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on Technology and Industrial Dynamics |
| By: | Florencia Jaccoud; Fabien Petit; Tommaso Ciarli; Maria Savona |
| Abstract: | This paper examines the labor market implications of investment in automation over the life cycle of ICT and robot technologies from 1995 to 2017 in 163 European regions. We first identify major technological breakthroughs during this period for these automation technologies and identify the phases of acceleration and deceleration in investment. We then examine how exposure to these automation technologies affects employment and wages across these different phases of their life cycle. We find that the negligible long term impact of automation on employment conceals significant short term positive and negative effects within phases of the technology life cycle. We also find that the negative impact of ICT investment on employment is driven by the phase of the cycle when investment decelerates (and the technology is more mature). The phases of the technology life cycles are more relevant than differences in regions’ structural characteristics, such as productivity and sector specialization in explaining the impact of automation on regional employment. |
| Keywords: | automation, technology life cycle, employment, wages, ICT, robot |
| JEL: | J21 O33 J31 |
| Date: | 2024 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_10987&r=tid |
| By: | Ms. Gabriela Cugat; Andrea Manera |
| Abstract: | We construct a novel measure of technology adoption, the Embodied Technology Imports Indicator (ETI), available for 181 countries over the period 1970-2020. The ETI measures the technological intensity of imports of each country by leveraging patent data from PATSTAT and product-level trade data from COMTRADE. We use this index to assess the link between capital flows and the diffusion of new technologies across emerging economies and low-income countries. Through a local projection difference-in-differences approach, we establish that variations in statutory capital flow regulations increase technological intensity by 7-9 percentage points over 5 to 10 years. This increase is accompanied by a significant 28-33 pp rise in the volume of gross capital inflows, driven primarily by foreign direct investment (21 pp increase), and a 9 to 12 percentage points shift in the level of Real GDP per capita in PPP terms. |
| Keywords: | Technology measurement; Technology diffusion; Capital flows; Capital account openness. |
| Date: | 2024–03–01 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:2024/044&r=tid |
| By: | Runst, Petrik; Thomä, Jörg |
| Abstract: | The literature has established that young firms engaged in R&D exhibit a pronounced asymmetry in their economic performance, with high premia at the upper end of the conditional growth distribution. We argue that this binary view - i.e., R&D-oriented firms versus all others - is somewhat limited. In particular, non-R&D innovation activity should be treated as an important category in its own right, and that its sui generis mode of learning is reflected in a distinct growth pattern. We examine data from the German IAB/ZEW Start-up Panel. Our evidence suggests that young non-R&D innovators also exhibit asymmetric and improved economic performance relative to non-innovators, although less so than R&D firms. Our results also suggest that firms engaged in non-R&D innovation grow in a less risky and costly way than R&D innovators, and that a young firm's decision whether to engage in R&D for the purpose of innovation and growth can therefore usefully be understood as being driven by a specific risk-return trade-off. |
| Keywords: | Firm growth, R&D, non-R&D innovation, Modes of innovation |
| JEL: | D21 L11 L25 L26 O31 |
| Date: | 2024 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ifhwps:285360&r=tid |
| By: | Wagner, Joachim |
| Abstract: | The use of cloud computing by firms can be expected to go hand in hand with higher productivity, more innovations, and lower costs, and, therefore, should be positively related to export activities. Empirical evidence on the link between cloud computing and exports, however, is missing. This paper uses firm level data for manufacturing enterprises from the 27 member countries of the European Union taken from the Flash Eurobarometer 486 survey conducted in February - May 2020 to investigate this link. Applying standard parametric econometric models and a new machine-learning estimator, Kernel-Regularized Least Squares (KRLS), we find that firms which use cloud computing do more often export, do more often export to various destinations all over the world, and do export to more different destinations. The estimated cloud computing premium for extensive margins of exports is statistically highly significant after controlling for firm size, firm age, patents, and country. Furthermore, the size of this premium can be considered to be large. Extensive margins of exports and the use of cloud computing are positively related. |
| Keywords: | Cloud computing, exports, firm level data, Flash Eurobarometer 486, kernel-regularized least squares (KRLS) |
| JEL: | D22 F14 |
| Date: | 2024 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:kcgwps:285359&r=tid |
| By: | Yoshimichi Murakami (Research Institute for Economics and Business Administration, Kobe University, JAPAN) |
