nep-tid New Economics Papers
on Technology and Industrial Dynamics
Issue of 2021‒10‒04
eighteen papers chosen by
Fulvio Castellacci
Universitetet i Oslo

  1. Information leakage, imitation, and the patent system By Czarnitzki, Dirk; van Criekingen, Kristof
  2. The Impact of Venture Capital Expenditures on Innovation in Europe By Leogrande, Angelo; Costantiello, Alberto; Laureti, Lucio
  3. Regional technological capabilities and Green opportunities in Europe By Nicolo Barbieri; Davide Consoli; Lorenzo Napolitano; Francois Perruchas; Emanuele Pugliese; Angelica Sbardella
  4. How do workers adjust when firms adopt new technologies? By Genz, Sabrina; Gregory, Terry; Janser, Markus; Lehmer, Florian; Matthes, Britta
  5. Intended and unintended effects of public incentives for innovation. Quasi-experimental evidence from Italy By Giovanni Mellace; Marco Ventura
  6. Does green public procurement trigger environmental innovations? By Krieger, Bastian; Zipperer, Vera
  7. Robots For Economic Development By Calì, Massimiliano; Presidente, Giorgio
  8. The tradeoffs of brokerage in innovation networks: a study of Latin American cities By Carlos Bianchi; Pablo Galaso; Sergio Palomeque
  9. The struggle of small firms to retain high-skill workers: Job duration and importance of knowledge intensity By Hugo Castro-Silva; Francisco Lima
  10. Automation and labor market polarization in an evolutionary model with heterogeneous workers By Florent Bordot; Andre Lorentz
  11. Collaborative Innovation Blocs and Mission-Oriented Innovation Policy: An Ecosystem Perspective By Elert, Niklas; Henrekson, Magnus
  12. Are online platforms killing the offline star? Platform diffusion and the productivity of traditional firms By Hélia Costa; Giuseppe Nicoletti; Mauro Pisu; Christina von Rueden
  13. Exploring the Antibiotics Innovation System and R&D policies in China: Mission Oriented Innovation? By Yuhan Bao; Adrian Ely; Michael M. Hopkins; Xianzhe Li; Yangmu Huang
  14. Technology Adoption and Market Allocation:The Case of Robotic Surgery By Danea Horn; Adam Sacarny; R. Annetta Zhou
  15. The Evolution of Skill Use Within and Between Jobs By Costas Cavounidis; Vittoria Dicandia; Kevin Lang; Raghav Malhotra
  16. Financing and advising early stage startups: The effect of angel investor subsidies By Berger, Marius; Gottschalk, Sandra
  17. Welcome to the (digital) jungle: Measuring online platform diffusion By Hélia Costa; Giuseppe Nicoletti; Mauro Pisu; Christina von Rueden
  18. Business Dynamism, Sectoral Reallocation and Productivity in a Pandemic By Guido Ascari; Andrea Colciago; Riccardo Silvestrini

  1. By: Czarnitzki, Dirk; van Criekingen, Kristof
    Abstract: From a firm's perspective two competing forces are driving the decision to invest in innovation. On the one hand, innovative performance is an important driver of profitability and growth. On the other hand, investments in innovation suffer from negative externalities, i.e. spillovers to other firms, and hence imitation could be induced. To preempt imitation firms may protect their inventions by means of intellectual property rights, such as patents. By taking out a patent, however, a firm also conveys information about the functioning of the invention to competitors. In this empirical paper, we highlight the trade-off of patenting by setting up a recursive system of equations on knowledge leakage and imitation that, among other factors, may be partly determined by firms' patenting activity. Thereby we contribute to the debate on the functioning of the contemporary patent system. We find that patenting firms are being less confronted with imitation. The effect of patents on the dissemination of R&D findings is, however, insignificant. Therefore, we conclude that patent disclosures do not significantly harm the appropriability conditions for inventions, but help to protect, at least partly, against imitation, as it has been originally envisaged by policy.
