nep-tid New Economics Papers
on Technology and Industrial Dynamics
Issue of 2020‒10‒12
eleven papers chosen by
Fulvio Castellacci
Universitetet i Oslo

  1. Returns to intangible capital in global value chains: New evidence on trends and policy determinants By Ali Alsamawi; Charles Cadestin; Alexander Jaax; Joaquim Guilhoto; Sébastien Miroudot; Carmen Zurcher
  2. Clean Energy Innovation and the Influence of Venture Capitalists' Social Capital By Till Fust
  3. Fostering Innovation Activities with the Support of a Development Bank: Evidence from Brazil By Marco Carreras
  4. Latent Technology as an Outcome of R&D By Cunningham, James; Link, Albert
  5. Do Capabilities Reside in Firms or in Regions? Analysis of Related Diversification in Chinese Knowledge Production By Yiou Zhang; David L. Rigby;
  6. Labor Supply and Automation Innovation By Alexander M. Danzer; Carsten Feuerbaum; Fabian Gaessler
  7. The Rise (and Fall) of Tech Clusters By Sergey Kichko; Wen-Jung Liang; Chao-Cheng Mai; Jacques-Francois Thisse; Ping Wang
  8. When robots do (not) enhance job quality: The role of innovation regimes By Damiani, Mirella; Pompei, Fabrizio; Kleinknecht, Alfred
  9. The Emergence of Knowledge Production in New Places By Christopher R. Esposito; ;
  10. Technology evolution in the global automotive industry: a patent-based analysis By Alessandra Perri; Daniela Silvestri; Francesco Zirpoli
  11. De-Routinization of Jobs and Polarization of Earnings: Evidence from 35 Countries By Maximilian Longmuir; Carsten Schröde; Matteo Targa

  1. By: Ali Alsamawi; Charles Cadestin; Alexander Jaax; Joaquim Guilhoto; Sébastien Miroudot; Carmen Zurcher
    Abstract: Intangible capital, a broad category of knowledge-based assets that lack physical embodiment, increasingly shapes the distribution of income in global value chains (GVCs). While some intangible assets are reported in national accounts (e.g. R&D or computer software and databases), others are hard to detect in conventional statistics (e.g. brand value or organisational capital). In this paper, we combine information on factor income from national accounts with the OECD Inter-Country Input-Output tables in order to estimate returns to measured (i.e. included in national accounts) and ‘unmeasured’ intangible capital (captured as a residual) in GVCs. We find that total intangible capital accounts for about 27% of income in manufacturing GVCs and that this share has increased between 2005 and 2015 in OECD countries. The paper highlights differences across GVC stages and specific types of GVCs. A significant share of income is captured at the distribution stage, particularly in buyer-driven value chains. An econometric analysis suggests that trade and investment openness are important determinants of patterns in returns to intangible capital in GVCs. Direct public funding of R&D and the quality of intellectual property protection are associated with higher returns to intangible assets.
    JEL: E1 E22 F23 F68
    Date: 2020–09–30
  2. By: Till Fust
    Abstract: This study contributes to the understanding of the enabling role that venture capitalists can play in bringing new innovative technologies to market, with a focus on clean energy technologies. Applying the structural model introduced by Sorensen (2007) that allows to control for a potential sorting bias, I estimate the influence of venture capital investor's social capital on startups' funding and exit performance, with social capital de ned as the investors' eigencentrality and constraint within the network of investors. Looking at startups' first venture capital funding rounds in California between 2001 and 2019, this study finds a positive and significant influence of the lead investor's eigencentrality on the funding amount raised and the exit probability of the firm. Furthermore, a less constrained lead investor also increases the chance of the startup's eventual exit. But no differentiated effect for cleantech startups compared to other industries is found.
    Keywords: Venture Capitalists;CleanEnergy; Clean Technologies; Startups; Capital Funding; Cleantech startup
    JEL: O14 O33 Q41 Q42
    Date: 2020–09–29
  3. By: Marco Carreras (Institute of Development Studies)
    Abstract: I evaluate the impact of the Banco Nacional de Desenvolvimento Econômico e Social, (BNDES) disbursements on companies’ R&D intensity of companies operating in the Brazilian manufacturing sector for the period of 2003-2011. Using Instrumental Variable (IV) technique, I find a crowding-in impact of receiving funding from BNDES on business-funded innovation intensity, resulting in an increased commitment in innovation activities for funded Brazilian manufacturing companies. The findings of this analysis provide new evidence regarding the industrial sector activity of the Brazilian development bank, adding on the debate about additionality/substitutability of public financial resources.
