nep-tid New Economics Papers
on Technology and Industrial Dynamics
Issue of 2022‒06‒13
twelve papers chosen by
Fulvio Castellacci
Universitetet i Oslo

  1. The contribution of industrial robots to labor productivity growth and economic convergence: A production frontier approach By Eder, Andreas; Koller, Wolfgang; Mahlberg, Bernhard
  2. The Impact of Robots on Labour Market Transitions in Europe By Bachmann, Ronald; Gonschor, Myrielle; Lewandowski, Piotr; Madoń, Karol
  3. Assessment of the advancement of market-upstream innovations and of the performance of research and innovation projects By Svetlana Klessova; Sebastian Engell; Catherine Thomas
  4. From the Systems of Innovation Approach to a General Theory of Innovation: Do Activities and Functions Reflect what Happens in Innovation Systems? By Edquist, Charles; Laatsit, Mart
  5. Green credit policy and total factor productivity: Evidence from Chinese listed companies By Shu, Guo; ZhongXiang, Zhang
  6. AI, Trade and Creative Destruction: A First Look By Daniel Trefler; Ruiqi Sun
  7. Relatedness in regional development: in search of the right specification By Yang Li; Frank Neffke
  8. Firms and Inequality By Jan De Loecker; Tim Obermeier; John Van Reenen
  9. Joint foreign ownership and global value chains effects on productivity: A comparison of firms from Poland and Germany. By Sabina Szymczak; Aleksandra Parteka; Joanna Wolszczak-Derlacz
  10. AI Adoption in a Competitive Market By Joshua S. Gans
  11. Innovative performance and firm size: a meta-regression analysis By Bachmann, Federico; Liseras, Natacha; Graña, Fernando Manuel
  12. Is production in global value chains (GVCs) sustainable? A review of the empirical evidence on social and environmental sustainability in GVCs By Delera, Michele

  1. By: Eder, Andreas; Koller, Wolfgang; Mahlberg, Bernhard
    Abstract: This paper investigates the contribution of industrial robots to labor productivity growth and the process of economic convergence in 19 developed and 17 emerging countries in the period 1999 to 2019. To answer our research questions, we extend the non-parametric production frontier framework by considering industrial robots as a separate production factor. Production frontiers and distances to the frontiers are estimated by Data Envelopment Analysis, a method based on linear programming models. Considerable contributions of robotization to labor productivity growth are mainly found in emerging countries and are rather modest in most developed countries. In the period 2009 to 2019 robot capital deepening as a source of productivity growth has gained in importance in emerging countries but not in developed countries. Within the period 1999 to 2019 we find some evidence of i) unconditional β-convergence, ii) a reduction in the dispersion of productivity levels across economies (σ-convergence) and iii) a depolarization (shift from bimodal to unimodal distribution) of the labor productivity distribution. Non-robot physical capital deepening and robotization are the most important drivers of β-convergence. Robot capital deepening contributed to the depolarization of the labor productivity distribution and to σ-convergence. Though, the effect of robot capital deepening on the entire shift of the labor productivity distribution between 1999 and 2019 is modest and dominated by other growth factors such as technological change and non-robot physical capital deepening.
    Keywords: automation; robotization; decomposition; data envelopment analysis; emerging countries; developed countries
    JEL: E24 O33 O47
    Date: 2022–03
  2. By: Bachmann, Ronald (RWI); Gonschor, Myrielle (RWI); Lewandowski, Piotr (Institute for Structural Research (IBS)); Madoń, Karol (Institute for Structural Research (IBS))
    Abstract: We study the effects of robot exposure on worker flows in 16 European countries between 1998-2017. Overall, we find small negative effects on job separations and small positive effects on job findings. Labour costs are shown to be a major driver of cross-country differences: the effects of robot exposure are generally larger in absolute terms in countries with low or average levels of labour costs than in countries with high levels of labour costs. These effects are particularly pronounced for workers in occupations intensive in routine manual or routine cognitive tasks, but are insignificant in occupations intensive in non-routine cognitive tasks. For young and old workers in countries with low levels of labour costs, robot exposure had a beneficial effect on transitions. Our results imply that robot adoption increased employment and reduced unemployment most in the European countries with low or average levels of labour costs.
