nep-tid New Economics Papers
on Technology and Industrial Dynamics
Issue of 2023‒11‒13
twelve papers chosen by
Fulvio Castellacci, Universitetet i Oslo

  1. Technological Innovations and Workers’ Job Insecurity: The Moderating Role of Firm Strategies By Mauro Caselli; Andrea Fracasso; Arianna Marcolin; Sergio Scicchitano
  2. Mind the Knowledge Gap! The Origins of Declining Business Dynamics in a Macro Agent-Based Model By Domenico Delli Gatti; Roberta Terranova; Enrico Maria Turco
  3. There are different shades of green: heterogeneous environmental innovations and their effects on firm performance By Gianluca Biggi; Andrea Mina; Federico Tamagni
  4. Empirical Determinants of Innovation in European Countries: Testing the Porter's Hypothesis By Makrevska Disoska, Elena; Tonovska, Jasna; Toshevska-Trpcevska, Katerina; Tevdovski, Dragan; Stojkoski, Viktor
  5. R&D Subsidy and Import Substitution: Growing in the Shadow of Protection By Gustavo de Souza
  6. Factors Influencing Labor Share: Automation, Task Innovation, and Elasticity of Substitution By Baek, Seungjin; Jeong, Deokjae
  7. The E-Commerce and Global Value Chains By Yea, Sangjun; Lee, Seungrae
  8. Seeking for the shift towards challenge-oriented innovation policies: Tracing digitalization policies over two decades in Africa By Otioma, Chuks; Nsanzumuhire, Silas U.; Grillitsch, Markus; Jirström, Magnus
  9. Does Artificial Intelligence benefit UK businesses? An empirical study of the impact of AI on productivity By Sam Hainsworth
  10. Impact of Innovation on CO2 Emissions in South Asian Countries By Ashiq, Saima; Ali, Amjad; Siddique, Hafiz Muhammad Abubakar; Sumaira, Sumaira
  11. Internationalisation, specialisation and technological collaboration in the EU Outermost Regions: A patent data-based analysis By OECD
  12. Economic benefits of high-speed broadband network coverage and service adoption: Evidence from OECD member states By Briglauer, Wolfgang; Cambini, Carlo; Gugler, Klaus

  1. By: Mauro Caselli; Andrea Fracasso; Arianna Marcolin; Sergio Scicchitano
    Abstract: In this paper, we empirically assess whether the perceived implications of technological innovations on the probability of job loss vary according to the innovation-related strategies adopted by firms. We take advantage of a unique dataset based on a large and representative cross-sectional survey covering several characteristics of Italian workers and their firms. We find that the relationship between technological innovations and job insecurity is moderated by firms’ technology-specific training programs, their dismissal plans, and the impact of innovations on the tasks and activities performed by workers. Thus, workers’ perceptions of job insecurity vary significantly across innovative firms and the adoption of technological innovations in the workplace has a multifaceted impact on the perceptions of job insecurity of the affected workers.
    Keywords: job insecurity, technology, innovation, firms
    JEL: J28 O33
    Date: 2023
  2. By: Domenico Delli Gatti; Roberta Terranova; Enrico Maria Turco
    Abstract: In this paper we replicate most of the stylized facts characterizing the decline in business dynamism in the USA highlighted by Akcigit and Ates (2021) and provide an explanation of their emergence by means of a macroeconomic agent-based model populated by two types of firms: innovators who generate new and more productive capital goods, and entrepreneurs who employ labor and capital goods to produce consumption goods. A key ingredient of the model is the assumption that the entrepreneurs’ access to new and better capital goods depends on the knowledge gap, i.e., the wedge between the firm’s technical knowledge and the state of technology embodied in new capital goods. Within this framework, we investigate the obstacles to knowledge diffusion subsequently leading to declining business dynamism. Our findings indicate that only when knowledge diffusion decreases in both the technology imitation and adoption processes does it lead to high market concentration and markups, falling labor share and productivity growth. Patents are an important obstacle to knowledge diffusion. We find an inverse U-shaped relationship between patent strength and growth: moderate levels of patent protection can stimulate growth, but strong protection leads to rising market power and slower growth.
    Keywords: innovation, imitation, knowledge diffusion, knowledge gap, patents
    JEL: O31 O32 O33 O34
    Date: 2023
  3. By: Gianluca Biggi; Andrea Mina; Federico Tamagni
    Abstract: Using a firm-level dataset from the Spanish Technological Innovation Panel (2003-2016), this study explores the characteristics of environmentally innovative firms and quantifies the effects of pursuing different types of environmental innovation strategies (resource-saving, pollution-reducing, and regulation-driven innovations) on sales, employment, and productivity dynamics.
