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on Technology and Industrial Dynamics |
| By: | Luo, Lianfa; Cheng, Zhiming; Ye, Qingqing; Cheng, Yanjun; Smyth, Russell; Yang, Zhiqing; Zhang, Le |
| Abstract: | We use the short-lived, but high-profile, China Top Brand Award to examine the causal effects of nonmonetary awards on firm innovation. To do so, we create a panel dataset by matching official China Top Brand Award recipients to the innovation outputs of listed companies. Results from difference-in-differences estimates show that firms that received the China Top Brand Award have a higher number, and better quality, of filed patents. We find that the positive effects of winning the China Top Brand Award on innovation outputs operate through higher government subsidies to winning firms. We also find that the positive effects of award-winning are stronger among state-owned enterprises, larger enterprises, and better-performing enterprises, as well as in provinces with stronger intellectual property rights protection. Our results are robust to a series of sensitivity checks. |
| Keywords: | China Top Brand Award, intellectual property rights, innovation outputs |
| JEL: | M2 O3 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:glodps:1345&r=tid |
| By: | Antonio Ughi; Andrea Mina |
| Abstract: | Investments in advanced manufacturing technologies are expected to generate substantial gains for firms. The aim of this work is to evaluate the nature and extent of such gains. We use information on the ''Nuova Sabatini'' subsidy - an important policy measure adopted in Italy over the last few years - and employ a Difference-in-Differences methodology to estimate the effects of digital technologies on adopters relative to a first control group of applicants whose funding was revoked, and a second one obtained through statistical matching. The analysis exploits the rare opportunity of bringing together data from the Italian ''National Register of State Aids'' (NRA), confidential data from the Ministry of Economic Development (MiSE), and financial data from the complete business register of the Italian Chambers of Commerce (InfoCamere). Results show that new digital investments have positive effects on productivity and that the policy is effective in boosting the overall performance of treated firms. In addition, there is no evidence that digital adoption results in technological unemployment. |
| Keywords: | Advanced manufacturing; Industry 4.0; Technology diffusion; Adoption subsidies; Industrial strategy. |
| Date: | 2023–11–17 |
| URL: | http://d.repec.org/n?u=RePEc:ssa:lemwps:2023/41&r=tid |
| By: | David Hemous; Simon Lepot; Thomas Sampson; Julian Scharer |
| Abstract: | This paper provides a first comprehensive quantitative analysis of optimal patent policy in the global economy. We introduce a new framework, which combines trade and growth theory into a tractable tool for quantitative research. Our application delivers three main results. First, the potential gains from international cooperation over patent policies are large. Second, only a small share of these gains has been realized so far. And third, the WTO's TRIPS agreement has been counterproductive, slightly reducing welfare in the Global South and for the world. Overall, there is substantial scope for policy reform. |
| Keywords: | trade policy, innovation, growth, patents, TRIPS |
| Date: | 2023–11–13 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp1958&r=tid |
| By: | Justin Bloesch; Jacob P. Weber |
| Abstract: | R&D investment spending exhibits a delayed and hump-shaped response to shocks. We show in a simple partial equilibrium model that rapidly adjusting R&D investment is costly if the probability of converting new hires into productive R&D workers (“onboarding”) is decreasing in the number of new hires (“congestion”). Congestion thus causes R&D-producing firms to slowly hire new workers in response to good shocks and hoard workers in response to bad shocks, providing a microfoundation for convex adjustment costs in R&D investment. Using novel, high-frequency productivity data on individual software developers collected from GitHub, a popular online collaboration platform, we provide quantitative evidence for such congestion. Calibrated to this evidence, a sticky-wage new Keynesian model with heterogeneous investment-producing firms subject to congestion in onboarding and no other frictions yields hump-shaped responses of R&D investment to shocks. |
| Keywords: | intangibles; monetary policy; R&D; innovation; team specific capital; labor adjustment costs |
| JEL: | E22 O36 |
| Date: | 2023–11–01 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fednsr:97288&r=tid |
| By: | Ufuk Akcigit; Harun Alp; André Diegmann; Nicolas Serrano-Velarde |
| Abstract: | This paper investigates a unique policy designed to maintain employment during the privatization of East German firms after the fall of the Iron Curtain. The policy required new owners of the firms to commit to employment targets, with penalties for non-compliance. Using a dynamic model, we highlight three channels through which employment targets impact firms: distorted employment decisions, increased productivity, and higher exit rates. Our empirical analysis, using a novel dataset and instrumental variable approach, confirms these findings. We estimate a 22% points higher annual employment growth rate, a 14% points higher annual productivity growth, and a 3.6% points higher probability of exit for firms with binding employment targets. Our calibrated model further demonstrates that without these targets, aggregate employment would have been 15% lower after 10 years. Additionally, an alternative policy of productivity investment subsidies proved costly and less effective in the short term. |
