nep-tid New Economics Papers
on Technology and Industrial Dynamics
Issue of 2021‒08‒16
twelve papers chosen by
Fulvio Castellacci
Universitetet i Oslo

  1. The Geography of Job Tasks By Enghin Atalay; Sebastian Sotelo; Daniel Tannenbaum
  2. Technological Change and Domestic Outsourcing By Bergeaud, Antonin; Mazet-Sonilhac, Clément; Malgouyres, Clément; Signorelli, Sara
  3. How Do Workers Adjust When Firms Adopt New Technologies? By Genz, Sabrina; Gregory, Terry; Janser, Markus; Lehmer, Florian; Matthes, Britta
  4. Regional policies and sectoral outputs in the Italian regions. A multi-input multi-output counterfactual approach. By Gianluigi Coppola; Sergio Destefanis; Giorgia Marinuzzi; Walter Tortorella
  5. R&D Heterogeneity and Countercyclical Productivity Dispersion By Shuowen Chen; Yang Ming
  6. Technology Competition, Cumurative Innovation, and Technological Development Scheme By Masahito Ambashi
  7. Buyers' workload and R&D procurement outcomes: Evidence from the US Air Force Research Lab By Giuffrida, Leonardo M.; Raiteri, Emilio
  8. State-firm coordination and upgrading in Spain's and Korea's ICT industries By Calvo, Angela Garcia
  9. Education, routine, and complexity-biased Knowledge Enabling Technologies: Evidence from Emilia-Romagna, Italy. By Roberto Antonietti; Luca Cattani; Francesca Gambarotto; Giulio Pedrini
  10. Applying Evolutionary Economic Geography beyond case studies in the Global North: Regional diversification in Vietnam By Moritz Breul; Fabio Pruß;
  11. What do Firms Gain from Patenting? The Case of the Global ICT Industry By Dimitrios Exadaktylos; Mahdi Ghodsi; Armando Rungi
  12. The Cultural Roots of Firm Entry, Exit, and Growth By Katharina Erhardt; Simon Haenni

  1. By: Enghin Atalay; Sebastian Sotelo; Daniel Tannenbaum
    Abstract: The returns to skills and the nature of work differ systematically across labor markets of different sizes. Prior research has pointed to worker interactions, technological innovation, and specialization as key sources of urban productivity gains, but has been limited by the available data in its ability to fully characterize work across geographies. We study the sources of geographic inequality and present new facts about the geography of work using online job ads. We show that the (i) intensity of interactive and analytic tasks, (ii) technological requirements, and (iii) task specialization all increase with city size. The gradient for tasks and technologies exists both across and within occupations. It is also steeper for jobs requiring a college degree and for workers employed in non-tradable industries. We document that our new measures help account for a substantial portion of the urban wage premium, both in aggregate and across occupation groups.
    JEL: J20 J24 R12 R23
    Date: 2021–08–09
  2. By: Bergeaud, Antonin (Bank of France); Mazet-Sonilhac, Clément (Sciences Po, Paris); Malgouyres, Clément (Paris School of Economics); Signorelli, Sara (University of Amsterdam)
    Abstract: Domestic outsourcing has grown substantially in developed countries over the past two decades. This paper addresses the question of the technological drivers of this phenomenon by studying the impact of the staggered diffusion of broadband internet in France during the 2000s. Our results confirm that broadband technology increases firm productivity and the relative demand for high-skill workers. Further, we show that broadband internet led firms to outsource some non-core occupations to service contractors, both in the low and high-skill segments. In both cases, we find that employment related to these occupations became increasingly concentrated in firms specializing in these activities, and was less likely to be performed in-house within firms specialized in other activities. As a result, after the arrival of broadband internet, establishments become increasingly homogeneous in their occupational composition. Finally, we provide suggestive evidence that high-skill workers experience salary gains from being outsourced, while low-skill workers lose out.
    Keywords: broadband, firm organization, labor market, outsourcing
    JEL: G14 G21 O33
    Date: 2021–07
  3. By: Genz, Sabrina (Institute for Employment Research (IAB), Nuremberg); Gregory, Terry (IZA); Janser, Markus (Institute for Employment Research (IAB), Nuremberg); Lehmer, Florian (Institute for Employment Research (IAB), Nuremberg); Matthes, Britta (Institute for Employment Research (IAB), Nuremberg)
    Abstract: We investigate how workers adjust to firms' investments into new digital technologies, including artificial intelligence, augmented reality, or 3D printing. For this, we collected novel data that links survey information on firms' technology adoption to administrative social security data. We then compare individual outcomes between workers employed at technology adopters relative to non-adopters. Depending on the type of technology, we find evidence for improved employment stability, higher wage growth, and increased cumulative earnings in response to digital technology adoption. These beneficial adjustments seem to be driven by technologies used by service providers rather than manufacturers. However, the adjustments do not occur equally across worker groups: IT-related expert jobs with non-routine analytic tasks benefit most from technological upgrading, coinciding with highly complex job requirements, but not necessarily with more academic skills.
