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on Technology and Industrial Dynamics |
| By: | Anuraag Singh; Giorgio Triulzi; Christopher L. Magee |
| Abstract: | In this work, we attempt to provide a comprehensive granular account of the pace of technological change. More specifically, we survey estimated yearly performance improvement rates for nearly all definable technologies for the first time. We do this by creating a correspondence of all patents within the US patent system to a set of technology domains. A technology domain is a body of patented inventions achieving the same technological function using the same knowledge and scientific principles. We obtain a set of 1757 domains using an extension of the previously defined classification overlap method (COM). These domains contain 97.14% of all patents within the entire US patent system. From the identified patent sets, we calculated the average centrality of the patents in each domain to estimate their improvement rates, following a methodology tested in prior work. The estimated improvement rates vary from a low of 1.9% per year for the Mechanical Skin treatment - Hair Removal and wrinkles domain to a high of 228.8% per year for the Network management - client-server applications domain. We developed a one-line descriptor identifying the technological function achieved and the underlying knowledge base for the largest 50, fastest 20 as well as slowest 20 of these domains, which cover more than forty percent of the patent system. In general, the rates of improvement were not a strong function of the patent set size and the fastest improving domains are predominantly software-based. We make available an online system that allows for automated searching for domains and improvement rates corresponding to any technology of interest to researchers, strategists and policy formulators. |
| Date: | 2020–04 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2004.13919&r=all |
| By: | Fafaliou, Irene; Giaka, Maria; Konstantios, Dimitrios; Polemis, Michael |
| Abstract: | The relationship between innovation and corporate sustainability constitutes a long-lasting debate among policymakers and researchers. Despite the significant contributions to this field, extant literature does not provide clear answers. This can be attributed to the fact that prior studies do not incorporate the various aspects of innovation to measure their impact on sustainability performance. This study aims to cover this gap in the emerging literature by using a unique micro-level panel dataset consisting of a large number of firms scattered across the US states over the period 2007-2016. Our findings reveal that the basic mechanism for achieving corporate sustainability is through the innovation channel. We also argue that the quantity and value of innovation enhance the sustainability level, whereas these effects are strengthened in times of recession (global financial crisis). The empirical results survive robustness checks under alternative innovation measures and different econometric techniques dealing with endogeneity and reverse causality. Lastly, policy implications relating to the nature of corporate sustainability performance are also provided. |
| Keywords: | Innovation; Sustainability; Patents; Trademarks; Corporate Sustainability Performance |
| JEL: | L20 O31 O34 |
| Date: | 2020–04 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:99834&r=all |
| By: | Lorenz Kueng (University of Lugano - Faculty of Economics; Swiss Finance Institute; National Bureau of Economic Research (NBER); Centre for Economic Policy Research (CEPR); Northwestern University - Kellogg School of Management); Mu-Jeung Yang (University of Washington - Department of Economics); Bryan Hong (New York University (NYU) - Leonard N. Stern School of Business) |
| Abstract: | What determines the life-cycle of businesses? Exploiting unique firm-level panel data on internal organization and innovation we establish three key sets of stylized facts to inform recent theories of firm life-cycles. First, life-cycle effects are driven by startups, not by new establishments of existing firms. Second, organizational restructuring and innovation are both strongly correlated with firm growth but not with firm age, in contrast to passive learning theories of firm dynamics. Third, there are important sectoral differences in innovation activities which are monotonically increasing in firm size for manufacturing firms but hump-shaped for firms in service industries. |
| Keywords: | firm life-cycle, organizational capital, innovation |
| Date: | 2020–04 |
| URL: | http://d.repec.org/n?u=RePEc:chf:rpseri:rp2034&r=all |
| By: | Daniel Berkowitz |
| Abstract: | Using methods in Hall and Jorgenson (1967) and Barkai (2020), we find that pure profitshares rose 25.6 percentage points in China during a period when reforms were enacted thatshould have strengthened market competition. Increases in firms' markups accounts for roughlyfive-sixths of the increase of pure profit shares in manufacturing. Firms that raised markupsoperated primarily in industries where state owned enterprises (SOEs) were pervasive, net entryof firms was slow, and there was a strong reallocation of market shares to SOEs and a weakreallocation to competitive firms. While there was an overall decline in market competition,markets became more competitive in industries where SOEs had small market shares. |
| Date: | 2020–01 |
| URL: | http://d.repec.org/n?u=RePEc:pit:wpaper:6897&r=all |
| By: | Maurizio Iacopetta (SKEMA Business School and OFCE Sciences Po); Raoul Minetti (Michigan State University); Pierluigi Murro (LUISS University) |