    Keywords: Innovation,R&D,Imitation,Dissemination,Patents
    JEL: O31 O33 O34 O38
    Date: 2021
  2. By: Leogrande, Angelo; Costantiello, Alberto; Laureti, Lucio
    Abstract: We investigate the relationship between “Venture Capital Expenditures” and innovation in Europe. Data are collected from the European Innovation Scoreboard for 36 countries in the period 2010-2019. We perform Panel Data with Fixed Effects, Panel Data with Random Effects, Pooled OLS, WLS, Dynamic Panel. Results show that the level of Venture Capitalist Expenditure is positively associated to “Foreign Doctorate Students” and “Innovation Index” and negatively related to “Government Procurement of Advanced Technology Products”, “Innovators”, “Medium and High-Tech Products Exports”, “Public-Private Co-Publications”. In adjunct, cluster analysis is realized with the algorithm k-Means and the Silhouette coefficient, and we found the presence of four different clusters for the level of “Venture Capital Expenditures”. Finally, we propose a confrontation among 8 different algorithms of machine learning to predict the level of “Venture Capital Expenditures” and we find that the linear regression generates the best results in terms of minimization of MAE, MSE, RMSE.
    Keywords: Innovation and Invention: Processes and Incentives, Management of Technological Innovation and R&D, Technological Change: Choices and Consequences, Intellectual Property and Intellectual Capital, Open Innovation, Government Policy.
    JEL: O30 O31 O32 O33 O34 O38 O39
    Date: 2021–09–25
  3. By: Nicolo Barbieri; Davide Consoli; Lorenzo Napolitano; Francois Perruchas; Emanuele Pugliese; Angelica Sbardella
    Abstract: The goal of the paper is to elaborate an empirical overview of green technological development in European regions. This is a timely pursuit considering the ambitious commitments stipulated in the recent European Green Deal to achieve climate neutrality by 2050. Our analysis is organised in three steps. First, we map the geographical distribution of innovative activities in Europe and profile regions in terms of technological capabilities. Second, we elaborate a metric to identify regions' green innovation potential. Third, we check whether possessing comparative advantage in specific technological domains is associated with a region's capacity to develop green technologies.
    Keywords: Green Technology; European regions; Economic Fitness and Complexity.
    Date: 2021–09–22
  4. By: Genz, Sabrina; Gregory, Terry; Janser, Markus; Lehmer, Florian; Matthes, Britta
    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
  5. By: Giovanni Mellace; Marco Ventura
    Abstract: Italy introduced a policy to incentivize young innovative start-up firms in 2012. Using a regression discontinuity design (RDD) we estimate its causal effects on the firms' share of intangible assets, turnover, number of employees, and number of partners. Our results indicate that after two years the policy was effective in increasing the number of partners, but we do not find any significant effects on innovation, at least in the short run. We provide strong evidence that the new investors might have been attracted by the tax benefit but had little interest in innovation.
    Keywords: Policy evaluation; Regression discontinuity design; Incentives to innovations
    JEL: H32 L52 C21 O31
    Date: 2021–09
  6. By: Krieger, Bastian; Zipperer, Vera
    Abstract: Green public procurement has gained high political priority and is argued to be an effective demand-side policy to trigger environmental innovations. Its implementation usually takes the form of environmental award selection criteria in public procurement tenders. However, there is no direct or broad empirical evidence on its innovation impact. There are even doubts about its effectiveness as an innovation policy tool, as it does not require innovations as part of its contracts and might only influence the selection of awardees in public procurement tenders. We construct a novel firm-level dataset to investigate the effect of winning green public procurement awards on firms' introduction of environmental innovations. Employing cross-sectional difference-in-differences methods, we find that winning green public procurement awards increases a firm's probability of introducing more environmentally friendly products on average by 20 percentage points. We show that this effect is driven by small and medium-sized firms and is not significant for larger firms. There is no significant effect on the introduction of more environmentally friendly processes.
    Keywords: Green Public Procurement,Environmental Innovation,Demand Pull
    JEL: H57 O38 Q55 Q58
    Date: 2021
  7. By: Calì, Massimiliano; Presidente, Giorgio
    Abstract: Recent evidence suggests that automation technologies entail a trade-off between productivity gains and employment losses for the economies that adopt them. This paper casts doubts on this trade-off in the context of a developing country. It shows significant productivity and employment gains from automation in Indonesian manufacturing during the years 2008-2015, a period of rapid increase in robot imports. Analysis based on manufacturing plant data provides evidence of two plausible reasons for the absence of this trade-off. First, it documents the presence of diminishing productivity returns to robot adoption. As a result, the benefits from automation could be particularly large for countries at early stages of adoption, such as Indonesia. Second, the analysis finds significant positive employment spillovers from automation in downstream plants. Such effects are likely larger in countries such as Indonesia, where the foreign content of manufacturing production is low. Suggestive evidence indicates such results could apply to developing countries more generally.
