nep-tid New Economics Papers
on Technology and Industrial Dynamics
Issue of 2021‒08‒09
twenty papers chosen by
Fulvio Castellacci
Universitetet i Oslo

  1. Mission-Oriented Policies and the “Entrepreneurial State” at Work: An Agent-Based Exploration By Giovanni Dosi; Francesco Lamperti; Mariana Mazzucato; Mauro Napoletano; Andrea Roventini
  2. The Impact of Foreign Direct Investment on Innovation: Evidence from Patent Filings and Citations in China By Chen, Yongmin; Jiang, Haiwei; Liang, Yousha; Pan, Shiyuan
  3. The return on human (STEM) capital in Belgium By Gert Bijnens; Emmanuel Dhyne
  4. Dynamics of Imitation versus Innovation in Technological Leadership Change: Latecomers’ Catch-up Strategies in Diverse Technological Regimes By Chang, Sungyong; Kim, Hyunseob; Song, Jaeyong; Lee, Keun
  5. Servitization across Countries and Sectors: Evidence from World Input-Output Data By Klaus S. Friesenbichler; Agnes Kügler
  6. Corporate effective tax rates for R&D: The case of expenditure-based R&D tax incentives By Ana Cinta González Cabral; Silvia Appelt; Tibor Hanappi
  7. The Potential Employment Implications of the Fourth Industrial Revolution Technologies: The Case of the Manufacturing, Engineering and Related Services Sector By Caitlin Allen Whitehead; Haroon Bhorat; Robert Hill; Tim Köhler; François Steenkamp
  8. Extending A Regional Innovation Network: A Technology Intelligence Approach By Johannes van der Pol; Jean-Paul Rameshkoumar; Sarah Teulière; Thierry Bazerque
  9. The R&D investment decision game with product differentiation By Domenico Buccella; Luciano Fanti; Luca Gori
  10. Do capacity constraints trigger high growth for enterprises? By Coad, Alexander; Domnick, Clemens; Flachenecker, Florian; Harasztosi, Peter; Janiri, Mario Lorenzo; Pál, Rozália; Teruel Carrizosa, Mercedes
  11. Policy Influence in the Knowledge Space: a Regional Application By Stefano Basilico; Uwe Cantner; Holger Graf
  12. The Role of Digitalisation in Shaping India’s Global Value Chain Participation By Subash Sasidharan; Ketan Reddy
  13. Making life richer, easier and healthier: Robots, their future and the roles for public policy By Alistair Nolan
  14. Measuring Robot Quality: Has Quality Improvement Slowed Down? By FUJIWARA Ippei; KIMOTO Ryo; SHIRATSUKA Shigenori; SHIROTA Toyoichiro
  15. Employment creation potential, labor skills requirements, and skill gaps for young people: A South African case study By Caitlin Allen; Zaakhir Asmal; Haroon Bhorat; Robert Hill; Jabulile Monnakgotla; Morné Oosthuizen; Chris Rooney
  16. Understanding Economic Complexity: An Application to the MER Sector By Caitlin Allen Whitehead; Haroon Bhorat
  17. Patterns of development in the European biopharmaceutical industry. A network analysis of cross-sectoral linkages (2000-2016) By Emanuela Sirtori; Alessandra Caputo; Domenico Scalera
  18. Human capital accumulation, long-run GDP growth and technological frontier By Lemoine, Mathilde; Munoz, Mathilde
  19. Place-Based Policies and the Geography of Corporate Investment By Cameron LAPOINT; SAKABE Shogo
  20. Innovation in Malmö after the Öresund Bridge By Olof Ejermo; Katrin Hussinger; Basheer Kalash; Torben Schubert

  1. By: Giovanni Dosi (Laboratory of Economics and Management); Francesco Lamperti (Université Panthéon-Sorbonne - Paris 1 (UP1)); Mariana Mazzucato; Mauro Napoletano (Observatoire français des conjonctures économiques); Andrea Roventini
    Abstract: We study the impact of alternative innovation policies on the short- and long-run performance of the economy, as well as on public finances, extending the Schumpeter meeting Keynes agent-based model (Dosi et al., 2010). In particular, we consider market-based innovation policies such as R&D subsidies to firms, tax discount on investment, and direct policies akin to the “Entrepreneurial State” (Mazzucato, 2013), involving the creation of public research oriented firms diffusing technologies along specific trajectories, and funding a Public Research Lab conducting basic research to achieve radical innovations that enlarge the technological opportunities of the economy. Simu- lation results show that all policies improve productivity and GDP growth, but the best outcomes are achieved by active discretionary State policies, which are also able to crowd-in private investment and have positive hysteresis effects on growth dynamics. For the same size of public resources allocated to market-based interventions, “Mission” innovation policies deliver significantly better aggregate performance if the government is patient enough and willing to bear the intrinsic risks related to innovative activities.
