nep-tid New Economics Papers
on Technology and Industrial Dynamics
Issue of 2021‒11‒15
thirteen papers chosen by
Fulvio Castellacci
Universitetet i Oslo

  1. Cross-Border Institutions and the Globalization of Innovation By Bian, Bo; Meier, Jean-Marie; Xu, Ting
  2. Information Leakage, Imitation, and the Patent System By Dirk Czarnitzki; Kristof Van Criekingen
  3. Technological Diffusion and Productivity Convergence across European Regions: A Spatial Approach over the Period 2000-2015 By Fabio Manca; Giuseppe Piroli
  5. Structural change and productivity growth in the European Union: Past, present and future By DUERNECKER Georg; SANCHEZ MARTINEZ Miguel
  6. Global Value Chains from an Evolutionary Economic Geography perspective: a research agenda By Ron Boschma; ;
  7. Exploring the Concept of Geographies of Innovation By Victoria Galan-Muros; Fatime Barbara Hegyi; Alep Blancas; Andrea Sagredo
  8. Geography of eco-innovations vis-à-vis geography of sustainability transitions: Two sides of the same coin? By Hendrik Hansmeier
  9. CO2 Emissions and Energy Technologies in Western Europe By J. Barrera-Santana; Gustavo A. Marrero; Luis A. Puch; Antonia Díaz
  10. The Long-run Gains from the Early Adoption of Electricity By Björn Brey
  11. Does Economic Growth Stimulate Energy Consumption? The Role of Human Capital and R&D Expenditures in China By Shahbaz, Muhammad; Song, Malin; Ahmad, Shabbir; Vo, Xuan Vinh
  12. The Industrial Revolution in Services By Chang-Tai Hsieh; Esteban Rossi-Hansberg
  13. How innovative EU firms faced the COVID-19 downturn By DI MININ Alberto; DE MASSIS Alfredo; MONCADA PATERNO' CASTELLO Pietro; MARQUES SANTOS Anabela; HAEGEMAN Karel

  1. By: Bian, Bo; Meier, Jean-Marie; Xu, Ting
    Abstract: We identify strong cross-border institutions as a driver for the globalization of in-novation. Using 67 million patents from over 100 patent offices, we introduce novel measures of innovation diffusion and collaboration. Exploiting staggered bilateral in-vestment treaties as shocks to cross-border property rights and contract enforcement, we show that signatory countries increase technology adoption and sourcing from each other. They also increase R&D collaborations. These interactions result in techno-logical convergence. The effects are particularly strong for process innovation, and for countries that are technological laggards or have weak domestic institutions. Increased inter-firm rather than intra-firm foreign investment is the key channel.
    Keywords: Innovation,technology diffusion,globalization,cross-border institutions,bilateral investment treaties
    JEL: F21 F61 G18 G38 K33 O31 O33
    Date: 2021
  2. By: Dirk Czarnitzki; Kristof Van Criekingen
    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
    Date: 2021–10–29
  3. By: Fabio Manca; Giuseppe Piroli
    Abstract: What are the drivers of growth and convergence in productivity at regional level? Differences in the stock of human capital across regions are hypothesized to be the major cause of differences in the speed by which following regions converge and catch-up with the most advanced ones. In addition, we test the role played by R&D expenditures and institutions exploiting a database covering European regions from 1995 to 2015, which includes regional total factor productivity (TFP) computed by the conventional residual approach. We find robust empirical evidence for these hypotheses in terms of both model specifications and sectoral disaggregation.
    Keywords: Regional Studies, European Regions, Catching-up, Total Factor Productivity
    JEL: P48 D24 J24 E02 C31 C33
    Date: 2021–10–07
    Abstract: In this article we estimate the determinants of broadband penetration in Europe. We use data from the European Innovation Scoreboard of the European Commission for 37 countries in the period 2010-2019. We apply Panel Data with Fixed Effects, Panel Data with Random Effects, WLS, OLS and Dynamic Panel. We found that the level of “Broadband Penetration” in Europe is positively associated to “Enterprises Providing ICT Training”, “Innovative Sales Share”, “Intellectual Assets”, “Knowledge-Intensive Service Exports”, “Turnover Share SMEs”, “Innovation Friendly Environment” and negatively associated with “Government procurement of advanced technology products”, “Sales Impact”, “Firm Investments”, “Opportunity-Driven Entrepreneurship”, “Most Cited Publications”, “Rule of Law”. In adjunct we perform a clusterization with k-Means algorithm optimized with the Silhouette Coefficient and we find the presence of three different clusters. Finally, we apply eight machine learning algorithms to predict the level of “Broadband Penetration” in Europe and we find that the Polynomial Regression algorithm is the best predictor and that the level of the variable is expected to increase of 10,4%.
