nep-tid New Economics Papers
on Technology and Industrial Dynamics
Issue of 2023‒05‒01
eleven papers chosen by
Fulvio Castellacci
Universitetet i Oslo

  1. The role of localised, recombinant and exogenous technological change in European regions By T.E. Uberti; M.A. Maggioni; E. Marrocu; S. Usai
  2. Trade and Diffusion of Embodied Technology: An Empirical Analysis By Stephen Ayerst; Faisal Ibrahim; Gaelan MacKenzie; Swapnika Rachapalli
  3. Identifying Technology Opportunity Using a Dual-attention Model and a Technology-market Concordance Matrix By MOTOHASHI Kazuyuki
  4. Closing the gap between research and projects in climate change innovation in Europe By Larosa, Francesca; Mysiak, Jaroslav; Molinari, Marco; Varelas, Panagiotis; Akay, Haluk; McDowall, Will; Spadaru, Catalina; Fuso-Nerini, Francesco; Vinuesa, Ricardo
  5. Was Robert Gibrat right? A test based on the graphical model methodology By Marco Guerzoni; Luigi Riso; Marco Vivarelli
  6. The Green Innovation Premium: Evidence from U.S. Patents and the Stock Market By Markus Leippold; Tingyu Yu
  7. Air Quality, High-Skilled Worker Productivity and Adaptation: Evidence from GitHub By Felix Holub; Beate Thies
  8. Not like the others: frontier scientists for high-impact inventions By Thomas Schaper; Samuel Arts; Reinhilde Veugelers
  9. Does Emissions Trading Scheme Induce Innovation and Carbon Leakage? Evidence from Japan By Guanyu Lu; Taisuke Sadayuki; Toshi H Arimura
  10. Related or Unrelated Diversification: What is Smart Specialization? By \"Onder Nomaler; Bart Verspagen
  11. Returns to ICT Skills Use and Labour Market Institutions By Giorgio Cutuli; Alessio Tomelleri

  1. By: T.E. Uberti; M.A. Maggioni; E. Marrocu; S. Usai
    Abstract: How do regions develop and evolve along their productive and technological path is a central question. Within an evolutionary perspective, a given region is likely to develop new technologies closer to its pre-existing specialization. We adopt the approach of Hidalgo et al. (2007) to map the regional European technology/knowledge space to investigate the pattern and the evolution of regional specialisation in the most innovative EU countries. These dynamics depend on the interaction of three factors - (i) localised technological change, (ii) endogenous processes of knowledge recombination, and (iii) exogenous technological paradigm shifts while accounting for spatial and technological spillovers. Our paper maps the technological trajectories of 198 EU regions over the period 1986-2010 by using data on 121 patent sectors at the NUTS2 level for the 11 most innovative European countries, plus Switzerland and Norway. The results show that regional technological specialization is mainly shaped by localised technological change and exogenous technological paradigm shifts, whereas recombinant innovation contributes to a lower extent and that these effects largely depends on the increasing, decreasing or stable regional dynamics.
    Keywords: Technology/knowledge space;spatial ordered models.;recombinant innovation;patent analysis;localised technology change;evolutionary economic geography;european regions
    Date: 2023
  2. By: Stephen Ayerst; Faisal Ibrahim; Gaelan MacKenzie; Swapnika Rachapalli
    Abstract: Using data from patents, citations, inter-sectoral sales and customs, we examine the international diffusion of technology through imports of sectoral knowledge and production inputs. We construct measures of the flow of technology embodied in imports. These measures are weighted by inter-sectoral knowledge and production input-output linkages that capture the relevance of this technology for generating new innovations in different sectors in importing countries. We develop an instrumental variable strategy to identify the causal effects of technology embodied in imports on innovation and diffusion outcomes. For sectors in importing countries, increases in both knowledge- and production-weighted embodied technology imports lead to technology diffusion (measured using backward citations in new patent applications) and increases in the rate of new innovations (measured using the forward citations those patents receive). Effects are substantially larger for knowledge-weighted imports of embodied technology, which also lead to improvements in the average quality of new innovations.
    Keywords: Development economics; International topics; Productivity; Trade integration
    JEL: O33 F14 O31 O19 F61
    Date: 2023–04
  3. By: MOTOHASHI Kazuyuki
    Abstract: To understand the role of new technologies in innovation, it is crucial to develop a methodology that links technology and market information. Conventionally, the relationship between technology and the market has been analyzed using a technology-industry concordance matrix, but the granularity of market information is confined by industrial classification systems. In this study, we propose a new methodology for extracting keyword-level market information related to firms’ technology. Specifically, we developed a dual-attention model to identify technical keywords from firms’ websites. We then vectorized the market information (extracted keywords) and technology information (patents) using word embedding to construct technology-market concordance matrices. Matrices were generated based on a group of high-growth companies that suggest new technologies and market opportunities in the automotive, electronics, and pharmaceutical industries.
