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on Technology and Industrial Dynamics |
| By: | David Klenert (European Commission – JRC); Enrique Fernandez-Macias (European Commission - JRC); Jose-Ignacio Anton (University of Salamanca, Spain) |
| Abstract: | While citizen opinion polls reveal that Europeans are concerned about the labour market consequences of technological progress, the understanding of the actual significance of this relationship is still imperfect. This paper assesses the impact of robot adoption on employment in Europe. Combining industry-level data on employment by skill-type with data on robot adoption and using different sets of fixed-effects techniques, we find that robot use is linked to an increase in aggregate employment. Contrary to some previous studies, we do not find evidence of robots reducing the share of low-skill workers across Europe. Since the overwhelming majority of industrial robots is used in manufacturing, our findings should not be interpreted outside of the manufacturing context. However, the results still hold when including non-manufacturing sectors and they are robust across a wide range of assumptions and econometric specifications. |
| Keywords: | Robots, jobs, employment, low-skilled workers, inequality, European Union, economic activities |
| Date: | 2020–01 |
| URL: | http://d.repec.org/n?u=RePEc:ipt:laedte:202001&r=all |
| By: | Bertani, Filippo; Raberto, Marco; Teglio, Andrea |
| Abstract: | Since the last 30 years, the economy has been undergoing a massive digital transformation. Intangible digital assets, like software solutions, web services, and more recently deep learning algorithms, artificial intelligence and digital platforms, have been increasingly adopted thanks to the diffusion and advancements of information and communication technologies. Various observers argue that we could rapidly approach a technological singularity leading to explosive economic growth. The contribution of this paper is on the empirical and the modelling side. First, we present a cross-country empirical analysis assessing the correlation between intangible digital assets and different measures of productivity. Then we figure out their long-term impact on unemployment under different scenarios by means of an agent-based macro-model. |
| Keywords: | Intangible assets, Digital transformation, Total factor productivity, Technological unemployment, Agent-based economics |
| JEL: | C63 |
| Date: | 2020–01–20 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:98233&r=all |
| By: | Sandro Montresor (School of Advanced Studies, Gran Sasso Science Institute); Antonio Vezzani (Roma Tre University) |
| Abstract: | We investigate the extent to which financial constraints hamper the firms’ investment in intangibles. Drawing on the extant literature, we maintain that a distinction should be kept between innovators and non-innovators. Moreover, we argue that such a distinction should be investigated along the whole spectrum of intangibles firms invest and by addressing the risks of reverse causality and simultaneity bias in the relationship. Through an original quasi-panel extension of a recent European Innobarometer survey, we estimate two sets of recursive bivariate probit models – for innovative and non-innovative firms’ investments – from which interesting results emerge. Financial barriers hamper the investment of both kinds of firms only for R&D, design, and organisation and business processes. With respect to other intangibles, instead, financial barriers act only on innovators (or non-innovators) or are even absent. Furthermore, the hampering role of financial barriers distributes differently across different intangibles between innovators and non-innovators. |
| Keywords: | &D, intangibles, innovation, financial barriers. |
| JEL: | O30 O32 O33 |
| Date: | 2019–12 |
| URL: | http://d.repec.org/n?u=RePEc:ipt:wpaper:201907&r=all |
| By: | Morrow, John; Dhingra, Swati |
| Abstract: | Empirical work has drawn attention to the high degree of productivity differences within industries and their role in resource allocation. This paper examines the allocational efficiency of such markets. Productivity differences introduce two new margins of potential inefficiency: selection of the right distribution of firms and allocation of the right quantities across firms. We show that these considerations affect welfare and policy analysis, and market power across firms leads to distortions in resource allocation. Demand-side elasticities determine how resources are misallocated and when increased competition from market expansion provides welfare gains. |
| Keywords: | efficiency; productivity; social welfare; demand elasticity; markups |
| JEL: | J1 |
| Date: | 2019–02 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:59226&r=all |
| By: | Reinhold Kosfeld (University of Kassel); Timo Mitze (Southern University of Denmark) |
