nep-tid New Economics Papers
on Technology and Industrial Dynamics
Issue of 2023‒09‒04
eight papers chosen by
Fulvio Castellacci, Universitetet i Oslo

  1. Digitalisation in European regions: Unravelling the impact of relatedness and complexity on digital technology adoption and productivity growth By Stefan Apostol; Eduardo Hernández-Rodríguez
  2. A new mapping of technological interdependence By A. Fronzetti Colladon; B. Guardabascio; F. Venturini
  3. Robots and Wages: A Meta-Analysis By Jurkat, Anne; Klump, Rainer; Schneider, Florian
  4. Tariffs and Innovation in a Schumpeterian Economy with North-South Technology Transfer By Ho, Florence Ut Meng
  5. Long Tails, Automation and Labor By Kausik, B.N.
  6. Diversify or not? The link between global sourcing of ICT goods and firm performance By Schiersch, Alexander; Bertschek, Irene; Niebel, Thomas
  7. Regional vulnerability to the green transition By Rodríguez-Pose, Andrés; Bartalucci, Federico
  8. Spatial wage inequality in North America and Western Europe: changes between and within local labour markets 1975-2019 By Bauluz, Luis; Bukowski, Pawel; Fransham, Mark; Lee, Annie; López Forero, Margarita; Novokmet, Filip; Breau, Sébastien; Lee, Neil; Malgouyres, Clement; Schularick, Moritz; Verdugo, Gregory