    Keywords: General; Innovation and Invention: Processes and Incentives; Management of Technological Innovation and R&D; Technological Change: Choices and Consequences; Intellectual Property and Intellectual Capital.
    JEL: O30 O31 O32 O33 O34
    Date: 2021–10–31
  5. By: DUERNECKER Georg; SANCHEZ MARTINEZ Miguel (European Commission - JRC)
    Abstract: The aim of this paper is to investigate the interplay between structural change, interpreted as the secular process of sectoral transformation, and labour productivity growth in the EU in several new dimensions. First, based on the latest data, we document the size of the negative effect that structural change has exerted onto productivity growth over long time horizons. We provide a comparative analysis of these and present-day trends with respect to the US. Second, we develop a general equilibrium model calibrated to match these empirical observations to analyse the potential impact that projected structural change may have on future productivity growth. This model generates structural change through both price and income effects. Our main results indicate that, other things equal, this phenomenon is bound to have a greater dent on productivity growth in the future than it has had in the past. This is the case for both newer and older EU Member States, albeit with important nuances. Our findings suggest that policies should focus on the promotion of productivity-enhancing technological innovation, as well as on the furtherance of greater levels of competition, especially in the most sluggish service sectors.
    Keywords: Structural change, Productivity growth, Economic growth, Baumol's cost disease, Service sector, European Union
    Date: 2021–11
  6. By: Ron Boschma; ;
    Abstract: The research agendas of Evolutionary Economic Geography (EEG) and Global Value Chains (GVC) have developed more or less independently from each other, with little interaction so far. This is unfortunate because both streams of literature have a lot to offer to each other. This paper explores how, looking at four strands in the GVC literature. Promising crossovers between EEG and the GVC literature are identified but also some missing links that need to be taken up in future research. These new research avenues, promoting the adoption of an evolutionary perspective on GVCs, are expected to enrich both literatures in mutual ways.
    Keywords: Evolutionary Economic Geography, Global Value Chains, Global Production Networks, Global Innovation Systems, regional diversification, relatedness
    JEL: B52 F23 O19 O33 R10
    Date: 2021–11
  7. By: Victoria Galan-Muros (Innovative Futures Institute); Fatime Barbara Hegyi (European Commission - JRC); Alep Blancas; Andrea Sagredo
    Abstract: In the last decades, so-called geographies of innovation have emerged worldwide as vehicles to drive economic development. These urban areas are planned and actively managed spatial clustering of a wide range of innovative organisations and intermediaries to undertake collaborative innovation activities. However, the concept of geography of innovation (or innovation geography) remains ambiguous. In addition, there are no commonly accepted definitions or classifications of different models of geographies of innovation. Terms such as park, hub, district, cluster, and ecosystem are used interchangeably, and their definitions can be far-reaching and adaptable. The key question addressed in this research is the main challenges of current policies for geographies of innovation in Europe, offering a view on how governments can better support the emergence and development of geographies of innovation in Europe.Hence, this report aims to explore the concept of geographies of innovation as an evolution of industrial and business clustering combining theoretical and practical approaches. The authors propose a definition and classification of the different models of geographies of innovation, highlighting some of the main challenges in implementing this identification and measurement. The comparative case study analysis containing thirteen case studies from four cities provide evidence supporting the development of European, national, or regional policies, enabling current and future geographies of innovation to enhance their performance and their contributions to greener, cleaner, socially more just, and overall to more developed cities and regions in Europe and beyond.
    Keywords: geographies of innovation, innovation districts, economic development, social development, policy development, policy support
    Date: 2021–11
  8. By: Hendrik Hansmeier (Fraunhofer Institute for Systems and Innovation Research ISI, Karlsruhe, Germany)
    Abstract: The need to develop and disseminate solutions to address environmental challenges such as climate change or resource depletion is more urgent than ever. However, the spatial dimension of pathways towards sustainability has only attracted scholarly interest in recent years, particularly through largely parallel research on the geography of eco-innovations and the geography of sustainability transitions. By systematically reviewing the literature, this article aims to compare both lines of research, devoting special attention to the role of regions and actors. While the geography of eco-innovations field focuses on local and regional conditions that enable the emergence of environmentally friendly technologies and industries, research on the geography of sustainability transitions highlights the place-specific but multiscalar nature of socio-technical change, taking into account the role of different actor groups. The review identifies numerous complementarities between both fields that may serve as starting points to further integrate geographical work on eco-innovations and transformative change.
