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on Technology and Industrial Dynamics |
| By: | Dechezleprêtre, Antoine; Hémous, David; olsen, morten; Zanella, carlo |
| Abstract: | Do higher wages lead to more automation innovation? To answer this question, we first introduce a new measure of automation by using the frequency of certain keywords in patent text to identify automation innovations in machinery. We validate our measure by showing that it is correlated with a reduction in routine tasks in a cross-sectoral analysis in the US. Then we build a firm-level panel dataset on automation patents. We combine macroeconomic data from 41 countries and information on geographical patent history to build firm-specific measures of low-skill and high-skill wages. We find that an increase in low-skill wages leads to more automation innovation with an elasticity between 2 and 4. An increase in high-skill wages tends to reduce automation innovation. Placebo regressions show that the effect is specific to automation innovations. Finally, we use the Hartz labor market reforms in Germany for an event study and find that they are associated with a relative reduction in automation innovations. |
| Keywords: | automation; Income inequality; Innovation; patents |
| JEL: | J20 O31 O33 |
| Date: | 2019–12 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:14249&r=all |
| By: | Sara Amoroso (European Commission - JRC); Roberto Martino (European Commission - RTD) |
| Abstract: | In this paper, we develop a new firm-level measure of distance to the productivity frontier that accounts for international technology spillovers stemming from the use of imported intermediate goods. The trade-weighted technological distance to frontier is matched with sector- and country-level data on regulation and firm dynamics (entry and exit rates) of 16 European countries. Using our measure of trade-adjusted technology gap, we investigate the role of labour, capital, and product market regulatory frameworks in the technology catch-up process, gauging the effect of firms' dynamics in mediating and moderating the impact of regulation on the technology gap. Our study offers a novel perspective and insights to the analysis of the link between framework conditions and technological distance to frontier. While most scholars argue that less regulation always favours productivity growth and the diffusion of technology, our results provide a more nuanced picture. Deregulation is not a one-size-fits-all solution that leads to faster technology diffusion, instead heterogeneity in business dynamism and countries' regulatory structures need to be considered. |
| Keywords: | Innovation diffusion, Framework conditions, Business dynamics, Technological frontier |
| JEL: | L16 L50 M21 O33 |
| Date: | 2020–07 |
| URL: | http://d.repec.org/n?u=RePEc:ipt:wpaper:202004&r=all |
| By: | Moretti, Enrico; Steinwender, Claudia; Van Reenen, John |
| 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; Innovation; productivity; R&D |
| Date: | 2019–12 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:14145&r=all |
| By: | Baum, Christopher F (Boston College, DIW Berlin & Centre of Excellence for Science and Innovation Studies); Lööf, Hans (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology); Stephan, Andreas (Jönköping University, DIW Berlin & Centre of Excellence for Science and Innovation Studies); Viklund-Ros, Ingrid (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology) |
| Abstract: | We examine the impact of offshoring on patenting and total factor productivity using a panel of 7,000 mainly small Swedish manufacturing firms over the period 2001-2014. We apply the United Nations Broad Economic Categories (BEC)system to identify offshoring-related intermediate imports. The results show that the link between offshoring on the one hand and innovation and productivity on the other is largely explained by self-selection and reverse causality. We find a positive but statistically weak impact of offshoring on innovation, and no effect on productivity. |
| Keywords: | offshoring; patent; trademark; innovation; productivity; panel data |
| JEL: | C33 D24 F61 L23 O31 |
| Date: | 2020–08–03 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:cesisp:0486&r=all |
| By: | Crescenzi, Riccardo; Dyevre, Arnaud; Neffke, Frank |
