeBin Ahn; Mai Chi Dao |
| Abstract: | We document a broad-based trend in rising cash holdings of firms across major industrialized countries over the last two decades, a trend that is most pronounced for firms engaged strongly in R&D activities. Our contributions to the literature are twofold. First, we develop a simple model that brings together the insights from modern trade theory (Melitz, 2003) with those of contract theory in corporate finance (Holmström and Tirole, 1998) to show that increased openness to trade can result in rising returns to innovation and in turn greater demand for cash as firms insure against innovation-induced liquidity risk. Second, we derive sharp empirical predictions and find supporting evidence for them using firm-level data across major G7 countries during 1995-2014, a period that saw an unprecedented rise in globalization and business innovation. |
| Date: | 2019–01–18 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:19/17&r=all |
| By: | Benos, Nikos; Tsiachtsiras, Georgios |
| Abstract: | In this paper we explore the effect of innovation on income inequality using annual country panel data for 29 countries. We demonstrate that innovation activities reduce personal income inequality by matching patents from the European Patent Office with their inventors. Our findings are supported by instrumental variable estimations to tackle endogeneity. The results are also robust with respect to various inequality measures, alternative quality indexes of innovation, truncation bias, the use of patent applications together with granted patents and different ways to split or allocate patents. |
| Keywords: | top income inequality, overall inequality, innovation, citations, knowledge spillovers |
| JEL: | D63 O30 O31 O33 O34 O40 O47 |
| Date: | 2019–02–07 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:92050&r=all |
| By: | Helm, Ines (Dept. of Economics, Stockholm University) |
| Abstract: | Using a broad set of national industry trade shocks, I employ a novel approach to estimate agglomeration effects by exploiting within industry variation in indirect exposure to the other local industries’ (national) trade shocks across local labor markets. This variation stems from differences in local industry composition and allows to test for the existence of heterogeneous agglomeration effects across industries. I find considerable employment spillovers from other tradable industries’ trade shocks and even stronger effects within the same broad sector. Spillovers are larger for industries employing similar workers and are triggered predominantly by shocks to high technology industries. |
| Keywords: | Agglomeration; Local Labor Markets; Trade Shocks |
| JEL: | F16 J20 R11 R12 |
| Date: | 2019–01–10 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:sunrpe:2019_0001&r=all |
| By: | Sotiris Blanas (National Bank of Belgium) |
| Abstract: | This paper is the first to study the distinct effects of Information Technologies (IT) and Communication Technologies (CT) on the skill, age, and age-skill composition of labour demand. The analysis is conducted on a sample comprising 10 developed countries, 30 industries covering the largest part of the economy, and the period 1982-2005. I find that IT intensity increases the relative demands for the high-skilled, low-skilled and oldest workers, while it decreases the relative demands for the medium-skilled and younger workers. Also, IT intensity increases the relative demands for the high-skilled and low-skilled of all age profiles, while it decreases the relative demands for the medium-skilled of all age profiles. CT intensity exerts opposite effects. Consistent with knowledge-based hierarchy theories highlighting the organisational aspect of the adoption of IT and CT by firms, the empowerment of agents at lower and higher levels of the hierarchy induced by IT and CT, respectively, rationalise these findings. I also find that the aforementioned effects operate mostly as of 1990, when the advancement rates of IT and CT were even higher than in the 1980s. Although a clear pattern of disproportionate effects across sectors is not identified, such a pattern across countries does exist: the inequalities generated by the two types of technologies are mitigated by higher union density. |
| Keywords: | Information Technologies; Communication Technologies; relative labour demand; ageskill profile |
| JEL: | O33 J21 J23 J24 J31 |
| Date: | 2019–01 |
| URL: | http://d.repec.org/n?u=RePEc:nbb:reswpp:201901-365&r=all |