nep-tid New Economics Papers
on Technology and Industrial Dynamics
Issue of 2023‒01‒16
seven papers chosen by
Fulvio Castellacci
Universitetet i Oslo

  1. On GVC and Innovation: What Is at Stake? By Yasmine Eissa; Chahir Zaki
  2. Patents that Match your Standards: Firm-level Evidence on Competition and Growth By Bergeaud Antonin; Schmidt Julia; Zago Riccardo
  3. Air Pollution and Firm-Level Human Capital, Knowledge and Innovation By Cavalcanti, T.; Mohaddes, K.; Nian, H.; Yin, H.
  4. Long-Run Effects of Technological Change: The Impact of Automation and Robots on Intergenerational Mobility By Heyman, Fredrik; Olsson, Martin
  5. Slow Magic: Agricultural vs Industrial R&D Lag Models By Alston, Julian M.; Pardey, Philip G.; Serfas, Devin; Wang, Shanchao
  6. Automation and Low-Skill Labor By Mann, Katja; Pozzoli, Dario
  7. The EU and Global Production Networks: The Length of Value Chains, Patterns and Dynamics of Industrial Ecosystems By DACHS Bernhard; NEULÄNDTNER Martina; STEHRER Robert

  1. By: Yasmine Eissa (Cairo University); Chahir Zaki (Cairo University)
    Abstract: This paper empirically investigates the impact of global value chains (GVC) participation on countries’ innovation performance. Highlighting the learning effect of foreign knowledge embedded in imported intermediate goods counters the argument that GVC participation is biased towards developed countries with skilled labor abundance. We construct a GVC knowledge spilloversindex by merging data on GVC from the EORA26 dataset with R&D of the trade partner. Results show a positive and significant effect of the GVC knowledge spillovers index on innovation measured by resident patent per capita. Likewise, we show that the quality of institutions, intellectual property agreements, competition policy and trade policy constitute a pile of interfering preconditions in the nexus between GVC participation and innovation. Our results remain robust when we use an instrumental variable approach to control for the endogeneity between GVC and innovation and when we use alternative measure for our two variables of interest
    Date: 2022–09–20
  2. By: Bergeaud Antonin; Schmidt Julia; Zago Riccardo
    Abstract: When a technology becomes the new standard, the firms that are leaders in producing this technology have a competitive advantage. Matching the semantic content of patents to standards and exploiting the exogenous timing of standardization, we show that firms closer to the new technological frontier increase their market share and sales. In addition, if they operate in a very competitive market, these firms also increase their R&D expenses and investment. Yet, these effects are temporary since standardization creates a common technological basis for everyone which allows followers to catch up and the economy to grow.
    Keywords: Standardization, Patents, Competition, Innovation, Text Mining
    JEL: L15 O31 O33
    Date: 2022
  3. By: Cavalcanti, T.; Mohaddes, K.; Nian, H.; Yin, H.
    Abstract: This paper investigates the long-run effects of prolonged air pollution on firmlevel human capital, knowledge and innovation composition. Using a novel firm-level dataset covering almost all industrial firms engaged in science and technology activities in China, and employing a regression discontinuity design, we show that prolonged pollution significantly diminishes both the quantity and the quality of human capital at the firm level. More specifically, we show that air pollution affects firm-level human capital composition by reducing the share of employees with a PhD degree and master’s degree, but instead increasing the share of employees with bachelor’s degree. Moreover, the difference in the composition of human capital materially change the knowledge and innovation structure of the firms, with our estimates showing that pollution decreases innovations that demand a high level of creativity, such as publications and inventions, while increasing innovations with a relatively low level of creativity, such as design patents. Quantitatively, on the intensive margin, one μg/m 3 increase in the annual average PM 2.5 concentration leads to a 0.188 loss in the number of innovations per R&D employee. Overall, we show that air pollution has created a gap in human capital, knowledge, and innovation between firms in the north and south of China, highlighting the importance of environmental quality as a significant factor for productivity and welfare.
    Keywords: Pollution, human capital, knowledge, innovation, China
    JEL: O15 O30 O44 Q51 Q56
    Date: 2023–01–03
  4. By: Heyman, Fredrik (Research Institute of Industrial Economics (IFN)); Olsson, Martin (Research Institute of Industrial Economics (IFN))
