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on Technology and Industrial Dynamics |
| By: | Athreye, Suma (Essex Business School); Fassio, Claudio (CIRCLE, Lund University); Roper, Stephen (Warwick Business School) |
| Abstract: | In order to observe a patent application at the firm level two conditions need to be met: new products need to be of patentable quality, which depends both on the degree of novelty of innovations and on the total number (portfolio) of innovations; and the benefits of patents need to be higher than the costs of owning them. Analyzing the patent propensity of small and large UK firms using a novel innovation-level survey (the SIPU survey) linked to Community Innovation Survey data we find that when we consider the whole innovation portfolio smaller firms do patent less than larger firms. However, using data on individual innovations, we find that smaller firms are no less likely to patent any specific innovation than larger firms. We argue that size differences in the probability to patent relate primarily to the ‘portfolio effect’, i.e. larger firms generate more innovations than smaller firms and therefore are more likely to create one or more which are patentable. As for the decision to patent a patentable innovation, we find that cost barriers, more than issues of innovation quality or enforceability, deter small firms from patenting specific innovations. Measures to address the costs of patenting for smaller firms – perhaps by considering patents as eligible costs for R&D tax credits – and/or subsidizing SMEs’ participation in IP litigation schemes may both encourage patent use by smaller firms. |
| Keywords: | Patenting; SME; small firms; UK |
| JEL: | O32 O34 O38 |
| Date: | 2020–02–26 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:lucirc:2020_002&r=all |
| By: | Horbach, Jens; Rammer, Christian |
| Abstract: | Skilled labor is a key input to the innovation process. A shortage in supply of skilled labor may hence impede innovation activities, resulting in lower productivity gains. While governments are concerned about these likely negative impacts, there is only limited empirical evidence whether and to what extent labor shortage affects innovation activities. The paper addresses this question using panel data from three waves (2017 to 2019) of the German innovation survey. We measure labor shortage by job openings that could not be filled at all, not with the required skills or only with significant delay, distinguishing different skill levels. We analyze whether labor shortage resulted in stopping or abandoning of innovation projects. Endogeneity issues are tackled by instrumental variable estimation techniques. Our results show that innovative firms are more likely to be subject to skill shortage, whereas skill shortage induces the cancelation of innovation projects. Effects are stronger for labor shortage related to professional occupations and less for academic qualifications. |
| Keywords: | community Innovation Survey,labor shortage,innovation,probit instrumental variable estimation |
| JEL: | J23 J24 O31 C26 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:20009&r=all |
| By: | Belotti,Federico; Borin,Alessandro; Mancini,Michele |
| Abstract: | Several new statistical tools and analytical frameworks have been developed recently to measure countries'and sectors'involvement in global value chains. Such wealth of methodologies reflects that different empirical questions call for distinct accounting methods, along with different levels of aggregation of trade flows. This paper is a companion to the conceptual framework presented in Borin and Mancini (2019). The paper describes a new Stata module, icio, that allows the user to construct the most appropriate measure for given empirical questions on trade in value-added and participation in global value chains of countries and sectors. By exploiting inter-country input-output tables, icio provides decompositions of aggregate, bilateral, and sectoral exports and imports according to the source and destination of their value-added content. As different measures are suited to address distinct economic questions, icio is designed to be flexible also in this respect. |
| Date: | 2020–02–19 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:9156&r=all |
| By: | Van Reenen, John; Moretti, Enrico; Steinwender, Claudia |
| Abstract: | In the US and many other OECD countries, expenditures for defense-related R&D represent a key policy channel through which governments shape innovation, and dwarf all other public subsidies for innovation. We examine the impact of government funding for R&D - and defense-related R&D in particular - on privately conducted R&D, and its ultimate effect on productivity growth. We estimate models that relate privately funded R&D to lagged government-funded R&D using industry-country level data from OECD countries and firm level data from France. To deal with the potentially endogenous allocation of government R&D funds we use changes in predicted defense R&D as an instrumental variable. In both datasets, we uncover evidence of “crowding in” rather than “crowding out,” as increases in government-funded R&D for an industry