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on Technology and Industrial Dynamics |
| By: | Zhiyuan Chen; Minjie Deng; Min Fang |
| Abstract: | This paper documents that firms are increasingly financing innovation using their stock of innovation, measured as patents. We refer to this behavior as financing innovation with innovation. Drawing on patent collateral data from both the US and China, we first show that (1) in both countries, the total number and share of patents pledged as collateral have been rising steadily, (2) Chinese firms employ patents as collateral on a smaller scale and with a lower intensity than US firms, (3) firms increase their borrowing and innovation after they start to use patent collateral. We then construct a heterogeneous firm general equilibrium model featuring idiosyncratic productivity risk, innovation capital investment, and borrow- ing constrained by patent collateral. The model emphasizes two barriers that hinder the use of patent collateral: high inspection costs and low liquidation values of patent assets. We parameterize the model to firm-level panel data in the US and China and find that both barriers are significantly more severe in China than in the US. Finally, counterfactual analyses show that the gains in innovation, output, and welfare from reducing the inspection costs in China to the US level are substantial, moreso than enhancing the liquidation value of patent assets. |
| Keywords: | Patent collateral; innovation investment; financial frictions; firm dynamics; |
| JEL: | E22 G32 O31 O33 |
| Date: | 2023–03–02 |
| URL: | http://d.repec.org/n?u=RePEc:tor:tecipa:tecipa-749&r=tid |
| By: | Daron Acemoglu; Hans R. A. Koster; Ceren Ozgen |
| Abstract: | We estimate the effects of robot adoption on firm-level and worker-level outcomes in the Netherlands using a large employer-employee panel dataset spanning 2009-2020. Our firm-level results confirm previous findings, with positive effects on value added and hours worked for robot-adopting firms and negative outcomes on competitors in the same industry. Our worker-level results show that directly-affected workers (e.g., blue-collar workers performing routine or replaceable tasks) face lower earnings and employment rates, while other workers indirectly gain from robot adoption. We also find that the negative effects from competitors' robot adoption load on directly-affected workers, while other workers benefit from this industry-level robot adoption. Overall, our results highlight the uneven effects of automation on the workforce. |
| JEL: | D63 E22 E23 E24 J24 O33 |
| Date: | 2023–03 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:31009&r=tid |
| By: | Lionel Fontagné; Ariell Reshef; Gianluca Santoni; Giulio Vannelli; Lionel Gérard Fontagné |
| Abstract: | We study how technology adoption and changes in global value chain (GVC) integration jointly affect labor shares and business function specialization in a sample of 14 manufacturing industries in 14 European countries in 1999–2011. Our main contribution is to highlight the indirect effect of robotization on relative demand for labor via GVC integration. To do this, we develop a methodology to separately account for robots in the total capital stock. Increases in upstream, forward GVC participation directly reduce labor shares, mostly through reductions in fabrication, but also via management, marketing and R&D business functions. We do not find any direct effects of robot adoption; robotization affects labor only indirectly, by increasing upstream, forward GVC integration. In this sense robotization is “upstream-biased”. We also study novel channels through which rapid robotization in China shaped robotization in Europe and, therefore, GVC participation. This highlights an understudied way by which the global integration of China has affected relative demand for labor in its trading partners. |
| Keywords: | labor share, functional specialization, global value chains, upstreamness, technological change, automation, robots |
| JEL: | E25 F14 F16 O33 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_10281&r=tid |
| By: | Anderton, Robert; Botelho, Vasco; Reimers, Paul |
| Abstract: | Is digitalisation a massive gamechanger which will deliver huge gains in productivity, or is it more of a sideshow with only limited impacts? We use a large balance sheet panel dataset comprising more than 19 million European firm-level observations to empirically investigate the impact of digitalisation on productivity growth via various previously unexplored chan-nels and mechanisms. Our results suggest that for two otherwise identical firms, the firm that exhibits on average a higher share of investment in digital technologies will exhibit a faster rate of TFP growth, but not all firms and sectors experience significant productivity gains from digitalisation. Digitalisation does not seem to have relatively stronger impacts on the productivity of frontier firms compared to laggards, nor does it help to turn laggards into frontier firms. Overall, firms should not regard digital investment as a ‘one-size-fits-all’ strategy to improve their productivity. Digital technologies are a gamechanger for some firms. But they seem more like a sideshow for most firms, who attempt to be increasingly digital but are not able to adequately reap its productivity gains. JEL Classification: D22, D24, D25, O33 |
| Keywords: | digital technology/transition, productivity growth, technology adoption/diffusion |
| Date: | 2023–03 |
| URL: | http://d.repec.org/n?u=RePEc:ecb:ecbwps:20232794&r=tid |
| By: | Mons Chan; Amil Petrin; Frederic Warzynski |
| Abstract: | In this paper we provide a methodology that jointly studies production and demand for multi-product firms using detailed firm-product level data from Denmark. We estimate marginal cost by combining production function estimation with a cost function that allows for quasi-fixed inputs. We use a discrete choice demand model that extends insights from Berry, Levinsohn and Pakes (1995) to obtain a measure of the demand shock (quality). We estimate the relationship between product (process) R&D and quality (efficiency), and find strong evidence that process innovation is related to higher efficiency, while product innovation is associated with higher product quality. We discuss the welfare implications of these two distinct innovation activities. |
| JEL: | L1 |
| Date: | 2023–02 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:30950&r=tid |
| By: | Ajay K. Agrawal; Joshua S. Gans; Avi Goldfarb |