    Keywords: Robots,Automation,Development,Employment,Productivity,Spillovers
    JEL: O14 J23 J24 L11 F63
    Date: 2021
  8. By: Carlos Bianchi (Universidad de la República (Uruguay). Facultad de Ciencias Económicas y de Administración. Instituto de Economía); Pablo Galaso (Universidad de la República (Uruguay). Facultad de Ciencias Económicas y de Administración. Instituto de Economía); Sergio Palomeque (Universidad de la República (Uruguay). Facultad de Ciencias Económicas y de Administración. Instituto de Economía)
    Abstract: Brokers play a critical role in the evolution of innovation systems. However, accessing and diffusing knowledge into the system imply costs and requires capacities. Using patent data to analyze inter-city networks in Latin America, we revisit the debate on the benefits and costs of knowledge networks. We identify broker cities, differentiating between intra-regional and extra-regional connections, and we estimate the effects of brokerage on patenting outcomes between 2006 and 2017. Our findings reveal that cities holding a central position in the network show higher patenting activity; however, being broker, particularly bridging Latin America with extra-regional cities, negatively influences patenting outcomes.
    Keywords: inter-city networks, patents, brokerage, innovation systems, Latin America.
    JEL: O31 O54 P48
    Date: 2021–09
  9. By: Hugo Castro-Silva (Universidade de Lisboa); Francisco Lima (Universidade de Lisboa)
    Abstract: In the knowledge economy, skilled workers play an important role in innovation and economic growth. However, small firms may not be able to keep these workers. We study how the knowledge-skill complementarity relates to job duration in small and large firms, using a Portuguese linked employer-employee data set. We select workers displaced by firm closure and estimate a discrete-time hazard model with unobserved heterogeneity on the subsequent job relationship. To account for the initial sorting of displaced workers to firms, we introduce weights in the model according to the individual propensity of employment in a small firm. Our results show a lower premium on skills in terms of job duration for small firms. Furthermore, we find evidence of a strong knowledge-skill complementarity in large firms, where the accumulation of firm-specific human capital also plays a more important role in determining the hazard of job separation. For small firms, the complementarity does not translate into longer job duration, even for those with pay policies above the market. Overall, small knowledge-intensive firms struggle to retain high skill workers and find it harder to leverage the knowledge-skill complementarity.
    Keywords: knowledge intensity, technology, firm size, small firms, job duration, skills
    JEL: A1
    Date: 2021
  10. By: Florent Bordot; Andre Lorentz
    Abstract: The purpose of this paper is to investigate the mechanisms underlying the relationship between automation and labor market polarization. To do so, we build an agent-based model (ABM) in which workers, heterogeneous in nature and level of skills, interact endogenously on a decentralized labor market with firms producing goods requiring specific set of skills to realize the tasks necessary for the production process. The two scenarios considered, with and without automation, confirm that automation is indeed a key factor in polarizing the structure of skill demand and increasing wage inequality. This result emerges even without reverting to the routine-based technical change (RBTC) hypothesis usually found in the literature, giving some support to the complexity-based technical change (CBTC) hypothesis. Finally, we also highlight that the impact of automation on the distribution of skill demand and wage inequality is correlated with the velocity of technical change.
    Keywords: Automation; Wage Polarization; Technical Change; Employment; Agent-Based Model.
