nep-tid New Economics Papers
on Technology and Industrial Dynamics
Issue of 2020‒04‒13
thirteen papers chosen by
Fulvio Castellacci
Universitetet i Oslo

  1. Hipsters vs. Geeks? Creative workers, STEM and innovation in US cities By Andrés Rodríguez-Pose; Neil Lee
  2. The EU vs US corporate R&D intensity gap: Investigating key sectors and firms By Pietro Moncada-Paterno-Castello; Nicola Grassano
  3. Do Patents Enable Disclosure? Evidence from the Invention Secrecy Act By Gaetan de Rassenfosse; Gabriele Pellegrino; Emilio Raiteri
  4. Legal forms, organizational architecture, and firm failure: A large survival analysis of Russian corporations By Iwasaki, Ichiro; Kim, Byung-Yeon
  5. Structural accounting: an empirical assessment of cross-country differences in productivity By Dario Diodato
  6. The Productivity Impact of Business Visits across Industries By Piva, Mariacristina; Tani, Massimiliano; Vivarelli, Marco
  7. The Impact of the Third Sector of R&D on the Innovative Performance of Entrepreneurial Firms By Link, Albert; Morris, Cody; van Hasselt, Martijn
  8. Do Vertical Spillovers Differ by Investors' Productivity? Theory and Evidence from Vietnam By Ni, Bin; Kato, Hayato
  9. Why is productivity slowing down? By Goldin, Ian; Koutroumpis, Pantelis; Lafond, François; Winkler, Julian
  10. Trends in water-related technological innovation: Insights from patent data By Xavier Leflaive; Ben Krieble; Harry Smythe
  11. Network compatibility, intensity of competition and process R&D: A Generalization By Sumit Shrivastav
  12. Effects of competition forms and market structure on green innovation incentives By Iwata, Hiroki
  13. International Patent Protection and Trade: Transaction-Level Evidence By Gaetan de Rassenfosse; Marco Grazzi; Daniele Moschella; Gabriele Pellegrino

  1. By: Andrés Rodríguez-Pose; Neil Lee
    Abstract: Innovation in cities is increasingly regarded as an outcome of two potential inputs: scientific activity and creativity. Recent research using firm level data has suggested that actually it might be the combination of these two inputs, rather than the mere presence of workers representing each group, which matters. Yet there is little evidence on whether this relationship holds using city level data in the case of the United States (US). This paper investigates this gap in our knowledge by examining how the combination of STEM (geeks) and creative workers (hipsters) in a panel of 290 US Metropolitan Statistical Areas during the period between 2005 and 2015 relates to city level innovation. The results indicate that, although the presence of STEM workers is a more important driver of innovation than that of creative ones, the most innovative cities are characterised by a combination of the two. Hence, current policies which tend to focus mainly on either STEM or creativity may be better targeted at ensuring interactions between the two.
    Keywords: creativity, creative class, STEM, innovation, cities, United States
    JEL: O18 O32 O33 R12
    Date: 2020–04
  2. By: Pietro Moncada-Paterno-Castello (European Commission - JRC); Nicola Grassano (European Commission - JRC)
    Abstract: This paper contributes to the literature on corporate research and development (R&D) intensity decomposition by examining the effects of several parameters on R&D intensity. It draws on a longitudinal company-level micro-dataset, built using four editions of the EU R&D Scoreboard, and confirms the structural nature of the EU R&D intensity gap with the US, which has widened in the last decade. As a novel contribution to the literature, this paper uncovers the differences between the EU and the US by inspecting which sectors and firms are more accountable for the aggregate R&D intensity performance of these two economies. Furthermore, the study shows that a large share of R&D investment by the EU sample is mostly conducted in sectors with medium or low R&D intensity, and that there is a high concentration of R&D in a few sectors and firms. Interestingly, the investigation finds a high heterogeneity in firms' R&D intensity within sectors, indicating the coexistence of firms with different R&D investment strategies and efficiencies. Finally, the study reveals that the EU holds a much lower number of both larger and smaller R&D investors than the USA, in the four high-tech sectors that are key to the aggregate EU R&D intensity gap vis-Ã -vis the USA.
    Keywords: Corporate R&D, R&D intensity decomposition, EU vs US R&D intensity gap, R&D distribution; comparative performance; top world R&D firms.