| Keywords: | Industrial policy, Privatizations; Productivity; Size-dependent regulations |
| JEL: | D22 D24 J08 L25 |
| Date: | 2023–11–07 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedgif:1382&r=tid |
| By: | Marjan Petreski; Stefan Tanevski; Irena Stojmenovska |
| Abstract: | This paper examines how investment in environmentally sustainable practices impacts employment and labor productivity growth of firms in transition economies. The study considers labor skill composition and geographical differences, shedding light on sustainability dynamics. The empirical analysis relies on the World Bank-s Enterprise Survey 2019 for 24 transition economies, constructing an environmental sustainability index from various indicators through a Principal Components Analysis. To address endogeneity, a battery of fixed effects and instrumental variables are employed. Results reveal the relevance of environmental sustainability for both employment and labor productivity growth. However, the significance diminishes when addressing endogeneity comprehensively, alluding that any relation between environmentally sustainable practices and jobs growth is more complex and needs time to work. The decelerating job-creation effect of sustainability investments is however confirmed for the high-skill firms, while low-skill firms benefit from labor productivity gains spurred by such investment. Geographically, Central Europe sees more pronounced labor productivity impacts, possibly due to its higher development and sustainability-awareness levels as compared to Southeast Europe and the Commonwealth of Independent States. |
| Date: | 2023–10 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2310.18989&r=tid |
| By: | Cesar Barreto; Robert Grundke; Zeev Krill |
| Abstract: | The green transformation of the economy is expected to lead to a sharp reduction in employment in carbon-intensive industries. For designing policies to support displaced workers, it is crucial to better understand the cost of job loss, whether there are specific effects of being displaced from a carbon-intensive sector and which workers are most at risk. By using German administrative labour market data and focusing on mass layoff events, we estimate the cost of involuntary job displacement for workers in high carbon-intensity sectors and compare it with the displacement costs for workers in low carbon-intensity sectors. We find that displaced workers from high carbon-intensity sectors have, on average, higher earnings losses and face stronger difficulties in finding a new job and recovering their earnings. Our results indicate that this is mainly due to human capital specificity, the regional clustering of carbon-intensive activities and higher wage premia in carbon-intensive firms. Workers displaced in high carbon-intensity sectors are older, face higher local labour market concentration and have fewer outside options for finding jobs with similar skill requirements. They have a higher probability to switch occupations and sectors, move to occupations that are more different in terms of skill requirements compared to the pre-displacement job, and are more likely to change workplace districts after displacement. Women, older workers and those with vocational degrees as well as workers in East Germany, experience particularly high costs in case they are displaced from high carbon-intensity sectors. |
| Keywords: | carbon-intensive sectors, difference-in-differences, green transition, human capital specificity, Job loss effect, labour displacement, labour market concentration, labour reallocation |
| JEL: | J24 J31 J42 J63 J64 J65 Q52 |
| Date: | 2023–11–13 |
| URL: | http://d.repec.org/n?u=RePEc:oec:ecoaaa:1774-en&r=tid |
| By: | Elhanan Helpman |
| Abstract: | Empirical studies have found that enhanced foreign competition can encourage or discourage innovation. To address this relationship, I examine a market structure in which a small number of large multi-product oligopolists compete with a large number of small single-product firms in the same industry. The single-product firms are short-lived while the multi-product firms live forever, and the large firms invest in innovation in order to enlarge their product spans. All firms export. I show that an increase in the competitiveness of foreign firms can increase or reduce innovation efforts of a large multi-product firm. Moreover, changes in the incentives to innovate can be different for more-productive and less-productive oligopolists. As a result, aggregate sectoral innovation may rise or decline, depending on the productivity distribution of the oligopolists. I also show that changes in short-term operating profits may not be aligned with changes in the incentives to invest in innovation. |
| JEL: | D43 F1 L1 |
| Date: | 2023–11 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:31840&r=tid |
| By: | Bridget Kauma; Giordano Mion |