| Abstract: | Modern cluster theory provides reasons for positive external effects that accrue from the interaction of spatially proximate firms operating in common and related fields of economic activity. In this paper, we examine the impact of R&D-intensive clusters as a key factor of regional competitiveness on productivity and innovation growth. In analogy to the industry-oriented concepts of related and unrelated variety (Frenken, Van Oort, Verburg 2007), we differentiate between effects of cluster specialisation and diversity. The identification of R&D-intensive clusters is based on a hybrid approach of qualitative input-output analysis and spatial scanning (Kosfeld and Titze 2017). Our empirical study is conducted for a panel of German NUTS-3 regions in 2001-2011. To comprehensive account for specialisation and diversity effects of clustering we adopt a spatial econometric approach, which allows us to identify these effects beyond the geographical boundaries of a single region. After controlling for regional characteristics and unobserved heterogeneity, a robust ‘cluster strength’ effect (i.e. specialization) on productivity growth is found within the context of conditional convergence across German regions. With regard to the underlying mechanisms, we find that the presence of a limited number of R&D-intensive clusters in specific technological fields is most strongly linked to higher levels of regional productivity growth. While we also observe a positive effect of cluster strength on innovation growth once we account for spatial spillovers, no significant effects of ‘cluster diversity’ can be identified. This indicates that some but not all cluster-based regional development strategies are promising policy tools to foster regional growth processes. |
| Keywords: | Industry clusters, regional competitiveness, cluster specialisation, cluster diversity, correlated random effects model |
| JEL: | L16 R11 R15 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:mar:magkse:202001&r=all |
| By: | Lars Mewes; Tom Broekel |
| Abstract: | Previous research shows ample evidence that regional diversification is strongly path-dependent, as regions are more likely to diversify into related than unrelated activities. In this paper, we ask whether contemporary innovation policy in form of R&D subsidies intervenes in the process of regional diversification. We focus on R&D subsidies and assess if they cement existing path-dependent developments, or if they help in breaking these by facilitating unrelated diversification. To investigate the role of R&D policy in the process of regional technological diversification, we link information on R&D subsidies with patent data and analyze the diversification of 141 German labor-market regions into new technology classes between 1991 and 2010. Our findings suggest that R&D subsidies positively influence regional technological diversification. In addition, we find significant differences between types of subsidy. Subsidized joint R&D projects have a larger effect on the entry probabilities of technologies than subsidized R&D projects conducted by single organizations. To some extent, collaborative R&D can even compensate for missing relatedness by facilitating diversification into unrelated technologies. |
| Keywords: | regional technological diversification, relatedness, innovation, policy, R&D subsidies |
| JEL: | O31 O33 O38 |
| Date: | 2020–01 |
| URL: | http://d.repec.org/n?u=RePEc:egu:wpaper:2003&r=all |
| By: | Serguey Braguinsky (University of Maryland - Department of Management & Organization; National Bureau of Economic Research (NBER); Osaka University - Institute of Social and Economic Research); Atsushi Ohyama (Hitotsubashi University); Tetsuji Okazaki (University of Tokyo); Chad Syverson (University of Chicago - Booth School of Business; National Bureau of Economic Research (NBER)) |
| Abstract: | We explore how firms grow by adding products. In contrast to most earlier work on the topic, our conceptual and empirical framework allows for separate treatment of product innovation (vertical differentiation) and diversification (horizontal differentiation). The market context is Japan’s cotton spinning industry at the turn of the last century. We find that introducing innovative products outside of the previously feasible set involves removing the “supply-side constraint” by investing in new types of machines and technologies. This process involves a high degree of uncertainty, however, so firms that take steps in this direction tend to first introduce innovative products on experimental basis. We show that conducting such experiments is a key to firm growth. It not only provides opportunities to capture the market in high-end vertically differentiated products when successful, but also facilitates horizontal differentiation of the firm’s products within its previous technical capabilities. In long-term outcomes over 20 years, the right tail of the firm size distribution becomes dominated by firms that were able to expand in both directions: moving first into technologically challenging vertically differentiated products, and then later applying their newly acquired high-end technical competence to horizontal expansion of their product portfolios. |
| Keywords: | Innovation, Growth |
| JEL: | D2 L1 N6 N8 O3 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:bfi:wpaper:2020-03&r=all |
| By: | Evguenia Bessonova; Anna Tsvetkova |