| Abstract: | We study whether and when Research and Development (R&D) activities by foreign multinationals help in the formation and development of new innovation clusters. Combining information on nearly four decades worth of patents with socio-economic data for regions that cover virtually the entire globe, we use matched difference-in-differences estimation to show that R&D activities by foreign multinationals have a positive causal effect on local innovation rates. This effect is sizeable: foreign research activities help a region climb 14 percentiles in the global innovation ranks within five years. This effect materializes through a combination of knowledge spillovers to domestic firms and the attraction of new foreign firms to the region. However, not all multinationals generate equal benefits. In spite of their advanced technological capabilities, technology leaders generate fewer spillovers than technologically less advanced multinationals. A closer inspection reveals that technology leaders also engage in fewer technological alliances and exchange fewer workers in local labor markets abroad than less advanced firms. Moreover, technology leaders tend to set up their foreign R&D activities in regions with relatively low absorptive capacity. We attribute these differences to that fact that the trade-off between costs and benefits of local spillovers a multinational faces depends on the multinational’s technological sophistication. This illustrates the importance of understanding corporate strategy when analyzing innovation clusters. |
| Keywords: | innovation; regions; Foreign Direct Investment; patenting; cluster emergence |
| JEL: | O32 O33 R11 R12 |
| Date: | 2020–07 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:105684&r=all |
| By: | Quentin Plantec (CGS i3 - Centre de Gestion Scientifique i3 - CNRS - Centre National de la Recherche Scientifique - PSL - PSL Research University - MINES ParisTech - École nationale supérieure des mines de Paris, Institut National de la Propriété Industrielle (INPI)); Pascal Le Masson (CGS i3 - Centre de Gestion Scientifique i3 - CNRS - Centre National de la Recherche Scientifique - PSL - PSL Research University - MINES ParisTech - École nationale supérieure des mines de Paris); Benoit Weil (CGS i3 - Centre de Gestion Scientifique i3 - CNRS - Centre National de la Recherche Scientifique - PSL - PSL Research University - MINES ParisTech - École nationale supérieure des mines de Paris) |
| Abstract: | The paper suggests a new taxonomy of knowledge search modes to describe the creative process of new invention design, in particular how firms combine knowledge components from their own knowledge base-taking into account both the components and the structures of knowledge bases-with those from newly acquired or newly internally developed. Using network theory techniques, we defined four knowledge search modes: (1) refinement, (2) clustering, (3) absorption and (4) recomposition. We conducted an exploratory study on the oil & gas industry, reviewing 50,776 utility patents filed by 16 major firms between 1989 and 2016. The results showed, first, that firms relied to varying extents on different knowledge search modes in their invention design processes. Second, reviewing the technological originality of the designed inventions showed that simply absorbing new knowledge components, without major changes in knowledge base structure, was associated with low technological originality, but constituted one of the main knowledge search modes used by the analyzed firms. In contrast, major changes in knowledge base structure favored technological originality, with or without new knowledge components, but were nevertheless the least used mode. Understanding organizational learning practices associated with the phenomena described here can foster innovation performance in firms. |
| Keywords: | Knowledge search,Patent,Oil & gas,technological originality,knowledge base |
| Date: | 2020–08–11 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-02613665&r=all |
| By: | Stiebale, Joel; Südekum, Jens; Woessner, Nicole |
| Abstract: | We study the impact of a recent digital automation technology - industrial robotics - on the distribution of sales, productivity, markups, and profits within industries. Our empirical analysis combines data on the industry-level stock of industrial robots with firms' balance sheet data for six European countries from 2004 to 2013. We find that robots disproportionally raise productivity in those firms that are already most productive to begin with. Those firms are able to increase their markups and overall profits, while they tend to decline for less profitable firms within the same industry, country and year. We also show that robots contribute to the falling aggregate labor income share through a rising concentration of industry sales in highly productive firms with low firm-specific labor shares. In sum, our paper suggests that robots boost the emergence of superstar firms within European manufacturing, and thereby shifts the functional income distribution away from wages and towards profits. |