| Abstract: | We propose a new data resource that attempts to overcome limitations of standard firm-level datasets for the UK (like the ARD/ABS) by building on administrative data covering the population of UK firms with at least one employee. We also construct a similar dataset for France and use both datasets to: 1) Provide some highlights of the data and an overall picture of the evolution of aggregate UK and French productivity and markups: 2) Analyse the spatial distribution of productivity in both countries at a fine level of detail - 228 Travel to Work Areas (TTWAs) for the UK and 297 Zones da'emploi (ZEs) for France - while focusing on the role of economic density. Our findings suggest that differences in firm productivity across regions are magnified in the aggregate by an increasing productivity return of density along the productivity distribution. |
| Keywords: | firm-level dataset, merging, BSD, FAME, VAT, FICUS, FARE, productivity, markups, UK, France, regional disparities, density |
| Date: | 2023–11–01 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp1955&r=tid |
| By: | Grillitsch, Markus (CIRCLE, Lund University); Asheim, Björn (CIRCLE, Lund University); Fünfschilling, Lea (CIRCLE, Lund University); Kelmenson, Sophie (University of North Carolina at Chapel Hill); Lowe, Nicola (CIRCLE, Lund University); Lundquist, Karl Johan (CIRCLE, Lund University); Mahmoud, Yahia (CIRCLE, Lund University); Martynovich, Mikhail (CIRCLE, Lund University); Mattson, Pauline (CIRCLE, Lund University); Miörner, Johan (CIRCLE, Lund University); Nilsson, Magnus (CIRCLE, Lund University); Schubert, Torben (CIRCLE, Lund University) |
| Abstract: | Rescaling as a concept has been used to investigate and explain shifting patterns in economic and industrial development. This ranges from processes explaining the shift towards globalisation in the 1980s to current calls for shifts towards decarbonisation, national security, and more even development, which profoundly affect the organisation of economies and industries. This paper aims to unpack the notion of rescaling, identify and elaborate on different dimensions of rescaling, and use rescaling as conceptual and analytical lens to discuss and understand shifting patterns in economic and industrial development. We explore the potential of rescaling to capture the complex processes underpinning such shifts in patterns with a unifying language that connects multiple disciplinary perspectives. It is also relevant from a societal perspective as rescaling has been used as a strategy to affect the patterns in economic and industrial development. |
| Keywords: | economic development; industrial dynamics; globalisation; technological regimes; industrial policy; sustainable development |
| JEL: | F02 F50 F60 L50 L60 O10 O30 |
| Date: | 2023–11–07 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:lucirc:2023_011&r=tid |
| By: | Bottasso, Anna (University of Genoa); Conti, Maurizio (University of Genoa); Ferrara, Antonella Rita (University of Calabria); Robbiano, Simone (University of Eastern Piedmont) |
| Abstract: | The focus of this study is to assess the causal impact of the connection of a local area to a high-speed rail network (HSR) on firms' total factor productivity (TFP). The quasi-random location of the HSR station in the Italian city of Reggio Emilia is exploited in a Difference-in Differences (DiD) research design applied to a large sample of firms, observed over the period 2010-2018. The results suggest that the opening of the HSR station improved treated firms' TFP of about 5%; in particular, such effect is larger for firms closer to the HSR station and slightly increases over the sample period. We also find that the impact of the connection to the HSR station is heterogeneous across industries and depends on firms' size and past productivity. Overall results are robust to a large number of sensitivity checks and falsification tests. |
| Keywords: | transport infrastructure, Difference-in-Differences, total factor productivity |
| JEL: | C50 D24 L92 R30 |
| Date: | 2023–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16572&r=tid |
| By: | Henrekson, Magnus (Research Institute of Industrial Economics (IFN)); Sandström, Christian (Jönköping International Business School, Jönköping, Sweden); Stenkula, Mikael (Research Institute of Industrial Economics (IFN)) |
| Abstract: | This paper integrates findings from several different case studies on Mission-Oriented Innovation Policies (MOIPs) and makes use of existing literature to briefly describe three other missions: The War on Cancer, homeownership in the United States, and the Swedish Million Program. Together with the analyses in the contributions in the volume Moonshots and the New Industrial Policy: Questioning the Mission Economy, seven takeaways regarding mission-oriented innovation policies are developed and described: 1) wicked problems cannot be solved through missions, 2) politicians and government agencies are not exempt from self-interest, 3) MOIPs are subject to rent-seeking and mission capture, 4) policymakers lack information to design MOIPs, 5) MOIPs distort competition, 6) government support programs distort incentives and result in moral hazard, and 7) MOIPs ignore opportunity costs. These seven takeaways are illustrated using the cases described in this essay and in other contributions in the above-mentioned volume. |
| Keywords: | Mission-oriented policies; Innovation policy; New industrial policy; Moonshots; Rent seeking; Public choice |
| JEL: | H50 L26 L52 O31 O38 P16 |
| Date: | 2023–11–06 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:iuiwop:1478&r=tid |