nep-tid New Economics Papers
on Technology and Industrial Dynamics
Issue of 2021‒05‒24
ten papers chosen by
Fulvio Castellacci
Universitetet i Oslo

  1. Intangible Capital and Firm-Level Productivity – Evidence from Germany By Roth, Felix; Sen, Ali; Rammer, Christian
  2. The Rise of Robots and the Fall of Routine Jobs By de Vries, Gaaitzen J.; Gentile, Elisabetta; Miroudot, Sébastien; Wacker , Konstantin M.
  3. The Influence of Value-Chain Governance on Innovation Performance: A Study of Italian Suppliers By Brancati, Emanuele; Pietrobelli, Carlo; Mazzi, Caio Torres
  4. The Sectoral Innovation Database, 1994-2016.Methodological Notes By Mario Pianta; Andrea Coveri; Jelena Reljic
  5. The Great Fall of Labor Share:Micro Determinants for EU Countries Over 2011-2019 By Alessandro Bellocchi; Giovanni Marin; Giuseppe Travaglini
  6. Automation, Offshoring and Employment Distribution in Western Europe By Jocelyn Maillard
  7. The effects of technology intensity in manufacturing on CO2 emissions: Evidence from developing countries By Elvis Avenyo; Fiona Tregenna
  8. The Macroeconomic Effects of a Carbon Tax to Meet the U.S. Paris Agreement Target: The Role of Firm Creation and Technology Adoption By Alan Finkelstein Shapiro; Gilbert E. Metcalf
  9. The Race of Man and Machine: Implications of Technology When Abilities and Demand Constraints Matter By Gries, Thomas; Naudé, Wim
  10. The Economics of Diversity: Innovation, Productivity, and the Labour Market By Ozgen, Ceren

  1. By: Roth, Felix; Sen, Ali; Rammer, Christian
    Abstract: This paper analyses the impact of intangible capital on firm-level productivity for Germany using panel data from the Community Innovation Survey for the time period 2006 to 2018. Our paper presents three novel results. First, we find a highly significant positive relationship between intangible capital and firm-level productivity with elasticities overall in line with previous findings reported for other large EU economies. Second, our results show that both manufacturing and services are highly intangible-capital intensive, and that intangibles have a greater impact on firm-level productivity in services - particular in the business services sector. Third, our results show that intangible capital investments in German firms are equal to investments in tangible capital since the early 2000s. Overall, the evidence presented in our paper indicates that Germany - in line with other advanced economies - has undergone a structural transition into a knowledge economy in which intangibles act as an important driver of firm-level productivity.
    Keywords: Intangible capital,firm-level productivity,panel data,Germany
    JEL: D24 O30 L22 C33
    Date: 2021
  2. By: de Vries, Gaaitzen J. (University of Groningen, The Netherlands); Gentile, Elisabetta (Asian Development Bank); Miroudot, Sébastien (Organisation for Economic Co-operation and Development); Wacker , Konstantin M. (University of Groningen, The Netherlands)
    Abstract: This paper examines the impact of industrial robots on jobs. We combine data on robot adoption and occupations by industry in 37 economies for the period 2005–2015. We exploit differences across industries in technical feasibility—defined as the industry’s share of tasks replaceable by robots—to identify the impact of robot usage on employment. The data allow us to differentiate effects by the routine intensity of employment. We find that a rise in robot adoption relates significantly to a fall in the employment share of routine manual task-intensive jobs. This relation is observed in high-income economies, but not in emerging market and transition economies.
    Keywords: employment; occupations; robots; tasks
    JEL: E23 J23 O30
    Date: 2021–08–28
  3. By: Brancati, Emanuele (Sapienza University of Rome); Pietrobelli, Carlo (University of Rome 3); Mazzi, Caio Torres (UNU-MERIT)
    Abstract: This paper explores how value-chain governance affects the innovation performance of suppliers of intermediate products. We take advantage of a unique dataset of Italian firms to identify governance regimes along suppliers’ technological capabilities and the level of explicit coordination in the value chain. Our results indicate that ‘modular’ value-chain governance is more conducive to innovation for suppliers, especially when these firms have medium capability levels. Conversely, market-based governance modes appear to strongly reduce the innovativeness of suppliers with low capability. These patterns are also reflected in export performances and sales of innovative products. Our results go partially against other findings in the GVC literature, whereby relational value chains are seen to provide the most favorable environment to learn and innovate. Interestingly, the highest levels of technological capabilities consistently reduce the correlation between supplying intermediates and innovation performance, which indicates that technology-gap is an important mediator of learning within value chains.
