nep-tid New Economics Papers
on Technology and Industrial Dynamics
Issue of 2019‒03‒04
ten papers chosen by
Fulvio Castellacci
Universitetet i Oslo

  1. GVC journeys: Industrialisation and Deindustrialisation in the Age of the Second Unbundling By Toshihiro Okubo; Richard Baldwin
  2. The Employment Effects of Technological Innovation, Consumption, and Participation in Global Value Chains: Evidence from Developing Asia By Bertulfo, Donald Jay; Gentile, Elisabetta; de Vries , Gaaitzen J.
  3. Testing the Smile Curve: Functional Specialisation in GVCs and Value Creation By Roman Stöllinger
  4. Specialisation, diversification and the ladder of green technology development By François Perruchas; Davide Consoli; Nicolò Barbieri
  5. Work of the Past, Work of the Future By David Autor
  6. Networks and Spillovers in Software in Israeli Hi-Tech By Cohen, Shani; Gandal, Neil
  7. Trademarks and Appropriability in the Digital Era: Evidences from Swedish Video Games Industry By Long, Vicky; Domeij, Bengt
  8. Big Data and Firm Dynamics By Farboodi, Maryam; Mihet, Roxana; Philippon, Thomas; Veldkamp, Laura
  9. Natural resources, economic growth and geography By González-Val, Rafael; Pueyo, Fernando
  10. Technology heterogeneity in European industries' energy efficiency performance. The role of climate, greenhouse gases, path dependence and energy mix. By Kounetas, Konstantinos; Stergiou, Eirini