    Date: 2023–03
  4. By: Larosa, Francesca; Mysiak, Jaroslav; Molinari, Marco; Varelas, Panagiotis; Akay, Haluk; McDowall, Will; Spadaru, Catalina; Fuso-Nerini, Francesco; Vinuesa, Ricardo
    Abstract: Innovation is a key component to equip our society with tools to adapt to new climatic conditions. The development of research-action interfaces shifts useful ideas into operationalized knowledge allowing innovation to flourish. In this paper we quantify the existing gap between climate research and innovation action in Europe using a novel framework that combines artificial intelligence (AI) methods and network science. We compute the distance between key topics of research interest from peer review publications and core issues tackled by innovation projects funded by the most recent European framework programmes. Our findings reveal significant differences exist between and within the two layers. Economic incentives, agricultural and industrial processes are differently connected to adaptation and mitigation priorities. We also find a loose research-action connection in bioproducts, biotechnologies and risk assessment practices, where applications are still too few compared to the research insights. Our analysis supports policy-makers to measure and track how research funding result in innovation action, and to adjust decisions if stated priorities are not achieved.
    Keywords: climate innovation; natural language processing; knwoledge production
    JEL: H54 O32 O33 O38
    Date: 2023
  5. By: Marco Guerzoni (DEMS, Università di Milano-Bicocca, Milano, Italy - BETA, University of Strasbourg, France); Luigi Riso (Dipartimento di Politica Economica, DISCE, Università Cattolica del Sacro Cuore, Milano, Italy); Marco Vivarelli (Dipartimento di Politica Economica, DISCE, Università Cattolica del Sacro Cuore, Milano, Italy – UNU-MERIT, Maastricht, The Netherlands – IZA, Bonn, Germany)
    Abstract: Using both regression analysis and an unsupervised graphical model approach (never applied before to this issue), we confirm the rejection of the Gibrat’s law when our firm-level data are considered over the entire investigated period, while the opposite is true when we allow for market selection. Indeed, the growth behavior of the re-shaped (smaller) population of the survived most efficient firms is in line with the Law of Proportionate Effect; this evidence reconciles early and current literature testing Gibrat’s law and may have interesting implications in terms of both applied and theoretical research.
    Keywords: Gibrat’s Law, firm survival, market selection, firm growth
    JEL: L11
    Date: 2023–03
  6. By: Markus Leippold (University of Zurich; Swiss Finance Institute); Tingyu Yu (University of Zurich)
    Abstract: This paper investigates if firms’ green innovation efforts are reflected in their stock market prices. Firms with a higher proportion of green patents experience lower stock returns than those with a lower percentage. A long-short portfolio based on green patent shares has an average annual return of 8%, which remains significant when we control for common risk factors. However, firms with high green patent shares outperform their counterparts after events that increase climate concerns and strengthen environmental regulations. Moreover, firms with green innovation attract more institutional ownership and can weakly decrease their future carbon intensity and incident involvement.
    Keywords: Green patents, cross-section of stock returns, event study, institutional investors
    JEL: G12 G14 O34 Q55
    Date: 2023–03
  7. By: Felix Holub; Beate Thies
    Abstract: Highly skilled knowledge workers are important drivers of innovation and long-run growth. We study how air quality affects productivity and work patterns among these workers, using data from GitHub, the world’s largest coding platform. We combine panel data on daily output, working hours, and task choices for a sample of 25, 000 software developers across four continents during the period 2014-2019 with information on concentrations of fine particulate matter (PM2.5). An increase in air pollution reduces output, measured by the number of total actions performed on GitHub per day, and induces developers to adapt by working on easier tasks and by ending work activity earlier. To compensate, they work more on weekends following high-pollution days, which suggests adverse impacts on their work-life-balance. The decline in output arises even at concentrations in line with current regulatory standards in the EU and US and is driven by a reduction in individual coding activity, while interactive activities are unaffected. Exposure to PM2.5 levels above the city-specific 75th percentile reduces daily output quantity by 4%, which translates into a loss in output value by approximately $11 per developer.