    Keywords: technological change, artificial intelligence, employment stability, wages
    JEL: J23 J31 J62
    Date: 2021–08
  4. By: Gianluigi Coppola (University of Salerno); Sergio Destefanis (University of Salerno); Giorgia Marinuzzi (IFEL); Walter Tortorella (IFEL)
    Abstract: We assess the impact of various types of regional policies on the economies of the 20 Italian administrative regions for the 1994-2016 period. Differently from previous works, we assess the impact of various policy funds in four sectors (agriculture, industry, construction, services) through a multi-input multioutput transformation function, and we estimate the policies’ average partial effects through a control function approach incorporating the funds’ allocation rules. Our evidence implies that European Structural Funds had a significant impact on various sectoral components of regional GDP per capita, with the ERDF taking the strongest role. Furthermore, the effectiveness of European Structural Funds is weaker for services, and stronger for industry and (to a lesser extent) agriculture. Nationally funded regional policies do not have any aggregate impact but affect the sectoral composition of GDP.
    Keywords: European Structural Funds, control function approach, sectoral development, multi-output multiinput transformation functions
    JEL: C43 D24
    Date: 2021–05
  5. By: Shuowen Chen; Yang Ming
    Abstract: What causes countercyclicality of industry--level productivity dispersion in the U.S.? Empirically, we construct an index of negative profit shocks and show that both productivity dispersion and R&D intensity dispersion enlarge at the onset of the shock and gradually dissipate. Theoretically, we build a duopolistic technology--ladder model in which heterogeneous R&D costs determine firms' post--shock optimal behaviors and equilibrium technology gap. Quantitatively, we calibrate a parameterized model, simulate firms' post--shock responses and predict that productivity dispersion is due to the low--cost firm increasing R&D efforts and the high--cost firm doing the opposite. We provide two empirical tests for this mechanism.
    Date: 2021–08
  6. By: Masahito Ambashi (Institute of Economic Research, Kyoto University)
    Abstract: This paper investigates which technological development scheme is desirable in technology competition and cumulative innovation with significant uncertainty included in the follow-on innovation. Technology competition is likely to generate a socially overincentive for innovation especially when consumer surplus is negligible. This paper first finds that grant-back clause combined with an appropriate distribution of expected profits mitigates the socially overinvestments in both the initial and follow-on technologies, and therefore, improves social welfare. In particular, this paper shows that if a government authority can specify a particular distribution of expected profits between the firms, the socially optimal investment in the initial technology can be realized. On the other hand, assuming significantly positive consumer surplus instead, this paper reveals that competition in the follow-on technology creates higher social welfare as consumer surplus is large.
    Keywords: technology competition, cumulative innovation, initial and follow-on technologies, technological development scheme, grant-back clause
    JEL: L24 O32 O34
    Date: 2021–08
  7. By: Giuffrida, Leonardo M.; Raiteri, Emilio
    Abstract: Does workload constitute a bottleneck to a public agency's mission, and if so, to what extent? We ask these questions in the context of the US government's procurement of R&D. We link tender, contract, patent, and office records to the identity of the officer responsible for the procurement process to estimate how workload in the federal acquisition unit affects the execution of R&D contracts. The identification comes from unanticipated retirement shifts among contracting officers, which we use to instrument workload. We find a large increase in patenting at the extensive margin when the same officer is exposed to a declining workload. In our sample, an additional contracting officer in the procurement unit, holding fixed the procurement budget and number of purchases, leads to a two percentage point increase in the probability for an R&D contract to generate patents. We provide suggestive evidence that backlogged contracting officers are unable to devote enough time to tender and contract specifications.
    Keywords: Workload,Public Procurement,Contracting Officer,R&D,Patents
    JEL: D23 H57 O31 O32
    Date: 2021
  8. By: Calvo, Angela Garcia
    Abstract: Generating sustainable growth and reaching advanced economy status depend on the ability of countries to host local, globally competitive firms in skill-, capital-, and knowledge-intensive industries. However, few countries succeed. This paper asks whether state activism is necessary to foster economic transformation at high levels of complexity in the globalisation era, and if so, what strategies are effective. Using evidence from Spain's and Korea's ICT industries since the 1980s, the paper argues that state-firm coordination remains necessary to reach the efficiency frontier in complex industries. However, coordination has shifted from hierarchical structures to nonhierarchical models in which states and firms develop mutually agreed-upon working rules to reach beneficial outcomes. Nonhierarchical coordination may involve adopting different institutional configurations, depending on the identities and capabilities of firms and national governments and on the nature of linkages with other nations. These linkages may lead to alternative pathways to upgrading and diverse productive specialisations.
