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on Technology and Industrial Dynamics |
| By: | Kruglov, Panteleimon |
| Abstract: | This study explores the relationship between R&D intensity, as a measure of innovation, and financial performance among S&P 500 companies over 100 quarters from 1998 to 2023, including multiple crisis periods. It challenges the conventional wisdom that larger companies are more prone to innovate, using a comprehensive dataset across various industries. The analysis reveals diverse associations between innovation and key financial indicators such as firm size, assets, EBITDA, and tangibility. Our findings underscore the importance of innovation in enhancing firm competitiveness and market positioning, highlighting the effectiveness of countercyclical innovation policies. This research contributes to the debate on the role of R&D investments in driving firm value, offering new insights for both academic and policy discussions. |
| Keywords: | Innovation, Financial Crises, financial valuation |
| JEL: | E44 O33 |
| Date: | 2024–03–07 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:120404&r=tid |
| By: | Arntz, Melanie; Findeisen, Sebastian; Maurer, Stephan; Schlenker, Oliver |
| Abstract: | This study quantifies the relationship between workplace digitalization, i.e., the increasing use of frontier technologies, and workers' health outcomes using novel and representative German linked employer-employee data. Based on changes in individual-level use of technologies between 2011 and 2019, we find that digitalization induces similar shifts into more complex and service-oriented tasks across all workers, but exacerbates health inequality between cognitive and manual workers. Unlike more mature, computer-based technologies, frontier technologies of the recent technology wave substantially lower manual workers' subjective health and increase sick leave, while leaving cognitive workers unaffected. We provide evidence that the effects are mitigated in firms that provide training and assistance in the adjustment process for workers. |
| Keywords: | health, inequality, technology, machines, automation, tasks, capital-labor substitution |
| JEL: | I14 J21 J23 J24 O33 |
| Date: | 2024 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:cexwps:289440&r=tid |
| By: | Francisco J. Buera; Nicholas Trachter |
| Abstract: | How should industrial policies be directed to reduce distortions and foster economic development? We study this question in a multi-sector model with technology adoption, where the production of goods and modern technologies features rich network structures. We provide simple formulas for the sectoral policy multipliers, and provide insights regarding the power of alternative policy instruments. We devise a simple procedure to estimate the model parameters and the distribution of technologies across sectors, which we apply to Indian data. We find that technology adoption greatly amplifies the multipliers' magnitudes, and it changes the ranking of priority sectors for industrial policy. Further, we find that adoption subsidies are the most cost-effective instrument for promoting economic development. |
| JEL: | O11 O14 O25 O41 |
| Date: | 2024–03 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:32230&r=tid |
| By: | Anton Korinek; Donghyun Suh |
| Abstract: | We analyze how output and wages behave under different scenarios for technological progress that may culminate in Artificial General Intelligence (AGI), defined as the ability of AI systems to perform all tasks that humans can perform. We assume that human work can be decomposed into atomistic tasks that differ in their complexity. Advances in technology make ever more complex tasks amenable to automation. The effects on wages depend on a race between automation and capital accumulation. If the distribution of task complexity exhibits a sufficiently thick infinite tail, then there is always enough work for humans, and wages may rise forever. By contrast, if the complexity of tasks that humans can perform is bounded and full automation is reached, then wages collapse. But declines may occur even before if large-scale automation outpaces capital accumulation and makes labor too abundant. Automating productivity growth may lead to broad-based gains in the returns to all factors. By contrast, bottlenecks to growth from irreproducible scarce factors may exacerbate the decline in wages. |
| Date: | 2024–03 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2403.12107&r=tid |
| By: | J. Daniel Kim; Joonkyu Choi; Nathan Goldschlag; John Haltiwanger |