    Keywords: Innovation policy, mission-oriented R&D, entrepreneurial state, agent-based modelling
    JEL: O33 O38 O31 O40 C63
    Date: 2021
  2. By: Chen, Yongmin; Jiang, Haiwei; Liang, Yousha; Pan, Shiyuan
    Abstract: This paper studies how foreign direct investment (FDI) affects innovation in the host country, using matched firm-level patent data of Chinese firms. The data contain multidimensional information about patent counts and citations which, together with an identification strategy based on Lu et al. (2017), allows us to measure innovation comprehensively and to uncover the causal relationship. Our empirical analysis shows that FDI has positive intra-industry effects on the quantity and quality of innovation by Chinese firms. We show that these positive effects are driven by increases in competition, rather than by knowledge spillover from FDI which is measured by patent citations between domestic firms and foreign invested enterprises (FIEs). We further investigate the inter-industry effects of FDI and find that FDI has positive vertical effects on innovation in upstream sectors.
    Keywords: FDI; Innovation; Patent; Competition; Spillover
    JEL: F2 L5 O3
    Date: 2021–07–26
  3. By: Gert Bijnens (Economics and Research Department, NBB); Emmanuel Dhyne (Economics and Research Department, NBB)
    Abstract: Whilst overall productivity growth is stalling, firms at the frontier are still able to capture the benefits of the newest technologies and business practices. This paper uses linked employer-employee data covering all Belgian firms over a period of almost 20 years and investigates the differences in human capital between highly productive firms and less productive firms. We find a clear positive correlation between the share of high-skilled and STEM workers in a firm's workforce and its productivity. We obtain elasticities of 0.20 to 0.70 for a firm's productivity as a function of the share of high-skilled workers. For STEM (science, technology, engineering, mathematics) workers, of all skill levels, we find elasticities of 0.20 to 0.45. More importantly, the elasticity of STEM workers is increasing over time, whereas the elasticity of high-skilled workers is decreasing. This is possibly linked with the increasing number of tertiary education graduates and at the same time increased difficulties in filling STEM-related vacancies. Specifically, for high-skilled STEM workers in the manufacturing sector, the productivity gain can be as much as 4 times higher than the gain from hiring additional high-skilled non-STEM workers. To ensure that government efforts to increase the adoption of the latest technologies and business practices within firms lead to sustainable productivity gains, such actions should be accompanied by measures to increase the supply and mobility of human (STEM) capital. Without a proper supply of skills, firms will not be able to reap the full benefits of the digital revolution.
    Keywords: : human capital, skills, education, productivity, linked employer-employee data
    JEL: E24 I26 J24
    Date: 2021–07
  4. By: Chang, Sungyong (London Business School); Kim, Hyunseob (Jackson State University); Song, Jaeyong; Lee, Keun
    Abstract: We examine the role of latecomers’ optimal resource allocation between innovation and imitation in latecomers’ catch-up under diverse technological regimes. Building on Nelson and Winter (1982), we develop computational models of technological leadership change. The results suggest that one-sided dependency upon either imitation or innovation deters technological leadership change. At an early stage with low-level technologies, latecomers should focus on imitation; then, as the technological gap decreases, they should allocate more R&D resource to innovation. We also examine the role of several variables, such as appropriability, cumulativeness, and cycle time of technologies (CTT), as related to technological regimes. The simulation results show that while low appropriability tends to increase the probability of technological leadership change, it makes imitation a more e˙ective strategy compared to innovation; in addition, while a higher level of cumulativeness tends to reduce the probability of leadership change, it makes imitation a more valuable option because innovation becomes more diÿcult for latecomers. We also find an inverted U-shaped relationship between the CTT and the probability of technological leadership change. When the CTT is short, it makes sense for latecomers to allocate more resources to imitation, especially when their technology level is initially low.