| Abstract: | The paper focuses on trends in the convergence of labour and multifactor productivity in Russia. Using firm-level data for the 2011-2016 period, we obtain the following result: low-productivity firms grow faster than high-productivity ones. Despite this, the initial gap between the most and the least productive firms in the Russian economy is so wide that it is hardly possible to overcome in the short term. Moreover, we find that this gap has increased over the 2011-2016 period, suggesting divergence in productivity levels of Russian firms. To verify the divergence within narrowly defined industries, we also use the stochastic frontier analysis. Our estimates confirm divergence in most industries. |
| Keywords: | productivity gap, beta-convergence, sigma-convergence, stochastic frontier analysis. |
| JEL: | D24 E22 O47 |
| Date: | 2019–10 |
| URL: | http://d.repec.org/n?u=RePEc:bkr:wpaper:wps51&r=all |
| By: | Radicic, Dragana |
| Abstract: | This paper evaluates the effectiveness of national and international R&D support programmes on firms' technology scouting, defined as firms' use of external knowledge sources. Drawing on a unique dataset on R&D support programmes for small and medium-sized enterprises (SMEs) operating in both manufacturing and service sectors across 28 European countries, this study reports treatment effects estimated by the copula-based endogenous switching model, which takes into account unobserved firm heterogeneity. Empirical results indicate that R&D support programmes have heterogenous effects on technology scouting, whereby a crowding out effect arises in the case of a short-run scouting, while additional effect are mostly reported for strategic external knowledge sourcing. Moreover, our results suggest that unfavourable, crowding out, effects could be reduced, if not eliminated, by a random distribution of public funding. |
| Keywords: | Technology scouting,External knowledge search,European SMEs,copula-based endogenous switching model |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:leafwp:1905&r=all |
| By: | Christos Karydas (Center of Economic Research (CER-ETH), ETH Zurich, Switzerland); Evangelos V. Dioikitopoulos (King's Business School, Group of Economics, King's College London, UK) |
| Abstract: | This paper argues that the joint relation between long-term orientation, environmental quality and innovation plays a key role in explaining environment-poverty traps. Based on empirical observations, we allow for the subjective discount rate to negatively depend on environmental quality in an R&D-driven endogenous growth model with local pollution externalities. Our model reconciles two empirical facts: i) multiple equilibria of economic and environmental development; ii) opposite responses to technological improvements depending on the initial equilibrium. Our results suggest that -- in addition to traditional policies such as development aid and technology transfer -- policies that aim at improving both the economic and the environmental dimension of sustainability, should also focus on changing individuals' long-term views in countries that face weak environmental conditions. |
| Keywords: | Endogenous growth, innovation, time preference, environmental poverty traps, economic poverty traps |
| JEL: | D90 E21 O13 O44 Q55 Q56 |
| Date: | 2020–01 |
| URL: | http://d.repec.org/n?u=RePEc:eth:wpswif:20-330&r=all |
| By: | Dana Kassem |
| Abstract: | I ask whether electrification causes industrial development. I combine newly digitized data from the Indonesian state electricity company with rich manufacturing census data. To understand when and how electrification can cause industrial development, I shed light on an important economic mechanism - firm turnover. In particular, I study the effect of the extensive margin of electrification (grid expansion) on the extensive margin of industrial development (firm entry and exit). To deal with endogenous grid placement, I use an instrumental variable approach exploiting the location of colonial electric infrastructure and the need for an interconnected grid in the island of Java. I find that electrification causes industrial development by increasing the number of manufacturing firms, manufacturing workers, and manufacturing output. Electrification increases firm entry rates, but also exit rates. Higher turnover rates lead to higher average productivity and induce reallocation towards more productive firms. This is consistent with electrification lowering entry costs, increasing competition and forcing unproductive firms to exit more often. |
| JEL: | D24 O13 O14 O18 Q41 R11 R12 |
| Date: | 2020–01 |
| URL: | http://d.repec.org/n?u=RePEc:bon:boncrc:crctr224_2019_052v3&r=all |
| By: | Richard Hornbeck; Martin Rotemberg |
| Abstract: | We examine impacts of market integration on the development of American manufacturing, as railroads expanded through the latter half of the 19th century. Using new county-by-industry data from the Census of Manufactures, we estimate substantial impacts on manufacturing productivity from relative increases in county market access as railroads expanded. In particular, the railroads increased economic activity in marginally productive counties. Allowing for the presence of factor misallocation generates much larger aggregate economic gains from the railroads than previous estimates. Our estimates highlight how broadly-used infrastructure or technologies can have much larger economic impacts when there are inefficiencies in the economy. |
| JEL: | D24 N61 N71 R1 |
| Date: | 2019–12 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:26594&r=all |