nep-tid New Economics Papers
on Technology and Industrial Dynamics
Issue of 2022‒05‒09
ten papers chosen by
Fulvio Castellacci
Universitetet i Oslo

  1. Technology and jobs: A systematic literature review By Kerstin H\"otte; Melline Somers; Angelos Theodorakopoulos
  2. Patent disputes as emerging barriers to technology entry? Empirical evidence from patent opposition By Arianna Martinelli; Julia Mazzei; Daniele Moschella
  3. Automation, Market Concentration, and the Labor Share By Hamid Firooz; Zheng Liu; Yajie Wang
  4. Exploring Artificial Intelligence as a General Purpose Technology with Patent Data -- A Systematic Comparison of Four Classification Approaches By Kerstin H\"otte; Taheya Tarannum; Vilhelm Verendel; Lauren Bennett
  5. Intangible Capital and Labor Productivity Growth – Revisiting the Evidence: An Update By Roth, Felix
  6. Industries, Mega Firms, and Increasing Inequality By Haltiwanger, John C.; Hyatt, Henry R.; Spletzer, James R.
  7. State capital involvement, managerial sentiment and firm innovation performance Evidence from China By Xiangtai Zuo
  8. Technology Transfer and Early Industrial Development: Evidence from the Sino-Soviet Alliance By Michela Giorcelli; Bo Li
  9. Trade-Induced Adoption of New Work By Kim, Gueyon
  10. Skill Formation, Employment Discrimination, and Wage Inequality: Evidence from the People’s Republic of China By Wang, Jun; Liao, Chengjuan; Wan, Xuan; Song, Hui