    Date: 2023–10
  4. By: Makrevska Disoska, Elena; Tonovska, Jasna; Toshevska-Trpcevska, Katerina; Tevdovski, Dragan; Stojkoski, Viktor
    Abstract: We investigate the interplay between innovation and productivity, emphasizing the role of environmental regulations on the innovation behaviours of European firms. Anchored in the Porter hypothesis, which proposes that environmental regulations can drive technological innovation and bolster commercial competitiveness, we utilize the CDM model (Crépon, Duguet, and Mairesse, 1998) for in-depth analysis. Our approach begins by pinpointing the factors that shape firms' decisions to innovate and the associated investments, employing the Heckman correction model. Subsequently, we adopt the three-stage least squares (3SLS) methodology to analyse both innovation outputs and firm productivity in tandem. Drawing data from the Community Innovation Survey (CIS) 2018, our structured examination unveils how diverse innovation drivers can elevate labor productivity in varied institutional landscapes. By contrasting the performance of South Europe (comprising Greece, Spain, Portugal) and Central Eastern Europe (countries like Bulgaria, Estonia, Hungary) against a German benchmark, our research offers a nuanced understanding of environmental regulations' influence on innovation and productivity across European contexts.
    Keywords: innovation, productivity, CDM model, CIS, Porter`s hypothesis
    JEL: C33 C36 O31 O33
    Date: 2023–09–29
  5. By: Gustavo de Souza
    Abstract: I study the effect of an innovation subsidy on the growth of firms in a developing country. Using administrative microdata for Brazil and difference-in-differences, I find that innovation subsidies drive firm growth by facilitating firm entry into high-tariff markets with domestically produced versions of foreign goods. After receiving an innovation subsidy, firms issue more patents, expand their workforce, and diversify their product line. However, these patents receive minimal citations, while also heavily citing foreign patents. Firms increase imports of foreign inputs and expand their product line towards products with high import tariff. Despite that, in the most conservative estimate, every $1 of innovation subsidy generated $10 in present value wages.
    Keywords: R&D; Industrial policy; Industrial development
    JEL: O3 O14 O25
    Date: 2023–10–05
  6. By: Baek, Seungjin; Jeong, Deokjae
    Abstract: This paper explores the underlying factors contributing to the recent decline in labor share, focusing specifically on the roles of automation and the development of new tasks that are exclusive to humans. First, our paper strengthens the argument that automation has a negative impact on labor share. Second, we are the first to empirically estimate the influence of new human-exclusive tasks on labor share. Our findings suggest that the positive impact of human-exclusive tasks dominates the negative impact brought about by automation. Third, we find that the elasticity of substitution between labor and capital is less than one, offering a coherent framework for predicting how various factors ---capital price, robot price, and wages--- impact labor share. We identify two distinct mechanisms through which robots negatively affect labor share: automation and a reduction in the price of robots. Our general equilibrium model predicts that the latter will gain increasing importance in the future as robots become more prevalent. Lastly, we estimate the elasticity of substitution between tasks to be one, empirically validating an assumption that many existing studies have made.
    Keywords: automation; tasks; labor share; robot; elasticity of substitution
    JEL: D24 D33 E24 E25 J23 O33 O57
    Date: 2023–10–01
  7. By: Yea, Sangjun (KOREA INSTITUTE FOR INTERNATIONAL ECONOMIC POLICY (KIEP)); Lee, Seungrae (Hankuk University of Foreign Studies)
    Abstract: We investigated the impact of e-commerce on global value chains (GVC). Using firm-level data from Korea for the period 2006-2014, we found that firms that adopted an integrated e-commerce management system had a significantly higher probability of participating in GVC, particularly for firms with productivity levels below the upper quartile. We also examined the implications of firm-level e-commerce participation for the aggregate GVC trade using a theoretical model. The model showed that e-commerce facilitates GVC trade and makes the trade volume more responsive to trade costs. From these results, we conclude that supporting SMEs in their digital transformation and e-commerce participation can be effective in promoting SMEs' participation in GVC. We also highlight that efforts to reduce trade costs remain imperative, even as e-commerce becomes more prevalent.
    Keywords: E-Commerce; Digital Trade; Global Value Chain; GVC
    Date: 2023–10–06
  8. By: Otioma, Chuks (UNU Merit); Nsanzumuhire, Silas U. (UNU Merit); Grillitsch, Markus (CIRCLE, Lund University); Jirström, Magnus (Lund University)
    Abstract: The current innovation-policy discourse suggests a shift towards challenge-orientation and calls for a whole of government approach to tackle grand societal challenges such as climate change, inequality, and poverty. We seek for such a shift in two countries highly exposed to these challenges, South Africa and Rwanda, and in relation to digitalization policies, which hold strong transformative potential. To do so, we develop an analytical framework, which differentiates between policy goals (intended economic, social, or environmental outcomes) and policy rationales (technology-push, system building, or transformative change). Our empirical results show little resemblance to the temporality assumed in the literature, namely that policy goals and policy rationales should shift towards challenge-orientation and transformation over time. In contrast, we find that the policies relevant for the digital transformation have been challenge-driven from the beginning addressing besides economic growth also inclusivity and poverty reduction. Also, we find a potentially generalizable pattern in transformation processes, embarking from system building, then focusing on developing products, processes, and business models, and finally specializing the instruments to address specific shortcomings. The findings complement and contrast existing studies often centered on the Global North and often covering a narrower set of innovation policies.