    Abstract: This paper examines whether recent advancements in automation and robotics have affected intergenerational income mobility. Using detailed data on all individuals and firms registered in Sweden, we study whether parental exposure to robots at the occupational level and heterogeneous adoption of robots across industries and regions influence children’s outcomes in adulthood. We find that occupational exposure to robots is associated with lower income mobility for children. Based on a shift-share IV approach, we show that the lower intergenerational income mobility originates from industry-regions with a relatively large increase in robot adoption. In addition, we show that these children are worse off in a number of labor market and family-related outcomes. Our results indicate a new channel through which technological changes affect intergenerational mobility and that automation and exposure to new technologies can have long-lasting effects.
    Keywords: Intergenerational Mobility; Automation; Robots; Matched Employer-Employee Data
    JEL: J24 J31 J62 O33
    Date: 2022–12–19
  5. By: Alston, Julian M.; Pardey, Philip G.; Serfas, Devin; Wang, Shanchao
    Abstract: R&D is slow magic. It takes many years before research investments begin to affect productivity, but then they can affect productivity for a long time. Many economists get this wrong. Here we revisit the conceptual foundations for R&D lag models used to represent the temporal links between research investments and impact, review prevalent practice, and document and discuss a range of evidence on R&D lags in agriculture and other industries. Our theory and evidence consistently support the use of longer lags with a different overall lag profile than is typically imposed in studies of industrial R&D and government compilations of R&D knowledge stocks. Many studies systematically fail to recognize the many years of investment and effort typically required to create a new technology and bring it to market, and the subsequent years as the technology is diffused and adopted. Consequential distortions in the measures and economic understanding are implied.
    Keywords: Agricultural Finance, Industrial Organization, Production Economics, Research and Development/Tech Change/Emerging Technologies
    Date: 2022–12
  6. By: Mann, Katja (Copenhagen Business School); Pozzoli, Dario (Copenhagen Business School)
    Abstract: Changes in the supply of low-skill labor may affect robot adoption by firms. We test this hypothesis by exploiting an exogenous increase in the local labor supply induced by a large influx of immigrants into Danish municipalities. Using the Danish employer-employee matched dataset over the period 1995-2019, we show in a shift-share regression that a larger share of migrants in a municipality leads to fewer imports of robots at the firm-level. We rationalize this finding in a simple model of robot adoption in which robots and low-skill workers are substitutes. As many advanced economies are facing labor shortages, this paper sheds light on the future of robotization.
    Keywords: labor supply, immigration, robots, shift-share
    JEL: E22 J20 J61 R23
    Date: 2022–12
  7. By: DACHS Bernhard; NEULÄNDTNER Martina; STEHRER Robert
    Abstract: This study investigates the evolution of global value chains (GVCs) and the strategic position of the EU27 in these GVCs and production networks. The analysis is based on input-output data from the FIGARO database that covers 2010-2019. An in-depth coverage is provided for four sectors (food, pharma, electronics, and vehicles) and three industrial ecosystems (energy intensive industries, mobility-transport-automotive, aerospace & defence). In terms of the main results, the overall share of foreign sourcing is quite stable over this period, and the length of GVCs remains roughly the same, so there is no sign of large-scale backshoring. The most important geographical shifts are the gains of China as a supplier in the value chains of EU27 and US. Europe’s strategic capacities, as measured by social network analysis indicators, are in mobility/automotive/transport, energy-intensive industries, and electronics and are towards the US and China. Strategic dependencies exist mainly towards China in electronics and energy-intensive industries. The analysis clearly shows the mutually dependent character of these relationships between the US, China, and the EU27.
    Keywords: Global Value Chains, Input-Output, Strategic Dependency, Network Analysis
    Date: 2022–10

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