| Abstract: | Using administrative data from the U.S. Census Bureau, we introduce a new public-use database that tracks activities across firm growth distributions over time and by firm and establishment characteristics. With these new data, we uncover several key trends on high-growth firms—critical engines of innovation and economic growth. First, the share of firms that are high-growth has steadily decreased over the past four decades, driven not only by falling firm entry rates but also languishing growth among existing firms. Second, this decline is particularly pronounced among young and small firms, while the share of high-growth firms has been relatively stable among large and old firms. Third, the decline in high-growth firms is found in all sectors, but the information sector has shown a modest rebound beginning in 2010. Fourth, there is significant variation in high-growth firm activity across states, with California, Texas, and Florida having high shares of high-growth firms. We highlight several areas for future research enabled by these new data. |
| Keywords: | Firm Growth, Business Dynamism, Entrepreneurship, Business Dynamics Statistics |
| JEL: | L11 L25 L26 O30 O40 |
| Date: | 2024–03 |
| URL: | http://d.repec.org/n?u=RePEc:cen:wpaper:24-11&r=tid |
| By: | Paolo Buonanno; Francesco Cinnirella; Elona Harka; Marcello Puca |
| Abstract: | Access to useful knowledge is crucial for fostering modern economic growth. We show, for the first time, that knowledge accumulated and stored in monasteries was useful for innovation. In 1866, anticlerical legislation in Italy led to the suppression of religious orders, the expropriation of their properties, and the transfer of their manuscripts to local public libraries. From a contemporary survey on public libraries, we construct a unique dataset on municipalities which received monastic volumes. This information is then linked to newly digitized annual data on patents issued in Italy between 1863 and 1883. Difference-in-differences estimates show that municipalities exposed to an influx of monastic manuscripts experienced a significant increase in innovation. The effect is driven by the increase in the number of manuscripts in previously existing libraries. We show that the innovation advantage also persisted in the long run and had no impact on human capital. |
| Keywords: | books, manuscripts, knowledge, religion, monastery, libraries, patents |
| JEL: | N33 O30 Z12 |
| Date: | 2024 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_11015&r=tid |
| By: | Serenella Caravella; Giovanni Cerulli; Francesco Crespi; Eleonora Pierucci |
| Abstract: | This paper analyses the growth-enhancing effect of different types of innovative activities, i.e., standard-innovation and eco-innovation by focusing on the potential role of exports in mediating the innovation-growth nexus. The empirical study is carried out on a representative sample of Italian firms built by integrating data from the Italian CIS-Community Innovation Survey with the ASIA-FRAME database of the Italian National Statistical Office (ISTAT), which reports information on export values and employment dynamics. The econometric analysis applies Structural Equations Models (SEM) and a two-step counterfactual analysis. Results show that export activities, spurred by engagement in innovation efforts, represent a powerful transmission channel through which innovation displays its effect on firms’ growth. Moreover, results highlight the existence of some heterogeneity in the capacity of different types of innovation activities, i.e., standard-innovation and eco-innovation to leverage the export channel to foster firms’ growth. In particular, the empirical evidence has identified a stronger indirect export-mediated impact for Efficiency-improving (EFI) than for Pollutionreducing (PR) Eco-innovation. |
| Keywords: | Eco-innovation, Export-mediated effect, Innovation-growth nexus |
| JEL: | Q52 Q55 L25 |
| Date: | 2024–03 |
| URL: | http://d.repec.org/n?u=RePEc:rtr:wpaper:0282&r=tid |
| By: | Nakatani, Ryota |
| Abstract: | Multifactor productivity (MFP) growth is an imperative economic engine. MFP dynamism across five advanced and seven developing countries from 1996 to 2015 is analyzed, elucidating its association with financing and intangible assets. Debt is manifested by its inverted U-shaped nonlinear relationship with MFP advancement, while corporate cash holdings are negatively (positively) associated with MFP development in five (three) countries. The heterogeneous relationships between intangible assets and MFP growth are identified across industries, countries, and time; intangible assets are requisite MFP growth enhancers for manufacturing in developing countries, for service businesses in advanced countries, and for the period after the global financial crisis. The greater the productivity effect of intangible assets is, the higher a country’s per-capita income and/or governance quality becomes. Additionally, the results evince the catching-up of MFP to the technological frontier. Moreover, older firms exhibit slower MFP growth than their peers, whilst the positive effects of firm size on MFP growth are larger in high-tech and knowledge-intensive industries. |
| Keywords: | Industrial Analysis; Multifactor Productivity Growth; Cash Holding; Debt Financing; Knowledge and Technology Intensive Sectors; Intangible Assets |
| JEL: | D22 D24 G32 L25 L6 L8 M21 O34 O57 |
| Date: | 2024–03–20 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:120503&r=tid |
| By: | Roger Masclans-Armengol; Sharique Hasan; Wesley M. Cohen |