    Keywords: Innovation policy; grand challenges; digitalization; South Africa; Rwanda; transformation; system innovation; policy evolution
    JEL: O10 O30 O33 O38 O55
    Date: 2023–10–30
  9. By: Sam Hainsworth
    Abstract: Media hype and technological breakthroughs are fuelling the race to adopt Artificial Intelligence amongst the business community, but is there evidence to suggest this will increase productivity? This paper uses 2015-2019 microdata from the UK Office for National Statistics to identify if the adoption of Artificial Intelligence techniques increases labour productivity in UK businesses. Using fixed effects estimation (Within Group) with a log-linear regression specification the paper concludes that there is no statistically significant impact of AI adoption on labour productivity.
    Date: 2023–10
  10. By: Ashiq, Saima; Ali, Amjad; Siddique, Hafiz Muhammad Abubakar; Sumaira, Sumaira
    Abstract: Across the globe, human lifestyles are accelerating carbon emissions, and this phenomenon is especially pronounced in developing nations. As the world grapples with the compelling imperative to address severe environmental challenges, technology has emerged as a steadfast ally. Over recent decades, the advancement of cutting-edge technology and the granting of patent rights have ignited a profound discourse on novel approaches to mitigating environmental threats. In recent years, there has been a growing interest in investigating how innovations might assist in reducing carbon emissions. The current study looks at how innovation affects carbon dioxide emissions in South Asian nations. The goal of this study is to use panel OLS and fixed effects methodologies to examine the influence of innovation on CO2 emissions in five South Asian nations from 1980 to 2019. The study's findings show that carbon dioxide emissions are negatively impacting environmental quality, while technological developments help to lower these carbon emissions. The findings argue for the development of initiatives to foster and expand technical innovation, particularly in South Asian countries. This research underscores the imperative of harnessing innovation to confront the immediate environmental challenges that loom large in the twenty-first century, as we strive for a more sustainable and environmentally responsible future.
    Keywords: Innovation, CO2 emissions, environment, South Asia
    JEL: O3 Q5
    Date: 2023
  11. By: OECD
    Abstract: This paper explores the innovation dynamics of the EU Outermost Regions (EU ORs) through patenting behaviour. It emphasises the potential for international collaborations with a wide range of partners, and recommends to mobilise the resources and strategies provided by the EU to strengthen research and innovation in the private sector; enhance the impact of public research centres and universities; and foster intra-regional co-operation. It also calls for stronger ties with African countries, the Latin American and Caribbean region, as well as Small Island Developing States (SIDS), to foster innovation-based collaborations, particularly around sustainable agriculture, renewable energy and the ocean economy. The paper is developed within the framework of the EU-OECD project on Global Outermost Regions.
    Keywords: EU Outermost Regions, Global Value Chains, Intellectual Property Rights, Research and Development, Technological Innovation
    JEL: O33 O34 O52 O55 R11 R58 O54
    Date: 2023–10–30
  12. By: Briglauer, Wolfgang; Cambini, Carlo; Gugler, Klaus
    Abstract: A broad-scale rollout and adoption of new high-speed broadband networks and services, respectively, is expected to generate innovative services for consumers and create a high potential for productivity increases and economic growth. However, there is no evidence available on the causal impact of both high-speed broadband coverage and adoption on economic outcomes, which we measure as gross domestic product (GDP). Moreover, no study has yet simultaneously considered the impact of both new wireline broadband based on fiber-optic technologies and new wireless (mobile) broadband based on 3G+/4G technologies. Distinguishing these effects is of crucial relevance for the efficient design of broadband policies. In order to provide reliable evidence on causal effects, we utilize comprehensive panel data for 32 OECD countries for the years 2002-2020 and panel fixed-effects estimators including instrumental variables estimation. Exclusionary restrictions follow from micro-funded determinants of network coverage and consumer adoption decisions. Our results show that both fixed and mobile broadband adoption exert a substantial and significant impact on GDP, while network deployment per se exhibits only minor multiplier-related effects on GDP per capita. Contemporaneous effects of a 1% increase in fixed broadband adoption impact GDP per capita growth in a range of 0.026% to 0.034%, while a 1% increase in mobile broadband adoption contributes between 0.079% and 0.088%. While the impact of contemporaneous mobile broadband adoption is substantially higher, fixed broadband adoption shows stronger dynamic and cumulative effects, as well as larger effects in later deployment periods. Generally, our results are consistent with the notion that the diffusion of technologies to substantial proportions of the population is most important in driving economic growth. Supporting policies should be technology neutral and should not neglect the demand side.
    Keywords: High-speed broadband, coverage, adoption, OECD panel, ex-post evaluation
    JEL: H54 L96 L98 O38
    Date: 2023

This nep-tid issue is ©2023 by Fulvio Castellacci. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
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