  1. By: Stefan Apostol; Eduardo Hernández-Rodríguez
    Abstract: Digitalisation has become a clear policy objective. Regions want to digitalise their economies to benefit from the digital world. This paper provides empirical evidence on how the adoption of new digital web technologies is shaped by previous regional digital capabilities. The analysis is based upon an economic complexity and relatedness framework using novel data on digital web technologies’ adoption for 278 European NUTS-2 regions between years 2000-2022. Results show that regions tend to adopt new digital web technologies when they already master related digital capabilities. This paper also shows how digital complexity is associated with labour productivity gains at the regional level. Conclusions shed light on how regions are adopting digital web technologies and serve as a tool for policymakers.
    Keywords: Digitalisation; digital web technologies; relatedness; economic complexity; productivity; European regions
    JEL: L86 O14 O33 R11
    Date: 2023–08
  2. By: A. Fronzetti Colladon; B. Guardabascio; F. Venturini
    Abstract: Which technological linkages affect the sector's ability to innovate? How do these effects transmit through the technology space? This paper answers these two key questions using novel methods of text mining and network analysis. We examine technological interdependence across sectors over a period of half a century (from 1976 to 2021) by analyzing the text of 6.5 million patents granted by the United States Patent and Trademark Office (USPTO), and applying network analysis to uncover the full spectrum of linkages existing across technology areas. We demonstrate that patent text contains a wealth of information often not captured by traditional innovation metrics, such as patent citations. By using network analysis, we document that indirect linkages are as important as direct connections and that the former would remain mostly hidden using more traditional measures of indirect linkages, such as the Leontief inverse matrix. Finally, based on an impulse-response analysis, we illustrate how technological shocks transmit through the technology (network-based) space, affecting the innovation capacity of the sectors.
    Date: 2023–07
  3. By: Jurkat, Anne; Klump, Rainer; Schneider, Florian
    Abstract: The empirical evidence on how industrial robots affect employment and wages is very mixed. Our meta-study helps to uncover the potentially true effect of industrial robots on labor market outcomes and to identify drivers of the heterogeneous empirical results. By means of a systematic literature research, we collected 53 papers containing 2143 estimations for the impact of robot adoption on wages. We observe only limited evidence for a publication bias in favor of negative results. The genuine overall effect of industrial robots on wages is close to zero and both statistically and economically insignificant. With regard to the drivers of heterogeneity, we find that more positive results are obtained if primary estimations a) include more countries in their sample, b) control for ICT capital, demographic developments, or tenure, c) focus on employees that remain employed in the same sector, d) consider only non-manufacturing industries, e) are specified in long differences, and f) come from a peer-reviewed journal article. More negative effects, in turn, are reported for primary estimations that are i) weighted, ii) aggregated at country level, iii) control for trade exposure, iv) and consider only manufacturing industries. We also find some evidence for skill-biased technological change. The magnitude of that effect is albeit small and less robust than one might expect in view of skill-biased technological change. We find little evidence for data dependence.
    Keywords: robots, meta study, labor markets, wages, IFR, publication bias, job polarization, gender wage gap, skill bias
    JEL: E24 J23 J31 J24 O33
    Date: 2023
  4. By: Ho, Florence Ut Meng
    Abstract: This paper develops a North-South quality-ladder model with northern innovative R&D, southern adaptive R&D and imitative R&D to analyze the effects of tariffs on innovation, technology transfer, relative wage and welfare. We find that increasing southern tariff decreases the relative wage between the North and the South permanently, increases the technology transfer rate permanently and decreases the northern innovation rate temporarily. In contrast, increasing northern tariff increases the relative wage permanently, decreases the technology transfer rate permanently and either increases or decreases the northern innovation rate, depending on the size of the North-South labor ratio. Moreover, we calibrate this model to the US-China data to perform a quantitative analysis. We find that imposing tariff in the home country yields welfare gain in itself and yields welfare loss in the foreign country. When both countries impose tariffs simultaneously, they can benefit from the welfare gains. The numerical results are consistent with the analytical policy implications.
    Keywords: Tariffs; Technology Transfer; Innovation; Foreign Direct Investment; Product Cycles.
    JEL: F13 F4
    Date: 2023–06–21
  5. By: Kausik, B.N.
    Abstract: A central question in economics is whether automation will displace human labor and diminish standards of living. Whilst prior works typically frame this question as a competition between human labor and machines, we frame it as a competition between human consumers and human suppliers. Specifically, we observe that human needs favor long tail distributions, i.e., a long list of niche items that are substantial in aggregate demand. In turn, the long tails are reflected in the goods and services that fulfill those needs. With this background, we propose a theoretical model of economic activity on a long tail distribution, where innovation in demand for new niche outputs competes with innovation in supply automation for mature outputs. Our model yields analytic expressions and asymptotes for the shares of automation and labor in terms of just four parameters: the rates of innovation in supply and demand, the exponent of the long tail distribution and an initial value. We validate the model via non-linear stochastic regression on historical US economic data with surprising accuracy.
    Keywords: Labor share; Automation; AI
    JEL: D63 E2 J2 O33 O4
    Date: 2023–07–16
  6. By: Schiersch, Alexander; Bertschek, Irene; Niebel, Thomas
    Abstract: Our paper contributes to the discussion about Europe's digital sovereignty. We analyze the relationship between firm performance and the diversification of sourcing countries for imported ICT goods. The analysis is based on administrative data for 3888 German manufacturing firms that imported ICT goods in the years 2010 and 2014. We find that firms that diversify the sourcing of ICT goods across multiple countries perform better than similar firms with a less diversified sourcing structure. This result holds for value added as well as for gross operational surplus as performance measures and for two different indicators of diversification.
    Keywords: ICT goods imports, global sourcing, digital sovereignty, firm performance
    JEL: F14 F23 L14 L23 D24
    Date: 2023
  7. By: Rodríguez-Pose, Andrés (Cañada Blanch Centre and Department of Geography and Environment, London School of Economics); Bartalucci, Federico (Cañada Blanch Centre and Department of Geography and Environment, London School of Economics)
    Abstract: The impacts of climate change are unevenly distributed across territories. Less is known about the potential effects of climate policies aimed at mitigating the negative consequences of climate change, while transitioning economies towards low-carbon standards. This paper presents an analytical framework for identifying and assessing the regional impacts of the green transition. We develop a Regional Green Transition Vulnerability Index, a composite measure of the regional vulnerability of European regions to the socio- economic reconfigurations prompted by the green transition. The index brings to light strong regional variations in vulnerability, with less developed, peri-urban, and rural regions in Southern and Eastern Europe more exposed to the foreseeable changes brought about by the green transition. We also draw attention to the potential rise of pockets of growing ‘green’ discontent, especially if the green transition contributes, as is likely to be the case, to leaving already left-behind regions further behind.
    Keywords: Green transition, environment, left-behind regions, development trap, European Union
    JEL: O44 Q56 R11
    Date: 2023–07
  8. By: Bauluz, Luis; Bukowski, Pawel; Fransham, Mark; Lee, Annie; López Forero, Margarita; Novokmet, Filip; Breau, Sébastien; Lee, Neil; Malgouyres, Clement; Schularick, Moritz; Verdugo, Gregory
    Abstract: The rise of economic inequalities in advanced economies has been often linked with the growth of spatial inequalities within countries, yet there is limited comparative research that studies the relationship between national and subnational economic inequality. This paper presents the first systematic attempt to create internationally comparable evidence showing how different countries perform in terms of geographic wage inequalities. We create cross-country comparable measures of spatial wage disparities between and within similarly-defined local labour market areas (LLMAs) for Canada, France, (West) Germany, the UK and the US since the 1970s, and assess their contribution to national inequality. By the end of the 2010s, spatial inequalities in LLMA mean wages are similar in Canada, France, Germany and the UK; the US exhibits the highest degree of spatial inequality. Over the study period, spatial inequalities have nearly doubled in all countries, except for France where spatial inequalities have fallen back to 1970s levels. Due to a concomitant increase in within-place inequality, the contribution of places in explaining national wage inequality has remained fairly constant over the 40-year study period, except in the UK where we document a significant increase. Whilst common global social, economic and technological shocks are important drivers of spatial inequality, this variation in levels and trends of spatial inequality opens the way to comparative research exploring the role of national institutions in mediating how global shocks translate into economic disparities between places.
    Keywords: regional inequality; wage inequality; local labour markets
    JEL: J30 R10 R23
    Date: 2023–08–01

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