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on Technology and Industrial Dynamics |
| By: | Thomas Grebel; Mauro Napoletano; Lionel Nesta |
| Abstract: | We study the productivity level distributions of manufacturing firms in France and Germany, and how these distributions evolved across the Great Recession. We show the presence of a systematic productivity advantage of German firms over French ones in the decade 2003-2013, but the gap has narrowed down after the Great Recession. Convergence is explained by the better growth performance of French firms in the post-recession period, especially of those located in the top percentiles of the productivity distribution. We also highlight the role of sectoral growth, firm size and export intensity in explaining the above convergence. In contrast, the contribution of allocative efficiency was small. |
| Keywords: | International productivity gaps; productivity distributions; firm level comparisons. |
| Date: | 2020–11–26 |
| URL: | http://d.repec.org/n?u=RePEc:ssa:lemwps:2020/36&r=all |
| By: | Yusuke Oh (Bank of Japan); Koji Takahashi (Bank of Japan) |
| Abstract: | We investigate innovation dynamics in Japanese listed firms by calculating an indicator for the accumulation of innovation based on patent citations, the gcitation stock. h The calculated citation stock has decreased since the mid-2000s, which implies that the pace of innovation accumulation at Japanese listed firms has slowed. Using the citation stock, we show that an increase in a firm fs citation stock contributes to its productivity growth and that the citation stock provides information on whether research and development (R&D) leads to innovation that cannot be captured by focusing on the amount of R&D investment alone. In addition, we find that while higher R&D investment is associated with new innovation, the efficiency of R&D investment in Japan has decreased in recent years. Such a decrease in the efficiency of R&D investment has been reported not only for Japanese firms but also for a wide range of fields around the world, so that firms and research institutions are attempting to maintain the pace of innovation by increasing the number of researchers and research spending. For Japan, where it is difficult to increase the number of researchers due to the declining population, it is important to improve the quality of research through various efforts such as increasing the diversity of researchers. |
| Keywords: | productivity; patent data; innovation; R&D |
| JEL: | O31 E23 D24 |
| Date: | 2020–11–27 |
| URL: | http://d.repec.org/n?u=RePEc:boj:bojwps:wp20e07&r=all |
| By: | Peter Horvát (OECD); Colin Webb (OECD) |
| Abstract: | This paper summarises and describes the variables, industries, methods and sources used in the construction of the STructural ANalysis (STAN) industry database. The STAN database serves as a tool for analysing industrial performance at a relatively detailed level of industrial activity. It includes annual measures of output, value added and its components, as well as labour input, investment and capital stock from 1970 onwards. This allows for a wide range of comparative cross-country analyses focusing on, for example, productivity growth, competitiveness and economic structural change. A standard industry list allows for comparisons across countries and provides sufficient detail to focus on, for example, high R&D-intensive activities, high digital-intensive activities or detailed ICT industries. The industry list is compatible with those used in related OECD industry databases. |
| Date: | 2020–11–18 |
| URL: | http://d.repec.org/n?u=RePEc:oec:stiaaa:2020/10-en&r=all |
| By: | Jacopo Staccioli; Maria Enrica Virgillito |
| Abstract: | This paper, relying on a still relatively unexplored long-term dataset on U.S.~patenting activity, provides empirical evidence on the history of labour-saving innovations back to early 19th century. The identification of mechanisation/automation heuristics, retrieved via textual content analysis on current robotic technologies by Montobbio et al. (2020), allows to focus on a limited set of CPC codes where mechanisation and automation technologies are more prevalent. We track their time evolution, clustering, eventual emergence of wavy behaviour, and their comovements with long-term GDP growth. Our results challenge both the general-purpose technology approach and the strict 50-year Kondratiev cycle, while provide evidence of the emergence of erratic constellations of heterogeneous technological artefacts, in line with the development-block approach enabled by autocatalytic systems. |
| Keywords: | Labour-Saving Technologies; Search Heuristics; Industrial Revolutions; Wavelet analysis. |