| Keywords: | Automation,Robots,Productivity,Markups,Labor share,Superstar firms |
| JEL: | D4 L11 O33 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:dicedp:347&r=all |
| By: | Wen Yao; Xiaodong Zhu |
| Abstract: | In developed countries, aggregate employment is strongly pro-cyclical and almost as volatile as output. In China, the correlation of aggregate employment and output is close to zero, and the volatility of aggregate employment is very low. We argue that the key to understanding the aggregate employment fluctuations in China is the labour reallocation between the agricultural and non-agricultural sectors, and that income effect plays an important role in determining the labour reallocation dynamics in both the long-run and short-run. |
| Keywords: | Structural Change, Income Effect, Labour Reallocation, Employment Fluctuations, China |
| JEL: | E24 E32 O41 |
| Date: | 2020–07–14 |
| URL: | http://d.repec.org/n?u=RePEc:tor:tecipa:tecipa-671&r=all |
| By: | Jean Imbs; Laurent L. Pauwels (Division of Social Science) |
| Abstract: | We propose a new measure of high order trade, labeled HOT, based on the fraction of a sector's downstream uses that cross a border. Because it decomposes gross output, HOT evaluates a sector's exposure to foreign shocks abstracting altogether from observed direct trade, which we exploit to construct instruments for openness. For the same reason, we can evaluate HOT with precision for activities where measured direct trade is essentially zero, like some services. We compute HOT and its instruments for 50 sectors in 43 countries using recently released data on international input-output linkages. We compare its properties with conventional measures that all rely on observed direct trade. HOT correlates positively with conventional trade measures across countries, much less across sectors as many more are open according to our measure. HOT correlates significantly with sector productivity, growth, and synchronization; none of the conventional measures do. Once instrumented, we show high order openness causes productivity and synchronization, but not growth. JEL Codes: E32, F44 |
| Date: | 2020–06 |
| URL: | http://d.repec.org/n?u=RePEc:nad:wpaper:20200047&r=all |
| By: | Norbäck, Pehr-Johan; Olofsson, Charlotta; Persson, Lars |
| 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; IP law; ownership; Sleeping patents |
| JEL: | G24 L1 L2 M13 O3 |
| Date: | 2019–12 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:14172&r=all |
| By: | José M. Labeaga (UNED); Juan A. Ester Martínez-Ros (Universidad Carlos III de Madrid); Amparo Sanchis-Llopis (University of Valencia and ERICES); Juan A. Sanchis-Llopis (University of Valencia and ERICES) |
| Abstract: | Despite the generosity of its tax system, Spain is far from EU neighbouring countries in terms of R&D spending, and in innovation outcomes. A policy instrument commonly used to foster firms’ investment in R&D are tax incentives. The use of this instrument is not generalized in firms spending on R&D, and only a fraction of firms are regular claimants. In this paper we investigate whether persistence in using tax credits is positively related to the achievement of product innovations, beyond R&D investments. We consider that firms investing in qualified R&D spending and making a regular use of tax credits are likely to be firms aiming at innovating. By contrast, occasional tax credit users are probably firms seeking to reduce their corporate tax burden, and not prioritizing the achievement innovations. Using a sample of Spanish manufacturing firms spanning 2001-2014, we first estimate persistence using a duration model accounting for firm observed and unobserved heterogeneity. Our results are consistent with negative duration dependence, indicating that the probability of ceasing in claiming tax credits decreases with the passage of time. Second, we estimate a count-data model and find that the number of product innovations positively depends on tax credit persistence only for SMEs. |
| Keywords: | tax credits; persistence; duration dependence; count-data |
| JEL: | C41 H25 H32 |
| Date: | 2020–07 |
| URL: | http://d.repec.org/n?u=RePEc:eec:wpaper:2003&r=all |
| By: | Massimiliano Nuccio (BLISS – Digital Impact Lab, Department of Management, Università Ca' Foscari Venice); Marco Guerzoni (DESPINA Big Data Lab, Department of Economics and Statistics Cognetti De Martiis, University of Torino); Riccardo Cappelli (Department of Economics and Social Sciences, Polytechnic University of Marche); Aldo Geuna (Department of Culture, Politics and Society, University of Torino) |