    Keywords: global value chains, export, suppliers, innovation, technological capabilities
    JEL: F14 O30
    Date: 2021–04
  4. By: Mario Pianta (Scuola Normale Superiore, Florence); Andrea Coveri (Department of Economics, Society & Politics, Università di Urbino Carlo Bo); Jelena Reljic (Sapienza Università di Roma)
    Abstract: The Sectoral Innovation Database (SID) has been developed at the University of Urbino over the last 20 years and combines several major sources of industry-level data, shedding light on the dynamics of structural change, the nature and impact of innovation, the internationalisation of production, the evolution of the quantity and quality of employment, income distribution patterns and the role of digitalization. The database covers six major European countries – France, Germany, Italy, the Netherlands, Spain and the United Kingdom (representing 75% of EU28’s GDP) – from 1994 to 2016, considering six time periods corresponding to upswings and downswings of business cycles. The first version of the SID provides data for 21 manufacturing and 17 service sectors for two-digit NACE Rev. 1 classes. As statistical surveys have moved to the twodigit NACE Rev. 2 classification, a second version of the Sectoral Innovation Database was produced, providing data for 18 manufacturing and 23 service sectors for two-digit NACE Rev. 2 classes. Major sources of data include the Community Innovation Surveys provided by Eurostat, the OECD’s STAN database, the WIOD database, the Eurostat’s EU Labour Force Surveys, and the EU KLEMS data on digitalization. The integrated information provided by the Sectoral Innovation Database offers a comprehensive view of industries’ dynamics in Europe and allows for an in-depth investigation of key research questions related to technological change, economic performance, international production, income distribution and employment.
    Keywords: Innovation, Industries, Databases, Demand, Offshoring, Labour market
    JEL: F15 J31 J51 L16 O33
    Date: 2021
  5. By: Alessandro Bellocchi (Department of Economics, Society & Politics, Università di Urbino Carlo Bo); Giovanni Marin (Department of Economics, Society & Politics, Università di Urbino Carlo Bo); Giuseppe Travaglini (Department of Economics, Society & Politics, Università di Urbino Carlo Bo)
    Abstract: The worldwide fall of labor shares in recent decades is well documented, but its underlying sources remain still unclear. Most of the recent empirical analysis rely on industry or aggregate macro data, downplaying the importance of heterogeneity among firms. In this paper we analyze micro panel data from Amadeus and seek to understand the dynamics of labor share in 19 sectors of the EU28. In our model firms are heterogeneous in capital stock, market power and technology. Labor share’s changes turn out to be driven by the complex interplay among these factors. We show that its slowdown in recent years reflects changes in capital deepening, technology progress and capital-labor substitution. Although institutional factors play a significant role in specific industries, they appear to be less relevant, than is usually believed, for the aggregate economy. Specifically, non-linear terms for the capital-output ratio make the effect of capital accumulation on the labor share no longer trivial, explaining the observed heterogeneous behavior within industries.
    Keywords: Labor Shares, Capital-Output ratios, Elasticity of Substitution, Technological Change, Markups
    JEL: E24 E25 C33
    Date: 2021
  6. By: Jocelyn Maillard (GATE Lyon Saint-Étienne - Groupe d'analyse et de théorie économique - CNRS - Centre National de la Recherche Scientifique - Université de Lyon - UJM - Université Jean Monnet [Saint-Étienne] - UCBL - Université Claude Bernard Lyon 1 - Université de Lyon - UL2 - Université Lumière - Lyon 2 - ENS Lyon - École normale supérieure - Lyon)
    Abstract: This paper investigates the effects of automation and offshoring on the dynamics of the occupational distribution of employment with a focus on Western Europe between 2000 and 2016. I use a general equilibrium model with three regions, three types of workers, ICT capital, trade in final goods and endogenous offshoring. Fed with exogenous measures of ICT-capital prices and trade costs, the model replicates key features of the data. It matches the observed dynamics of offshoring to Eastern Europe and Asian countries. It also reproduces accurately the observed polarization of the labor market: abstract and manual labor increase while routine labor falls. A counterfactual experiment reveals that automation is the main driver of polarization. Since it is also the only factor that drives individuals to become abstract (highskill) workers, it is welfare enhancing. The effects of falling trade costs on labor polarization are smaller, but imply welfare gains.
