nep-tid New Economics Papers
on Technology and Industrial Dynamics
Issue of 2021‒09‒06
twelve papers chosen by
Fulvio Castellacci
Universitetet i Oslo

  1. The impact of digitalisation on productivity: Firm-level evidence from the Netherlands By Martin Borowiecki; Jon Pareliussen; Daniela Glocker; Eun Jung Kim; Michael Polder; Iryna Rud
  2. Emerging 21st Century technologies: Is Europe still falling behind? By Hugo Confraria; Vitor Hugo Ferreira; Manuel Mira Godinho
  3. Is ICT Still Polarising Labour Demand after the Crisis? By David Pichler; Robert Stehrer
  4. From Blue to Steel-Collar Jobs: The Decline in Employment Gaps? By Benjamin Lerch
  5. Does GVC Participation Improve Firm Productivity? A Study of Three Developing Asian Countries By Urata, Shujiro; Baek, Youngmin
  6. Quantitative Assessment on Frictions in Technology Market By Zhang, Yiran
  7. Opposing firm-level Responses to the China Shock: Horizontal Competition Versus Vertical Relationships? By Philippe Aghion; Antonin Bergeaud; Matthieu Lequien; Marc Melitz; Thomas Zuber
  8. Are Patent Offices Substitutes? By Elise Petit; Bruno Van Pottelsberghe; Lluís Gimeno Fabra
  9. Global Agricultural Value Chains and Structural Transformation By Sunghun Lim
  10. International Trade and Technological Competition in Markets with Dynamic Increasing Returns By Luca Fontanelli; Mattia Guerini; Mauro Napoletano
  11. Wage Differences According to Workers' Origin: The Role of Working More Upstream in GVCs By Fays, Valentine; Mahy, Benoît; Rycx, François
  12. Marginalized and Overlooked? Minoritized Groups and the Adoption of New Scientific Ideas By Wei Cheng; Bruce A. Weinberg

  1. By: Martin Borowiecki; Jon Pareliussen; Daniela Glocker; Eun Jung Kim; Michael Polder; Iryna Rud
    Abstract: This paper analyses the role of intangibles and digital adoption for firm-level productivity in the Netherlands drawing on a newly constructed panel data set of Dutch enterprises. It provides robust evidence on productivity effects of intangibles and digital adoption using firms’ exposure to sector-wide advances in intangible intensity and digital adoption as an instrument. Results show that intangibles as measured by levels of digital skill intensity have a positive and statistically significant impact on firm-level productivity growth in the service sector and for younger firms. Productivity benefits from software investment are strong for low productivity firms. Together, these findings highlight the potential of intangibles to support the productivity catch-up of laggard enterprises. The evidence also suggests that productivity benefits from ICT hardware investment and the uptake of high-speed broadband are positive and sizeable.
    Keywords: digitalisation, intangibles, productivity, skills
    JEL: D24 E22 J24 O33
    Date: 2021–09–08
  2. By: Hugo Confraria; Vitor Hugo Ferreira; Manuel Mira Godinho
    Abstract: Firms and countries that specialise in emerging technologies tend to have a higher chance of becoming or remaining competitive in the future. This paper aims to analyse the most dynamic areas of technological competition between 2010 and 2019 and to identify which actors are leading in those areas. We analyse patenting dynamics in four major patent offices (USPTO, EPO, JPO, KIPO), to have a global landscape of technological dynamism, and we use the IPC patent classification system to proxy the technological areas. After examining patenting growth patterns in all 4-digit IPC classes, we built a score to classify the emergent technological areas across the four offices. Our results indicate twelve “emerging” IPC classes, which are related to software engineering, digital communication, IT methods for management, medical technology, pharmaceuticals, energy conservation, games, biotechnology and semiconductor devices. We find that European firms do not hold a leading share in any of these IPC classes. This is particularly true in emerging areas such as software engineering, energy conservation and semiconductor devices, which are likely to be critical to succeed in the new techno-paradigms related to digitalization and clean energy.