| Abstract: | This paper uses a large language model to develop an ex-ante measure of the commercial potential of scientific findings. In addition to validating the measure against the typical holdout sample, we validate it externally against 1.) the progression of scientific findings through a major university’s technology transfer process and 2.) firms’ use of the academic science of major American research universities. We then illustrate the measure’s utility by applying it to two questions. First, does the patenting of academic research by universities impede its breadth of use by firms? Second, to illustrate how this measure can advance our understanding of the determinants of firms’ use of science generally, we use it to analyze how one factor, universities’ reputations for generating commercializable science, impacts firms’ use of academic science. For the former question, using our measure to control for commercializable science, we find that patenting does not dampen the dissemination of academic science in industry. For the second, we find that reputation per se, apart from the production of commercializable science, impacts industry’s use of science, especially for that science with high commercial potential, implying that the commercializable science of less prominent universities is disproportionately overlooked by industry. |
| JEL: | O3 O30 O31 O32 O33 O34 O35 O36 O38 O39 |
| Date: | 2024–03 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:32262&r=tid |
| By: | Bouscasse, P.; Nakamura, E.; Steinsson, J. |
| Abstract: | We provide new estimates of the evolution of productivity in England from 1250 to 1870. Real wages over this period were heavily influenced by plague-induced swings in the population. We develop and implement a new methodology for estimating productivity that accounts for these Malthusian dynamics. In the early part of our sample, we find that productivity growth was zero. Productivity growth began in 1600—almost a century before the Glorious Revolution. We estimate productivity growth of 3% per decade between 1600 and 1760, which increased to 6% per decade between 1770 and 1860. Our estimates attribute much of the increase in output growth during the Industrial Revolution to a falling land share of production, rather than to faster productivity growth. Our evidence helps distinguish between theories of why growth began. In particular, our findings support the idea that broad-based economic change preceded the bourgeois institutional reforms of 17th century England and may have contributed to causing them. We estimate relatively weak Malthusian population forces on real wages. This implies that our model can generate sustained deviations from the “iron law of wages†prior the Industrial Revolution. |
| JEL: | N13 O40 J10 |
| Date: | 2023–03–07 |
| URL: | http://d.repec.org/n?u=RePEc:cam:camjip:2309&r=tid |
| By: | Pardesi, Mantej (ROA / Human capital in the region, RS: GSBE other - not theme-related research) |
| Abstract: | In this paper, I study how converging to the productivity frontier influences a firm’s training investments. Although productivity growth induces a high-skill bias in firm’s workforce structure, little is known about its training incentives for vocational and technical skills. I address endogeneity in productivity growth using a two-stage control function approach where I use productivity shocks as exogenous changes to a firm’s position in intra-industry distribution. I find that closing the gap to the frontier leads to a negative effect on firm’s investment in training in vocational skills. The negative effect is stronger for large, multi-plant, innovative and technical advanced firms. Using a model for firm sponsored training, I explain the results via a technology effect, cost of training effect and labour substitution effect. First, productivity convergence induces technology upgradation that is skill biased against vocational skills. Second, high expected costs of training augments this skill-biasedness. Third, compositional shift in workforce induces firms to demand fewer vocational and technical skills. |
| JEL: | J24 J42 D24 D23 |
| Date: | 2024–04–04 |
| URL: | http://d.repec.org/n?u=RePEc:unm:umagsb:2024003&r=tid |
| By: | Davide Melcangi; Silvia Sarpietro |
| Abstract: | This paper presents empirical evidence on the nature of idiosyncratic shocks to firms and discusses its role for firm behavior and aggregate fluctuations. We document that firm-level sales and productivity are hit by heavy-tailed shocks and follow a nonlinear stochastic process, thus departing from the canonical linear. We estimate a state-of-the-art model to flexibly capture the rich dynamics uncovered in the data and characterize the drivers of nonlinear persistence and non-Gaussian shocks. We show that these features are crucial to get empirically plausible volatility and persistence of micro-originated (granular) aggregate fluctuations. |
| Keywords: | firm dynamics; productivity; nonlinearities; non-Gaussian shocks; granular fluctuations |
| JEL: | D22 E23 E32 |
| Date: | 2024–03–01 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fednsr:97929&r=tid |