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on Technology and Industrial Dynamics |
| By: | Anabela Santos; Michele Cincera; Giovanni Cerulli |
| Abstract: | Financing, innovation and growth linkage is a multi-stage process. First, access to finance has a leverage effect on innovation and secondly this additional innovation has an impact on growth. However, few authors have assessed the effect of these three components at the same time. Furthermore, the scientific literature usually focuses more on assessing only the effect of one type of source of financing, such as public support or venture capital, on innovation or firm growth. The aim of the present study is to go further and to assess the effect of eight different sources of financing (internal funds, bank loan, credit line, trade credit, grants, equity, leasing and factoring) on innovation and then on firm growth. Using data from the Survey on the Access to Finance of Enterprises and a three-step econometric approach, the study provides evidence that external sources of financing have a positive effect on innovation and then an additional effect on firm growth (turnover and employment). However, not all sources of external financing have the same impact.Equity financing has a larger effect on the strategic decision to innovate, and the highest output additionality on firm turnover growth, when compared to the effects of other sources of financing.Grants registered a moderate effect on innovation and on output additionality on firm growth (both turnover and employment) and its effect does not appear to be statistically different from other financing instruments (excluding equity). Moreover, grants show higher employment growth than turnover. Furthermore, the number of financing instruments used together also seems to matter, revealing that a financing instrument used alone has no effect on innovation. Our findings suggest that state aid to promote R&D and innovation needs to rely on sounder public/private support integration for it to be successful. All these conclusions could be particularly useful for policy-makers since recommendations for a European Innovation CouncilKeywordsFinancing; Innovation; Firm growth; Europe |
| Keywords: | Innovation, Microfinance, Microfinance in Europe |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:rem:wpaper:1349&r=all |
| By: | Mellace, Giovanni (Department of Business and Economics); Ventura, Marco (Department of Economics and Law) |
| Abstract: | This paper provides an extensive empirical evaluation of a policy introduced in Italy at the end of 2012 to incentivize young innovative start-up firms. Using a Regression Discontinuity Design (RDD) we estimate the causal effects of the policy on the firms’ share of intangible assets, turnover, number of employees, and number of partners. Our results indicate that two years after its implementation the policy was effective only in increasing the number of partners, thus attracting private investments, but failed, at least in the short run, in boosting innovation or increasing employment. It follows that the new investors generated by the policy might have been attracted only by the tax benefit and had little interest in innovation. |
| Keywords: | Policy evaluation; regression discontinuity design; incentives to innovations |
| JEL: | C21 H32 L52 O31 |
| Date: | 2019–08–28 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:sdueko:2019_009&r=all |
| By: | Max Nathan |
| Abstract: | Despite academic scepticism, cluster policies remain popular with policymakers. This paper evaluates the causal impact of a flagship UK technology cluster programme. I build a simple framework and identify effects using difference-in-differences and synthetic controls on rich microdata. I further test for timing, cross-space variation, scaling and churn channels. The policy grew and densified the cluster, but has had more mixed effects on tech firm productivity. I also find most policy 'effects' began before rollout, raising questions about the programme's added value. |
| Keywords: | cities, clusters, technology, economic development, synthetic controls |
| JEL: | L53 L86 O31 R30 R50 |
| Date: | 2019–08 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp1648&r=all |
| By: | Dominick G. Bartelme; Arnaud Costinot; Dave Donaldson; Andrés Rodríguez-Clare |
| Abstract: | The textbook case for industrial policy is well understood. If some sectors are subject to external economies of scale, whereas others are not, a government should subsidize the first group of sectors at the expense of the second. The empirical relevance of this argument, however, remains unclear. In this paper we develop a strategy to estimate sector-level economies of scale and evaluate the gains from such policy interventions in an open economy. Our benchmark results point towards significant and heterogeneous economies of scale across manufacturing sectors, but only modest gains from industrial policy, below 1% of GDP on average. Though these gains can be larger in some of the alternative environments that we consider, they are always smaller than the gains from optimal trade policy. |
| JEL: | F1 F10 F11 F12 F13 F14 F17 |
| Date: | 2019–08 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:26193&r=all |
| By: | Michael Carter; Rachid Laajaj; Dean Yang |
