nep-tid New Economics Papers
on Technology and Industrial Dynamics
Issue of 2020‒10‒26
twelve papers chosen by
Fulvio Castellacci
Universitetet i Oslo

  1. In knowledge we trust: learning-by-interacting and the productivity of inventors By Matteo Tubiana; Ernest Miguelez; Rosina Moreno
  2. R&D and ICT in the Innovation Process of Japanese Innovative SMEs: Panel Data Analysis Based on Firm-Level Survey Data By Shigeno, Hidenori; Bunno, Teruyuki; Abu Taher, Sheikh; Tsuji, Masatsugu
  3. Growth factors in developed countries: A 1960-2019 growth accounting decomposition By Cette Gilbert; Devillard Aurélien; Spiezia Vincenzo
  4. Organizing Crisis Innovation: Lessons from World War II By Daniel P. Gross; Bhaven N. Sampat
  5. The Heterogeneous and Regressive Consequences of COVID-19: Evidence from High Quality Panel Data By Crossley, Thomas F.; Fisher, Paul; Low, Hamish
  6. Uncertainty, Intangible Capital, and Productivity Dynamics By Edoardo Palombo
  7. Cyclical phenomena in technological change By Mario Coccia
  8. Consumer-benefiting transport cost: The role of product innovation in a vertical structure By Kazuhiro Takauchi; Tomomichi Mizuno
  9. Covid-19 Shocking Global Value Chains By Peter Eppinger; Gabriel J. Felbermayr; Oliver Krebs; Bohdan Kukharskyy
  10. The Effects of COVID-19 on U.S. Small Businesses: Evidence from Owners, Managers, and Employees By Georgij Alekseev; Safaa Amer; Manasa Gopal; Theresa Kuchler; JW Schneider; Johannes Stroebel; Nils Wernerfelt
  11. The Rise of Fintech: A Cross-Country Perspective By Oskar KOWALEWSKI; Paweł PISANY
  12. “Forced Automation” by COVID-19? Early Trends from Current Population Survey Data By Lei Ding; Julieth Molina

  1. By: Matteo Tubiana; Ernest Miguelez; Rosina Moreno
    Abstract: Innovation rarely happens through the actions of a single person. Innovators source their ideas while interacting with their peers, at different levels and with different intensities. In this paper, we exploit a dataset of disambiguated inventors in European cities to assess the influence of their interactions with co-workers, organizations’ colleagues, and geographically co-located peers, to understand if the different levels of interaction influence their productivity. Following inventors’ productivity over time and adding a large number of fixed effects to control for unobserved heterogeneity, we uncover critical facts, such as the importance of city knowledge stocks for inventors’ productivity, with firm knowledge stocks and network knowledge stocks being of smaller importance. However, when the complexity and quality of knowledge is accounted for, the picture changes upside down, and closer interactions (individuals’ coworkers and firms’ colleagues) become way more important.
    Keywords: inventors; productivity; stock of knowledge; interactions
    JEL: O18 O31 O33 O52 R12
    Date: 2020
  2. By: Shigeno, Hidenori; Bunno, Teruyuki; Abu Taher, Sheikh; Tsuji, Masatsugu
    Abstract: This study seeks the elements of R&D and ICTs that play a role in the innovation process, and how these two are integrated with each other to achieve innovation. To achieve this goal, this paper uses panel data analysis. A fairly large number of panel data studies on innovation have appeared thus far, but the novelty of this paper lies in the authors' own firm-level survey data. The surveys were conducted in February 2012 and March 2017. The number of achieved innovations in the questionnaire is taken as an outcome variable. Explanatory variables related to R&D and ICTs were extracted from related questions by factor analysis. The fixed effect robust model with an instrumental variable (IV) is estimated, since the error term may contain heteroscedasticity. The significant variables are R&D autonomy (p
    Keywords: random effect,instrumental variable,R&D autonomy,R&D orientation,factor analysis
    Date: 2020
  3. By: Cette Gilbert; Devillard Aurélien; Spiezia Vincenzo
    Abstract: Using a new and original database, our paper contributes to the growth accounting literature with three original aspects: first, it covers a long period from the early 60’s to 2019, just before the COVID-19 crisis; second, it analyses at the country level a large set of economies (30); finally, it singles out the growth contribution of ICTs but also of robots. The original database used in our analysis covers 30 developed countries and the Euro Area over a long period allowing to develop a growth accounting approach from 1960 to 2019. This database is built at the country level. Our growth accounting approach shows that the main drivers of labor productivity growth over the whole 1960-2019 period appear to be TFP, non-ICT and non-robot capital deepening, and education. The overall contribution of ICT capital is found to be small, although we do not estimate its effect on TFP. The contribution of robots to productivity growth through the two channels (capital deepening and TFP) appears to be significant in Germany and Japan in the sub-period 1975-1995, in France and Italy in 1995-2005, and in several Eastern European countries in 2005-2019. Our findings confirm also the slowdown in TFP in most countries from at least 1995 onwards. This slowdown is mainly explained by a decrease of the contributions of the components ‘others’ in the capital deepening and the TFP productivity channels.
