|
on Technology and Industrial Dynamics |
| By: | Frattini, Federico Fabio; Vona, Francesco; Bontadini, Filippo; Colantone, Italo |
| Abstract: | What are the job multipliers of the green industrialization? We tackle this question within EU regions over the period 2003-2017, building a novel measure of green manufacturing penetration that combines green production and regional employment data. We estimate local job multipliers of green penetration in a long-difference model, using a shift-share instrument that exploits plausibly exogenous changes in non-EU green innovation. We find that a 3-years change in green penetration per worker increases the employment-to-active population ratio by 0.11 pp. The effect is: persistent both in manufacturing and outside manufacturing; halved by agglomeration effects that increase the labour market tightness; stronger for workers with high and low-education; and present also in regions specialized in polluting industries. When focusing on large shocks in a staggered DiD design, we find ten times larger effects, particularly in earlier periods. |
| Keywords: | Climate Change, Environmental Economics and Policy, Industrial Organization, Labor and Human Capital |
| Date: | 2025–06–04 |
| URL: | https://d.repec.org/n?u=RePEc:ags:feemwp:358792 |
| By: | Dandan Xia; Bruno Cassiman; David Wehrheim |
| Abstract: | This study leverages advanced text-analysis techniques to investigate how increased product market rivalry, induced by Chinese import competition, affects innovation among incumbent U.S. firms in the electronic and electrical appliance industry. We measure the similarity between the product descriptions of U.S. firms and those of Chinese importers, thus capturing firm-level competitive pressure. Employing a continuous difference-in-differences framework, we compare innovation outcomes of U.S. firms more directly competing with Chinese importers to those facing lower competitive pressure, over a five-year period before and after initial Chinese market entry. We find that incumbent U.S. firms significantly increase their quality-weighted patent production, create more newproduct patents, and strategically diversify into new technological and business segments when confronted with heightened competition. Our findings highlight the role of import-driven rivalry in stimulating strategic innovation and illustrate how text-based similarity measures can effectively quantify firm-level competition, providing novel methodological tools for strategy scholars. |
| Date: | 2025–05–23 |
| URL: | https://d.repec.org/n?u=RePEc:ete:msiper:765722 |
| By: | Ashish Arora; Sharon Belenzon; Larisa C. Cioaca; Elia Ferracuti |
| Abstract: | We quantify the private returns to government R&D contracts awarded to firms. We present new evidence that R&D contracts not only finance innovation but also embed an implicit government guarantee of noncompetitive future procurement for the winning R&D contractor. We measure its private value by analyzing stock market reactions to news about R&D contract awards. Using all federal R&D contracts awarded to U.S. publicly traded firms from 1984 through 2015, we find that the average private return on an R&D contract is 19 times its maximum potential revenue. However, returns are highly skewed, with only 7.5% of firms receiving at least one top-quartile contract. Private returns are linked to future production contracts, but only for noncompetitive awards to vertically integrated or large firms. These results suggest that a procurement regime bundling R&D and production contracts enhances value for firms with production capability. We develop a conceptual framework to clarify this innovation policy lever. |
| JEL: | H57 O31 O38 |
| Date: | 2025–05 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:33880 |
| By: | Castellacci, Fulvio |
| Abstract: | Innovation fosters economic growth and the long-run dynamics of national economies. However, recent literature shows that innovation is also a source of increasing income inequalities. Public policies face thus an important trade-off between efficiency and equity effects of innovation. What are the possible policy strategies to address this trade-off? The paper presents a model in which innovations can be developed by both private firms and public companies. Technological change increases the profit share in the long-run, exacerbating income inequalities between firms’ owners, employed workers, and the unemployed. I empirically calibrate the model for the US economy and carry out a simulation analysis to investigate the effects of different policies aimed at reducing the inequality effects of innovation. Specifically, the analysis compares two distinct policy strategies: one is based on a standard economic policy approach that increases taxes to finance welfare spending; the other is based on a new approach – the Entrepreneurial State – in which the profits of innovations developed by public R&D companies are used to finance welfare programs. The results point out the advantages and drawbacks of different strategies and show that the optimal policy strategy largely depends on the policy maker’s preferences regarding the income distribution. |
| Keywords: | Innovation; income inequalities; labor share; public policies; Entrepreneurial State; public R&D. |
| JEL: | O1 O30 O4 O40 |
| Date: | 2024–04 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:124900 |
| By: | Gianluca Biggi; Elisa Giuliani; Arianna Martinelli; Julia Mazzei |