    Keywords: robots, technological change, tasks, labour market flows, Europe
    JEL: J24 O33 J23
    Date: 2022–05
  3. By: Svetlana Klessova (GREDEG - Groupe de Recherche en Droit, Economie et Gestion - UNS - Université Nice Sophia Antipolis (... - 2019) - COMUE UCA - COMUE Université Côte d'Azur (2015-2019) - CNRS - Centre National de la Recherche Scientifique - UCA - Université Côte d'Azur); Sebastian Engell (TU - Technische Universität Dortmund [Dortmund]); Catherine Thomas (GREDEG - Groupe de Recherche en Droit, Economie et Gestion - UNS - Université Nice Sophia Antipolis (... - 2019) - COMUE UCA - COMUE Université Côte d'Azur (2015-2019) - CNRS - Centre National de la Recherche Scientifique - UCA - Université Côte d'Azur)
    Abstract: The assessment of the advancement of technological innovations at their development stage is a difficult task, but important to judge on the performance of innovation projects. Assessments have so far been made by assessing technical characteristics, subjectively, or by counting patents. This paper proposes an approach to assess the advancement of market-upstream innovations directly and objectively, through the advancement of their technological maturity. On this basis, also the innovation performance of larger projects that were put in place to progress one or several innovations, can be assessed. The paper presents an exploratory qualitative multi-case study of 54 innovative technologies at different maturity levels, that were developed in 5 market-upstream large technological research and innovation projects with mostly engineering and IT dimensions, funded by the European Union's Research and Innovation Programmes under its sub-programme "Leadership in Enabling and Industrial Technologies". From extensive documentation and data from interviews, a refined technology readiness scale and a scoring method that reflects the increase in the required efforts to advance the maturity of the innovations is developed. The findings provide groundwork for future research on market-upstream innovation and how the innovation performance of projects can be measured at the early stages of the innovation process.
    Keywords: Innovation,Innovative technologies,Market-upstream,Maturation,R&D,Technology readiness levels,Project,Innovation performance
    Date: 2022
  4. By: Edquist, Charles (CIRCLE, Lund University); Laatsit, Mart (CIRCLE, Lund University)
    Abstract: ‘The system of innovation approach’ has been around in innovation research for more than three decades. In this paper, we ask whether the time has come to try to develop a general theory of innovation. There is now a considerable literature addressing what happens in the innovation systems (and not only which elements and components they include). This literature places the focus on the causes of innovations in terms of functions and activities in the systems. Analysing this literature, including the several lists of activities and functions, is the focus in this paper. We aim to find out whether these lists are useful for developing a general theory of innovation. We argue that we, as a ‘collective research community’, have already tried to do this, and that we have made some progress. We will indicate how this work can continue to develop the systems of innovation ‘approach’ into a ‘theory’.
    Keywords: Innovation; System of innovation; Innovation policy; Holistic innovation policy; Linear view; Research Policy
    JEL: O30 O38 O49 O52
    Date: 2022–05–16
  5. By: Shu, Guo; ZhongXiang, Zhang
    Abstract: The green credit policy plays a vital role in promoting enterprise upgrading. Using a thirteen year panel data of listed companies in China (2007 2019), this study uses the difference in differences (DID) method to examine the effects of the Green Credit Guidelines in 2012 (GCG2012) on the firm level total factor productivity (TFP). Our results show that the GCG2012 significantly increases the TFP of companies in green credit restricted industries. This finding remains robust through employing the PSM-DID model, alternating the treatment group, changing the sample period, and controlling the effects of other environmental policies and financial crises. This effect is more pronounced for private enterprises, companies with worse debt paying ability, companies in highly competitive industries and companies in regions with higher financial liberalization. The impact mechanism test indicates that increasing the green innovation and reducing the agency costs (including green agency costs and traditional agency costs) are two possible channels to boost firm level TFP. Further analysis shows that the GCG2012 is effective not only for heavily polluting industries but also for light polluting industries, and that the GCG2012 can improve the economic performance of firms in green credit restricted industries. Overall, this study reveals the micro mechanisms behind the long term impact of the GCG2012 policy on firm level TFP, providing empirical evidence and policy suggestions for improving green credit policies and promoting green development.
    Keywords: Environmental Economics and Policy, Production Economics, Productivity Analysis
    Date: 2022–05–31
  6. By: Daniel Trefler; Ruiqi Sun
    Abstract: Artificial Intelligence is a powerful new technology that will likely have large impacts on the size, direction and composition of international trade flows. Yet almost nothing is known empirically about this. One AI-enabled set of services that can be tracked resides in the palm of our hands: the Mobile Apps used by half the world's population. To analyze the impact of AI on international trade in mobile App services we merge 2014-2020 data on international downloads of mobile Apps with data on the AI patents held by each App's parent company. From this we build a measure of AI deployment. We instrument AI deployment using cost-shifters from the theory of comparative advantage: Countries with a large stock of AI expertise will have a comparative advantage producing AI-intensive Apps. We show the following IV results. (1) Bilateral Trade: AI deployment increases App downloads by a factor of six. (2) Variety Effects: AI deployment doubles the number of exported App varieties. (3) Creative Destruction: AI deployment increases creative destruction (entry and exit of Apps) and in 2020 the net effect was an increase in welfare of between 2.5% and 10.6%.
