nep-tid New Economics Papers
on Technology and Industrial Dynamics
Issue of 2022‒03‒21
eight papers chosen by
Fulvio Castellacci
Universitetet i Oslo

  1. Regional diversification in Brazil: the role of relatedness and complexity By Mariane Santos Françoso; Ron Boschma; Nicholas Vonortas
  2. FDI Spillover Effects on Innovation Activities of Knowledge-using and Knowledge-creating Firms: Evidence from an Emerging Economy By Iraj Hashi; Mehtap Hisarciklilar; Slavo Radošević; Nebojša Stojčić; Nina Vujanović
  3. Patent Publication and Innovation By Deepak Hegde; Kyle F. Herkenhoff; Chenqi Zhu
  4. A Structural Empirical Model of R&D Investment, Firm Heterogeneity, and Industry Evolution By Yanyou Chen; Daniel Xu
  5. Could Machine Learning be a General Purpose Technology? A Comparison of Emerging Technologies Using Data from Online Job Postings By Avi Goldfarb; Bledi Taska; Florenta Teodoridis
  6. The contribution of robots to productivity growth in 30 OECD countries over 1975–2019 By Gilbert Cette; Aurélien Devillard; Vincenzo Spiezia
  7. The Rise of the Engineer: Inventing the Professional Inventor During the Industrial Revolution By W. Walker Hanlon
  8. Peer Effects in Product Adoption By Michael Bailey; Drew Johnston; Theresa Kuchler; Johannes Stroebel; Arlene Wong