| Date: | 2020–11–23 |
| URL: | http://d.repec.org/n?u=RePEc:ssa:lemwps:2020/34&r=all |
| By: | Rodríguez-Pose, Andrés; Ganau, Roberto; Maslauskaite, Kristina; Brezzi, Monica |
| Abstract: | This paper examines the relationship between credit constraints - proxied by the investment-to-cash flow sensitivity – and firm-level economic performance - defined in terms of labor productivity – during the period 2009-2016, using a sample of 22,380 manufacturing firms from 11 European countries. It also assesses how regional institutional quality affects productivity at the level of the firm both directly and indirectly. The empirical results highlight that credit rationing is rife and represents a serious barrier for improvements in firm-level productivity and that this effect is far greater for micro and small than for larger firms. Moreover, high-quality regional institutions foster productivity and help mitigate the negative credit constraints-labor productivity relationship that limits the economic performance of European firms. Dealing with the European productivity conundrum thus requires greater attention to existing credit constraints for micro and small firms, although in many areas of Europe access to credit will become more effective if institutional quality is improved. |
| Keywords: | credit constraints; labor productivity; manufacturing firms; regional institutions; cross-country analysis; Europe |
| JEL: | C23 D24 G32 H41 R12 |
| Date: | 2020–11 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:107500&r=all |
| By: | Rene Belderbos; Boris Lokshin; Christophe Boone; Jojo Jacob |
| Abstract: | We investigate how international diversity in Top Management Teams (TMTs) contributes to the effectiveness of geographically dispersed R&D strategies in enhancing innovation performance. Both international work experience and nationality diversity may enhance the effectiveness of geographically dispersed R&D when there is alignment between the countries of work experience and nationality of TMT members, on the one hand, and firms’ R&D locations on the other. This influence is stronger for international work experience diversity than for nationality diversity, as the former provides more task-related knowledge to coordinate R&D activities and is less associated with the risk of social categorization. We find partial support for these notions in a panel analysis of the innovation performance of 165 leading MNCs based in Europe, Japan and the United States. |
| Keywords: | diversity, innovation, internationalization, MNCs, R&D, Top Management Teams (TMTs) |
| Date: | 2020–11–18 |
| URL: | http://d.repec.org/n?u=RePEc:ete:msiper:663275&r=all |
| By: | Márta Bisztray (Centre for Economic and Regional Studies, Budapest and Corvinus University Budapest, CERGE-EI Foundation Teaching Fellow); Francesca de Nicola (World Bank, Washington DC); Balázs Muraközy (University of Liverpool Management School, Liverpool and Centre for Economic and Regional Studies, Budapest) |
| Abstract: | This paper investigates the contribution of high-growth firms (HGFs) to aggregate productivity growth. Four stylized facts emerge. First, HGFs mainly contribute to productivity growth during their high-growth phase but not afterwards. Second, their contribution varies substantially across industries and it is not necessarily positive. Third, the impact on productivity depends on how HGFs are defined. Output-based HGFs substantially outperform employment-based ones in terms of their productivity contribution while the difference in terms of job creation is low. Fourth, HGFs' contribution to productivity is higher in industries where industry dynamics favor growing firms, captured by the strength of reallocation and the relationship between productivity growth and size growth. We present a simple model to show that these patterns arise naturally under realistic correlation structures. Our results suggest that policies supporting HGFs may focus on firms increasing their sales, and these can effectively be complemented by framework policies promoting efficient reallocation |
| Keywords: | high-growth firms, productivity growth, reallocation, industry dynamics |
| JEL: | L25 O40 |
| Date: | 2020–11 |
| URL: | http://d.repec.org/n?u=RePEc:has:discpr:2047&r=all |
| By: | Mattia Guerini; Philipp Harting; Mauro Napoletano |