| Abstract: | Local sourcing of intermediate inputs by foreign affiliates is a major source of the positive spillover effects of foreign direct investments (FDIs) in emerging countries. However, few studies have analyzed the determinants of local sourcing; studies using panel data in a specific emerging country are particularly rare. Considering that Chile is well-integrated into global value chains (GVCs) and that its position in GVCs is relatively upstream compared to that of other Latin American countries, this study empirically analyzes whether foreign affiliates' upstream positions have positive effects on their local sourcing, which is defined as the share of local material inputs to total costs. By matching industry-level panel data, including positions in GVCs, to plant-level panel data, this study constructs a unique dataset for the period from 1995 to 2006. We find that the upstream positions of foreign affiliates in GVCs are positively associated with the share of local material inputs to the total costs. We find that this positive effect is robust to the difference in entry modes between joint ventures and wholly owned subsidiaries, use of lagged affiliate-level variables, exclusion of affiliates with changes in industry affiliation, and different periods of analysis. Moreover, we find that the magnitude of the coefficient of the GVC position index is substantially larger than that of a previous study that analyzed other developing countries. Thus, the findings indicate that foreign affiliates operating in upstream industries have successfully developed backward linkages with local suppliers in Chile, contrary to the traditional view that FDI in natural-resource-related sectors has an enclave nature with very limited backward linkages. Therefore, this study provides new evidence on the role of FDI for productive linkages in resource-based economies. |
| Keywords: | Global value chains (GVCs); Upstream position; Foreign direct investment (FDI); Local sourcing; Chile |
| JEL: | F21 F23 F61 O54 |
| Date: | 2024–03 |
| URL: | http://d.repec.org/n?u=RePEc:kob:dpaper:dp2024-08&r=tid |
| By: | Stan Metcalfe (Manchester Institute of Innovation Research, The University of Manchester) |
| Abstract: | This lecture explores the evolution of economics as a discipline during 1870-1920, focusing on the critical question of wealth creation from knowledge. It highlights the tension between understanding economic structures and their transformative growth, with special attention to Alfred Marshall and Joseph Schumpeter's insights on the evolving nature of capitalism and innovation's role in economic development. By contrasting their views — Schumpeter's emphasis on disruptive innovation and Marshall's on gradual change — the lecture underscores the significance of innovation and knowledge in driving economic transformation. This discussion aims to illuminate the complex relationship between knowledge, innovation, and economic dynamics, essential for understanding the workings of modern economies. |
| Keywords: | Economic Evolution, Innovation and Growth, Schumpeter and Marshall, Wealth from Knowledge, Historical Economics |
| Date: | 2024–03 |
| URL: | http://d.repec.org/n?u=RePEc:bdj:smioir:2024-02&r=tid |
| By: | Lee, Neil; Fransham, Mark; Bukowski, Pawel |
| Abstract: | Spatial inequality in economic outcomes is increasingly seen as a problem for national economies. This paper considers spatial inequality in the UK labour market, its causes, and potential policy solutions. Relative to other European countries, the UK is highly spatially uneven, but it is not as unequal as the United States. The most common explanations for growing spatial inequality are economic, in particular the linked processes of manufacturing decline, the rise in knowledge-based services, and London’s growth as an international service hub. However, these explanations ignore the importance of spatial labour market institutions on different local economies. In this paper we argue that labour market institutions are one of the key missing explanations for the changing patterns of spatial inequality in the UK, and that the impact of labour market policy is likely to dwarf the limited funding provided for local economic development policy. We conclude with some suggestions for how policy might better address spatial labour market inequality in the UK and start to create good jobs across the country. |
| Keywords: | public policy; labour markets; inequality; regions; ES/V013548/1 |
| JEL: | J08 N90 R00 |
| Date: | 2024–03–01 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:122224&r=tid |
| By: | Andrés Rodríguez-Pose; Lewis Dijkstra; Hugo Poelman |
| Abstract: | While in recent times many regions have flourished, many others are stuck —or are at risk of becoming stuck— in a development trap. Such regions experience decline in economic growth, employment, and productivity relative to their neighbours and to their own past trajectories. Prolonged periods in development traps are leading to political dissatisfaction and unrest. Such discontent is often translated into support for anti-system parties at the ballot box. In this paper we study the link between the risk, intensity, and duration of regional development traps and the rise of discontent in the European Union (EU) —proxied by the support for Eurosceptic parties in national elections between 2013 and 2022— using an econometric analysis at a regional level. The results highlight the strong connection between being stuck in a development trap, often in middle- or high-income regions, and support for Eurosceptic parties. They also suggest that the longer the period of stagnation, the stronger the support for parties opposed to European integration. This relationship is also robust to considering only the most extreme Eurosceptic parties or to including parties that display more moderate levels of Euroscepticism. |
| Keywords: | discontent, Euroscepticism, development trap, economic growth, employment, productivity, regions, EU |
| JEL: | D72 R11 R58 |
| Date: | 2024–03 |
| URL: | http://d.repec.org/n?u=RePEc:egu:wpaper:2405&r=tid |