nep-tid New Economics Papers
on Technology and Industrial Dynamics
Issue of 2019‒09‒23
nine papers chosen by
Fulvio Castellacci
Universitetet i Oslo

  1. Emerging and Disappearing Work, Thriving and Declining Firms By Enghin Atalay; sarada sarada
  2. The Effects of Mandating Training in Firms: Theory and Evidence from the Colombian Apprenticeship Program By Santiago Caicedo; Arthur Seibold; Miguel Espinosa
  3. Firm Dynamics and Productivity Growth during the Industrial Revolution By Reka Juhasz; Mara Squicciarini; Nico Voigtländer
  4. Testing the employment and skill impact of new technologies: A survey and some methodological issues By Barbieri, Laura; Mussida, Chiara; Piva, Mariacristina; Vivarelli, Marco
  5. Capabilities and firm growth: the role of formal collaboration agreements By Roberto Gabriele; Andrea Mazzitelli; Giuseppe Espa; Maria Michela Dickson
  6. Occupational exposure to capital-embodied technology By julieta caunedo; David Jaume; Elisa Keller
  7. Sectoral and Aggregate Structural Change By Andrew Foerster; Andreas Hornstein; Mark Watson; Pierre-Daniel Sarte
  8. Looking forward via the Past: An Investigation of the Evolution of the Knowledge Base of Robotics Firms. By Estolatan, Eric; Geuna, Aldo
  9. European Immigrants and the United States’ Rise to the Technological Frontier By Costas Arkolakis; Michael Peters; Sun Kyoung Lee

  1. By: Enghin Atalay (University of Wisconsin, Madison); sarada sarada (UNIV OF WISCONSIN-MADISON)
    Abstract: Using the text of vacancy postings from 1940 to 2000, we examine the characteristics of firms which hire for newly emerging and soon-to-be disappearing work practices. To do so, we classify job titles as emerging or disappearing according to the years in which they appear. We verify that emerging work involves higher skill levels and is closer to the technological frontier --- qualities inherent to innovation. We find that, among the set of publicly listed firms, those which post ads for emerging work tend to be younger, more R&D intensive, and have higher future sales growth. Among privately held firms, those which post ads for emerging work are more likely to go public in the future. We then explore heterogeneity in the job vintage-firm performance relationship according to jobs that are in product-related technical fields versus in business related non-technical fields. New technological work correlates with R&D intensity and future sales growth, while survival and publicly traded status is more closely related to having newer vintages of business-related non-technological jobs. Our measures of firm innovativeness can be constructed for all employers, and are not limited to publicly traded firms or to industries in which R&D spending and patenting are prevalent.
    Date: 2019
  2. By: Santiago Caicedo (University of Chicago); Arthur Seibold (University of Mannheim); Miguel Espinosa (Universitat Pompeu Fabra)
    Abstract: We study the effect of apprenticeship programs on firms and welfare, using novel administrative data on the universe Colombian manufacturing firms with at least 10 workers, and a unique reform to apprenticeship regulation. The reform simultaneously establishes apprentice quotas that vary discontinuously in firm size and lowers apprentices' wages. We begin by documenting that the policy is successful in increasing the number of trained apprentices more than threefold. However, the reform also induces significant firm size distortions driven by heterogeneous firm responses. In sectors with high skill requirements, firms avoided hiring apprentices decreasing their size and bunching just below the regulation thresholds. In contrast, firms in low-skilled sectors, increase their size and bunch just above the regulation thresholds in order to be able to hire more apprentices. As a consequence, the regulation results in most apprentices being trained in low-skilled sectors. We develop a simple theoretical model featuring heterogeneous training costs across sectors in order to rationalize and quantify these empirical findings. The key insight of the model is firms that train apprentices incur in an opportunity cost of spending time teaching and not producing. As training in high-skill sectors takes longer than in low-skill sectors, firms in high skilled sectors will avoid apprentices while firms in low-skill sectors try to get as many as possible. Finally, we use the model to analyze the welfare consequences of the regulation and study counterfactual policies.