| Abstract: | Earlier research using the directed technical change framework argues that with the right mix of policies, governments can steer firms' R&D efforts away from harmful technologies toward supposedly cleaner alternatives. This article puts that assumption to the test by examining the impact of the 2004 Stockholm Convention, which banned 12 highly toxic persistent organic pollutants (POPs), on the development of alternative chemical compounds. Does regulation truly drive innovation toward safer substitutes, or does it create new risks under a different guise? Our results show that rather than steering innovation towards safer alternatives, the Stockholm Convention has incentivized the development of patents containing s.c. "regrettable" chemicals -i.e. chemicals that, while not banned under the Convention, exhibit POP-like characteristics, particularly high toxicity and persistence. Our study suggests that a closer inspection of the substitute technologies is crucial to understanding the effectiveness of incentives set to replace dirty technologies with cleaner ones. |
| Keywords: | directed technical change, persistent organic pollutants (POPs), Stockholm Convention, policy evaluation, patent toxicity |
| Date: | 2025–06–09 |
| URL: | https://d.repec.org/n?u=RePEc:ssa:lemwps:2025/23 |
| By: | George Chondrakis; Carlos J. Serrano; Rosemarie Ziedonis |
| Abstract: | Markets for technology provide a vibrant channel through which firms purchase ownership rights to patented inventions. Although such transactions enable firms to secure access to intangible assets originating beyond their borders, they also provide cues to competitors regarding the purchasing firm’s technological investments. This study explores the timing of strategic disclosure of patent acquisitions and the conditions under which firms trade the benefits of competitor deterrence through early recordation for those of secrecy through delayed disclosure. Using evidence on the lag between the execution and recording dates for US patents purchased by publicly traded corporations, we predict and find earlier disclosure of patent acquisitions when the buyer works on related technologies and is better positioned to enforce the patents (i.e., is large and relatively litigious). As predicted by the model, we also find that the buyer delays disclosure when the seller is a large firm, suggesting that buyers take advantage of the seller’s ability to deter competitors while keeping the transaction secret. Additional analyses reveal that (a) regulatory changes reducing the value of keeping acquisitions of patent applications secret lead to shorter recording lags, and (b) increases in the enforceability of business method and software patents further accelerate the voluntary recording of patent ownership changes. The study provides new evidence on the tradeoffs that innovating firms face when determining the timing of disclosure for patents they have purchased in technology markets. |
| JEL: | O3 O32 O34 O38 |
| Date: | 2025–05 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:33783 |
| By: | Ufuk Akcigit; Harun Alp; Jeremy Pearce; Marta Prato |
| Abstract: | This paper explores the symbiotic relationship between transformative entrepreneurs and inventors, which is crucial for economic growth. We utilize microdata from Denmark to demonstrate that while the relationship between IQ and general entrepreneurship tends to be negative, it is strongly positive among transformative entrepreneurs. Transformative entrepreneurs, often with higher IQ and education levels, significantly drive R&D and business growth, thereby providing substantial opportunities for inventors. In contrast, average entrepreneurs are more influenced by their family’s entrepreneurship background. Our economic model links these dynamics to overall economic progress, highlighting how higher education influences career paths in entrepreneurship and invention. We identify talent misallocation caused by unequal education access, particularly affecting lower-income families. Our findings indicates the most effective policies strengthen the interplay between higher education, innovation, and entrepreneurship to foster transformative businesses and achieve long-run economic growth. |
| JEL: | J24 O31 O38 O47 |
| Date: | 2025–05 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:33766 |
| By: | Chiara Zisler; Patricia Palffy; Harald Pfeifer; Kerstin Pull; Uschi Backes-Gellner |
| Abstract: | This paper introduces teams' technology use as a contingency factor for the link between teams' boundary-spanning activities - such as regularly maintaining firm external or firm internal contacts, or memberships in multiple teams - and team innovativeness. Using novel, detailed data on the technology use of teams in a representative sample of over 3, 500 German firms, we derive distinct technological portfolios at the team level, comprising comprehensive tech use portfolios with advanced artificial intelligence (AI) applications, minimalistic tech use portfolios, and focused tech use portfolios heavily reliant on specialized technologies, such as Big Data or IT security. We find that the effectiveness of team boundary spanning in increasing team innovativeness strongly depends on a team’s technological portfolio. While boundary spanning is more vital for team innovativeness with either minimal or comprehensive technology use, it is less relevant for focused-tech teams. Our results emphasize the critical interplay between a team’s technological portfolio and the link between boundary-spanning activities and team innovativeness. We provide insights into how teams can better align their boundary-spanning activities with their technological portfolios to support team innovativeness. |
| Date: | 2025–05 |
| URL: | https://d.repec.org/n?u=RePEc:iso:educat:0243 |
| By: | Andrew J. Fieldhouse; Karel Mertens |