    Date: 2021–07–29
  5. By: Klaus S. Friesenbichler; Agnes Kügler
    Abstract: We use the supply tables that underlie WIOT data to explore the provision of services by manufacturing sectors. The value-added shares generated by services differ substantially across countries and sectors, while they remain largely stable over time. A Bayesian classification assigns broadly defined manufacturing sectors to economy-wide growth models. It differentiates between service- and manufacturing driven models in catching up and developed economies. Servitization increase with labour productivity. The service intensities in the sectoral production mix are lower in countries with higher manufacturing shares. This holds for both catching up and developed economies. However, servitization is largely unrelated to productivity and employment growth. Hence, we argue that the degree of servitization is contingent on and an attribute of the respective economic model in which a sector operates.
    Keywords: Servitiziation, employment, productivity, latent class analysis, WIOD
    Date: 2021–08–04
  6. By: Ana Cinta González Cabral; Silvia Appelt; Tibor Hanappi
    Abstract: R&D tax incentives have become a widely used policy tool to promote business R&D. How do they shape firms’ incentives to invest in R&D? This paper contributes a methodology to construct forward-looking effective tax rates for an R&D investment that reflect the value of expenditure-based R&D tax incentives. The new OECD estimates cover 48 countries and consider the case of large profitable firms, accounting for the bulk of R&D in most economies. The results provide new insights into the generosity of R&D tax incentives from the perspective of firms that decide on whether or where to invest in R&D (extensive margin) and the level (intensive margin) of R&D investment. The generosity of the favourable tax treatment of R&D is shown to vary at the intensive and extensive margins, highlighting differences in countries’ strategies to support R&D through the tax system.
    JEL: H25 H2 O3 H
    Date: 2021–07–29
  7. By: Caitlin Allen Whitehead; Haroon Bhorat; Robert Hill; Tim Köhler; François Steenkamp (Development Policy Research Unit, University of Cape Town)
    Abstract: In this paper we examine the potential employment displacement effects of technologies related to the Fourth Industrial Revolution (4IR) on the MER sector, by observing this risk through the lens of the task content of occupations or the routinisation hypothesis. We use network analytics to develop a MER sector occupation space, which shows the occupational structure of the MER sector labour force. Given the occupational structure of the sector, we identify occupations at high risk of displacement – i.e. what tasks, and hence what occupations, are most at risk of being automatated, computerised or digitised. Drawing on household survey data, we explore the characteristics of workers who occupy these high risk occupations in an attempt at identifying a typology of individuals most likely to be deleteriously impacted on by 4IR technologies. Three implications emerge: Firstly, technology induced employment displacement is likely to jeopardise low- to medium-skill employment in the production cluster occupations, and correspondingly result in an increase in relative demand for semi- and high-skilled nonproduction cluster occupations. Second, the non-random distribution of high risk occupations across the two clusters of the occupation space suggests that the skill transition to shift workers from high to low risk occupations is long, and in the event of substantial uptake of employment displacing technologies across the sector, technological unemployment is that much harder to mitigate. Third, the relatively high employment share associated with high risk occupations in the production cluster indicates that the potential displacement effects resulting in technological unemployment are likely to be substantial.
    Keywords: Automation; employment; manufacturing; fourth industrial revolution; task content of occupations; technology
    JEL: O13 O14 O25
    Date: 2021–05
  8. By: Johannes van der Pol (GREThA - Groupe de Recherche en Economie Théorique et Appliquée - UB - Université de Bordeaux - CNRS - Centre National de la Recherche Scientifique); Jean-Paul Rameshkoumar; Sarah Teulière; Thierry Bazerque
    Abstract: In France, Regions do not make their own innovation policies, this is the role of the State. A Region implements national policies and uses grants and subsidies to create and dynamize innovation ecosystems important for its economic development. The Region's role is therefore largely influential. In order to influence one needs to how and when to exert this influence. A precise understanding of an innovation ecosystem is therefore of vital importance. On the occasion of the venue of a Nobel laureate to the French region of Nouvelle-Aquitaine the regional counsel aimed to connect her with the regional innovation ecosystem around her research. The purpose of this paper is to show methods and techniques using patents, scientific publications and non-patent literature citations that can help with the identification of an innovation ecosystem and how to integrate a researcher into this ecosystem .