  1. By: Kerstin H\"otte; Melline Somers; Angelos Theodorakopoulos
    Abstract: Does technological change destroy or create jobs? New technologies may replace human workers, but can simultaneously create jobs if workers are needed to use these technologies or if new economic activities emerge. Furthermore, technology-driven productivity growth may increase disposable income, stimulating a demand-induced expansion of employment. To synthesize the existing knowledge on this question, we systematically review the empirical literature on the past four decades of technological change and its impact on employment, distinguishing between five broad technology categories (ICT, Robots, Innovation, TFP-style, Other). Overall, we find across studies that the labor-displacing effect of technology appears to be more than offset by compensating mechanisms that create or reinstate labor. This holds for most types of technology, suggesting that previous anxieties over widespread technology-driven unemployment lack an empirical base, at least so far. Nevertheless, low-skill, production, and manufacturing workers have been adversely affected by technological change, and effective up- and reskilling strategies should remain at the forefront of policy making along with targeted social support systems.
    Date: 2022–04
  2. By: Arianna Martinelli; Julia Mazzei; Daniele Moschella
    Abstract: The recent surge of patent disputes plays an important role in discouraging firms from entering new technology domains (TDs). Using a large-scale dataset combining data from the EPO-PATSTAT database and ORBIS-IP and containing patents applied at EPO between 2000 and 2015, we construct a new measure of litigiousness using patent opposition data. We find that the degree of litigiousness and the density of patent thickets negatively affect the likelihood of firms entering new TDs. Across technologies, the frequency of oppositions discourages firms mostly in high-tech industries. Across firms, the risk of opposition falls disproportionately on small rather than large firms. Finally, for large firms, we observe a sort of learning-by-being-opposed effect. This evidence suggests that litigiousness and hold-up potential discourage firms from entering new TDs, shaping Schumpeterian patterns of innovation characterized by a stable number of large-established firms and a lower degree of turbulence.
    Keywords: Patent opposition; Technological entry; Innovation Strategies.
    Date: 2022–05–02
  3. By: Hamid Firooz; Zheng Liu; Yajie Wang
    Abstract: Since the early 2000s, a rising share of production has been concentrated in a small number of superstar firms. We argue that the rise of automation technologies and the cross-sectional variation of robot use rates have contributed to the increases in industrial concentration. Motivated by empirical evidence, we build a general equilibrium model with heterogeneous firms, endogenous automation decisions, and variable markups. Firms choose between two types of technologies, one uses workers only and the other uses both workers and robots subject to an idiosyncratic fixed cost of robot operation. Larger firms are more profitable and are thus more likely to choose the automation technology. A decline in the cost of robot adoption increases the relative automation usage by large firms, raising their market share of sales. However, the employment share of large firms does not increase as much as the sales share because the expansion of large firms relies more on robots than on workers. Our calibrated model predicts a cross-sectional distribution of automation usage in line with firm-level data. The model also implies that a decline in automation costs reduces the labor income share and raises the average markup, both driven by between-firm reallocation, consistent with empirical evidence.
    Keywords: automation; market concentration; labor share; markup; reallocation; heterogeneous firms
    JEL: E24 L11 O33
    Date: 2022–04–01
  4. By: Kerstin H\"otte; Taheya Tarannum; Vilhelm Verendel; Lauren Bennett
    Abstract: Artificial Intelligence (AI) is often defined as the next general purpose technology (GPT) with profound economic and societal consequences. We examine how strongly four patent AI classification methods reproduce the GPT-like features of (1) intrinsic growth, (2) generality, and (3) innovation complementarities. Studying US patents from 1990-2019, we find that the four methods (keywords, scientific citations, WIPO, and USPTO approach) vary in classifying between 3-17% of all patents as AI. The keyword-based approach demonstrates the strongest intrinsic growth and generality despite identifying the smallest set of AI patents. The WIPO and science approaches generate each GPT characteristic less strikingly, whilst the USPTO set with the largest number of patents produces the weakest features. The lack of overlap and heterogeneity between all four approaches emphasises that the evaluation of AI innovation policies may be sensitive to the choice of classification method.
    Date: 2022–04
  5. By: Roth, Felix
    Abstract: This contribution analyzes the impact of intangible capital on labor productivity growth across countries at the aggregate and sectoral levels by employing an econometric growth-accounting approach. First, our results show that intangible capital deepening accounts for around 50 percent of labor productivity growth at both the aggregate and sectoral level. Second, we find that this positive impact of intangible capital on productivity growth at both levels of aggregation is driven by investments in economic competencies, the only intangible group not covered in the national accounts. Third, our results reveal deep sectoral heterogeneities regarding investments and productivity effects of different intangible types. These findings have important implications for future EU industrial policies and are directly relevant to the EU's efforts to close its productivity gap with the US.
    Keywords: intangible capital,labor productivity growth,cross-country sectoral panel analysis,manufacturing,market services,EU
    JEL: C23 E22 L16 L60 L80 O47 O52
    Date: 2022
  6. By: Haltiwanger, John C. (University of Maryland); Hyatt, Henry R. (U.S. Census Bureau); Spletzer, James R. (U.S. Census Bureau)
    Abstract: Most of the rise in overall earnings inequality is accounted for by rising between-industry dispersion from about ten percent of 4-digit NAICS industries. These thirty industries are in the tails of the earnings distribution, and are clustered especially in high-paying high-tech and low-paying retail sectors. The remaining ninety percent of industries contribute little to between-industry earnings inequality. The rise of employment in mega firms is concentrated in the thirty industries that dominate rising earnings inequality. Among these industries, earnings differentials for the mega firms relative to small firms decline in the low-paying industries but increase in the high-paying industries. We also find that increased sorting and segregation of workers across firms mainly occurs between industries rather than within industries.
    Keywords: inequality, firm size, industry, wage differentials, sorting, segregation, pay premium
    JEL: J31 J21
    Date: 2022–03
  7. By: Xiangtai Zuo (Shutter Zor)
    Abstract: In recent years, more and more state-owned enterprises (SOEs) have been embedded in the restructuring and governance of private enterprises through equity participation, providing a more advantageous environment for private enterprises in financing and innovation. However, there is a lack of knowledge about the underlying mechanisms of SOE intervention on corporate innovation performance. Hence, in this study, we investigated the association of state capital intervention with innovation performance, meanwhile further investigated the potential mediating and moderating role of managerial sentiment and financing constraints, respectively, using all listed non-ST firms from 2010 to 2020 as the sample. The results revealed two main findings: 1) state capital intervention would increase innovation performance through managerial sentiment; 2) financing constraints would moderate the effect of state capital intervention on firms' innovation performance.
    Date: 2022–04
  8. By: Michela Giorcelli; Bo Li
    Abstract: This paper studies the causal effect of technology and knowledge transfers on early industrial development. Between 1950 and 1957, the Soviet Union supported the “156 Projects” in China for building technologically advanced industrial facilities. We exploit idiosyncratic delays in project completion and the unexpected end of the Sino-Soviet Alliance, and show that receiving both Soviet technology and know-how had large, persistent effects on plant performance, while the effects of receiving only Soviet capital goods were short-lived. The intervention generated horizontal and vertical spillovers, and production reallocation from state-owned to privately owned companies since the late 1990s.
    Keywords: industrialization, technology transfer, knowledge diffusion, China
    JEL: L20 M20 N34 N64 O32 O33
    Date: 2022
  9. By: Kim, Gueyon (University of California, Santa Cruz)
    Abstract: I study the trade-induced restructuring process using a novel measure of new work that captures the firm's demand for jobs employing new knowledge, skills, and technologies. To construct measures of new work, I identify newly emerged job titles using word embedding models. Using both regional and firm-level analyses, I find that greater import exposure causes a persistent increase in new work in managerial occupations, but a decrease in new work in other occupations. Examining the activities performed in managerial new work, I find evidence of increased investments in post-production activities such as customer support, marketing, and sales. I further show that the trade-induced increase in managerial new work is driven by college-educated workers, thereby shedding light on the role of new work adoption in the distributional consequences of import shocks.
    Keywords: new work, trade adjustments, labor market inequality
    JEL: F16 J23 O33 R12
    Date: 2022–03
  10. By: Wang, Jun (Asian Development Bank Institute); Liao, Chengjuan (Asian Development Bank Institute); Wan, Xuan (Asian Development Bank Institute); Song, Hui (Asian Development Bank Institute)
    Abstract: We study the impact of skill formation on employment opportunities and wages. Instead of international trade theory or technological progress theory, we focus on labor “skill formation” to investigate the employment discrimination and skill wage inequality in the PRC's labor market. Based on data from the 2014 China Family Panel Studies, we use cognitive ability and noncognitive ability to measure skill formation. The empirical results show that skill formation has a positive impact on employment opportunities and wages. This result exhibits robustness in tests on monopoly industries and non-monopoly industries, except that there is a certain tendency toward wage equalization in monopoly industries. We also find employment discrimination resulting from skill differences in state-owned and non-state-owned sectors. A similar trend of wage equalization exists in state-owned sectors, while a significant trend of wage differentiation exists between high and low skills in non-state-owned sectors.
    Keywords: skill formation; employment discrimination; skill wage inequality
    JEL: J21 J24 J71
    Date: 2021–08

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