nep-tid New Economics Papers
on Technology and Industrial Dynamics
Issue of 2023‒03‒06
ten papers chosen by
Fulvio Castellacci
Universitetet i Oslo

  1. Heterogeneous Adjustments of Labor Markets to Automation Technologies By Fabien Petit; Florencia Jaccoud; Tommaso Ciarli
  2. Firm-level productivity growth returns of social capital: Evidence from Western Europe By Roberto Ganau; Andres Rodriguez-Pose; ;
  3. Who Learns More from Afar? Spatial Empirical Evidence on Manufacturing and Services By Nina Vujanović
  4. Pain or Anxiety? The Health Consequences of Rising Robot Adoption in China By Qiren Liu; Sen Luo; Robert Seamans
  5. Distorted Innovation: Does the Market Get the Direction of Technology Right? By Daron Acemoglu
  6. Reshoring, nearshoring and developing countries By Pietrobelli, Carlo; Seri, Cecilia
  7. Playing the innovation subsidy game: experience, clusters, consultancy, and networking in regional innovation support By Rodríguez-Pose, Andrés; Belso-Martinez, Jose Antonio; Díez-Vial, Isabel
  8. The Value Added-Exports Puzzle and Global Value Chains By Zhe Chen; Yoshinori Kurokawa
  9. Being at the core: firm product specialisation By Filippo Bontadini; Mercedes Campi; Marco Due\~nas
  10. A Bottom Up Industrial Taxonomy for the UK. Refinements and an Application By Juan Mateos-Garcia; George Richardson