    JEL: O30 O32 O38 O57
    Date: 2020–03
  3. By: Gaetan de Rassenfosse (Ecole polytechnique federale de Lausanne); Gabriele Pellegrino (Ecole polytechnique federale de Lausanne); Emilio Raiteri (Eindhoven University of Technology)
    Abstract: This paper provides novel empirical evidence that patents enable knowledge disclosure. The analysis exploits the Invention Secrecy Act, which grants the U.S. Commissioner for Patents the right to prevent disclosure of new inventions that represent a threat to national security. Using a two-level matching approach, we document a negative and large relationship between the enforcement of a secrecy order and follow-on inventions, as captured with patent citations and text-based measures of invention similarity. The effect of secrecy orders is particularly salient for geographically-distant parties and for inventions in the same technological field as the secreted patent.
    Keywords: disclosure, follow-on invention, knowledge diffusion, patent
    JEL: O31 O33 O34
    Date: 2020–03
  4. By: Iwasaki, Ichiro; Kim, Byung-Yeon
    Abstract: In this paper, we trace the survival status of more than 110,000 Russian firms from 2007–2015 and examine the relationship between legal forms of incorporation and firm survivability across industries and different periods of economic crisis and growth. Applying the Cox proportional hazards model, we find an optimal legal form that maximizes the probability of firm survival: closed joint-stock companies and those adopting limited liability survive longer than open joint-stock companies, partnerships, or cooperatives. This relationship is robust across periods of boom and recession and across industries.
    Keywords: Firm failure, legal form, Cox proportional hazards model, Russia
    JEL: D22 G01 G33 G34 P34
    Date: 2020–04
  5. By: Dario Diodato
    Abstract: This paper proposes a method to decompose cross-country differences in productivity (TFP) into a technological component - depending on the overall productivity of a country - and an allocation component, which depends on whether factors of productions are allocated to productive or unproductive industries. Using a sample of over 2 million fims from 30 countries, the analysis estimates that 1/4 of inequality between countries is due to the Composition effect, while 3/4 to the Place effect. Moreover, once accounting for heterogeneity at the subnational level, I find that the Composition effect may be as high as 50%.
    Keywords: total factor productivity, factor allocation, structural change
    JEL: O14 O33 O47
    Date: 2020–04
  6. By: Piva, Mariacristina (Università Cattolica del Sacro Cuore); Tani, Massimiliano (University of New South Wales); Vivarelli, Marco (Università Cattolica del Sacro Cuore)
    Abstract: This paper builds on and considerably extends Piva, Tani and Vivarelli (2018), confirming the key role of Business Visits as a productivity enhancing channel of technology transfer. Our analysis is based on a unique database on business visits sourced from the U.S. National Business Travel Association, merged with OECD and World Bank data and resulting in an unbalanced panel covering 33 sectors and 14 countries over the period 1998-2013 (3,574 longitudinal observations). We find evidence that BVs contribute to fostering labour productivity in a significant way. While this is consistent with what found by the previous (scant) empirical literature on the subject, we also find that short-term mobility exhibits decreasing returns, being more crucial in those sectors characterized by less mobility and by lower productivity performances.
    Keywords: business visits, labour mobility, knowledge diffusion, R&D, productivity
    JEL: J61 J61 O33
    Date: 2020–03
  7. By: Link, Albert (University of North Carolina at Greensboro, Department of Economics); Morris, Cody (University of North Carolina at Greensboro, Department of Economics); van Hasselt, Martijn (University of North Carolina at Greensboro, Department of Economics)
    Abstract: Entrepreneurial firms that rely on public research institutes, the third sector of R&D, are also firms that are more innovative in terms of introducing new or significantly improved goods or services to the market. This finding is based on an analysis of 4,004 knowledge-intensive entrepreneurial (KIE) firms located in ten European Union countries. We interpret our findings as suggestive evidence of the importance of policy makers continuing to support financially public research institutions.
    Keywords: Research institute; third sector of R&D; innovation; entrepreneurship; KIE firms;
    JEL: L26 O31 O32 O38
    Date: 2020–04–07
  8. By: Ni, Bin; Kato, Hayato
    Abstract: Developing countries are eager to host foreign direct investment to receive positive technology spillovers to their local firms. However, what types of foreign firms are desirable for the host country to achieve spillovers best? We address this question using firm-level panel data from Vietnam to investigate whether foreign Asian investors in downstream sectors with different productivity affects the productivity of local Vietnamese firms in upstream sectors differently. Using endogenous structural breaks, we divide Asian investors into low-, middle-, and high-productivity groups. The results suggest that the presence of the middle group has the strongest positive spillover effect. The differential spillover effects can be explained by a simple model with vertical linkages and productivity-enhancing investment by local suppliers. The theoretical mechanism is also empirically confirmed.