  1. By: Toshihiro Okubo (Faculty of Economics, Keio University); Richard Baldwin (Graduate Institute, Geneva)
    Abstract: Offshoring and participation in Global Value Chains (GVCs) are critical to understanding the rapid deindustrialisation of G7 nations and the rapid industrialisation of a handful of developing nations. This paper distinguishes between trade in final goods and trade in parts to track the shifting pattern of the location of manufacturing. We introduce a simple empirical measure of comparative advantage in parts on one hand and in final goods on the other. We illustrate how this distinction can help organise thinking on the patterns of industrialisation and deindustrialisation-namely the"GVC journeys" of advanced and emerging economies. We also provide one simple model. The model highlights the interactions of trade costs and the knowledge transfers to accompany offshoring of parts production and assembly, which we call trade-led versus knowledgeled globalisation.
    Keywords: Globalisation, Knowledge-led globalisation, Fragmentation
    JEL: F10 F20
    Date: 2019–01–12
  2. By: Bertulfo, Donald Jay (Asian Development Bank); Gentile, Elisabetta (Asian Development Bank); de Vries , Gaaitzen J. (University of Groningen)
    Abstract: Global value chains (GVCs) have been a vehicle for job creation in developing Asia, but there is mounting concern that more sophisticated and cost-effective technology could displace workers through automation or reshoring of production. We use the demand-based input–output approach in Reijnders and de Vries (2018) to examine how employment responded to consumption, trade, and technological advances in 12 economies that accounted for 90% of employment in developing Asia during the period 2005–2015. Structural decomposition analysis based on the Asian Development Bank Multiregional Input–Output Tables combined with harmonized cross-country occupation data indicates that, other things being equal, technological change within GVCs was associated with a decrease in labor demand across all sectors, and an increase in the share of nonroutine cognitive occupations. We also find that increased domestic consumption expenditures of goods and services generated an increase in labor demand large enough to offset the negative employment impact of technological change. Finally, we do not find evidence of major shifts in occupational labor demand due to reshoring.
    Keywords: developing Asia; employment; global value chains; reshoring; task relocation; technology
    JEL: D57 J21 O14
    Date: 2019–02–26
  3. By: Roman Stöllinger (The Vienna Institute for International Economic Studies, wiiw)
    Abstract: According to the ‘smile curve hypothesis’ the potential for generating value added varies significantly across the various functions along a firm’s value chain. It suggests in particular that the production stage is the least promising value chain function in the entire manufacturing process. This logic implies that countries specialising as ‘factory economies’ are likely to generate comparatively little value added. To shed light on the relationship between functional specialisation along the value chain and value creation, this paper develops measures for functional specialisation derived from project-level data on greenfield FDI for a global sample of countries. These measures keep the industry and the functional dimension of specialisation strictly apart. They are used to test econometrically the negative relationship between value added creation and functional specialisation in production as predicted by the smile curve hypothesis.
    Keywords: functional specialisation, global value chains, smile curve, factory economy, greenfield FDI
    JEL: L23 F20
    Date: 2019–02
  4. By: François Perruchas (INGENIO [CSIC-Universitat Politecnica de Valencia], Spain); Davide Consoli (INGENIO [CSIC-Universitat Politecnica de Valencia], Spain); Nicolò Barbieri (University of Ferrara, Italy)
    Abstract: This paper elaborates an empirical analysis of the temporal and geographical distribution of green technology, and on how specific country characteristics enable or thwart environmental inventive activities. Using patent data on 63 countries over the period 1970-2012 we identify key drivers of cross-country diversification and specialization. Our first finding is that countries diversify towards green technologies that are related to their existing competences. Notably, the maturity of the green technology matters more than the level of development of each country. The second main result is that countries move along cumulative paths of specialization, and towards more complex green technologies. Interestingly, the complexity of green technologies is not an obstacle to further specialisation. The latter holds also for developing countries that are most exposed to climate change hazards.
    Keywords: Environmental Technology; Technological diversification; Technological specialisation
    JEL: O14 O33 Q55
    Date: 2019–02
  5. By: David Autor
    Abstract: Labor markets in U.S. cities today are vastly more educated and skill-intensive than they were five decades ago. Yet, urban non-college workers perform substantially less skilled work than decades earlier. This deskilling reflects the joint effects of automation and international trade, which have eliminated the bulk of non-college production, administrative support, and clerical jobs, yielding a disproportionate polarization of urban labor markets. The unwinding of the urban non-college occupational skill gradient has, I argue, abetted a secular fall in real non-college wages by: (1) shunting non-college workers out of specialized middle-skill occupations into low-wage occupations that require only generic skills; (2) diminishing the set of non-college workers that hold middle-skill jobs in high-wage cities; and (3) attenuating, to a startling degree, the steep urban wage premium for non-college workers that prevailed in earlier decades. Changes in the nature of work—many of which are technological in origin—have been more disruptive and less beneficial for non-college than college workers.
    JEL: J23 J24 J31 J6 O33 R12
    Date: 2019–02
  6. By: Cohen, Shani; Gandal, Neil
    Abstract: A large literature has used patent data to measure knowledge spillovers across inventions but has not explicitly considered the collaboration networks formed by inventors as a mechanism for shaping these knowledge flows. Using a recently developed methodology, we examine the incidence and nature of knowledge flows mediated by the collaboration networks of inventors. We apply this methodology to three sectors in which programming skills are vital: (i) Information and Communication Technology/Information Security (ICT/IS) (ii) Financial Technology (Fin-Tech,) and (iii) Medical Technology (Med-Tech.) These are all areas of innovation in which Israel should have a comparative advantage. We find the following: (I) the quality of the Israeli ICT/information security inventions is systematically linked to the structure of the collaborative network. In particular, we find positive and significant direct and indirect knowledge spillovers. (II) We find no evidence of such spillovers in either Fin-Tech or Med-Tech.
    Date: 2019–01
  7. By: Long, Vicky (The Ratio Institute); Domeij, Bengt (The Ratio Institute)
    Abstract: What role can trademark play in appropriability regime, especially in a digitalized era where many innovations are easy to copy and difficult to protect, and where rapid diffusion is the norm? This study, using the Swedish video games industry as a case, aims to provide some insights and tentative answers to those questions. Combining firm-level interviews, statistical data concerning EUIPO trademarks filed by the Swedish video games industry, we present the quantitative trends of trademarking across this industry sector (i.e. timeline; distribution across technological platforms and firm sizes; correlation with turnover), as well as qualitative explanations for that. This study contributes to a meso-level explanation of the role of trademarks (registrations) in appropriability on the one hand, and to the understanding of the complexity of the general appropriability conditions (and logic) in the Digital Era, on the other.
    Keywords: Intellectual Property Rights (IPRs); Appropriability; Video Games; Digitalization; Innovation; Vicky Long; Bengt Domeij
    JEL: O32 O34
    Date: 2019–02–18
  8. By: Farboodi, Maryam; Mihet, Roxana; Philippon, Thomas; Veldkamp, Laura
    Abstract: We study a model where firms accumulate data as a valuable intangible asset. Data accumulation affects firms' dynamics. It increases the skewness of the firm size distribution as large firms generate more data and invest more in active experimentation. On the other hand, small data-savvy firms can overtake more traditional incumbents, provided they can finance their initial money-losing growth. Our model can be used to estimate the market and social value of data.
    Keywords: Big Data; firm size
    Date: 2019–01
  9. By: González-Val, Rafael; Pueyo, Fernando
    Abstract: Worldwide materials extraction increased by a factor of 8.4 over the course of the 20th century. In the meantime, global GDP and population increased by factors of about 22 and 4, respectively. This reveals that one of the key factors driving the increase in the exploitation of the resources was the growth in world population, although mitigated by the reduction in the intensity in the use of the resources in production. In this paper, we present a model that combines the theory of endogenous growth and the economy of natural resources, but taking into account the geographical distribution of economic activity. Indeed, the New Economic Geography provides insights about two elements that, although speeding up GDP growth, can curb the pressure on natural resources, namely the reduction in transports costs and a boost to pace of innovation.
    Keywords: industrial location, endogenous growth, renewable resource, geography
    JEL: F43 O30 Q20 R12
    Date: 2019–02
  10. By: Kounetas, Konstantinos; Stergiou, Eirini
    Abstract: Assessment of industrial-level energy efficiency development is a critical research topic that has infiltrated in the global battle against climate change. A balanced panel of fourteen European industries from twenty-four countries for the period 1995-2011 is introduced into a metafrontier framework. Reflecting the divergent views on the importance of desirable and undesirable outcomes in the pursuit of energy efficiency, the proposed approach estimate industrial performance by prioritizing either economic or environmental criterion incorporating technological heterogeneity. It is found that small-scale economies exhibit persistent high energy efficiency scores. Regarding energy efficiency determinants, path dependence phenomena have a strong presence, climate characteristics occurs, while energy mix displays linear but also non-linear relationships. Finally, regardless of the method employed, there is a strong evidence of conditional and unconditional convergence.
    Keywords: European industries, Energy efficiency, Technology heterogeneity,Directional distance function, Energy mix, Path dependence, Convergence.
    JEL: D24 D29 Q40 Q49
    Date: 2019–01–03

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