| Abstract: | The Green Revolution bolstered agricultural yields and rural well-being in Asia and Latin America, but bypassed sub-Saharan Africa. We study the first randomized controlled trial of a government-implemented input subsidy program (ISP) in Africa. A temporary subsidy for Mozambican maize farmers stimulates Green Revolution technology adoption and leads to increased maize yields. Effects of the subsidy persist in later unsubsidized years. In addition, social networks of subsidized farmers benefit from spillovers, experiencing increases in technology adoption, yields, and beliefs about the returns to the technologies. Spillovers account for the vast majority of subsidy-induced gains. ISPs alleviate informational market failures, stimulating learning about new technologies by subsidy recipients and their social networks |
| JEL: | O12 O33 O55 Q12 |
| Date: | 2019–08 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:26208&r=all |
| By: | Axenbeck, Janna |
| Abstract: | This paper investigates the effect of environmental innovations on firm profitability with respect to differences between small and medium-sized (SME) and large (LE) enterprises. Using data from the Mannheim Innovation Panel (MIP) 2015, results show that, in general, SME benefit more from environmental innovations than LE. This effect is particularly strong for resource efficiency-improving innovations induced by regulation. These environmental innovations are significantly related to an increase in profits of SME, whilst related to a decrease in profits of LE. A robustness check with data from the MIP 2009, however, does not confirm this result as the effect for LE is insignificant and differences between the two groups cannot be found in this survey wave. A reason why negative effects for LE are observed in the MIP 2015 - but not in the MIP 2009 - might be that most LE had already exploited the potentials of environmental innovations when they were surveyed in the MIP 2015. This is supported by evidence suggesting that size-related differences in the MIP 2015 are driven by a negative relationship between LE's profits and environmental innovations related to externalities that were reduced by innovations in periods before. |
| Keywords: | Firm Behavior,Firm Size,Porter hypothesis,Environmental Technology Adaption,Technological Innovation,Environmental Regulation |
| JEL: | D22 L25 Q52 Q55 Q58 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:19033&r=all |
| By: | McGuinness, Seamus (Economic and Social Research Institute, Dublin); Pouliakas, Konstantinos (European Centre for the Development of Vocational Training (Cedefop)); Redmond, Paul (ESRI, Dublin) |
| Abstract: | We use data from a new international dataset - the European Skills and Jobs Survey - to create a unique measure of skills-displacing technological change (SDT), defined as technological change that may render workers' skills obsolete. We find that 16 percent of adult workers in the EU are impacted by SDT, with significant variance across countries, ranging from a high of 28 percent in Estonia, to below seven percent in Bulgaria. Despite claims that technological change contributes to the deskilling of jobs, we present evidence that SDT is associated with dynamic upskilling of workers. The paper also presents the first direct micro-evidence of the reinstatement effect of automating technology, namely a positive contribution of automation to the task content and skills complexity of the jobs of incumbent workers. Despite the recent focus on the polarising impact of automation and associated reskilling needs of lower-skilled individuals, our evidence also draws attention to the fact that SDT predominantly affects higher-skilled workers, reinforcing inequalities in upskilling opportunities within workplaces. Workers affected by SDT also experience greater job insecurity. |
| Keywords: | technological change, automation, skills, tasks, skill mismatch, skills obsolescence |
| JEL: | J24 O33 O31 |
| Date: | 2019–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp12541&r=all |
| By: | Torres Mazzi, Caio (UNU-MERIT); Foster-McGregor, Neil (UNU-MERIT) |
| Abstract: | This paper explores how technological capabilities influence the relationship between imported inputs and the export performance of firms. We apply threshold regression techniques to a representative dataset of Brazilian firms and find a strong positive influence of innovation skills on the relationship between imported intermediates and export revenues. We further find that the complementarities between importing and exporting are stronger for firms that export products with a higher scope for quality differentiation. We also observe that technological capabilities are directly correlated with export performance, confirming the view that innovation positively influences firms' international competitiveness. This relationship is not found to be significant for firms that export products with a low scope for quality differentiation and that export to lower income non-OECD markets. Overall, our results suggest that technological capabilities and the quality of imported inputs not only benefit firms directly but also complement each other in enhancing export competitiveness. |
| Keywords: | imports, exports, productivity, innovation, technological capabilities, Brazil |