or a firm result in significant increases in private sector R&D in that industry or firm. A 10% increase in government-financed R&D generates 4.3% additional privately funded R&D. An analysis of wages and employment suggests that the increase in private R&D expenditure reflects actual increases in R&D employment, not just higher labor costs. Our estimates imply that some of the existing cross-country differences in private R&D investment are due to cross-country differences in defense R&D expenditures. We also find evidence of international spillovers, as increases in government-funded R&D in a particular industry and country raise private R&D in the same industry in other countries. Finally, we find that increases in private R&D induced by increases in defense R&D result in significant productivity gains. |
| Keywords: | defense; R&D; productivity |
| JEL: | R14 J01 J1 |
| Date: | 2019–11 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:103449&r=all |
| By: | Pehr-Johan Norbäck; Charlotta Olofsson; Lars Persson |
| Abstract: | Within the policy debate, there is a fear that large incumbent firms buy small firms’ inventions to ensure that they are not used in the market. We show that such “acquisitions for sleep” can occur if and only if the quality of a process invention is small; otherwise, the entry profit will be higher than the entry-deterring value. We then show that the incentive for acquiring for the purpose of putting a patent to sleep decreases when the intellectual property law is stricter because the profit for the entrant then increases more than the entry-deterring value does. |
| Keywords: | acquisitions, innovation, sleeping patents, IP law, ownership |
| JEL: | G24 L10 L20 M13 O30 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_8095&r=all |
| By: | Biancalani, Francesco; Czarnitzki, Dirk; Riccaboni, Massimo |
| Abstract: | This paper analyses the impact of the Italian Startup Act which entered into force in December 2012. This public policy provides a unique bundle of benefits, such as tax incentives, public loan guarantees, and a more flexible labor law, for firms registered as "innovative startups" in Italy. This legislation has been implemented by the Italian government to increase innovativeness of small and young enterprises by facilitating improved access to (external) capital and (highskilled) labor. Consequently, the goal of our evaluation is to assess the impact of the policy on equity, debt and employment. Using various conditional difference-in-difference models, we find that the Italian startup policy has met its primary objectives. The econometric results strongly suggest that firms operating under this program are more successful in obtaining equity and debt capital and they also hire more employees because of the program participation. |
| Keywords: | start up,innovation policy,firm subsidies,small firms |
| JEL: | M13 O38 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:20006&r=all |
| By: | JaeBin Ahn; Romain A Duval; Can Sever |
| Abstract: | While there is growing evidence of persistent or even permanent output losses from financial crises, the causes remain unclear. One candidate is intangible capital – a rising driver of economic growth that, being non-pledgeable as collateral, is vulnerable to financial frictions. By sheltering intangible investment from financial shocks, counter-cyclical macroeconomic policy could strengthen longer-term growth, particularly so where strong product market competition prevents firms from self-financing their investments through rents. Using a rich cross-country firm-level dataset and exploiting heterogeneity in firm-level exposure to the sharp and unforeseen tightening of credit conditions around September 2008, we find strong support for these theoretical predictions. The quantitative implications are large, highlighting a powerful stabilizing role for macroeconomic policy through the intangible investment channel, and its complementarity with pro-competition product market deregulation. |
| Date: | 2020–02–07 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:20/25&r=all |
| By: | Aghion, Philippe; Bergeaud, Antonin; Blundell, Richard; Griffith, Rachel |
| Abstract: | Matched employee-employer data from the UK are used to analyze the wage premium to working in an innovative firm. We find that firms that are more R&D intensive pay higher wages on average, and this is particularly true for workers in some low-skilled occupations. We propose a model in which a firm’s innovativeness is reflected in the degree of complementarity between workers in low-skill and highskilled occupations, and in which non-verifiable soft skills are an important determinant of the wages of workers in low-skilled occupations. The model yields additional predictions on training, tenure and outsourcing which we also find support for in data. |
| Keywords: | innovation; skill-based technological change; wage; complementarity |
| JEL: | O33 L23 J31 |
| Date: | 2019–12 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:103452&r=all |
| By: | Giuseppe Berlingieri (OECD); Sara Calligaris (OECD); Chiara Criscuolo (OECD); Rudy Verlhac (OECD) |