    Keywords: NPL,Technology Intelligence,Patents,innovation networks
    Date: 2021–07–16
  9. By: Domenico Buccella; Luciano Fanti; Luca Gori
    Abstract: This article extends the classical d'Aspremont and Jacquemin's (1988, 1990) cost-reducing R&D model with spill-overs to allow quantity-setting firms (Cournot rivalry) to play the non-cooperative R&D investment decision game with horizontal product differentiation. Unlike Bacchiega et al. (2010), who identify a parametric region – defined by the extent of technological spill-overs and the efficiency of R&D activity – in which the game is a prisoner's dilemma (self-interest and mutual benefit of cost-reducing innovation conflict), this work shows that product differentiation changes the game into a deadlock (self-interest and mutual benefit do not conflict), irrespective of the parameter scale (thus, holding also in the absence of spill-over effects). The social welfare when the degree of product differentiation is high enough and a deadlock characterises investing in cost-reducing R&D is larger than when firms do not invest in R&D, irrespective of the technological spillovers extent and the R&D activity's efficiency. These findings suggest that investing in R&D challenges the improvement of interventions aimed at favouring product differentiation. These results also hold for pricesetting firms (Bertrand rivalry).
    Keywords: Process innovation, Nash equilibrium, Social welfare
    JEL: D43 L13 O31
    Date: 2021–07–01
  10. By: Coad, Alexander; Domnick, Clemens; Flachenecker, Florian; Harasztosi, Peter; Janiri, Mario Lorenzo; Pál, Rozália; Teruel Carrizosa, Mercedes
    Abstract: High-Growth Enterprises (HGEs) have a large economic impact, but are notoriously hard to predict. Previous research has linked high-growth episodes to the configuration of lumpy indivisible resources inside firms, such that high capacity utilisation levels might stimulate future growth. We theorize that firms reaching critically high capacity utilisation levels reach a 'trigger point' involving either broad-based investment in further growth, or shrinking back to previous levels. We analyse EIBIS survey data (matched to ORBIS) which features a question on time-varying capacity utilisation. Overcapacity is a transitory state. Firms enter into overcapacity after a period of rapid growth of sales and profits, and the years surrounding overcapacity have higher employment growth rates. Firms operating at overcapacity make incremental investments (e.g. capacity expansion, process improvements, and modern machinery) rather than investing in R&D and new product development. We find support for the 'fork in the road' hypothesis: for some firms, overcapacity is associated with launching into massive investments and subsequent sales growth, while for other firms, overcapacity is negatively related to both investments and sales growth.
    Keywords: High-Growth Enterprises (HGEs),firm growth,investment,capacity utilisation,trigger points
    JEL: L25
    Date: 2021
  11. By: Stefano Basilico (Friedrich Schiller University Jena, Economics Department); Uwe Cantner (Friedrich Schiller University Jena, Economics Department, and University of Southern Denmark, Odense); Holger Graf (Friedrich Schiller University Jena, Economics Department)
    Abstract: Cluster policies aim at improving collaboration between co-located actors to address systemic failures. As yet, cluster policy evaluations are mainly concerned with effects on firm performance. Some recent studies move to the system level by assessing how the structure of actor-based knowledge networks is affected by such policies. We continue in that direction and analyze how technology-based regional knowledge spaces structurally respond to the introduction of a cluster policy. Taking the example of the German BioRegio contest, we examine how such knowledge spaces in winning and non-winning regions evolved before, during and after the policy. Using a difference-in-differences approach, we identify treatment effects of increased knowledge space embeddedness of biotechnology only in the post-treatment period. Our findings imply that cluster policies can have long-term structural effects typically not accounted for in policy evaluations.
    Keywords: BioRegio contest, network analysis, knowledge space, difference in differences, patents
    JEL: O31 O38 R11
    Date: 2021–08–02
  12. By: Subash Sasidharan; Ketan Reddy (Indian Institute of Technology Madras, Chennai, India)
    Abstract: This study investigates the role of digital infrastructure in shaping the global value chain (GVC) participation of Indian manufacturing firms. To examine the digitalisation and GVC nexus, a rich, firm-level, unbalanced panel of 4,875 manufacturing firms from the past 2 decades is employed to detail the rising importance of digital infrastructure in the Indian context and then to examine empirically the relationship between digitalisation and GVCs. Employing a logit model, a positive, significant impact of digitalisation is found regarding firms’ GVC participation. Further, subsample results highlight that digitalisation promotes integration of small firms and firms from low-technology industries into the GVC. The findings of the analysis are robust to alternate measures of the GVCs.