    Keywords: geography, eco-innovations, sustainability transitions, green technologies, socio-technical systems, systematic literature review
    Date: 2021
  9. By: J. Barrera-Santana; Gustavo A. Marrero; Luis A. Puch; Antonia Díaz
    Abstract: In this paper we investigate the path to the green transition in Europe. In so doing, we implement an empirical model of dynamic panel data on a sample of sixteen Western European countries over the period 1980 to 2019. The model is consistent with various features of neo-classical growth theory incorporating energy use. Our focus is on the short-run determinants of carbon emissions within that set of countries. We provide evidence that the relationship between economic activity and CO2 emissions is strong in economies where economic booms depend on energy-intensive sectors. Also, the mitigating role of renewable energy technologies is key when energy intensity rebounds. These circumstances may constitute a challenge for the climate transition goals targeted in the EU’s Recovery Plan, whose main objective at this very moment is to mitigate the economic and social impact of the coronavirus pandemic.
    Date: 2021
  10. By: Björn Brey
    Abstract: This paper explores the effect of the early adoption of technology on local economic development. While timing and intensity of technology adoption are key drivers of economic divergence across countries, the immediate impact of new technologies within advanced countries has been elusive. Resolving this puzzle, this paper documents that the early adoption of electricity across late 19th century Switzerland was conducive to local economic development not just in the short-run, but also in the long-run. Exploiting exogenous variation in the potential to produce electricity from waterpower combined with rapid changes in power generation and transmission technology the evidence presented can plausibly be interpretedas causal. The main mechanism through which differences in economic development persist is increased human capital accumulation and innovation, rather than persistent differences in the way electricity is used.
    Keywords: Electricity, Industrialization, Long-run development, Human capital
    Date: 2021–11
  11. By: Shahbaz, Muhammad; Song, Malin; Ahmad, Shabbir; Vo, Xuan Vinh
    Abstract: This study evaluates the link between human capital, energy consumption, and economic growth using data for the Chinese economy from 1971 to 2018. To test the cointegration relationship between disaggregated energy, human capital, and economic growth, a bounds testing approach is applied by taking the structural breaks into consideration. The estimated results confirm that these variables are integrated. Further, human capital accumulation has a statistically significant negative effect on all types of energy consumption. We note a positive link between energy usage and economic growth. However, a significant negative relationship is found between R&D expenditures, and energy consumption. The results also show a one-way causal effect of human capital on all forms of energy consumption. However, the association between economic growth, dirty energy usage, and clean energy usage remains interdependent, indicating a feedback effect. Further, energy consumption and R&D exhibit bidirectional causal relationship.
    Keywords: Human Capital, Energy Consumption, China
    JEL: Q2
    Date: 2021–10–13
  12. By: Chang-Tai Hsieh; Esteban Rossi-Hansberg
    Abstract: The U.S. has experienced an industrial revolution in services. Firms in service industries, those where output has to be supplied locally, increasingly operate in more markets. Employment, sales, and spending on fixed costs such as R&D and managerial employment have increased rapidly in these industries. These changes have favored top firms the most and have led to increasing national concentration in service industries. Top firms in service industries have grown entirely by expanding into new local markets that are predominantly small and mid-sized U.S. cities. Market concentration at the local level has decreased in all U.S. cities but by significantly more in cities thatwere initially small. These facts are consistent with the availability of a new menu of fixed-cost-intensive technologies in service sectors that enable adopters to produce at lower marginal costs in any markets. The entry of top service firms into new local markets has led to substantial unmeasured productivity growth, particularly in small markets.
    Date: 2021–10
  13. By: DI MININ Alberto; DE MASSIS Alfredo; MONCADA PATERNO' CASTELLO Pietro (European Commission - JRC); MARQUES SANTOS Anabela (European Commission - JRC); HAEGEMAN Karel (European Commission - JRC)
    Abstract: The Covid-19 pandemic has triggered many challenges, but also opportunities, for businesses across Europe. We examine how the innovation and growth of firms in the EU have been affected by the Covid-19 pandemic, and how as “European Innovation Champions”, SMEs reacted to the resultant shock. We find that compared to non-innovative firms, the economic performance of innovative firms in the EU has been considerably less affected by the pandemic. We also identify five different paradoxical behaviours of ‘European Innovation Champions” during the peak of the Covid-19 pandemic. Industrial policies targeting SMEs should be flexible and allow companies to adapt their investment plans in line with the evolving conditions to preserve and succeed through the crisis. EU instruments, such as the Recovery and Resilience Facility and Horizon Europe, offer wide opportunities for firms to exit from the Covid-19 crisis and boost their future competitiveness.
    Keywords: COVID-19, innovation, growth, firms
    Date: 2021–11

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