| Abstract: | This paper provides new evidence on the main characteristics of laggard firms - firms in the bottom 40% of the productivity distribution - and their potential for productivity growth. It finds that laggards are on average younger and smaller than more productive firms, and matter for aggregate resource reallocation. Moreover, younger laggards converge faster toward the productivity frontier, suggesting that the composition of the laggard group matters for future productivity. Yet this report finds that laggards converge at a slower rate in highly digital- and skill-intensive industries, suggesting that there are barriers to technology and knowledge diffusion. This could help explain the much-debated productivity slowdown and the increased productivity dispersion. This report also finds that policies aimed at improving workers’ skills, alleviating financial constraints to investments and increasing firms' absorptive capacity through direct R&D support can accelerate the diffusion of knowledge and technology, and help laggard firms to catch up. |
| Keywords: | Catch-up, Laggards, Productivity |
| JEL: | D2 D4 L2 O57 |
| Date: | 2020–03–05 |
| URL: | http://d.repec.org/n?u=RePEc:oec:stiaac:86-en&r=all |
| By: | Daron Acemoglu; Claire LeLarge; Pascual Restrepo |
| Abstract: | Using several sources, we construct a data set of robot purchases by French manufacturing firms and study the firm-level implications of robot adoption. Out of 55,390 firms in our sample, 598 have adopted robots between 2010 and 2015, but these firms account for 20% of manufacturing employment and value added. Consistent with theory, robot adopters experience significant declines in labor share and the share of production workers in employment, and increases in value added and productivity. They expand their overall employment as well. However, this expansion comes at the expense of their competitors (as automation reduces their relative costs). We show that the overall impact of robot adoption on industry employment is negative. We further document that the impact of robots on overall labor share is greater than their firm-level effects because robot adopters are larger and grow faster than their competitors. |
| JEL: | J23 J24 L11 |
| Date: | 2020–02 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:26738&r=all |
| By: | Michael Fritsch (Friedrich Schiller University Jena and Halle Institute for Economic Research (IWH), Germany.); Michael Wyrwich (University of Groningen, The Netherlands and Friedrich Schiller University Jena, Germany.) |
| Abstract: | We investigate the geographic concentration of patenting in large cities using a sample of 14 developed countries. There is wide dispersion of the share of patented inventions in large metropolitan areas. South Korea and the US are two extreme outliers where patenting is highly concentrated in large cities. We do not find any general trend that there is a geographic concentration of patents for the period 2000-2014. There is also no general trend that inventors in large cities have more patents than in rural areas (scaling). Hence, while agglomeration economies of large cities may offer advantages for innovation activities, the extent of these advantages is not very large. We conclude that popular theories over-emphasize the importance of large cities for innovation activities. |
| Keywords: | Innovation, patents, cities, urban scaling, creativity |
| JEL: | R12 O57 |
| Date: | 2020–02–24 |
| URL: | http://d.repec.org/n?u=RePEc:jrp:jrpwrp:2020-003&r=all |
| By: | Enrico De Monte |
| Abstract: | This paper analyzes productivity dynamics based on French firm-level data covering nine key 2-digit industries for the period 1994 - 2016. I estimate firm-level productivity through the estimation of a translog production function and investigate the following main aspects: (i) aggregate productivity change with firm entry and exit by applying the Dynamic OlleyPakes Productivity Decomposition (DOPD), (ii) firms’ ability to improve productivity and productivity persistence, and (iii) productivity differences between different firm groups such as survivors, entrants and exitors as well as small, medium and big firms by applying the concept of stochastical dominance. My results show that aggregate productivity has increased for most the considered 2-digit industries and that in many cases surviving firms’ have contributed significantly to these positive improvements. Entering firms contribute in many cases positively to aggregate productivity while the contribution of exitors shows varying signs. Furthermore, I find that firms’ reveal a high degree of productivity persistence. Analysing productivity difference between firm groups the results suggest that the productivity distribution of surviving firms stochastically dominates the distribution of entering and exiting firms. Surprisingly, the results reveal that big firms do not stochastically dominate the productivity distribution of small firms. |
| Keywords: | production function estimation, productivity decomposition, technological change, productivity differences, firm entry and exit. |
| JEL: | C13 C14 D24 D30 L60 O47 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:ulp:sbbeta:2020-07&r=all |