  1. By: Fabien Petit; Florencia Jaccoud; Tommaso Ciarli
    Abstract: This paper examines the labor market adjustments to four automation technologies (i.e. robots, communication technology, information technology, and software/database) in 227 regions across 22 European countries from 1995 to 2017. By constructing a measure of technology penetration, we estimate changes in regional employment and wages affected by automation technologies along with the reallocation of workers between sectors. We find that labor market adjustments to automation technologies differ according to i) the technology involved, ii) the sector of penetration, iii) the sectoral composition of the region, and iv) the region’s technological capabilities. These adjustments are driven largely by the reallocation of low-paid workers across sectors.
    Keywords: automation technology, labor market, employment reallocation, sectoral composition
    JEL: J21 O33 R23
    Date: 2023
  2. By: Roberto Ganau; Andres Rodriguez-Pose; ;
    Abstract: We analyse the firm-level labour productivity growth returns of social capital —defined as a synthetic measure of ‘generalised trust’, ‘active participation’, and ‘social norms’— using a large sample of manufacturing firms in France, Germany, Italy, Portugal, and Spain. We find that firms’ labour productivity growth is higher in areas with a better social capital endowment. The positive returns of social capital are, nevertheless, unevenly distributed across firms, with smaller, less productive, less capital-endowed, and low-tech firms benefitting the most from operating in strong social capital ecosystems.
    Keywords: Firm labour productivity growth; Social capital; Manufacturing industry; Western Europe.
    JEL: C36 D24 R10 Z13
    Date: 2023–02
  3. By: Nina Vujanović (The Vienna Institute for International Economic Studies, wiiw)
    Abstract: This paper investigates spatial dependence of FDI knowledge spillovers in manufacturing and services using spatial panel techniques applied to the 2006-2014 Bureau Van Dijk’s Amadeus firm-level dataset for Croatia and Slovenia. The paper finds diverse results across the two sectors. The distance between regions does not hinder the absorption of foreign knowledge in manufacturing despite the strong market-stealing effects operating within regions as well as spatially. On the other hand, FDI knowledge spillovers decrease service productivity within regions, because of market-stealing effects operating strongly across a smaller geographical scale. However, its impact is lost as knowledge spillovers from more distant neighbours are accounted for, because the poaching of local labour is impeded by distance due to rising costs of labour mobility. The research indicates that for knowledge absorption, geographic distance plays differing roles in manufacturing and services, due to the different nature of the production process.
    Keywords: knowledge spillovers, FDI, spatial econometrics, manufacturing, services
    JEL: F23 L6 L8 L2 O3 O4
    Date: 2023–02
  4. By: Qiren Liu; Sen Luo; Robert Seamans
    Abstract: The rising adoption of industrial robots is radically changing the role of workers in the production process. Robots can be used for some of the more physically demanding and dangerous production work, thus reducing the possibility of worker injury. On the other hand, robots may replace workers, potentially increasing worker anxiety about their job safety. In this paper, we investigate how individual physical health and mental health outcomes vary with local exposure to robots for manufacturing workers in China. We find a link between robot exposure and better physical health of workers, particularly for younger workers and those with less education. However, we also find that robot exposure is associated with more mental stress for Chinese workers, particularly older and less educated workers.
    Date: 2023–01
  5. By: Daron Acemoglu
    Abstract: In the presence of markup differences, externalities and other social considerations, the equilibrium direction of innovation can be systematically distorted. This paper builds a simple model of endogenous technology, which generalizes existing comparative static results and characterizes potential distortions in the direction of innovation. I show that empirical findings across a number of different areas are consistent with this framework's predictions and I use data from several studies to estimate its key parameters. Combining these numbers with rough estimates of differential externalities and markups, I provide suggestive evidence that equilibrium distortions in the direction of technology can be substantial in the context of industrial automation, health care, and energy, and correcting these distortions could have sizable welfare benefits.
    JEL: C65 J23 J24 L65 O14 O31 O33
    Date: 2023–02
  6. By: Pietrobelli, Carlo; Seri, Cecilia (RS: GSBE other - not theme-related research, Mt Economic Research Inst on Innov/Techn)
    Abstract: This paper discusses the concepts of reshoring and nearshoring that are gaining increasing popularity. We contribute to the literature in three main ways. First, building on previous theories we define a theoretical framework and consider how recent developments – COVID-19 and Industry 4.0 technologies – may impact on these patterns. Secondly, we process some preliminary evidence to test whether Latin American and Caribbean economies are indeed participating in this reshoring trend. Thirdly, we propose a measure of “Reshoring Readiness”, to assess whether Latin American countries appear to be ready to host relocations and benefit from them. Overall, we find limited evidence of nearshoring to the region so far, except for Mexico, and we highlight strengths and weaknesses of the region for attracting and benefitting from future relocations.
    JEL: F21 F23 L24 O16
    Date: 2023–01–16
  7. By: Rodríguez-Pose, Andrés; Belso-Martinez, Jose Antonio; Díez-Vial, Isabel
    Abstract: Government support to promote firm-level innovation is seen as a crucial factor for economic growth. This support is frequently channeled through firm-level subsidies. Despite their relevance within the policy portfolio, there is an open academic debate on whether subsidies are effective for innovation. This is by no means related to a potential inadequacy of subsidies, but because the mechanisms of assignment may be unsatisfactory. We argue that this may be the case when subsidies are awarded to larger firms with a solid international and innovative trajectory or to those that know how toplay the system, ” rather than to the most deserving firms and projects. To test whether this is the case, we use data from 17, 866 applicants for innovation subsidies managed by the Valencian Institute of Competitiveness. We find that firms with specific knowledge accrued through previous submissions, public funding and grant consultancy or cluster location, are the main beneficiaries of public innovation support, generally at the expense of more promising candidates that lack the know-how to navigate a complex and often flawed process. This inertia gets policy-makers stuck in a sub-optimal assignment system that should be deeply reconsidered.
    Keywords: clusters; consultancy services; innovation policy; networks; previous subsidy experience
    JEL: R14 J01 J1
    Date: 2021–12–01
  8. By: Zhe Chen; Yoshinori Kurokawa
    Abstract: While most OECD countries experienced declines in manufacturing value added relative to GDP over 1970-2001, they have experienced increases in manufacturing exports relative to GDP during the same period. Bergoeing et al. (2004) documented this "value added-exports puzzle" and predicted that vertical specialization can explain it. Using the 1995-2018 data for 22 OECD countries and 17 manufacturing industries, we empirically investigate whether vertical specialization, or global value chain (GVC) participation, is a factor significantly affecting the puzzle. Our regressions show that the puzzle is stronger for countries and industries with the greater GVC backward linkage, while it is weaker for countries and industries with the greater GVC forward linkage. We also find that the puzzle is weaker for countries and industries that focus more on the upstream stage. Thus Bergoeing et al. (2004) were right, but we must be careful that the two measures of vertical specialization, the backward and forward GVC linkages, have the opposite effects.
    Date: 2023–02
  9. By: Filippo Bontadini; Mercedes Campi; Marco Due\~nas
    Abstract: We propose a novel measure to investigate firms' product specialisation: product coreness, that captures the centrality of exported products within the firm's export basket. We study product coreness using firm-product level data between 2018 and 2020 for Colombia, Ecuador, and Peru. Three main findings emerge from our analysis. First, the composition of firms' export baskets changes relatively little from one year to the other, and products far from the firm's core competencies, with low coreness, are more likely to be dropped. Second, higher coreness is associated with larger export flows at the firm level. Third, such firm-level patterns also have implications at the aggregate level: products that are, on average, exported with higher coreness have higher export flows at the country level, which holds across all levels of product complexity. Therefore, the paper shows that how closely a product fits within a firm's capabilities is important for economic performance at both the firm and country level. We explore these issues within an econometric framework, finding robust evidence both across our three countries and for each country separately.
    Date: 2023–02
  10. By: Juan Mateos-Garcia; George Richardson
    Abstract: In previous research, we used web data and machine learning methods to assess the limitations of the Standard Industrial Taxonomy (SIC) that measures the industrial structure of the UK, and developed a prototype taxonomy based on a bottom-up analysis of business website descriptions that could complement the SIC taxonomy and address some of its limitations. Here, we refine and improve that prototype taxonomy by doubling the number of SIC4 codes it covers, implementing a consequential evaluation strategy to select its clustering parameters, and generating measures of confidence about a company's assignment to a text sector based on the distribution of its neighbours and its distance in semantic (text) space. We deploy the resulting taxonomy to segment UK local economies based on their sectoral, similarities and differences and analyse the geography, sectoral composition and comparative performance in a variety of secondary indicators recently compiled to inform the UK Government's Levelling Up agenda. This analysis reveals significant links between the industrial composition of a local economy based on our taxonomy and a variety of social and economic outcomes, suggesting that policymakers should play strong attention to the industrial make-up of economies across the UK as they design and implement levelling-up strategies to reduce disparities between them.
    Keywords: Industrial taxonomy, web data, machine learning
    JEL: C80 L60 O25 O3
    Date: 2022–11

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