    Keywords: digitalisation, Indian manufaturing, global value chain margins, difference-in-difference
    JEL: F14 F15 L86 O14
    Date: 2021–06–01
  13. By: Alistair Nolan
    Abstract: This paper addresses the current and emerging uses and impacts of robots, the mid-term future of robotics and the role of policy. Progress in robotics will help to make life easier, richer and healthier. Wider robot use will help raise labour productivity. As science and engineering progress, robots will become more central to crisis response, from helping combat infectious diseases to maintaining critical infrastructure. Governments can accelerate and orient the development and uptake of socially valuable robots, for instance by: supporting cross-disciplinary R&D, facilitating research commercialisation, helping small and medium-size enterprises (SMEs) understand the opportunities for investment in robots, supporting platforms that highlight robot solutions in healthcare and other sectors, embedding robotics engineering in high school curricula, tailoring training for workers with vocational-level mechanical skills, supporting data development useful to robotics, ensuring flexible regulation conducive to innovation, strengthening digital connectivity, and raising awareness of the importance of robotics.
    Date: 2021–07–29
  14. By: FUJIWARA Ippei; KIMOTO Ryo; SHIRATSUKA Shigenori; SHIROTA Toyoichiro
    Abstract: This paper measures the extent to which the quality of robots has improved in Japan between 1990 and 2018, by using data from the "Production and Shipments of Manipulators and Robots" of the Japan Robot Association and the "Corporate Goods Price Index" of the Bank of Japan. We first calculate quality-unadjusted robot price indices applying three approaches: the traditional index number approach, the stochastic approach in the spirits of Edgeworth and Jevons, the structural approach. Then, we compute robot quality by dividing quality-unadjusted prices by the quality-adjusted industrial robot price index produced by the Bank of Japan. Based on three approaches, significant decline in improvement in the quality of robots in the last decade is found. The differences in the growth rates of the robot quality between the 2000s and the 2010s show substantially negative values around -3 percentage points per annum .
    Date: 2021–07
  15. By: Caitlin Allen; Zaakhir Asmal; Haroon Bhorat; Robert Hill; Jabulile Monnakgotla; Morné Oosthuizen; Chris Rooney (Development Policy Research Unit, University of Cape Town)
    Abstract: We provide a quantitative analysis of labor force survey data and conducted a survey of firms operating in IWOSS. For the quantitative, a series data on gross valueadded (GVA) and individual labor market activities data obtained from Statistics South Africa.3 We also make use of O*NET, a standardized database of skill requirements from the United States for over 1,000 occupations (O*NET, 2019). The O*NET database provides information on numerous measures such as skills, knowledge, abilities, and education levels required for a particular occupation (O*NET, 2019). The firm survey on employment potential and skill requirements supplements the results of the quantitative analysis. These firm interviews were conducted in the tourism, agro-processing, horticulture, and transit trade sectors. These four IWOSS sectors were selected based on their ability to create several types of jobs across the skills spectrum in South Africa.
    Keywords: Structural change, South Africa, economic growth, manufacturing, “industries without smokestacks”, IWOSS
    Date: 2021–02
  16. By: Caitlin Allen Whitehead; Haroon Bhorat (Development Policy Research Unit, University of Cape Town)
    Abstract: This paper develops a relatively novel method for identifying opportunities for diversification in the South African Manufacturing, Engineering, and Related Services (MER) Sector. The central tenet of this analysis is the economic complexity framework, which states that countries are able to increase their complexity through the diversification of their economies toward increasingly complex products. By constructing a measure of economic complexity based on a dataset of traded MER sector products, it is shown that the most complex economies have shifted export activities toward highly complex, manufactured goods, specifically those in the MER sector. This manufacturing-led process of structural transformation centered around the MER sector is shown to be advantageous for both a country’s level of economic development and its long-run prosperity. Using network analysis, a MER sector product space, along the lines of Hidalgo et al. (2007) is used to identify optimal complexity-enhancing diversification opportunities in the sector. South Africa is sparsely represented in this product space. However, there is a core of automotive, rubber, and metal products, representing current productive capabilities from which future diversification opportunities within the MER sector can emerge. These opportunities, termed frontier products, are largely situated adjacent to the automotive sector.