    Keywords: Growth, Productivity, ICTs, Robots.
    JEL: O31 O33 O47
    Date: 2020
  4. By: Daniel P. Gross; Bhaven N. Sampat
    Abstract: World War II was one of the most acute emergencies in U.S. history, and the first where the mobilization of science and technology was a major part of the government response. The U.S. Office of Scientific Research and Development (OSRD) led a major research effort to develop technologies and medical treatments that not only helped win the war, but also transformed civilian life, while laying the foundation for postwar science policy. Scholars and policymakers often make broad appeals to the World War II innovation model in other crises. In this essay we describe exactly how it worked. We do so first through a general overview of how OSRD approached several questions that may confront any crisis innovation effort: priority setting, selecting and engaging researchers, a funding mechanism, coordinating research efforts, and translation to practice. Next we present case studies of the radar, atomic fission, penicillin, and malaria research programs, illustrating how the principles applied in specific contexts, but also heterogeneity. We conclude by discussing lessons from OSRD, such as what makes crisis innovation policy different, how crisis innovation policy approaches may vary, and the limits to generalizing from World War II for contemporary crises.
    JEL: H12 H56 N42 N72 O31 O32 O38
    Date: 2020–10
  5. By: Crossley, Thomas F.; Fisher, Paul; Low, Hamish
    Abstract: Using new data from the Understanding Society COVID-19 Study collected in two waves in April and in May 2020 in the UK, we make three contributions. First, Understanding Society is based on probability samples and the Covid-19 Study is carefully constructed to support valid population inferences. Second, the panel allows a long-run measure of income to characterise regressivity. Third, we have novel data on the mitigation strategies that households use. Our key findings are that those with precarious employment, under 30 and from minority ethnic groups face the biggest labour market shocks. Almost 50% of individuals have experienced declines in household earnings of at least 10%, but declines are most severe in the bottom income quintiles. Methods of mitigation vary substantially across groups: borrowing and transfers from family and friends are most prevalent among those most in need.Â
    Date: 2020–10–13
  6. By: Edoardo Palombo (Queen Mary University of London)
    Abstract: Following an unparalleled rise in uncertainty over the Great Recession, the US economy has been experiencing anaemic productivity growth. This paper offers a quantitative study on the link between uncertainty and low productivity growth. Firstly, using micro level data I show that uncertainty accounts for half of the drop in intangible capital stock during the Great Recession. Secondly, to investigate the effect of uncertainty on productivity growth dynamics, I present a novel general equilibrium endogenous growth model with heterogeneous firms that undertake intangible capital investment subject to non-convex costs and time-varying uncertainty. I show that uncertainty can generate slow recoveries and a persistent slowdown in productivity growth when accounting for the empirical discrepancy between the realised and expected changes to the second-moment of fundamentals.
    Keywords: Uncertainty, R&D, Innovation, Productivity, Great Recession, Intangible Capital, Slow Recoveries
    JEL: O40 O41 O51
    Date: 2020–06–25
  7. By: Mario Coccia
    Abstract: The process of technological change can be regarded as a non-deterministic system governed by factors of a cumulative nature that generate cyclical phenomena. In this context, the process of growth and decline of technology can be systematically analyzed to design best practices for technology management of firms and innovation policy of nations. In this perspective, this study focuses on the evolution of technologies in the U.S. recorded music industry. Empirical findings reveal that technological change in the sector under study here has recurring fluctuations of technological innovations. In particular, cycle of technology has up wave phase longer than down wave phase in the process of evolution in markets before it is substituted by a new technology. Results suggest that radical innovation is one of the main sources of cyclical phenomena for industrial and corporate change, and as a consequence, economic and social change.