    Date: 2021–09–23
  11. By: Elert, Niklas (Research Institute of Industrial Economics (IFN)); Henrekson, Magnus (Research Institute of Industrial Economics (IFN))
    Abstract: Among contemporary economists, Mariana Mazzucato stands out for her emphasis on the importance of innovation to solve pressing challenges and achieve a greater quality of life. However, the type of mission-oriented innovation policies she promotes usually rely on an overly mechanical view of innovation and economic growth. We employ an ecosystem perspective to demonstrate that innovative entrepreneurship takes place in a collaborative innovation bloc consisting of a myriad of nodes. Entrepreneurs, inventors, early- and later-stage financiers, key personnel, and customers are all actors whose skills and abilities are necessary to realize an entrepreneurial project. When mission-oriented policies play a large role in an industry’s production or financing, connections between actors in the innovation bloc risk being severed, severely curtailing the scope for actors to play their requisite roles. Thus, there is a risk that such policies do more harm than good for innovation and economic growth.
    Keywords: Entrepreneurial ecosystems; Collaboration; Entrepreneurship policy; Institutions; Innovation policy
    JEL: D20 G32 L23 L26 O33 O38
    Date: 2021–09–22
  12. By: Hélia Costa; Giuseppe Nicoletti; Mauro Pisu; Christina von Rueden
    Abstract: Online platform use has grown remarkably in the last decade. Despite this, our understanding of its implications for economic outcomes is scarce and often limited to case studies and advanced countries. Using a newly built harmonised international dataset of online platforms and their use across 43 countries, covering the 2013-18 period and seven areas of activity, we contribute to filling this gap. Specifically, we investigate whether and under which market conditions platform uptake leads to changes in incumbent firms’ productivity. We find that platform use increases labour productivity growth in firms operating in the same sector, and that this takes place through increases in value added growth as opposed to decreases in employment. What is more, productivity gains are greater for small firms and firms in the middle of the productivity distribution, suggesting that online platforms can play an important role in levelling the playing field between SMEs and large companies and in narrowing productivity gaps among firms. Finally, productivity gains are stronger in more dynamic platform markets. Our findings offer insights on factors and policies that can be leveraged to encourage platform development in ways that are beneficial for the economy.
    Keywords: digitalisation, firm behaviour, online platforms, Productivity
    JEL: D22 D24 O33 O47
    Date: 2021–10–05
  13. By: Yuhan Bao (School of Public Policy and Management, Tsinghua University. China); Adrian Ely (Science Policy Research Unit, University of Sussex Business School, Falmer, Brighton, UK); Michael M. Hopkins (Science Policy Research Unit, University of Sussex Business School, Falmer, Brighton, UK); Xianzhe Li (School of Public Health, Peking University, China); Yangmu Huang (School of Public Health, Peking University, China)
    Abstract: One possible response to the growing problem of Antimicrobial Resistance (AMR) in pathogenic infections is the development of new types of antibiotics. However, the pharmaceutical companies that have traditionally led such innovation face a lack of incentives at the present time due to high levels of market uncertainty and low expected returns. Mission oriented innovation with coordinated investment and market-shaping policies may offer an approach to accelerating antibiotic innovation. This paper aims to evaluate whether preCovid-19 Chinese policies concerning AMR can be seen as constituting a mission-oriented approach and whether these policies have influenced antibiotics innovation in China. It adopts a mixed method approach to deliver several insights. By using historical event analysis based on data collected from interviews, public and commercial databases as well as policy documents, the paper finds that China’s recent actions concerning AMR since 2008 comprise many elements of mission-oriented innovation policy. The National Action Plan to Contain AMR has provided a clear mission since 2016 to tackle the problem of AMR and provides the opportunity to coordinate and integrate these policies into a more coherent and evolving mission-oriented innovation approach. Analysis of relevant research grants and publications suggest that these policies (including the 2016 National Action Plan) have drawn the scientific community towards antibiotics research and provided more support to this area. Case studies following the development of new antibiotics are used to illustrate how the established elements of mission oriented innovation policy have or have not contributed to antibiotics innovation in China. Further research is required to more comprehensively analyse R&D investments, and to understand the effects of recent policies, especially after 2016.