    JEL: F1 F12 F14
    Date: 2022–04
  7. By: Yang Li; Frank Neffke
    Abstract: A large body of research has documented that the size and growth of an industry in a city or region depends on the local size of related industries. However, there is no consensus on how to best measure, either the relatedness between industries, or how well a particular industry fits a local economy as a whole. In this paper, we perform a structured search over tens of thousands of specifications to identify optimal – in terms of out-of-sample predictions – ways to construct these quantities, using a dataset that allows us to derive relatedness from co-occurrence patterns of industries in establishments, firms, regions and countries. We find that these di
    Date: 2022–04
  8. By: Jan De Loecker; Tim Obermeier; John Van Reenen
    Abstract: In the last few decades, dramatic changes have been documented in the US business landscape. These include rising productivity and pay dispersion between firms, higher aggregate markups (of price over variable costs), growing dominance of big companies ("superstar firms"), a fall in the labour share of GDP and a decline in business dynamism. We review the existing literature and present a new analysis using comprehensive firm level panel data, to show that qualitatively, these trends are also apparent in the UK. This similarity suggests that common trends in technology (or globalisation) have been the driving force behind these changes, rather than country-specific institutions (such as weaker US antitrust enforcement). Since (at least) the mid-1990s, there has been a large increase in UK firm-level inequality (especially in the upper tails) of productivity, wages, markups, and labour shares. Of course, inequality between firms is much less of a concern than inequality between people. However, it can signal economic problems, such as a slowdown in the diffusion of ideas between leading and laggard firms and can foster higher wage inequality. Indeed, there has been little aggregate UK productivity growth since the Global Financial Crisis, and this has been a serious drag on median and mean real wages. We suggest a simple theoretical framework for understanding some of these trends and quantitatively analyse why, despite increasing markups, the, the UK labour share has not fallen as sharply as that in the US. Finally, we suggest some policy options in response to these worrying trends, include modernising competition rules to deal with the growth of superstar firms and strengthening worker bargaining power.
    Keywords: firms inequality, financial crisis
    Date: 2022–12
  9. By: Sabina Szymczak (Gdansk University of Technology, Gdansk, Poland); Aleksandra Parteka (Gdansk University of Technology, Gdansk, Poland); Joanna Wolszczak-Derlacz (Gdansk University of Technology, Gdansk, Poland)
    Abstract: The study confronts the joint effects of foreign ownership and its involvement in global value chains (GVC) on the productivity performance of firms from a catching-up country (Poland) and a leader economy (Germany). Domestic owned firms are less productive than foreign ones, which is particularly true at low GVC participation levels. However, as GVC involvement increases, the foreign ownership productivity premium decreases, leading to productivity catching up between foreign and domestic owned firms. This mechanism is similar in Poland and Germany. However, in the leader country (Germany), domestically-owned firms' productivity performance is more stable along the GVC distribution.
    Keywords: GVC, FDI, productivity, firms, Amadeus database
    JEL: F23 F21 F61 D24 D22
    Date: 2022–05
  10. By: Joshua S. Gans
    Abstract: Economists have often viewed the adoption of artificial intelligence (AI) as a standard process innovation where we expect that efficiency will drive adoption in competitive markets. This paper models AI based on recent advances in machine learning that allow firms to engage in better prediction. Using prediction of demand, it is demonstrated that AI adoption is a complement to variable inputs whose levels are directly altered by predictions and use is economised by them (that is, labour). It is shown that, in a competitive market, this increases the short-run elasticity of supply and may or may not increase average equilibrium prices. There are generically externalities in adoption with this reducing the profits of non-adoptees when variable inputs are important and increasing them otherwise. Thus, AI does not operate as a standard process innovation and its adoption may confer positive externalities on non-adopting firms. In the long-run, AI adoption is shown to generally lower prices and raise consumer surplus in competitive markets.
    JEL: D21 D41 D81 O31
    Date: 2022–04
  11. By: Bachmann, Federico; Liseras, Natacha; Graña, Fernando Manuel
    Abstract: The aim of this research is to determine factors related to observed heterogeneity in the empirical literature regarding the relationship between size and innovative performance at firm level. Based on a systematic review of international literature published between 1993 and 2017, a meta-regression analysis is carried out in order to evaluate publication bias in the empirical evidence. The results show a positive relationship between firm size and innovative performance, which is moderated by diverse factors. Among them, methodological choices of the authors prevail, linked to the operationalization of size and innovation. Signs of publication bias are detected, and partially explained by methodological choices.
    Keywords: Empresas; Innovación; Desempeño; Tamaño de la Empresa; Análisis de Regresión;
    Date: 2021–11
  12. By: Delera, Michele
    Abstract: Sustainability in global value chains (GVCs) hinges on the interplay between specialisation, scale, and efficiency effects. This paper reviews different strands of literature which provide evidence on these channels. The evidence that I collect suggests that the sustainability impacts of GVCs are ambiguous. By allowing firms to specialise through the offshoring of relatively more polluting production activities, GVCs are associated to sizeable amounts of carbon leakage. Insofar as firms expand following entry in foreign markets, environmental impacts may also increase. Yet at the same time, participation in GVCs makes firms more energy and emission efficient than their domestic peers through a variety of mechanisms. Thus, GVCs also contribute to dampen emission growth. In terms of social sustainability, GVCs are associated with an income premium for workers and producers alike, although these benefits are not equally distributed.
    Date: 2022

This nep-tid issue is ©2022 by Fulvio Castellacci. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.