    Date: 2020–10
  8. By: Kazuhiro Takauchi (Faculty of Business and Commerce,Kansai University); Tomomichi Mizuno (Graduate School of Economics, Kobe University)
    Abstract: We study the effects of a reduction of transport cost on the firm's activity of product innovation and on consumer welfare. Firms engage in product R&D that increases the degree of product differentiation, purchase intermediate inputs from an exclusive supplier, and export their products to the foreign market paying a per-unit transport cost. Trade theory commonly asserts that zero transport cost maximizes consumer surplus. Contrary to this standard belief, we show that a positive transport cost can maximize consumer surplus. We also consider more general effects of R&D and show that our main results hold even in such case.
    Date: 2020–09
  9. By: Peter Eppinger; Gabriel J. Felbermayr; Oliver Krebs; Bohdan Kukharskyy
    Abstract: In early 2020, the disease Covid-19 caused a drastic lockdown of the Chinese economy. We use a quantitative trade model with input-output linkages to gauge the effects of this adverse supply shock in China on the global economy through international trade and global value chains (GVCs). We find moderate welfare losses in most countries outside of China, while a few countries even gain from the shock due to trade diversion. As a key methodological contribution, we quantify the role of GVCs (in contrast to final goods trade) in transmitting the shock. In a hypothetical world without GVCs, the welfare loss due to the Covid-19 shock in China is reduced by 40% in the median country. In several other countries, the effects are magnified or reversed for several countries. Had the U.S. unilaterally repatriated GVCs, the country would have incurred a substantial welfare loss while its exposure to the shock would have barely changed.
    Keywords: Covid-19, quantitative trade model, input-output linkages, global value chains, supply chain contagion, shock transmission
    JEL: F11 F12 F14 F17 F62
    Date: 2020
  10. By: Georgij Alekseev; Safaa Amer; Manasa Gopal; Theresa Kuchler; JW Schneider; Johannes Stroebel; Nils Wernerfelt
    Abstract: We analyze a large-scale survey of owners, managers, and employees of small businesses in the United States to understand the effects of the early stages of the COVID-19 pandemic on those businesses. The survey was fielded in late April 2020 among Facebook business page administrators, frequent sellers on Facebook’s e-commerce platform Marketplace, and the general Facebook user population. We observe more than 66,000 responses covering most sectors of the economy, including many businesses that had stopped operating due to the pandemic. The survey asks 136 questions covering topics such as changes in business operations and employment, changes in financing patterns, and the interaction of household and business responsibilities. We characterize the adjustments implemented to survive the pandemic and explore the key challenges to continue operating or to re-open. We show how these patterns differ across industry, firm size, owner gender, and other firm characteristics.
    Keywords: small businesses, COVID-19, working from home, small business finance
    JEL: E30 L26 M13
    Date: 2020
  11. By: Oskar KOWALEWSKI (IESEG School of Management & LEM-CNRS 9221); Paweł PISANY (Institute of Economics, Polish Academy of Sciences)
    Abstract: This study investigates the determinants of fintech company creation and activity using a cross-country sample that includes developed and developing countries. Using a random effect negative binomial model and explainable machine learning algorithms, we show the positive role of technology advancements in each economy, quality of research, and more importantly, the level of university-industry collaboration. Additionally, we find that demographic factors may play a role in fintech creation and activity. Some fintech companies may find the quality and stringency of regulation to be an obstacle. Our results also show the sophisticated interactions between the banking sector and fintech companies that we may describe as a mix of cooperation and competition.
    Keywords: fintech, innovation, start up, developed countries, developing countries
    JEL: G21 G23 L26 O30
    Date: 2020–07
  12. By: Lei Ding; Julieth Molina
    Abstract: This empirical study evaluates whether COVID-19 and the threat of future pandemics has expedited the process of automation in the U.S. The results suggest that the pandemic displaced more workers in automatable occupations, putting them at a greater risk of being permanently automated. The automatable jobs that are more vulnerable to the pandemic include jobs that do not permit remote work, have a high risk of COVID-19 transmission, or are in the most affected sectors. While most of the job losses during the pandemic are expected to be temporary, a replication of the analysis for the Great Recession suggests the losses of automatable jobs could become permanent during the recovery. The pandemic also hit automatable jobs held by minority workers particularly hard, increasing the risk of permanent job losses for these workers who are already vulnerable in the job market
    Keywords: employment; COVID-19; automation
    Date: 2020–09–14

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