| JEL: | F14 O31 O33 O47 |
| Date: | 2019–08–28 |
| URL: | http://d.repec.org/n?u=RePEc:unm:unumer:2019028&r=all |
| By: | Yuqing Xing (National Graduate Institute for Policy Studies, Tokyo, Japan) |
| Abstract: | Global Value chains (GVC) provide a new channel of innovation for firms participating in value chains or utilizing the value chain strategy to grow. Upgrading to high value added segments of GVCs step by step is a linear model of innovation. Our analysis on the Chinese firms involved in the value chain of the iPhone shows that the Chinese mobile industry has climbed up ladders of the iPhone value chain and performed relatively sophisticated tasks beyond simple assembly. In addition, by examining foreign value added and technology embedded in the smartphones of OPPO, Xiaomi and Huawei, we argue the Chinese smartphone vendors primarily follow a non-linear model of innovation, jumping directly to brand development before acquiring sufficient technology capacity. They have been focusing on incremental innovations and product differentiation by taking advantage of available technology platforms. The value chain strategy enabled them to overcome technology deficiency effectively and opened a short-cut to catch-up foreign rivals and evolve into leading smartphone makers in both domestic and foreign markets. |
| Date: | 2019–08 |
| URL: | http://d.repec.org/n?u=RePEc:ngi:dpaper:19-14&r=all |
| By: | Emerson G. Escolar; Yasuaki Hiraoka; Mitsuru Igami; Yasin Ozcan |
| Abstract: | Where do firms innovate? Mapping their locations in technological space is difficult, because it is high dimensional and unstructured. We address this issue by using a method in computational topology called the Mapper algorithm, which combines local clustering with global reconstruction. We apply this method to a panel of 333 major firms' patent portfolios in 1976--2005 across 430 technological areas. Results suggest the Mapper graph captures salient patterns in firms' patenting histories, and our measures of their uniqueness (the type and length of "flares") are correlated with firms' financial performances in a statistically and economically significant manner. |
| Date: | 2019–08 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1909.00257&r=all |
| By: | Antonio Navas; Antonella Nocco |
| Abstract: | This paper analyses the role played by vertical linkages on the effects of trade liberalization on technology adoption and their consequences on average productivity and welfare in a trade model with heterogeneous firms. We find that the strength of vertical linkages shapes the effects that trade liberalization produces on firms’ survival and technology upgrading decisions, having an impact on the average productivity of the economy and, ultimately, on welfare. |
| Keywords: | trade liberalization, heterogeneity, selection, technology adoption, vertical linkages |
| JEL: | F10 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_7788&r=all |
| By: | Bai, Zhuoran; Meng, Shuang; Miao, Zhuang; Zhang, Yan |
| Abstract: | During the last decades, we observe a liberalization trend in the services sector globally. Using the Chinese exporting firm data, this paper studies how multi-product firms adjust their export strategies in response to the services trade liberalization across export destination countries. Our study finds a highly significant positive relation between the services trade liberalization in the destination countries and each firm's export diversify, which is measured as the product scope, the Herfindahl-Hirschman style index, or the value skewness across varieties,export product switch. Our empirical analysis further finds that firms increase the relatedness of their exporting varieties towards the OECD countries, but reduce it towards the non-OECD countries. With a conventional multi-product firm model, we explore the mechanisms behind all our empirical findings. |
| Keywords: | Services trade Liberalization; Export Diversity; Chinese Data |
| JEL: | F13 F14 |
| Date: | 2019–08–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:95803&r=all |
| By: | Deming, David (Harvard Graduate School of Education and Harvard Kennedy School); Noray, Kadeem L. (Harvard University) |
| Abstract: | Science, Technology, Engineering, and Math (STEM) jobs are a key contributor to economic growth and national competitiveness. Yet STEM workers are perceived to be in short supply. This paper shows that the “STEM shortage†phenomenon is explained by technological change, which introduces new job skills and makes old ones obsolete. We find that the initially high economic return to applied STEM degrees declines by more than 50 percent in the first decade of working life. This coincides with a rapid exit of college graduates from STEM occupations. Using detailed job vacancy data, we show that STEM jobs change especially quickly over time, leading to flatter age-earnings profiles as the skills of older cohorts became obsolete. Our findings highlight the importance of technology-specific skills in explaining life-cycle returns to education, and show that STEM jobs are the leading edge of technology diffusion in the labor market. |
| JEL: | J24 |
| Date: | 2019–08 |
| URL: | http://d.repec.org/n?u=RePEc:ecl:harjfk:rwp19-025&r=all |