    Keywords: Air pollution, Productivity, High-skilled work, Adaptation, GitHub
    JEL: D24 J22 J24 L86 Q52 Q53
    Date: 2023–03
  8. By: Thomas Schaper; Samuel Arts; Reinhilde Veugelers
    Abstract: Linking scientific articles in PubMed and biomedical U.S. patents assigned to firms, we study the role of scientists active at the knowledge frontier, identified as authors on recent top articles. We expect them to be brokers between new scientific findings and inventions in industry with a high technological impact. We find that inventions made by such “frontier authors” are indeed more impactful and more likely to become breakthroughs, not only compared to those made by non-author inventors, but also compared to inventions from non-top authors and non-recent top authors. We also show that inventions with frontier science as prior art are more impactful. Frontier author patents are more likely to use frontier science as prior art in their inventions and to be first users of such frontier science. Yet, while frontier author patents have a significant impact premium on their non-frontier science prior art patents, their frontier science patents are not particularly more successful compared to frontier science patents from other types of inventors. Our results suggest that closeness to frontier science for use in their inventions is only part of the story of superior impact of frontier scientists, which seems a much broader story.
    Keywords: (top) technology impact, frontier science, Industry science links, inventor-authors
    Date: 2023–04–05
  9. By: Guanyu Lu (Graduate School of Economics, Waseda University); Taisuke Sadayuki (Faculty of Economics, Seijo University); Toshi H Arimura (Faculty of Political Science and Economics, Waseda University)
    Abstract: This study aims to explore if Japan’s environmental regulation, such as its regional emissions trading scheme (ETS), can improve innovation without inducing carbon leakage. Using unique firm-level data for the period from 2003 to 2018, based on the difference-in-differences method, this study investigates how firms address issues such as innovation and outsourcing under Japan’s regional ETS framework. The key findings are as follows. (1) Japan’s regional ETS is effective in improving targeted firms’ innovation during the early stage of the compliance period. (2) Targeted firms that pursued innovation before the ETS promoted subsequent innovations after the ETS. (3) Japan’s regional ETS did not induce the risk of carbon leakage through outsourcing activities. (4) Firms that did not actively encourage innovation increased their outsourcing activities during the compliance period. Based on these findings, we discuss the study implications and directions for future policy design.
    Keywords: Emissions trading scheme, Japan, innovation, carbon leakage, outsourcing activity, difference-in-differences
    JEL: Q48 Q50 Q55 Q56 Q58 Q59
    Date: 2023–03
  10. By: \"Onder Nomaler; Bart Verspagen
    Abstract: In this paper, we investigate the nature of the density metric, which is employed in the literature on smart specialization and the product space. We find that although density is supposed to capture relatedness between a country's current specialization pattern and potential products that it may diversify into, density is also correlated strongly to the level of diversification of the country, and (less strongly) to the ubiquity of the product. Together, diversity and ubiquity capture 93% of the variance of density. We split density into a part that corresponds to related variety, and a part that does not (i.e., unrelated variety). In regressions for predicting gain or loss of specialization, both these parts are significant. The relative influence of related variety increases with the level of diversification of the country: only countries that are already diversified show a strong influence of related variety. In our empirical analysis, we put equal emphasis on gains and losses of specialization. Our data show that the specializations that were lost by a country often represented higher product complexity than the specializations that were gained over the same period. This suggests that 'smart' specialization should be aimed at preserving (some) existing specializations in addition to gaining new ones. Our regressions indicate that the relative roles of related and unrelated variety for explaining loss of specialization are similar to the case of specialization gains. Finally, we also show that unrelated variety is also important in indicators that are derived from density, such as the Economic Complexity Outlook Index.
    Date: 2023–03
  11. By: Giorgio Cutuli; Alessio Tomelleri
    Abstract: This paper analyses the moderating role of institutional factors on returns to ICT skill usage among different groups of workers in eight European labour markets. Using PIAAC data, it leverages the ‘institutional salience’ of contractual status to analyse the returns on the use of ICT-related skills in the workplace, allowing for heterogeneous wage effects at the micro level among workers holding permanent and temporary contracts. It extends the analysis by considering how gaps in ICT wage premiums mirror the compositional differences in national-specific trade union densities among contractual groups. Wage premiums associated with ICT usage are not defined univocally by task content or demand-supply dynamics for specific occupations. Net of occupation and industry, the results show different returns between labour market segments and according to national-specific trade union densities of temporary and permanent workers, providing a test of how the consequence of technological change are shaped by institutional and regulative cleavages.
    Keywords: ICT skills, Wage premiums, European labour markets, Temporary contracts, Trade unions
    JEL: J2 E24 O30 J50
    Date: 2023–04

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