    Date: 2019
  3. By: Reka Juhasz (Columbia University); Mara Squicciarini (Bocconi University); Nico Voigtländer
    Abstract: The transition from millennia of stagnating per-capita incomes to sustained economic growth constitutes the most important structural break in economic history. A key feature of the Industrial Revolution was the unprecedented growth in manufacturing productivity. So far, productivity growth during this period has been studied mostly at the country level, or – in some cases – at the aggregate sectoral level. However, theoretical and empirical research over the past decade has pointed to the importance of firm dynamics for understanding aggregate productivity. The dearth of firm-level data has thus far made it impossible to study this channel in the context of the Industrial Revolution. This paper uses a novel dataset of French firms across various industries to study the evolution of firm productivity before and during the onset of industrialization. First, we document a set of novel stylized facts about firms in innovative and traditional sectors during the Industrial Revolution in France. Second, we exploit regional variation to estimate the extent to which different firm dynamics account for different levels of industrialization across France in 1850. Third, we estimate the extent to which productivity gains were driven by firm entry relative to the intensive margin.
    Date: 2019
  4. By: Barbieri, Laura (Università Cattolica di Piacenza); Mussida, Chiara (Università Cattolica di Piacenza); Piva, Mariacristina (Università Cattolica di Piacenza); Vivarelli, Marco (Università Cattolica di Milano)
    Abstract: The present technological revolution, characterized by the pervasive and growing presence of robots, automation, Artificial Intelligence and machine learning, is going to transform societies and economic systems. However, this is not the first technological revolution humankind has been facing, but it is probably the very first one with such an accelerated diffusion pace involving all the industrial sectors. Studying its mechanisms and consequences (will the world turn into a jobless society or not?), mainly considering the labor market dynamics, is a crucial matter. This paper aims at providing an updated picture of main empirical evidence on the relationship between new technologies and employment both in terms of overall consequences on the number of employees, tasks required, and wage/inequality effect.
    Keywords: technology, innovation, employment, skill, task, routine
    JEL: O33
    Date: 2019–09–11
  5. By: Roberto Gabriele; Andrea Mazzitelli; Giuseppe Espa; Maria Michela Dickson
    Abstract: The paper presents an empirical analysis of the effect of formal network agreements on growth of firm in Italy in the years 2011-2013. The theoretical background is given by evolutionary theories that assign a key role in determining the ability of firms to capture business opportunities to internal capabilities and to external knowledge and capabilities. We suggest that firms establishing formal relationships with other firms can extend the “set of things that they are able to do†–the set of capabilities– so that they are able to capture opportunities and grow. The study is based on a novel database of Italian firms that matches networked firms in year 2012 with firms that did not sign a formal network agreement but possess similar structural characteristics. In order to deal with possible self-selection phenomenon, we use difference-in-differences regression models to assess the effect on growth of belonging to a formal network agreement. Moreover, to study the effect of characteristics of network we employ two stage Hackman regression models. Results show that networked firms have a higher growth rate and that the size of the network plays a role. Results are in line with the evolutionary interpretation and suggest that formal network agreement can function as long-range antennas for firms that are more constrained from the geographical point of view. These agreements allow to acquire capabilities and knowledge of the market that allow firms to expand their economic activity.