    Keywords: business-government relationships; industrial upgrading; late development; Political economy; state activism; EU747943
    JEL: R14 J01
    Date: 2021–01–02
  9. By: Roberto Antonietti (University of Padova); Luca Cattani (University of Bologna); Francesca Gambarotto (University of Padova); Giulio Pedrini (Kore University of Enna)
    Abstract: We analyze the relationship between the use of Key Enabling Technologies (KETs) and the demand for occupations, tasks, and skills in the local labour market areas (LLMAs) of Emilia-Romagna, Italy. We merge three data sources, and we compute both the share of highly educated employees, or of employees accomplishing low- versus high-routine tasks, and three novel indicators measuring the complexity of occupations, tasks, and skills. Our panel estimates show that a larger share of KETs not only stimulates a higher demand for workers holding a tertiary education degree, or accomplishing less routinary tasks, but also a higher demand for a wider, and more exclusive, set of occupations, tasks, and skills. These results are also robust to unobserved heterogeneity and reverse causality.
    Keywords: key enabling technology, complexity, occupation, tasks, skills
    JEL: J24 O33 R10
    Date: 2021–05
  10. By: Moritz Breul; Fabio Pruß;
    Abstract: Hitherto, the path-dependent understanding of regional diversification in Evolutionary Economic Geography (EEG) has drawn largely on insights into industrialized countries. However, in the past few decades several regions in the Global South have undergone rapid structural transformations despite starting out with unfavourable regional asset bases. This raises the question as to whether the strong emphasis on endogenous capabilities in EEG also provides a sound theoretical framework for explaining these tremendous diversification dynamics. This paper therefore aims to re-evaluate the wider validity of the path-dependent conceptualization of regional diversification in the context of a lower-middle income economy. To this end, we analyse the diversification of Vietnamese regions between 2006 and 2015. In order to take into account context-specific conditions that characterize Vietnam’s economy, we add the role of foreign-owned firms and state-owned enterprises to the conceptualization of regional diversification processes. While the role of relatedness holds true for Vietnam, the presence of foreign- owned firms allowed Vietnamese regions to break away from path dependency and diversify to unrelated industries. The findings highlight that only by adapting the analysis to context-specific conditions are we able to understand how regional diversification takes place across different settings.
    Keywords: Regional diversification, relatedness, Evolutionary Economic Geography, path creation, Vietnam
    Date: 2021–07
  11. By: Dimitrios Exadaktylos; Mahdi Ghodsi; Armando Rungi
    Abstract: This study investigates the relationship between patenting activity, productivity, and market competition at the firm level. We focus on the Information and Communication Technology (ICT) industry as a particular case of an innovative sector whose contribution to modern economies is pivotal. For our purpose, we exploit financial accounts and patenting activity in 2009-2017 by 179,660 companies operating in 39 countries. Our identification strategy relies on the most recent approaches for a difference-in-difference setup in the presence of multiple periods and with variation in treatment time. We find that companies being granted patents increase on average market shares by 11%, firm size by 12%, and capital intensity by 10%. Notably, we do not register a significant impact of patenting on firms' productivity after challenging results for reverse causality and robustness checks. Findings are robust after we consider ownership structures separating patents owned by parent companies and their subsidiaries. We complement our investigation with an analysis of market allocation dynamics. Eventually, we argue that policymakers should reconsider the trade-off between IPR protection and market competition, especially when the benefits to firms' competitiveness are not immediately evident.
    Date: 2021–08
  12. By: Katharina Erhardt; Simon Haenni
    Abstract: Can culture explain persistent differences in economic activity among individuals and across regions? A novel measure of cultural origin enables us to contrast the entrepreneurial activity of individuals located in the same municipality but whose ancestors lived just on opposite sides of the Swiss language border in the 18th century. Individuals with ancestry from the German-speaking side create 20% more firms than those with ancestry from the French-speaking side. These differences persist over generations and independent of the predominant culture at the current location. Yet, founders’ ancestry does not affect exit or growth of newly-founded firms. A model of entrepreneurial choice and complementary survey evidence suggest that the empirical patterns are mainly explained by differences in preferences, rather than skill. The results have sizable economic implications, accounting for 120,000 additional jobs over a period of 15 years.
    Keywords: culture, entrepreneurship, natural experiment, spatial RDD
    JEL: D22 L26 O12 Z10
    Date: 2021

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