    Keywords: BNDES, development bank, crowding-in/out, R&D intensity2
    Date: 2020–09
  4. By: Cunningham, James (Northumbira University); Link, Albert (University of North Carolina at Greensboro, Department of Economics)
    Abstract: This paper focuses on a situation in which a firm decides to sell its non-commercialized technology to another firm rather than commercialize it (a latent entrepreneurial firm), and the other firm then adopts the appearance of an emergent entrepreneur. Using U.S. project data from firms funded through the U.S. Small Business Innovation Research (SBIR) program, we find using a qualitative choice model that firms that do not commercialize their newly developed SBIR-funded technology have a greater probability of selling their technology to another firm than do firms that do commercialize. We also identify other covariates with the probability that such a firm will sell their technology.
    Keywords: Latent entrepreneurship; Emergent entrepreneurship; SBIR; Commercialization;
    JEL: O32 O33 O38
    Date: 2020–09–29
  5. By: Yiou Zhang; David L. Rigby;
    Abstract: Do capabilities reside in firms, in regions, or in both? Most models of related diversification, building on the early work of Hidalgo et al. (2007), examine how the structure of economic activity within a region conditions the trajectory of diversification. Inter-regional flows are sometimes added to these models. The logic here is that capabilities are largely built-up within regions and sometimes shared between them. We challenge that logic, exploring whether capabilities are more likely to be built within the firm and to flow across spatial boundaries than they are to be built within the region flowing across firm boundaries. Analysis focuses on Chinese patent data spanning 286 cities over the period 1991 to 2015. We develop standard models of related diversification before examining how the branches of multi-locational firms diversify their knowledge portfolios. Evidence shows that the knowledge structure of firms is more important than the knowledge structure of regions in shaping branch diversification. We show that the influence of the firm and the region on diversification vary significantly between headquarters (HQ) branches and non-HQ branches of firms, and between the non-HQ branches of firms that are located in core and peripheral cities of China.
    Keywords: Related diversification; Patents; Capabilities; China
    Date: 2020–09
  6. By: Alexander M. Danzer (KU Eichstaett-Ingolstadt, IZA Bonn, CReAM, CESifo); Carsten Feuerbaum (KU Eichstaett-Ingolstadt , Max Planck Institute); Fabian Gaessler (Max Planck Institute)
    Abstract: While economic theory suggests substitutability between labor and capital, little evidence exists regarding the causal effect of labor supply on inventing labor-saving technologies. We analyze the impact of exogenous changes in regional labor supply on automation innovation by exploiting an immigrant placement policy in Germany during the 1990s and 2000s. Difference-in-differences estimates indicate that one additional worker per 1,000 manual and unskilled workers reduces automation innovation by 0.05 patents. The effect is most pronounced two years after immigration and confined to industries containing many low-skilled workers. Labor market tightness and external demand are plausible mechanisms for the labor-innovation nexus.
    Keywords: Labor supply, automation, innovation, patents, labor market tightness, quasi-experiment
    JEL: O31 O33 J61
    Date: 2020–07
  7. By: Sergey Kichko; Wen-Jung Liang; Chao-Cheng Mai; Jacques-Francois Thisse; Ping Wang
    Abstract: Tech clusters play a growing role in knowledge-based economies by accommodating high-tech firms and providing an environment that fosters location-dependent knowledge spillovers and promote R&D investments by .rms. Yet, not much is known about the economic conditions under which such entities may form in equilibrium without government interventions. This paper develops a spatial equilibrium model with a competitive final sector and a monopolistically competitive intermediate sector, which allows us to determine necessary and sufficient conditions for a tech cluster to emerge as an equilibrium outcome. We show that strongly localized knowledge spillovers, skilled labor abundance, and low commuting costs are key drivers for a tech cluster to form. Not only is the productivity of the final sector higher when intermediate firms cluster, but a tech cluster hosts more intermediate firms and more R&D and production activities, and yields greater worker welfare, compared to what a dispersed pattern would generate. With continual improvements in infrastructure and communication technology that lowers coordination costs, tech clusters will eventually be fragmented.