| Abstract: | New firms are often based on ideas that the founders developed while working for incumbent firms. We study the macroeconomic effects of spinoffs through a growth model of product variety expansion, driven by firm entry, and product innovation. Spinoffs stem from conflicts of interest between incumbent firms' shareholders and employees. The analysis suggests that incumbents invest more in product innovation when knowledge protection is stronger. An inverted-U shape relationship emerges, however, between the intensity of spinoff activities and the strength of the rule of law. A calibration experiment indicates that, with a good rule of law, loosening knowledge protection by 5\% reduces product innovation by one fifth in the short run and one seventh in the long run, but boosts the spinoff rate by one tenth and one sixth in the short and long run, respectively. Nevertheless, per capita income growth drops and welfare deteriorates. The trade-offs are broadly consistent with evidence from Italian firm. |
| Keywords: | Corporate governance, Endogenous growth, Spinoffs |
| JEL: | E44 O40 G30 |
| Date: | 2020–04 |
| URL: | http://d.repec.org/n?u=RePEc:lui:casmef:2002&r=all |
| By: | Lorenz Kueng (University of Lugano - Faculty of Economics; Swiss Finance Institute; National Bureau of Economic Research (NBER); Centre for Economic Policy Research (CEPR); Northwestern University - Kellogg School of Management); Nicholas Li (University of Toronto - Department of Economics); Mu-Jeung Yang (University of Washington - Department of Economics) |
| Abstract: | How do firms in high-income countries adjust to emerging market competition? We estimate how a representative panel of Canadian firms adjusts innovation activities, business strategies, and exit in response to large increases in Chinese imports. Whether firms invest in process or product innovation matters: on average, the number of process innovations declines more strongly than the number of product innovations. In addition, firms that initially pursue process innovation strategies and survive have higher profits ex-post, but are ex-ante more likely to exit. In contrast, firms that initially pursue product innovation strategies have higher profits if they survive, without significant impact on exit. Both empirical patterns are consistent with our theory, which suggests that innovation strategies do not ensure insulation against competitive shocks, but instead increase risk. |
| Keywords: | International Competition, Innovation, Management Practices, Firm Performance |
| JEL: | F14 L2 O3 |
| Date: | 2020–04 |
| URL: | http://d.repec.org/n?u=RePEc:chf:rpseri:rp2035&r=all |
| By: | Rodriguez Castelan, Carlos (World Bank); López-Calva, Luis-Felipe (World Bank); Barriga Cabanillas, Oscar (University of California, Davis) |
| Abstract: | Although market concentration is one of the main impediments to productivity growth globally, data constraints have limited its analysis to developed countries or cross-country studies based on definitions of market concentration across nations and industries. This paper takes advantage of a database that is unusual by developing-country standards by means of leveraging the richness of five rounds of the Mexican Manufacturing Census between 1994 and 2014. The data allow estimation of the effects of local industry concentration on productivity. The main results show that a decline by 10 points in the Herfindahl-Hirschman index (on a 0-100 scale), a measure of market concentration, explains an increase by 1 percent in the total factor productivity of revenue. Local industry concentration also has heterogeneous effects on productivity across industries, while its impact on productivity varies by level of exposure to international markets. Results show that the effect of greater exposure to trade offsets and, in most cases, reverses the negative effects of local concentration on productivity. These results are robust to specifications based on the estimation of firm productivity using the panels of establishment data from the 2009 and 2014 rounds of the economic census, to controlling for a proxy of markups, and to using alternative indicators of local industry concentration. |
| Keywords: | productivity, market concentration, instrumental variables |
| JEL: | C26 D24 D4 F12 L1 |
| Date: | 2020–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp13147&r=all |
| By: | Henriette Ruhrmann (Technical University of Berlin); Michael Fritsch (Friedrich Schiller University Jena, Faculty of Economics); Loet Leydesdorff (Amsterdam School of Communication Research (ASCoR), University of Amsterdam) |
| Abstract: | Employing a quantitative, data-driven tool - the Triple Helix Indicator - to microdata of firms in Germany, we develop an evidence base for innovation-policy strategies. We aim to answer the question which level of government (local, regional, national) might be most effective for strategic innovation policy-making based on smart specialization in Germany. The empirical results show that the country is decentralized to the extent that it cannot be considered a "national" innovation system. More than two-thirds of innovation-system synergy is generated at the lower levels of districts (NUTS3) and Governmental Regions (NUTS2). In high-tech and medium-tech manufacturing, former East and West Germany, as well as North and South Germany, can be considered separate sub-national innovation systems. These findings strengthen the case for region- and context-specific innovation policies. The results illustrate the value of the Triple Helix Indicator for systematic regional mapping and serve as evidence for policy-makers to expand RIS3 policy strategies to the regional and local level in Germany. |
| Keywords: | Innovation systems, Triple Helix, Germany, Redundancy, Synergy |
| JEL: | O30 R11 O38 O52 |
| Date: | 2020–04–22 |
| URL: | http://d.repec.org/n?u=RePEc:jrp:jrpwrp:2020-007&r=all |
| By: | Mario Benassi (Department of Economics, Management, and Quantitative Methods, University of Milan); Elena Grinza (Department of Management and Production Engineering, Politecnico di Torino); Francesco Rentocchini (Department of Economics, Management, and Quantitative Methods, University of Milan); Laura Rondi (Department of Management and Production Engineering, Politecnico di Torino) |