    Keywords: Emerging technologies; Technology policy; Technological competition; European Paradox; Matched patent-firm data
    Date: 2021–08
  3. By: David Pichler; Robert Stehrer (The Vienna Institute for International Economic Studies, wiiw)
    Abstract: The impact of ICT capital accumulation and digitisation on labour demand and wage structures has changed in recent years, according to some of the literature on the subject. We analyse the impact of ICT capital accumulation based on recent data differentiating between the period before and after the global financial crisis. Methodologically, we draw on Michaels, Natraj and van Reenen (2014) and are able to corroborate their findings for the period 1980-2004, whereas we find distinctly different patterns since 2011. Results suggest a negative relationship between changes in ICT intensity and the wage share for high-skilled workers, whereas medium-skilled workers were the main beneficiaries in sectors that experienced a more intensive digitisation process. These results are chiefly driven by the dynamics in the Central and Eastern European economies and the service industries. The effect of digitisation on low-skilled workers does not reveal any robust significant impact.
    Keywords: ICT capital, skill polarisation, wage patterns
    JEL: J31 O33
    Date: 2021–09
  4. By: Benjamin Lerch (Department of Economics, Università della Svizzera italiana, Switzerland)
    Abstract: The adoption of labor-replacing technologies has already displaced thousands of workers in the US. In this paper, I analyze how the adverse effects of the implementation of robots in firms' production processes are spreading among the population and how they are shaping the composition of labor markets. Exploiting exogenous variation in robot exposure across local labor markets and over time, I find that the introduction of industrial robots between the mid-1990s and 2014 contributes to the decline in the gender employment gap but increases the race and ethnicity employment gap. This finding follows from men and racial and ethnic minorities being more exposed to robots because of their over-representation in blue-collar jobs. Despite their predominance in the manufacturing sector, the labor market impacts of robots are not confined to these industries, but spill over also to the service sector.
    Keywords: industrial robots, employment, gender, race and ethnicity
    JEL: J15 J16 J23
    Date: 2021–07
  5. By: Urata, Shujiro (Asian Development Bank Institute); Baek, Youngmin (Asian Development Bank Institute)
    Abstract: We examine the impact of local firms’ participation in global value chains (GVCs) on productivity by considering three different patterns of GVC participation. We conducted a DID-PSM estimation involving three countries, Indonesia, the Philippines, and Viet Nam, and 17 manufacturing sectors in 2009 and 2015. We found an endogenous relationship between firm productivity and GVC participation: firms that enter GVCs have high productivity before participating in the GVCs (selection effect), and only Indonesian firms which entered GVCs had a high productivity growth after joining GVCs (learning effect). These two effects were only found for firms which both import intermediate goods and export output, and not for firms which only either import or export. We also found that indirect exporting does not improve a local firm’s productivity. We give several recommendations to help firms and governments facilitate the participation of firms in GVCs.
    Keywords: global value chains; productivity
    JEL: D24 F14 L11
    Date: 2021–03–31
  6. By: Zhang, Yiran
    Abstract: In this paper, I first document several novel stylized facts from Chinese patent transaction data matched with manufacturing firm data. A key finding is that Chinese patent market is significantly less developed than the U.S. To understand the causes and consequences, I build a model that endogenizes firm R&D investment, patent trading decision and productivity growth. I structurally estimate the model and find the following two main results. First, Chinese patent market plays a small role in growth. It only accounts for 5% of China’s GDP growth rate, as opposed to 17% in the U.S. Second, I evaluate the importance of three frictions calibrated to Chinese patent market: search cost, fixed transaction cost and information asymmetry. Search cost turns out to be the main friction to explain the gap of patent market size. If search cost was reduced to the US level, China’s productivity growth would increase by 0.16 percentage points.
    Keywords: Under-developed Patent Market, patent quality, search cost, fixed cost, information asymmetry
    JEL: O3
    Date: 2021–01–06
  7. By: Philippe Aghion; Antonin Bergeaud; Matthieu Lequien; Marc Melitz; Thomas Zuber
    Abstract: We decompose the “China shock” into two components that induce different adjustments for firms exposed to Chinese exports: a horizontal shock affecting firms selling goods that compete with similar imported Chinese goods, and a vertical shock affecting firms using inputs similar to the imported Chinese goods. Combining French accounting, customs, and patent information at the firm-level, we show that the horizontal shock is detrimental to firms’ sales, employment, and innovation. Moreover, this negative impact is concentrated on low-productivity firms. By contrast, we find a positive effect - although often not significant - of the vertical shock on firms’ sales, employment, and innovation.