  1. By: Mariane Santos Françoso; Ron Boschma; Nicholas Vonortas
    Abstract: The paper contributes to the growing literature on the relationship between relatedness, complexity and regional diversification. It explores regional diversification in an emerging economy, focusing on diversification opportunities of regions with distinct levels of local capabilities. We investigate the importance of relatedness and economic complexity for sectoral and technological diversification in all regions of Brazil during the period 2006-2019. Regions tend to diversify in sectors/technologies requiring similar capabilities to those already available locally. In general, the higher the sector/technology complexity, the lower the probability of diversification. However, in high-complex regions, complexity reverses into a positive force for diversification. Our analysis shows catching-up and diversification prospects vary widely across different types of regions in Brazil.
    Keywords: regional diversification; relatedness; complexity; emerging economies; Brazil
    JEL: O25 O33 R11 O31
    Date: 2022–02
  2. By: Iraj Hashi; Mehtap Hisarciklilar; Slavo Radošević; Nebojša Stojčić; Nina Vujanović (The Vienna Institute for International Economic Studies, wiiw)
    Abstract: The beneficial effects of innovation for firms’ performance and competitiveness are well documented, but it has been suggested in recent years that innovation regimes differ between advanced and emerging economies. While advanced economies rely on knowledge generation, their emerging counterparts follow mainly a knowledge-use regime through the application of existing knowledge and technology. Climbing up the technological ladder can be helped through spillovers from foreign investors to local firms. We investigate whether FDI spillovers influence different phases of the innovation process (from decision to innovate to productivity) among knowledge-using and knowledge-creating firms in an emerging European economy. The results show that the innovation process in emerging economies is closer to the imitation than the creation of novel products. Local firms benefit from foreign counterparts in the early phase of the innovation process. Stronger FDI effects are found among firms that undertake innovation through knowledge use rather than through knowledge generation.
    Keywords: knowledge use; knowledge generation; FDI; innovation; emerging economy
    JEL: F21 F23 L25 C31 L21
    Date: 2022–03
  3. By: Deepak Hegde; Kyle F. Herkenhoff; Chenqi Zhu
    Abstract: How does the publication of patents affect innovation? We answer this question by exploiting a large-scale natural experiment—the passage of the American Inventor's Protection Act of 1999 (AIPA)—that accelerated the public disclosure of most U.S. patents by two years. We obtain causal estimates by comparing U.S. patents subject to the law change with “twin” European patents which were not. After AIPA's enactment, U.S. patents receive more and faster follow-on citations, indicating an increase in technology diffusion. Technological overlap increases between distant but related patents and decreases between highly similar patents, and patent applications are less likely to be abandoned post-AIPA, suggesting a reduction in duplicative R&D. Firms exposed to one standard deviation longer patent grant delays increased their R&D investment by 4% after AIPA. These findings are consistent with our theoretical framework in which AIPA provisions news shocks about related technologies to follow-on inventors and thus alters their innovation decisions.
    JEL: D23 E02 G24 L26 O34
    Date: 2022–02
  4. By: Yanyou Chen; Daniel Xu
    Abstract: This paper develops and estimates an industry equilibrium model of manufacturing plants in the Korean electric motor industry from 1991 to 1996. Plant-level decisions on R&D, physical capital investment, entry, and exit are integrated in a dynamic setting with knowledge spillovers. We use a simulated method of moments estimator and the novel approximation method of Weintraub, Benkard and Van Roy (2008) to estimate the R&D cost, magnitude of knowledge spillovers, adjustment costs of physical investment, and plant scrap value distribution. Knowledge spillovers are essential to explaining the firm-level productivity evolution and the equilibrium market configuration. A counterfactual experiment reveals that a 15% R&D subsidy maximizes industry output and is broadly consistent with a past policy initiative of the Korean government.
    JEL: L11 O33
    Date: 2022–02
  5. By: Avi Goldfarb; Bledi Taska; Florenta Teodoridis
    Abstract: General purpose technologies (GPTs) push out the production possibility frontier and are of strategic importance to managers and policymakers. While theoretical models that explain the characteristics, benefits, and approaches to create and capture value from GPTs have advanced significantly, empirical methods to identify GPTs are lagging. The handful of available attempts are typically context specific and rely on hindsight. For managers deciding on technology strategy, it means that the classification, when available, comes too late. We propose a more universal approach of assessing the GPT likelihood of emerging technologies using data from online job postings. We benchmark our approach against prevailing empirical GPT methods that exploit patent data and provide an application on a set of emerging technologies. Our application exercise suggests that a cluster of technologies comprised of machine learning and related data science technologies is relatively likely to be GPT.
    JEL: O32 O33
    Date: 2022–02
  6. By: Gilbert Cette (Banque de France - Banque de France - Banque de France); Aurélien Devillard (AMSE - Aix-Marseille Sciences Economiques - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - ECM - École Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique); Vincenzo Spiezia (OECD - The Organisation for Economic Coopération and Development)
    Abstract: Using a new and original database, our paper contributes to the growth accounting literature by singling out the contribution of robots through two channels: capital deepening and TFP. The contribution of robots to productivity growth through capital deepening and TFP appears to have been significant in Germany and Japan in the sub-period 1975–1995 and in several Eastern European countries in 2005–2019. However, robotization does not appear to be the source of a significant revival in productivity.
    Keywords: growth,productivity,robots
    Date: 2021–03
  7. By: W. Walker Hanlon
    Abstract: Why was the Industrial Revolution successful at generating sustained growth? Some have argued that there was a fundamental change in the way that new technology was developed during this period, but evidence for this argument remains largely anecdotal. This paper provides direct quantitative evidence showing that how innovation and design work was done changed fundamentally during the Industrial Revolution. This change was characterized by the professionalization of innovation and design work through the emergence of the engineering profession. I also propose a theory describing how this change could have acted as one mechanism behind the transition to modern economic growth.
    JEL: N13 N73 O3
    Date: 2022–02
  8. By: Michael Bailey (Facebook); Drew Johnston (Harvard University); Theresa Kuchler (New York University); Johannes Stroebel (New York University); Arlene Wong (Princeton University)
    Abstract: We use de-identified data from Facebook to study the nature of peer effects in the market for cell phones. To identify peer effects, we exploit variation in friends’ new phone acquisitions resulting from random phone losses. A new phone purchase by a friend has a large and persistent effect on an individual’s own demand for phones of the same brand. While peer effects increase the overall demand for phones, a friend’s purchase of a particular phone brand can reduce an individual’s own demand for phones from competing brands, in particular if they are running on a different operating system.
    Keywords: Peer Effects, Demand Spillovers, Social Learning
    JEL: L1 L2 M3 D4
    Date: 2021–01

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