| Abstract: | Drawing on the knowledge-based view of the firm, we investigate whether firm performance is related to the accumulated stock of technological knowledge associated with the Fourth Industrial Revolution (4IR), and what contextual factors affect this relationship. We test our research questions on a longitudinal matched patent-firm data set on medium and large firms filing 4IR patents at the European Patent Office (EPO). Our results show a significant and economically relevant positive association between the development of 4IR technologies and firm productivity, but no relationship with its profitability, thereby suggesting that the returns from costly technological investments are slow to cash in. We also find that late entrants benefit more from the development of 4IR technological capabilities than early entrants and experience a substantial “boost effect”. We provide empirical support to an explanation of these findings in terms of the ability of late entrants to (i) manage the inherent complexity of the bundle of technologies comprising the 4IR and (ii) exploit profitable downstream applications of the 4IR. |
| Keywords: | Fourth Industrial Revolution (4IR); patenting; technology development; firm performance; longitudinal matched patent-firm data |
| JEL: | O33 D24 J24 |
| Date: | 2020–07 |
| URL: | http://d.repec.org/n?u=RePEc:srt:wpaper:0720&r=all |
| By: | Rückert, Désirée; Veugelers, Reinhilde; Weiss, Christoph |
| Abstract: | Using a new survey on digitalisation activities of firms in the EU and the US, we identify digitalisation profiles based on the current use of digital technologies and future investment plans in digitalisation. Our analysis confirms the trend toward digital polarisation and a growing digital divide in the corporate landscape with, on one side, many firms that are not digitally active, and on the other side, a substantial number of digitally active firms forging ahead. Old small firms, with less than 50 employees and more than 10 years old, are significantly more likely to be persistently digitally non-active. We show that these persistently non-digital firms are less likely to be innovative, increase employment or command higher mark-ups. These trends are likely to exacerbate the digital divide across firms in the EU and the US. |
| Keywords: | digital technology,investment,firm performance |
| JEL: | D22 E22 L25 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:eibwps:202007&r=all |
| By: | Alhassan A. Karakara (University of Cape Coast, Ghana); Evans S. Osabuohien (CEPDeR, Covenant University, Ota, Nigeria) |
| Abstract: | Purpose – This study investigates how ICT adoption enhances the innovativeness of informal firms in West Africa, using the cases of Ghana and Nigeria. Design/methods/approach – The study used the World Bank Enterprise Survey data 2014 for Ghana and Nigeria with binary logistic regression analysis to achieve this. Four different innovations are modelled. They include: first, whether a firm has innovated based on producing a new product or significantly improved product; second, whether a firm has innovated in its methods of production or services; third, whether a firm has innovated in terms of its organisational structure; and fourth, whether a firm has introduced a new and improved marketing method. Findings – The results show that the use of email, cellphone and website has a positive impact on the four types of innovations modelled. However, these effects varied markedly between Ghana and Nigeria. Firms’ spending on R&D, firm giving its employees the chance to develop their ideas and when firm competes with others; all positively impact on the four types of innovations. Thus, the study recommends that policies should be geared towards making firm have more access to ICTs to enable them to be more innovative to serve clients and the economy. Originality/value – This study differs by concentrating on how the adoption of ICTs could help firms to introduce innovations into their companies in two West African countries, namely: Ghana and Nigeria. Thus, it complements literature on informal firms’ innovation efforts in West Africa. |
| Keywords: | Firms, ICT adoption, Innovation, West Africa, World Bank Enterprise Survey data, Ghana, Nigeria |
| JEL: | D21 L60 L80 O14 O30 |
| Date: | 2020–01 |
| URL: | http://d.repec.org/n?u=RePEc:agd:wpaper:20/023&r=all |
| By: | Cathles, Alison; Nayyar, Gaurav; Rückert, Désirée |
| Abstract: | As the productivity of the European economy shows signs of slowing down, many hopes are pinned on digital technologies to reverse this trend. This study uses data from the EIBIS 2019 survey to examine whether the adoption of different digital technologies (such as advanced robotics, 3D printing, or Internet of Things) by firms in the EU have different impacts on productivity. It also examines whether these different technologies have different implications for employment growth, and whether there are complementarities between technologies when it comes to firm performance. |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:eibwps:202006&r=all |
| By: | Amat Adarov (The Vienna Institute for International Economic Studies, wiiw); Robert Stehrer (The Vienna Institute for International Economic Studies, wiiw) |
| Abstract: | The paper studies the drivers of productivity at country and sectoral levels over the period 2000-2017 with the focus on the impact of capital accumulation and structure. The analysis confirms an especially important role of ICT and intangible digital capital for productivity growth, particularly in the manufacturing sectors. While backward global value chain participation and EU integration are also found to be instrumental for accelerating productivity growth, the impact of inward foreign direct investment is not robustly detected when the data is purged from the effects of special purpose entities and outlier countries. |
| Keywords: | Productivity, digitalisation, ICT, intangible capital, FDI, capital accumulation, global value chains |
| JEL: | F14 F15 F21 E22 O47 |
| Date: | 2020–04 |
| URL: | http://d.repec.org/n?u=RePEc:wii:wpaper:178&r=all |