| Abstract: | Economic models provide little insight into when the next big idea and its associated productivity dividend will come along. Once a general purpose technology (GPT) is identified, the economist’s toolkit does provide an understanding when firms will adopt a new technology and for what purpose. The focus of the literature has been on commonalities across each type of GPT. This focus is natural, given that the goal of the literature has been to identify generalizable insights across technologies. Broadly, this literature emphasizes heterogeneity in co-invention costs across firms. Each GPT, however, provides a distinct benefit. Steam provided a new power source. The internet facilitated communication. The differences between GPTs are important for understanding adoption patterns. Using the examples of the internet and artificial intelligence, we discuss how both co-invention costs and distinct benefits determine the adoption of technology. For both technologies, we demonstrate that discussions of the impact of a GPT on productivity and growth need to emphasize the benefits as well as the costs. The goal of this paper is therefore to link the literature on co-invention costs with an understanding of the distinct benefits of each GPT. |
| JEL: | O33 O4 |
| Date: | 2023–02 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:30976&r=tid |
| By: | Stefano Basilico (University of Bremen, Faculty of Business Studies and Economics, and Gran Sasso Science Institute, Social Sciences); Nils Grashof (Friedrich Schiller University Jena, Faculty of Economics and Business Administration) |
| Abstract: | Green innovations aim to improve and reduce the environmental impact of economic activities. Thus far, research focus on the positive trajectories of green transition. Recent studies focus also on the speed of transition and on its effects on economic outcomes. Continuing in this direction we focus on brown regions (i.e. specialized in fossil-fuel technologies) and the challenges that they face to become sustainable. Taking as example German Labour Market Regions we identify brown regions and measure their transition using an innovative approach based on Social Network Analysis and Knowledge Spaces. We find that the earlier a region transitioned to green technologies, the better it is for both its social and economic outcomes. Our findings imply that the transition of brown regions has effects on socio-economic outcomes not yet accounted for in the sustainability transition literature. |
| Keywords: | green transition, green technologies, knowledge spaces, network embeddedness, socio-economic development |
| JEL: | O32 O33 R11 |
| Date: | 2023–03–09 |
| URL: | http://d.repec.org/n?u=RePEc:jrp:jrpwrp:2023-003&r=tid |
| By: | Fabio Cerina (University of Cagliari, CRENOS - University of Cagliari); Elisa Dienesch (IEP Aix-en-Provence - Sciences Po Aix - Institut d'études politiques d'Aix-en-Provence, AMSE - Aix-Marseille Sciences Economiques - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - ECM - École Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique); Alessio Moro (University of Cagliari); Michelle Rendall (Monash university, CEPR - Center for Economic Policy Research - CEPR) |
| Abstract: | We document the emergence of spatial polarization in the U.S. during the 1980-2008 period. This phenomenon is characterised by stronger employment polarization in larger cities, both at the occupational and the worker level. We quantitatively evaluate the role of technology in generating these patterns by constructing and calibrating a spatial equilibrium model. We find that faster skill-biased technological change in larger cities can account for a substantial fraction of spatial polarization in the U.S. Counterfactual exercises suggest that the differential increase in the share of low-skilled workers across city size is due mainly to the large demand by high-skilled workers for low-skilled services and to a smaller extent to the higher complementarity between low- and high-skilled workers in production relative to middle-skilled workers. |
| Date: | 2023–01 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-03788208&r=tid |
| By: | Isaac Sorkin; Melanie Wallskog |
| Abstract: | Over the last several decades, rising pay dispersion between firms accounts for the majority of the dramatic increase in earnings inequality in the United States. This paper shows that a distinct cross-cohort pattern drives this rise: newer cohorts of firms enter more dispersed and stay more dispersed throughout their lives. A similar cohort pattern drives a variety of other closely related facts: increases in worker sorting across firms on the basis of pay, education, and age, and increasing productivity dispersion across firms. We discuss two important implications. First, these cohort patterns suggest a link between changes in firm entry associated with the decline in business dynamism and the rise in earnings inequality. Second, cohort effects imply a slow diffusion of inequality: we expect inequality to continue to rise as older and more equal cohorts of firms are replaced by younger and more unequal cohorts. Back of the envelope calculations suggest that this momentum could be substantial with increases in between-firm inequality in the next two decades almost as large as in the last two. |
| JEL: | J3 |
| Date: | 2023–02 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:30977&r=tid |
| By: | MOTOHASHI Kazuyuki; KOSHIBA Hitoshi; IKEUCHI Kenta |
| Abstract: | In this study, the text information of academic papers published by Japanese authors (about 1.7 million papers) and patents filed with the Japan Patent Office (about 12.3 million patents) since 1991 are used for analyzing the inter-relationship between science and technology. Specifically, a distributed representation vector using the title and abstract of each document is created, then neighboring documents to each are identified using the cosine similarity. A time trend and sector specific linkages within science and technology are identified by using the count of neighbor patents (papers) for each paper (patent). It is found that the science intensity of inventions (the number of neighbor papers for patents) increases over time, particularly for university/PRI patents and university-industry collaboration patents over the 30 years studied. As for university/PRI patents, the institutional reforms for the science sector (government laboratory incorporation in 2001 and national university incorporation in 2004) contributed to the interactions between science and technology. In contrast, the technology intensity of science (the number of neighbor patents by paper) decreases over time. It is also found that the technology intensity of life science papers is rather low, although they have a significant impact on subsequent patents. However, there are some scientific fields which are affected by technological developments, so that the state of science and innovation interactions is heterogenous across the fields. |
| Date: | 2023–03 |
| URL: | http://d.repec.org/n?u=RePEc:eti:dpaper:23015&r=tid |