    Keywords: high-tech city, knowledge spillovers, intermediate firm clustering, land use, commuting, R&D
    JEL: D51 L22 O33 R13
    Date: 2020
  8. By: Damiani, Mirella; Pompei, Fabrizio; Kleinknecht, Alfred
    Abstract: Whether robots have a positive or negative impact on job quality and wages depends on the dominant innovation regime in an industry. In an innovation regime with a high cumulativeness of knowledge, i.e. if accumulation of (tacit) knowledge from experience (embodied by workers) is important for innovation, robots enhance the probability that workers will get permanent (other than temporary) contracts and they earn higher wages. The opposite holds for industries with a low-cumulativeness regime when innovation depends mainly on general (and generally available) knowledge. Our results emerge from multi-level estimates of two countries (Italy and Germany), combining sectoral data on robot use with person-level data on properties of workers. Our results imply that previous studies tended to find weak effects of robotization as they did not control for innovation regimes. An implication for European industrial policy is that the hiring of more flexible personnel (and shorter job tenures) that has become popular in the period of supply-side economics is likely to have a negative impact on the productive use of robot technology in industries with a high cumulativeness of knowledge, and less so in low-cumulativeness industries. Unqualified pleas for labour market deregulation can have a problematic impact on technology and should be reconsidered.
    Keywords: robots, quality of work, innovation regimes, knowledge cumulativeness
    JEL: J3 J5 M5 O3
    Date: 2020–09–21
  9. By: Christopher R. Esposito; ;
    Abstract: This article studies how new locations emerge as advantageous places for the creation of ideas. Analysis of a novel patent-based dataset that traces the flow of knowledge between inventions and across time reveals that inventors initiate knowledge production in new places through a three-stage process. In the first stage, about 50 years before knowledge production in a region reaches an appreciable volume, local inventors begin to experiment with a few promising ideas developed in other places. In the second stage, inventors use the promising ideas developed elsewhere to create a large number of highly impactful inventions locally. In the third stage, inventors source high-impact ideas from their local environs and produce an even larger number of inventions, albeit of lower quality. Overall knowledge production in regions peaks in this third stage, but novelty and the potential for future knowledge growth decline.
    Keywords: Regional development, innovation, knowledge transmission, agglomeration
    JEL: O33 R12
    Date: 2020–09
  10. By: Alessandra Perri (Department of Management, Università Ca' Foscari Venice); Daniela Silvestri (Department of Management, Università Ca' Foscari Venice); Francesco Zirpoli (Department of Management, Università Ca' Foscari Venice)
    Abstract: This study explores the evolution of the knowledge base of the automotive industry. Over the last decades, the industry has experienced major changes. New and originally unrelated fields have increasingly become relevant shaping over time the knowledge base of the industry. Using data on patent families granted in the period 1990-2014, we map the knowledge base of the automotive industry by reconstructing and analyzing the patenting portfolio of the top firms operating in this industry. The analysis documents exploration in new technical fields as well as persistence in industry-specific technical areas, pointing to the relevance of core competences that might be difficult to accumulate for industry outsiders.
    Keywords: knowledge base evolution, automotive industry, patent analysis
    JEL: L62 O34
    Date: 2020–09
  11. By: Maximilian Longmuir (Freie Universität Berlin); Carsten Schröde (DIW Berlin); Matteo Targa (DIW Berlin)
    Abstract: The job polarization hypothesis suggests a U-shaped pattern of employment growth along the earnings/skill distribution, which is driven by simultaneous growth in the employment of highskill/high-earnings and low-skill/low-earnings occupations due to Routine-Biased Technological Change (RBTC) [Acemoglu and Autor, 2011]. An aspect of both high social and political relevance is the implications of job polarization and technological change for earnings distributions. In this paper, we put the RBTC trend into perspective by decomposing earnings growth into parts attributable to job polarization and other components. Using a novel harmonized dataset provided by the Luxembourg Income Study and the Economic Re-search Forum, we find evidence for employment polarization in 30 out of the 35 countries under analysis, in both developed and developing economies. However, the effects of this displacement in the workforce have no polarizing effect on the earnings distribution in 33 countries, once we account for between and within variation in occupational classes returns. Length: 114
    Date: 2020–06–20

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