    Keywords: Economic complexity; manufacturing; industrial relatedness; product space; structural transformation; diversification
    JEL: O13 O14 O25
    Date: 2021–05
  17. By: Emanuela Sirtori (CSIL Centre for Industrial Studies); Alessandra Caputo (CSIL Centre for Industrial Studies); Domenico Scalera (Department of Law and Economics. University of Sannio, Italy)
    Abstract: This paper aims at identifying geographical patterns of Biopharma transformation trends in the EU over the period 2000-2016 through an analysis of cross-regional and cross-sectoral linkages. To this purpose, information on co-patenting, mergers and acquisitions, and joint ventures and alliances is used to carry out a network analysis at region level. Results show an increasing involvement of European regions in cross-sectoral Biopharma operations. However, while the network displays a tendency to enlarge toward the East (Poland) and West (Spain), a significant reduction in the activity of peripheral nodes in the Southern and Northern borders of the network is observed. More recently, the overall interconnectedness of the network slightly decreases; the network becomes sparser, showing a propensity toward regionalisation of cross-sectoral linkages. Finally, by exploiting information on the location of companies and inventors involved in cross-sectoral operations, the investigation allows pinpointing regional communities and their evolution throughout the yearsClassification-JEL: O18, R11, R58
    Keywords: Biopharmaceutical industry, Cross-sectoral linkages, Emerging Industries, Network analysis
    JEL: R11 R12 L14 L65
    Date: 2021–07–01
  18. By: Lemoine, Mathilde; Munoz, Mathilde
    Abstract: While initial education is at the heart of growth models, less work has been done on the influence of human capital accumulation on long-run growth. Our first step was to overcome the “human capital puzzle” by the introduction of the technological frontier as defined by Vandenbusshe, Aghion and Meghir (2006). The “human capital puzzle” means that the level of human capital has a significant positive effect on growth in countries where educational attainment is low and a significant negative effect in countries where educational attainment is high. We specified an aggregate long-run growth equation while taking account the limitations of the various approaches but without rejecting the contribution of endogenous theories. By combining the distance to technological frontier and the workhorse cross-country regression model, our coefficient on both the level and rate of accumulation of human capital are positive, and significant at the 1 and 10 percent level for the human capital predictors alone, and that the interaction between the rate of accumulation of human capital and distance to the technological frontier is also significant at the 5 percent level. This shows that the distance to the technological frontier significantly affects the relationship between human capital accumulation and economic growth, while cross-country differences in technology do not change the relationship between initial level of human capital stock and economic growth. Moreover, the effects of human capital accumulation on economic growth tend to increase with technological advancements of countries. According to oure conometric results, the “human capital puzzle” is thus partially solved by taking into account cross-country differences in technological advancements, and their interaction with human capital proxies. To address th eendogeneity of the human capital variable, we turn toward a simultaneous equations mode (SEM) where accumulation of human capital is also caused by economic growth, and where accumulation of physical capital is allowed to be endogenous. Despite a less complete dataset(fewercountries), the both human capital level and accumulation have a positive and significant effect on long-term growth of GDP per capita. These first results were needed before investigating the relationship between human capital and economic development at a more granular level and could help to not underestimate the spillover effect of the investment in human capital accumulation on long-run GDP growth especially incountries close to the technological frontier
    Keywords: human capital,human capital accumulation,long-run GDP growth, technological frontier, productivity, educational training, human capital equation, human capital spillover effects
    Date: 2021–07
  19. By: Cameron LAPOINT; SAKABE Shogo
    Abstract: We estimate the dynamic effects of place-based tax incentives on local investment, job creation, and firm relocation decisions using a series of policy experiments in Japan as our laboratory. The Japanese government rolled out the Technopolis program between 1984 and 1989, offering firms bonus depreciation rates as high as 30% towards tangible capital investment in economically peripheral regions. A follow-up policy enacted in 1989 expanded the set of eligible areas and increased bonus depreciation for firms in certain non-tradable industries. Using detailed multi-plant firm balance sheet data and several staggered difference-in-differences (DD) approaches, we find both policies generated employment and investment in building construction and non-real estate assets, with little evidence of spillovers to ineligible firms in treated areas. The effects are driven by more financially constrained firms and firms which rely on relatively long-lived assets such as buildings in their operations. Our results point to the importance of providing large and immediate rather than deferred financial incentives for inducing firms to make irreversible investments in struggling regions.
    Date: 2021–07
  20. By: Olof Ejermo; Katrin Hussinger; Basheer Kalash; Torben Schubert
    Abstract: We analyze the effect of the Öresund Bridge, a combined railway and motorway bridge between Swedish Malmö and the Danish capital Copenhagen, on inventive activity in the region of Malmö. Applying difference-in-difference estimation on individual-level data, our findings suggest that the Öresund Bridge led to a significant increase in the number of patents per individual in the Malmö region as compared to the two other major regions in Sweden, Gothenburg and Stockholm. We show that a key mechanism is the attraction of highly qualified workers to the Malmö region following the construction of the bridge.
    Keywords: Transportation infrastructure, innovation, Öresund Bridge, cross-border regions, patents; inventors, agglomeration effects
    JEL: O31 O33 R11 L91
    Date: 2021

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