nep-tid New Economics Papers
on Technology and Industrial Dynamics
Issue of 2023‒02‒13
ten papers chosen by
Fulvio Castellacci
Universitetet i Oslo

  1. Air Pollution and Firm-Level Human Capital, Knowledge and Innovation By Tiago Cavalcanti; Kamiar Mohaddes; Hongyu Nian; Haitao Yin
  2. Continuing patent applications at the USPTO By Cesare Righi; Davide Cannito; Theodor Vladasel
  3. Quantifying the Technological Foundations of Economic Complexity By Hardik Rajpal; Omar A Guerrero
  4. Innovation Characteristics of Korean Service Companies By Lee, Donghee; Kang, Minsung
  5. The Impact of Corporate Climate Action on Financial Markets: Evidence from Climate-Related Patents By Hege, Ulrich; Pouget, Sébastien; Zhang, Yifei
  6. Firm Heterogeneity, Industry Dynamics and Climate Policy By Ara Jo; Christos Karydas
  7. Are more automatable jobs less satisfying? By Arthur Jacobs; Elsy Verhofstadt; Luc Van Ootegem
  8. Identifying artificial intelligence actors using online data By Hélène Dernis; Flavio Calvino; Laurent Moussiegt; Daisuke Nawa; Lea Samek; Mariagrazia Squicciarini
  9. Green taxation and renewable energy technologies adoption: A global evidence By Tii N. Nchofoung; Hervé Kaffo Fotio; Clovis Wendji Miamo
  10. National Concentration of High-tech Products: The Second Great Divergence? By JU, Jiandong; LU, Bing; YU, Xinding

  1. By: Tiago Cavalcanti; Kamiar Mohaddes; Hongyu Nian; Haitao Yin
    Abstract: This paper investigates the long-run effects of prolonged air pollution on firm-level 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/m3 increase in the annual average PM2.5 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 and China
    JEL: O15 O30 O44 Q51 Q56
    Date: 2023–01
  2. By: Cesare Righi; Davide Cannito; Theodor Vladasel
    Abstract: Despite their growing importance for rm innovation strategy and frequent appearance in U.S. patent policy debates, how continuing patent applications are used remains unclear. Turn-of-the-century reforms strongly limited opportunities to extend patent term and surprise competitors, but continuing applications have steadily risen since. We argue that they retain a subtle use, as applicants can file continuations to keep prosecution open and change patent scope after locking in gains with the initial patent. We document a sharp drop in parent abandonment and rise in continuations per original patent after the reforms. Continuing applications are more privately valuable than original patents, are led in more uncertain contexts, for higher value technologies, by more strategic applicants, and react strongly to the notice of allowance. The evidence supports a current strategic use of continuing applications to craft claims over time.
    Keywords: Intellectual property, patent scope, continuation, divisional, innovation.
    JEL: O31 O34 O38
    Date: 2023–01
  3. By: Hardik Rajpal; Omar A Guerrero
    Abstract: The problem of inferring the technological structure of production processes and, hence, quantifying technological sophistication, remains largely unsolved; at least in a generalizable way. This reflects in empirical literature that either focuses on outputs instead of transformative processes, or preemptively assumes the nature of technology. Building on recent advances in information theory, we develop a method to quantify technological sophistication. Our approach explicitly addresses the transformative process where inputs interact to generate outputs; providing a more direct inference about the nature of technology. More specifically, we measure the degree to which an industry's inputs interact in a synergistic fashion. Synergies create novel outputs, so we conjecture that synergistic technologies are more sophisticated. We test this conjecture by estimating synergy scores for industries across nearly 150 countries using input-output datasets. We find that these scores predict popular export-based measures of economic complexity that are commonly used as proxies for economic sophistication. The method yields synergistic interaction networks that provide further insights on the structure of industrial processes. For example, they reveal that industries from the tertiary sector tend to be disassortative sector-wise. To the extent of our knowledge, our findings are the first data-driven inference of technological sophistication within production processes (on an industrial scale). Thus, they provide the technological foundations of economic complexity and represent an important step toward its empirical microfoundations.