| Abstract: | We develop a model to study the impact of corporate governance on firm investment decisions and industry competition. In the model, governance structure affects the distribution of shares among short- and long-term oriented investors, the robustness of the management regarding possible stockholder interference, and the managerial remuneration scheme. A bargaining process between firm's stakeholders determines the optimal allocation of financial resources between real investments in R&D and financial investments in shares buybacks. We characterize the relation between corporate governance and firm's optimal investment strategy and we study how different governance structures shape technical progress and the degree of competition over the industrial life cycle. Numerical simulations of a calibrated set-up of the model show that pooling together industries characterized by heterogeneous governance structures generate the well-documented inverted-U shaped relation between competition and innovation. |
| Keywords: | governance structure; industry dynamics; competition; technical change. |
| Date: | 2020–11–23 |
| URL: | http://d.repec.org/n?u=RePEc:ssa:lemwps:2020/35&r=all |
| By: | Emanuela Ciapanna (Bank of Italy); Sauro Mocetti (Bank of Italy); Alessandro Notarpietro (Bank of Italy) |
| Abstract: | This paper quantifies the macroeconomic effects of three major structural reforms (i.e., service sector liberalizations, incentives to innovation and civil justice reforms) undertaken in Italy in the last decade. We employ a novel approach that estimates the impact of each reform on total factor productivity and markups in an empirical micro setting and that uses these estimates in a structural general equilibrium model to simulate the macroeconomic impact of the reforms. Our results indicate that, accounting for estimation uncertainty, the increase in the level of GDP as of 2019 due to the sole effect of these reforms (ignoring all the other shocks that the Italian economy suffered in the same period) would be between 3% and 6%. The long-run increase in Italy's potential output would lie between 4% and 8%, with non-negligible effects on the labor market. |
| Keywords: | structural reforms, DSGE models, liberalization, innovation, civil justice |
| JEL: | E10 E20 J60 K40 L50 O30 |
| Date: | 2020–11 |
| URL: | http://d.repec.org/n?u=RePEc:bdi:wptemi:td_1303_20&r=all |
| By: | Roses Vendoiro, Juan Ramon; Prados de la Escosura, Leandro |
| Abstract: | The current productivity slowdown has stimulated research on the causes of growth. We investigate here the proximate determinants of long-term growth in Spain. Over the last 170 years output per hour worked raised nearly 24-fold dominating GDP growth, while hours worked per person shrank by one-fourth and population trebled. Half of labour productivity growth resulted from capital deepening, one-third from total factor productivity, and labour quality contributed the rest. In phases of acceleration (the 1920s and 1954-85), TFP was labour productivity's main driver complemented by capital deepening. Since Spain's accession to the European Union(1985), labour productivity has sharply decelerated as capital deepening slowed down and TFP stagnated. Up to the Global Financial Crisis (2008) GDP growth mainly resulted from an increase in hours worked per person and, to a less extent, from sluggish labour productivity coming mostly from weak capital deepening. Institutional constraints help explain the labour productivity slowdown. |
| Keywords: | Spain; Total Factor Productivity; Labour Quality; Capital Deepening; Labour Productivity; Growth |
| JEL: | N14 N13 O47 E01 D24 |
| Date: | 2020–11–23 |
| URL: | http://d.repec.org/n?u=RePEc:cte:whrepe:31465&r=all |
| By: | Augusto Cerqua (Department of Social Sciences and Economics, Sapienza University of Rome); Guido Pellegrini (Department of Social Sciences and Economics, Sapienza University of Rome) |
| Abstract: | Are place-based policies capable of taking lagging areas to a higher growth trajectory permanently? We answer this key question by investigating what happens when strongly subsidised regions suddenly experience a substantial reduction in external funding. We analyse an extensive database and estimate the average causal impact of exiting the convergence region status of the EU regional policy via the mean balancing approach, an econometric technique created appositely to fully exploit time-series cross-sectional data. Such an approach also allows us to investigate the heterogeneity of the impact concerning relevant covariates. We find that regions which experienced a considerable reduction in funding in a period of economic expansion did not suffer from the loss of such funding. On the other hand, we find that the sharp reduction in funding during the crisis led to a negative, but not statistically significant, impact on economic growth. However, the impact varies with the features of the regions and the local economic context. These findings differ from previous literature and signal a long-term positive effect of the EU funds on growth and employment. |