    Keywords: Collaboration agreements, Difference in differences, firm growth
    JEL: D22 L25 M21 L52
    Date: 2019
  6. By: julieta caunedo (Cornell University); David Jaume (Cornell University); Elisa Keller (University of Exeter)
    Abstract: What is the effect of technological change on income inequality? A vast literature suggests that skill-biased technological change (SBTC) is a mayor driver of income inequality. However, SBTC is a black box, much like total factor productivity (TFP) is to growth theory. To make progress on the effect of technology on inequality we need measurement. Theoretically, SBTC can be driven by capital-embodied technological change to the extent that capital and skills are complementary. In this paper, we explore the relationship between technological advancement and inequality by building measures of capital-embodied technological change at the occupation level. We document substantial heterogeneity in the degree of capital-skill complementarity across occupations. Importantly, we show that the role assigned to SBTC for the raise in employment in skill intensive occupations over the last 35 years is almost exclusively accounted for capital-embodied technological change. Finally, we show that the raise in the skill-premium over the same period is accounted for the dynamics of the capital labor ratio and factor complementarity in two occupations: technicians and low-skill services.
    Date: 2019
  7. By: Andrew Foerster (Federal Reserve Bank of San Francisco); Andreas Hornstein (Federal Reserve Bank of Richmond); Mark Watson (Princeton University); Pierre-Daniel Sarte (Federal Reserve Bank of Richmond)
    Abstract: We estimate that trends in TFP and employment growth have steadily declined across a majority of U.S. sectors over the post-war period. Most of the secular decline in aggregate TFP and employment growth results from the combination of sector-specific rather than aggregate disturbances. We embed these observations into a dynamic multi-sector framework in which materials and capital used in each sector are produced by other sectors. The presence of capital, in particular, induces quantitatively important sectoral multiplier effects from production linkages on GDP growth. Thus, in some sectors, the effects of changes in TFP or employment growth on GDP growth may be as large as 3 times their share in the economy. Taken together, structural changes across sectors have lowered trend GDP growth by around 2 percentage points since the early 1950s. Sustained contractions in growth specific to Durable and Non-Durable Goods, and most importantly Construction, account for close to 2=3 of this decline. Because of capital accumulation, structural changes have endogenously persistent effects. Consequently, we estimate that trend GDP growth will continue to decline for the next 10 years even if trend TFP and employment growth stabilize.
    Date: 2019
  8. By: Estolatan, Eric; Geuna, Aldo (University of Turin)
    Abstract: The case studies described in this paper investigate the evolution of the knowledge bases of the two leading EU robotics firms - KUKA and COMAU. The analysis adopts an evolutionary perspective and a systems approach to examine a set of derived patent-based measures to explore firm behavior in technological knowledge search and accumulation. The investigation is supplemented by analyses of the firms' historical archives, firm strategies and prevailing economic context at selected periods. Our findings suggest that while these enterprises maintain an outwardlooking innovation propensity and a diversified knowledge base they tend to have a higher preference for continuity and stability of their existing technical knowledge sets. The two companies studied exhibit partially different responses to the common and on-going broader change in the robotics industry (i.e. the emergence of artificial intelligence and ICT for application to robotics); KUKA is shown to be more outward-looking than COMAU. Internal restructuring, economic shocks and firm specificities are found to be stronger catalysts of change than external technology-based stimuli.
    Date: 2019–06
  9. By: Costas Arkolakis (Yale University); Michael Peters (Yale University); Sun Kyoung Lee (Columbia University)
    Abstract: What is the role of immigrants on (American) Growth? To answer this perplex question, we undertake a massive effort of collecting, digitizing, and harmonizing micro and macro economic data from the 19th and early 20th century. The data originate from the historical manufacturing and demographic census of the United States, immigration records datasets and the universe of US patents. To analyze the counterfactual implications of alternative allocations of immigrants, we develop a dynamical trade model where heterogenous firms make innovation and exporting decisions across space and time. The model predicts that the timing and the spatial allocation of immigrant arrivals affect the path of growth outcomes for each location and the aggregate US economy. We use the structural equations arising from the model to interpret empirical findings from the difference-in-difference analysis for the importance of the influx of skilled immigrants on the differential growth of US counties. Counterfactual scenarios of alternative allocation of skilled immigrants from different countries across space and time reveal the economic impact of barriers to migration to the United States economy.
    Date: 2019

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