    Date: 2023–01
  4. By: Lee, Donghee (Korea Institute for Industrial Economics and Trade); Kang, Minsung (Korea Institute for Industrial Economics and Trade)
    Abstract: In recent years, the importance of the service industry has been steadily increasing in terms of GDP and employment. In general, it is known that the service sectors of developed countries make significant contributions to overall economic productivity compared to those in less developed countries. However, the development of Korea’s service industry rates poorly compared to advanced countries. Employment in the service industry has been increasing since the 1990s, but growth in value-added has been stagnant for the last 10 years. In addition, while the employment creation effect of the service industry is large, the proportion of low-wage workers is high, and it is estimated that most service companies are small in scale. For comparison, in 2017 the proportion of workers with an average monthly wage of less than 2 million won is 29.3 percent in the manufacturing industry and 48.1 percent in the service industry. With such a high proportion GDP and employment in service industry, awareness of the problem of low productivity in the service sector is growing and the issue is naturally attracting policy attention to service innovation, that is, service R&D investment. In this paper, we analyze the characteristics of R&D investment behavior in order to derive policy implications for innovation investment in Korean service companies. The authors performed a principal component analysis (PCA) and a cluster analysis on Korean service and manufacturing based on innovation behavior. In the analysis, the firms are classified by the innovation behavior rather than Standard Industry Classification (SIC). Even if two companies are possess the same SIC designation, there may be various differences in innovation behavior depending on the management environment and capacity of each individual company. Therefore, classifying business groups based on innovation behavior rather than SIC is a better approach to understanding companies in terms of innovation.
    Keywords: R&D Investment Behavior; Innovation Investment; Korea Service Industry
    JEL: L80 O33
    Date: 2023–01–08
  5. By: Hege, Ulrich; Pouget, Sébastien; Zhang, Yifei
    Abstract: We study the impact of climate-related patents on financial markets. We exploit the quasi-random assignment of patent examiners with different degrees of leniency as an exogenous shock in patent approvals to allow for causal interpretations. We find that firms with more lucky climate-related patents subsequently display higher positive cumulative abnormal stock returns and enjoy a lower cost of capital, compared with similarly innovative but unlucky firms. These results hold especially during periods of high attention towards climate change and for initial climate patent granting. Firms with more lucky climate-related patents also exhibit better environmental ratings and attract more responsible institutional investors. OLS regressions show that firms developing more climate-related technologies reduce more direct carbon emission intensity.
    Keywords: climate-related patents; green patents; examiner leniency; climate change; implied cost of capital; ESG ratings; responsible investors; CO2 emissions.
    JEL: G11 G23 G24 O34
    Date: 2023–01
  6. By: Ara Jo (Department of Economics, University of Bath, 3 East, BA2 7AY, Bath, United Kingdom); Christos Karydas (Center of Economic Research, ETH Zurich, Zurichbergstrasse 18, 8092 Zurich, Switzerland)
    Abstract: We develop a dynamic general equilibrium model to quantify the interaction between climate policy, industry dynamics, and the elasticity of substitution between clean and dirty energy in the economy. The model incorporates empirical observations that firms differ substantially in their potential for energy substitution and that the economy is growing more capable of substituting clean for dirty energy over time as environmental regulation becomes more stringent. Our model highlights the effect of dynamic industry response on increasing the average elasticity of substitution in the economy due to the exit of least flexible firms in response to climate policy. The higher average elasticity of substitution increases the effectiveness of the policy at reducing emissions, resulting in a 35 percent decrease in the size of the carbon tax required to achieve carbon neutrality
    Keywords: industry dynamics, elasticity of substitution, climate policy
    JEL: Q40 Q55 Q54 O33
    Date: 2023–01
  7. By: Arthur Jacobs; Elsy Verhofstadt; Luc Van Ootegem (-)
    Abstract: We investigate whether the characteristics which render a job more likely to disappear due to automation also make that job less satisfying. The literature on automation offers convincing reasons infavour of this hypothesis, but it has not been empirically tested before. We use a widely-established, occupation-level measure of automatability and find that more automatable jobs are indeed significantly less satisfying using data from the European Working Conditions Survey. The effect is sizeableand robust to controlling for a wide range of individual-level variables and job-context variables. Our finding suggests that more automatable occupations are less satisfying because of their inherent nature (i.e. the nature of the tasks required for the performance of that occupation). We conduct a mediation analysis and find that the smaller creative intelligence requirement related to automatable occupations is the most important reason for their lower job satisfaction. We discuss to what extent these economy-wide findings translate to the level of the individual worker, in the context of a labor market segmented by education level.