    Keywords: FDI spillovers; Heterogeneous productivity; Firm-level data; Endogenous structural break; Vertical Cournot model
    JEL: D22 F21
    Date: 2020–03–27
  9. By: Goldin, Ian; Koutroumpis, Pantelis; Lafond, François; Winkler, Julian
    Abstract: The recent decline in aggregate labor productivity growth in leading economies has been widely described as a puzzle, even a paradox, leading to extensive research into possible explanations. Our review confirms the magnitude of the slowdown and finds that it is largely driven by a decline in total factor productivity and capital deepening. Disaggregation reveals that a significant part of the slowdown is due to sectors that experienced the large benefits from ICTs in the previous period, and that an increasing gap between frontier and laggard firms suggests slower technology diffusion and increasing misallocation of factors. We evaluate explanations that attempt to reconcile the paradox of slowing productivity growth and technological change, including mismeasurement, implementation lags for technologies, and creative destruction processes.
    Keywords: productivity growth; secular stagnation; economic growth;
    JEL: D24 E66 O40
    Date: 2020–03–19
  10. By: Xavier Leflaive (OECD); Ben Krieble (OECD); Harry Smythe (OECD)
    Abstract: Innovation has a role to play to mitigate water-related risks and to support the provision of water services on which our well-being and sustainable development depend. Water-related innovation originate in a wide range of countries, with different levels of ambition. They disseminate at different scales globally.This paper uses patent data to document trends in the invention of technologies to promote water security since 1990, focusing on the countries in which inventions are developed, where they might be commercialised, and in which subsectors they originate. The water-related technologies identified in the paper can be clustered into three categories: i) water pollution abatement; ii) demand-side; and iii) supply-side. The paper describes a number of important trends that can inform a broader discussion on the factors that might hinder, or enhance, inventive activity to promote water security.
    Keywords: droughts, floods, green tech, innovation, patent, water pollution
    JEL: O13 O31 O38 Q25 Q55
    Date: 2020–04–07
  11. By: Sumit Shrivastav (Indira Gandhi Institute of Development Research)
    Abstract: This paper analyses implications of network compatibility and competition on process innovation in differentiated network goods duopoly. It shows that firms R&D investments are strategic substitutes (complements), if effective network compatibility is less (more) than product substitutability, regardless of the nature of competition. If R&D investments are strategic complements, firms always invest in process innovation and they invest more under Bertrand competition than under Cournot competition. If R&D investments are strategic substitutes, unlike Cournot firms, Bertrand firms dont always undertake process innovation; but, when Bertrand firms also undertake process innovation, Cournot-Bertrand R&D ranking depends on the strength of network externalities.
    Keywords: Network compatibility, Network Externalities, Process R&D, Bertrand-Cournot Compari- son, Product Differentiation
    JEL: L13 D43 O31
    Date: 2020–02
  12. By: Iwata, Hiroki
    Abstract: This paper analyzes the effects of environmental policy on green innovation. We compare the incentives for green innovation in both the Cournot and Bertrand competition. It is shown that positive incentives for green innovation exist in both competition models. When environmental regulations are imposed, the effects of the probability of success on green innovation incentives differ between the Bertrand and Cournot competition. Additionally, we clarify the conditions necessary for the establishment of the Porter hypothesis in both competition models.
    Keywords: Cournot and Bertrand competition, Green innovation, Porter hypothesis
    JEL: L13 Q52 Q55
    Date: 2020–03–27
  13. By: Gaetan de Rassenfosse (Ecole polytechnique federale de Lausanne); Marco Grazzi (Department of Economic Policy, Università Cattolica del Sacro Cuore); Daniele Moschella (Institute of Economics & EMbeDS, Scuola Superiore Sant’Anna); Gabriele Pellegrino (Ecole polytechnique federale de Lausanne)
    Abstract: This paper investigates the extent to which international trade hinges on patents. We analyze the export and patenting activities of the universe of French exporting firms over the period 2002–2011. The noticeable feature of our study is that we observe export and patenting activities worldwide and at the product level. We exploit how heterogeneity of patent coverage across (and within) product-country relates to exports. We find a patent premium of at least 10 percent, which is mainly associated with a quantity effect. A modest price effect emerges in specific sectors, notably pharmaceuticals.
    Keywords: export, international trade, patent, product
    JEL: F14 O34
    Date: 2020–03

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