    Keywords: Automation,offshoring,labor-market polarization,European employment distribution
    Date: 2021–05–06
  7. By: Elvis Avenyo; Fiona Tregenna
    Abstract: Industrialisation is recognised as important for developing countries’ growth and ‘catching up’ with advanced economies, but is also associated with harmful carbon dioxide (CO2) emissions and hence with climate change. This poses a challenge to sustainable development, particularly for late industrialisers: how to industrialise while also mitigating CO2 emissions. This paper investigates the effect of technology intensity in manufacturing on CO2 emissions: is high-technology manufacturing less emitting than medium-technology and, in turn, low-technology manufacturing? We analyse this for a panel of 56 developing economies over the period 1991 to 2014, estimated using generalised method of moments (GMM). Methodologically, we adapt and synthesise the environmental Kuznets curve (EKC) and the stochastic effect by regression on population, affluence and technology (STIRPAT) approaches. We utilise two alternative measures of emissions: absolute and per capita volumes. Our results show that medium- and high-technology manufacturing are associated with higher emissions than low-technology manufacturing. In relation to the technology intensity of manufacturing exports, we find high-technology manufacturing to be associated with lower emissions than medium-technology manufacturing, and in turn low-technology manufacturing. These findings have important policy implications, suggesting that a shift towards more technology-intensive manufacturing may be a more environmentally sustainable industrialisation path for developing countries.
    Keywords: carbon dioxide (CO2) emissions, industrialisation, manufacturing, Technology, developing countries
    JEL: F18 O13 O14 O33 Q01 Q54 Q56
    Date: 2021–01
  8. By: Alan Finkelstein Shapiro; Gilbert E. Metcalf
    Abstract: We analyze the quantitative labor market and aggregate effects of a carbon tax in a framework with pollution externalities and equilibrium unemployment. Our model incorporates endogenous labor force participation and two margins of adjustment influenced by carbon taxes: (1) firm creation and (2) green production-technology adoption. A carbon-tax policy that reduces carbon emissions by 35 percent – roughly the emissions reductions that will be required under the Biden Administration's new commitment under the Paris Agreement – and transfers the tax revenue to households generates mild positive long-run effects on consumption and output; a marginal increase in the unemployment and labor force participation rates; and an expansion in the number and fraction of firms that use green technologies. In the short term, the adjustment to higher carbon taxes is accompanied by gradual gains in output and consumption and a negligible expansion in unemployment. Critically, abstracting from endogenous firm entry and green-technology adoption implies that the same policy has substantial adverse short- and long-term effects on labor income, consumption, and output. Our findings highlight the importance of these margins for a comprehensive assessment of the labor market and aggregate effects of carbon taxes.
    JEL: E20 E24 E62 H23 O33 Q52 Q54 Q55 Q58
    Date: 2021–05
  9. By: Gries, Thomas (University of Paderborn); Naudé, Wim (University College Cork)
    Abstract: In "The Race between Man and Machine: Implications of Technology for Growth, Factor Shares, and Employment," Acemoglu and Restrepo (2018b) combine the task-based model of the labor market with an endogenous growth model to model the economic consequences of artificial intelligence (AI). This paper provides an alternative endogenous growth model that addresses two shortcomings of their model. First, we replace the assumption of a representative household with the premise of two groups of households with different preferences. This allows our model to be demand constrained and able to model the consequences of higher income inequality due to AI. Second, we model AI as providing abilities, arguing that "abilities" better characterises the nature of the services that AI provide, rather than tasks or skills. The dynamics of the model regarding the impact of AI on jobs, inequality, wages, labor productivity and long-run GDP growth are explored.
    Keywords: technology, artificial intelligence, productivity, labor demand, income distribution, growth theory
    JEL: O47 O33 J24 E21 E25
    Date: 2021–04
  10. By: Ozgen, Ceren (University of Birmingham)
    Abstract: The empirical evidence on the economic impacts of diversity is mixed. Many studies in the literature present context dependent and data driven results which are challenging to reconcile with each other. This paper offers a systematic synthesis of the empirical findings on the economic impacts of diversity on innovation, productivity, and the labour market. It presents a structured framework which takes the spatial scale of the analysis in the papers as a reference to understand the inconsistency of some previous predictions and the varying magnitudes of the diversity impact. The empirical findings reconcile more meaningfully when diversity effects are documented discretely at the regional, firm and individual levels. The paper further sets out an agenda for future research and links the findings for policy relevance.
    Keywords: innovation, cultural diversity, migration, knowledge production function
    JEL: J24 J15 F22 O15
    Date: 2021–04

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