    Keywords: Automation, Job Satisfaction, Occupational Task Content, European Working Conditions Survey
    Date: 2023–01
  8. By: Hélène Dernis; Flavio Calvino; Laurent Moussiegt; Daisuke Nawa; Lea Samek; Mariagrazia Squicciarini
    Abstract: This paper uses information collected and provided by GlassAI to analyse the characteristics and activities of companies and universities in Canada, Germany, the United Kingdom and the United States that mention keywords related to Artificial Intelligence (AI) on their websites. The analysis finds that those companies tend to be young and small, mainly operate in the information and communication sector, have AI at the core of their business, and aim to provide customer solutions. It is noteworthy that the types of AI-related activities reported by them vary across sectors. Additionally, although universities are concentrated in and around large cities, this is not necessarily reflected in the intensity of AI-related activities. Taken together, this novel and timely evidence informs the debate on the most recent stages of digital transformation of the economy.
    Date: 2023–02–03
  9. By: Tii N. Nchofoung (Ministry of Trade, Cameroon); Hervé Kaffo Fotio (University of Maroua, Cameroon); Clovis Wendji Miamo (University of Dschang, Cameroon)
    Abstract: There is substantial literature on the determinants of renewable energy consumption. This growing interest is related to the fact that renewable energy is not only one of the main drivers of greenhouse gas mitigation but also its contribution to the achievement of other sustainable goals. Despite this strategic role, the adoption level of renewable energy remains quite low. In this article, we address one of the determinants so far ignored by the literature, namely the environmental tax. This study, therefore, examines the effect of environmental taxes on the adoption of renewable technologies for 49 global samples between the 1996-2017 periods. The results through the FE Driscoll and Kraay, the Newey-West, the system GMM, and the quantile regression methodologies show that environmental tax increase the consumption of renewable energy. However, taking into account disparities in the level of development, the results suggest that the environmental tax spurs renewable energy technologies adoption in developed countries while it decreases renewable energy technologies adoption in developing countries. As policy implications, policymakers within this sample should consider the optimization of environmental taxation as a policy toward environmental protection. This would cause energy consumers to opt for renewable energy sources of energy to escape these taxes.
    Keywords: Green taxation; renewable energy; panel data; SDG7; environmental protection
    Date: 2023–01
  10. By: JU, Jiandong; LU, Bing; YU, Xinding
    Abstract: Based on the product-country level trade data from 2004 to 2017, as well as the High-Tech Products Catalog from the US Census Bureau, this paper examines empirically the current phenomenon of “national concentration” in high-tech exports. The results show that the phenomenon of “national concentration” not only exists but also tends to be self-reinforcing. Compared with other products, the exports of high-tech products tend to be concentrated in certain countries, and this concentration trends were further strengthened after the global financial crisis of 2008–2009. The national concentration of R&D activities may be one of the important causes of the national concentration of high-tech products. This pattern remains robust when we further use the value-added export data and different definitions of high-tech products. We argue that the phenomenon of “national concentration” of high-tech exports may herald the arrival of the “Second Great Divergence” – the divergence between innovative and manufacturing activities – in the global economy.
    Keywords: high-tech products, national concentration, R&D, second great divergence
    JEL: F14
    Date: 2023–01–01

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