    JEL: F14 F16 F6 O31
    Date: 2021–08
  8. By: Elise Petit; Bruno Van Pottelsberghe; Lluís Gimeno Fabra
    Abstract: This paper evaluates whether and to what extent patent offices can substitute for each other. Based on an original dataset comprising 7.200 PCT patents filed simultaneously in Japan, the USA and Europe, the empirical analysis confirms that the degree of substitution is significant. Patent offices search up to 37% less technology classes, generate up to 33% less citations, and send up to 43% less communications when a PCT application was previously processed by another office. They also rely more on international citations and provide more information in the early stage of the examination process. Further substitution may still be leveraged, as around 55% of technology classes searched and up to 70% of backward citations are duplicates -voluntarily or not - of prior examination work.
    Keywords: Patent systems, TRIPs, national bias, examination, international comparison
    Date: 2021–07
  9. By: Sunghun Lim
    Abstract: Since the mid-1900s, agricultural global value chains (AGVCs) have grown rapidly and transformed the nature of agri-food production around the world. Little is known, however, about how participation in AGVCs changes the structure of participating economies. Using a constructed panel dataset from 155 countries for the period 1991-2015, I find that, in response to high AGVC participation, both GDP and employment shares in the agricultural and services sectors increase, and that both factors decrease in the manufacturing sector. Counter to conventional wisdom about structural transformation, I uncover evidence that modern agrarian economies are leapfrogging the manufacturing sector to directly develop their agriculture and services sectors through their participation in AGVCs.
    JEL: F14 F63 O13 Q17
    Date: 2021–08
  10. By: Luca Fontanelli (Université Côte d'Azur; GREDEG CNRS); Mattia Guerini (University of Brescia; GREDEG, CNRS, Université Côte d’Azur, France; bInstitute of Economics, Scuola Superiore Sant’Anna, Italy); Mauro Napoletano (Université Côte d'Azur; GREDEG CNRS; OFCE Sciences-Po; SKEMA Business School)
    Abstract: We build a simple dynamic model to study the effects of technological learning, market selection and international competition in the determination of export ows and market shares. The model features two countries populated by firms with heterogeneous productivity levels and sales. Market selection in each country is driven by a finite pairwise Pólya urn process. We show that market selection leads either to a national or to an international monopoly in presence of a static distribution of firm productivity levels. We then incorporate firm learning and entry-exit in the model and we show that the market structure does not converge to a monopoly. In addition, we show that the extended model is able to jointly reproduce a wide ensemble of stylized facts concerning intra-industry trade, industry and firm dynamics.
    Keywords: International trade, industrial dynamics, firm dynamics, market selection, Pólya urn
    JEL: C15 F1 L1
    Date: 2021–08
  11. By: Fays, Valentine; Mahy, Benoît; Rycx, François
    Abstract: This paper is the first to investigate the role of firm-level upstreamness (i.e. the number of steps before the production of a firm meets final demand) in explaining wage differences according to workers' origin. Using unique linked employer-employee data relative to the Belgian manufacturing industry for the period 2002-2010, our estimates show that firms that are further up in the value chain pay significantly higher wages. However, the wage premium associated with upstreamness is also found to vary substantially depending on the origin of the workers. Unconditional quantile estimates suggest that those who benefit the most from being employed in more upstream firms are high-wage workers born in developed countries. In contrast, workers born in developing countries, irrespective of their earnings, appear to be unfairly rewarded. Quantile decompositions further show that, while differences in average values of upstreamness according to workers' origin play a limited role, differences in wage premia associated with upstreamness account for a substantial part of the wage gap between workers born in developed and developing countries, especially at the top of the earnings distribution. These results are shown to be robust to a number of sensitivity tests, including broader or narrower definitions of workers' wages and different firm environments in terms of technological and knowledge intensity.
    Keywords: Wage Gaps,Workers’ Origin,Global Value Chains,Upstreamness,Unconditional Quantile Estimates and Decompositions
    JEL: J15 J31 F16
    Date: 2021
  12. By: Wei Cheng; Bruce A. Weinberg
    Abstract: The rapid diffusion and use of new ideas are critical for advancing and realizing the value of innovation. This paper explores the impact of demographic characteristics of innovators and potential adopters on the adoption of important new scientific ideas through networks. Using rich, population-level data on the biomedical researchers and their networks, natural language processing, and a novel two-way fixed effects strategy, we find that new ideas introduced by female scientists are under-utilized, which can be explain by two factors. First, female innovators are not as well-connected in networks; second, even at a short network distances, researchers (especially men) are less likely to adopt women’s ideas. Ideas from underrepresented racial and ethnic minorities are also less widely used.
    JEL: D85 J71 O31
    Date: 2021–08

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