| Abstract: | Recent literature on the diffusion of robots mostly ignores the regional dimension. The contribution of this paper at the debate on Industry 4.0 is twofold. First, IFR (2017) data on acquisitions of industrial robots in the five largest European economies are rescaled at regional levels to draw a first picture of winners and losers in the European race for advanced manufacturing. Second, using an unsupervised machine learning approach to classify regions based on their composition of industries. The paper provides novel evidence of the relationship between industry mix and the regional capability of adopting robots in the industrial processes. |
| Keywords: | Robots, Industry 4.0., Innovation, Industry Mix, Self-Organizing Maps |
| JEL: | E32 O33 R11 R12 |
| Date: | 2020–07 |
| URL: | http://d.repec.org/n?u=RePEc:vnm:wpdman:173&r=all |
| By: | Kyriakos Drivas; ; Raphaël |
| Abstract: | This paper provides insights on trademark activity at the regional level via two objectives. First, it examines the relationship between technological capabilities and new trademark applications. Second, it examines whether regions branch out to new trademark specializations that are related to their existing specializations. We employ EUIPO’s data to study 218 European NUTS-2 regions (16 countries) over the period 2000-2016. Results show that increased technological stock is associated with more trademark applications and that existing trademark relatedness induces new specializations. These findings contribute to better understanding of trademark activity and policies related to regional diversification including Smart Specialization. |
| Keywords: | Technological capabilities, Marketing activities, Trademark applications, Regional diversification, Relatedness, EUIPO |
| JEL: | O34 O38 R11 |
| Date: | 2020–08 |
| URL: | http://d.repec.org/n?u=RePEc:egu:wpaper:2031&r=all |
| By: | Gutierrez, German; Philippon, Thomas |
| Abstract: | We study the entry and exit of firms across U.S. industries over the past 40 years. The elasticity of entry with respect to Tobin's Q was positive and significant until the late 1990s but declined to zero afterwards. Standard macroeconomic models suggest two potential explanations: rising entry costs or rising returns to scale. We find that neither returns to scale nor technological costs can explain the decline in the Q elasticity of entry, but lobbying and regulations can. We reconcile conflicting results in the literature and show that regulations drive down the entry and growth of small firms relative to large ones, particularly in industries with high lobbying expenditures. We conclude that lobbying and regulations have caused free entry to fail. |
| Date: | 2019–12 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:14219&r=all |
| By: | Flavio Calvino; Daniele Giachini; Mattia Guerini |
| Abstract: | We investigate upon the shape and the determinants of the age distribution of business firms. By employing a novel dataset covering the population of French businesses, we highlight that a geometric law provides a reasonable approximation for the age distribution. However, relevant systematic deviations and sectoral heterogeneity appear. We develop a stochastic model of firm dynamics to explain the mechanisms behind this evidence and relate them to business dynamism. Results reveal a long-term decline in entry rates and lower survival probabilities of young firms. Our findings bear important implications for aggregate outcomes, notably employment growth. |
| Keywords: | Firm demographics; age distribution; business dynamism. |
| Date: | 2020–07–26 |
| URL: | http://d.repec.org/n?u=RePEc:ssa:lemwps:2020/20&r=all |
| By: | Acemoglu, Daron; Restrepo, Pascual |
| Abstract: | Artificial Intelligence is set to influence every aspect of our lives, not least the way production is organized. AI, as a technology platform, can automate tasks previously performed by labor or create new tasks and activities in which humans can be productively employed. Recent technological change has been biased towards automation, with insufficient focus on creating new tasks where labor can be productively employed. The consequences of this choice have been stagnating labor demand, declining labor share in national income, rising inequality and lower productivity growth. The current tendency is to develop AI in the direction of further automation, but this might mean missing out on the promise of the "right" kind of AI with better economic and social outcomes. |
| Keywords: | artiÂ?cial intelligence; automation; inequality; Innovation; jobs; labor demand; productivity; Tasks; technology; wages |
| JEL: | J23 J24 |
| Date: | 2019–12 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:14223&r=all |