| Keywords: | Place-based policy, European Union, mean balancing, regional growth |
| JEL: | C23 O47 R11 |
| Date: | 2020–11 |
| URL: | http://d.repec.org/n?u=RePEc:saq:wpaper:20/20&r=all |
| By: | Ari Van Assche (HEC Montreal) |
| Abstract: | Located at the heart of global value chains (GVCs), intangibles are documented to have a high and rising value capture, and to depend on both agglomeration economies and global connectedness for their performance. In this paper, we study how the distinct nature of intangibles require countries to develop novel policy prescriptions to attract intangible-intensive activities and to increase the value capture of these activities. We suggest that such GVC-oriented policies fall into three categories: Attractiveness policies that aim to strengthen the appeal of a location for intangible activities; Buzz policies that intend to strengthen the local production and innovation ecosystem; and Connectedness policies that aspire to strengthen the local ecosystem’s connections to other locations. Together, they constitute the ABCs of GVC-oriented policies. |
| Keywords: | Innovation, Intangible capital, Investment policy, Trade policy |
| JEL: | E22 F23 F68 |
| Date: | 2020–11–25 |
| URL: | http://d.repec.org/n?u=RePEc:oec:traaab:242-en&r=all |
| By: | Roman Römisch (The Vienna Institute for International Economic Studies, wiiw) |
| Abstract: | This paper asks whether we can, from an economic point of view, justify the EU Cohesion Policy. To this end, our research – using structural equation modelling, macro-economic modelling and regional input-output analysis – found a) positive dynamic effects of Cohesion Policy on regional growth, b) small static effects on output if parts of the Cohesion Policy funds are reallocated to the strongest EU economies and c) strong demand spillovers from the less-developed to the more-developed regions. For us, the dynamic Cohesion Policy gains in growth outweigh the static allocation inefficiency. Additionally, the spillovers from the less-developed regions mitigate potential losses in the more-developed regions. Therefore, our answer to the question ‘Can we justify EU Cohesion Policy from an economic point of view?’ is ‘Yes, we can.’ |
| Keywords: | Cohesion Policy, EU regions, regional development |
| JEL: | R11 R58 |
| Date: | 2020–11 |
| URL: | http://d.repec.org/n?u=RePEc:wii:pnotes:pn:42&r=all |
| By: | Eun Jung Kim; Annabelle Mourougane; Mark Baker |
| Abstract: | This paper examines the link between barriers to trade and investment and productivity performance, in the United Kingdom and selected European countries using both firm-level and sectoral data. Barriers to trade and investment appear to be a robust determinant of productivity in the long term. Control variables such as spending on R&D and human capital also play a role, though their effects depend on the way they are measured or on the sample. The results are robust across a range of productivity measures as well as to changes in the sectoral coverage and the set of controls. |
| Keywords: | barriers to trade and investment, firm-level, productivity, sectoral |
| JEL: | C23 D24 F13 |
| Date: | 2020–11–23 |
| URL: | http://d.repec.org/n?u=RePEc:oec:ecoaaa:1630-en&r=all |
| By: | Foong, Gerald (Ministry of Trade and Industry); Chang, Pao-Li (School of Economics, Singapore Management University) |
| Abstract: | Apart from the public health crisis entailed by the Coronavirus Disease 2019 (COVID-19) pandemic, it has also propagated a pandemic-induced economic shock globally. One transmission channel is via the inter-country linkages arising from the trade in intermediate inputs, which is a pertinent characteristic of global value chains (GVCs), and resulting in a "supply-chain contagion" as termed by Baldwin and Tomiura (2020). In this paper, we propose measures of bilteral downstreamness and upstreamness, the extent of a country's GVC participation, and the position of a country in GVCs by leveraging upon the gross export decomposition framework as laid out by Borin and Mancini (2019), which builds upon the work done by Koopman et al. (2014). By applying a regional lens to our analysis, we also identify key intermediary nodes that intermediate GVC-related ows within their region and across regions. Through this, we investigate the trade linkages of countries and discuss the potential impact of COVID-19 on GVCs. |
| Keywords: | COVID-19; global value chain (GVC); gross export decomposition; GVC position; upstream/downstream trade partners |
| JEL: | F14 F15 |
| Date: | 2020–11–05 |
| URL: | http://d.repec.org/n?u=RePEc:ris:smuesw:2020_024&r=all |