    Keywords: Antimicrobial Resistance, mission-oriented innovation, National S&T major research project, market shaping policy
    Date: 2021–08
  14. By: Danea Horn; Adam Sacarny; R. Annetta Zhou
    Abstract: The adoption of healthcare technology is central to improving productivity in this sector. To provide new evidence on how technology affects healthcare markets, we focus on one area where adoption has been particularly rapid: surgery for prostate cancer. Over just six years, robotic surgery grew to become the dominant intensive prostate cancer treatment method. Using a difference-in-differences design, we show that adopting a robot drives prostate cancer patients to the hospital. To test whether this result reflects market expansion or business stealing, we also consider market-level effects of adoption and find they are significant but smaller, suggesting that adoption expands the market while also reallocating some patients across hospitals. Marginal patients are relatively young and healthy, inconsistent with the concern that adoption broadens the criteria for intervention to patients who would gain little from it. We conclude by discussing implications for the social value of technology diffusion in healthcare markets.
    JEL: I1 L1
    Date: 2021–09
  15. By: Costas Cavounidis; Vittoria Dicandia; Kevin Lang; Raghav Malhotra
    Abstract: We develop a tractable general equilibrium model for understanding within- and between-occupation changes in skill use over time. We apply the model to skill-use measures from the third, fourth, and revised fourth editions of the Dictionary of Occupational Titles and data from the 1960, 1970, and 1980 Censuses and March Current Population Surveys. We recover changes in skill productivity by exploiting between-occupation movements. Most importantly, finger-dexterity productivity grew rapidly while abstract-skill productivity lagged. We leverage these findings to estimate an inelastic relation between abstract and routine inputs and explain within-occupation shifts in skill use.
    JEL: J01 J24
    Date: 2021–09
  16. By: Berger, Marius; Gottschalk, Sandra
    Abstract: In recent years governments around the world have introduced policies to stimulate investments in early stage entrepreneurial companies, in particular investments by Angel investors. In this paper we study whether introducing subsidies to Angel investors has effects on startups' access to financial and managerial resources provided by Angel investors. Using data for a representative sample of entrepreneurial companies in Germany, we analyze the effect of the introduction of a major subsidy program for Angel investors in Germany. Having data before and after the introduction of the program allows us to use a difference-in-differences framework to examine the effect of the program on eligible companies. Our findings indicate that subsidies for Angel investors both increase the chances to receive financing from Angel investors (+36-67%), as well as the amount of financing received (+70-82%). In terms of managerial resources, we find no effects that are significantly different from zero. This result is in contrast to theoretical predictions suggesting negative effects of investment subsidies on the level of managerial support that companies receive. Exploring the mechanisms behind our results, we find that the policy stimulated entry by inexperienced investors, but also increased syndicate sizes of Angel investors in entrepreneurial companies.
    Keywords: Entrepreneurship Policy,Angel Investors,Venture Capital,Syndication
    JEL: G28 G24 M13 O38
    Date: 2021
  17. By: Hélia Costa; Giuseppe Nicoletti; Mauro Pisu; Christina von Rueden
    Abstract: Despite the rising importance and economy-wide effects of online platforms, the paucity of cross-country comparable data still hampers understanding of the structural and policy determinants of their diffusion. This study contributes to the understanding of multi-sided online platforms in three main ways. First, we build a harmonised international dataset of online platforms and their use across 43 OECD and G20 countries, covering the 2013-19 period and nine areas of activity. Second, we describe main trends in the use of platforms in the past years, and third, we investigate the structural and policy determinants of online platforms diffusion across countries and over time.
    Keywords: Data collection, digitalisation, online platforms
    JEL: C80 M20 O33
    Date: 2021–10–05
  18. By: Guido Ascari; Andrea Colciago; Riccardo Silvestrini
    Abstract: Asymmetric effects across sectors are the distinctive features of the Covid-19 shock. Business Formation Statistics in the United States show a reallocation of entry and exit opportunities across sectors in the initial phase of the pandemic. To explain these facts, we propose an Epidemiological-Industry Dynamic model with heterogeneous firms and endogenous firms dynamics. Our analysis suggests that the cleansing effect on business dynamism of the Covid-19 crisis, which typically characterizes recessions, is sector-specific. The framework can rationalize the dynamics of aggregate productivity during the crisis. Monetary policy and sticky wages are central ingredients to capture reallocation effects. Social distancing, by smoothing out cleansing in the social sector, slows down the reallocation process and prolongs the recession, but saves lives.
    Keywords: Covid-19; Productivity; Entry; Reallocation.
    JEL: E3 L16 I3
    Date: 2021–09

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