| Abstract: | Recent empirical evidence by Fieldhouse and Mertens (2024) points to a strong causal link between federal nondefense R&D funding and private-sector productivity growth, and large implied social returns to public R&D investment. We show that these high social return estimates broadly align with existing evidence on the social returns to private or total R&D spending. If the R&D increases authorized under the CHIPS and Science Act were fully appropriated, our modeling indicates a boost in U.S. productivity within a few years, reaching gains of 0.2–0.4% after seven years or more. At their peak, the direct productivity effects of the implied expansion in nondefense R&D alone would raise output by over $40 billion in a single year—exceeding total outlays from the CHIPS Act R&D provisions over a decade. The potential productivity impact of fiscal consolidations changing R&D spending is not clear ex ante. We show that in recent fiscal consolidations, cuts to federal R&D funding were largely borne by defense R&D, whereas funding for nondefense R&D was largely spared or was increased. Our evidence suggests that future deficit reduction efforts that instead emphasize cuts to nondefense R&D funding could have a larger adverse impact on productivity and economic growth than previous fiscal consolidations. |
| Keywords: | Public R&D; productivity; growth; innovation; fiscal consolidations |
| JEL: | E62 O38 O47 |
| Date: | 2025–05–14 |
| URL: | https://d.repec.org/n?u=RePEc:fip:feddwp:99990 |
| By: | Anton Korinek (University of Virginia); Joseph Stiglitz (Columbia University) |
| Abstract: | Rapid progress in new technologies such as AI has led to widespread anxiety about adverse labor market impacts. This paper asks how to guide innovative efforts so as to increase labor demand and create better-paying jobs while also evaluating the limitations of such an approach. We develop a theoretical framework to identify the properties that make an innovation desirable from the perspective of workers, including its technological complementarity to labor, the factor share of labor in producing the goods involved, and the relative income of the affected workers. Applications include robot taxation, factor-augmenting progress, and task automation. We find that steering technology becomes more desirable the less efficient social safety nets are. If technological progress devalues labor, the desirability of steering is at first increased, but beyond a critical threshold, it becomes less effective, and policy should shift toward greater redistribution. If labor's economic value diminishes in the future, progress should increasingly focus on enhancing human well-being rather than labor productivity. |
| Keywords: | technological progress, AI, inequality redistribution |
| JEL: | E64 D63 O3 |
| Date: | 2025–05–05 |
| URL: | https://d.repec.org/n?u=RePEc:thk:wpaper:inetwp232 |
| By: | Ping Wang; Tsz-Nga Wong |
| Abstract: | How large is the impact of artificial intelligence (AI) on labor productivity and unemployment? This paper introduces a labor-search model of technological unemployment, conceptualizing the generative aspect of AI as a learning-by-using technology. AI capability improves through machine learning from workers and in turn enhances their labor productivity, but eventually displaces workers if wage renegotiation fails. Three distinct equilibria emerge: no AI, some AI with higher unemployment, or unbounded AI with sustained endogenous growth and little impact on employment. By calibrating to the U.S. data, our model predicts more than threefold improvements in productivity in some-AI steady state, alongside a long-run employment loss of 23%, with half this loss occurring over the initial five-year transition. Plausible change in parameter values could lead to global and local indeterminacy. The mechanism highlights the considerable uncertainty of AI's impacts in the presence of labor-market frictions. In the unbounded-AI equilibrium, technological unemployment would not occur. We further show that equilibria are inefficient despite adherence to the Hosios condition. By improving job-finding rate and labor productivity, the optimal subsidy to jobs facing the replacement risk of AI can generate a welfare gain from 26.6% in the short run to over 50% in the long run. |
| JEL: | E2 J2 O30 O40 |
| Date: | 2025–05 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:33867 |
| By: | Elisa Celis; Lingxiao Huang; Nisheeth K. Vishnoi |
| Abstract: | The rapid rise of Generative AI (GenAI) tools has sparked debate over their role in complementing or replacing human workers across job contexts. We present a mathematical framework that models jobs, workers, and worker-job fit, introducing a novel decomposition of skills into decision-level and action-level subskills to reflect the complementary strengths of humans and GenAI. We analyze how changes in subskill abilities affect job success, identifying conditions for sharp transitions in success probability. We also establish sufficient conditions under which combining workers with complementary subskills significantly outperforms relying on a single worker. This explains phenomena such as productivity compression, where GenAI assistance yields larger gains for lower-skilled workers. We demonstrate the framework' s practicality using data from O*NET and Big-Bench Lite, aligning real-world data with our model via subskill-division methods. Our results highlight when and how GenAI complements human skills, rather than replacing them. |
| Date: | 2025–05 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2505.23432 |
| By: | Michael Landesmann (The Vienna Institute for International Economic Studies, wiiw) |
| Abstract: | Industrial policy has become a core item in the policy agenda of many governments as well as of the EU which has come up with many policy initiatives over the past two decades. This paper emphasises the important shifts taking place in the global economy with the rise of China but also of other emerging/ed economies that affect the competitiveness of the European economy and challenges its traditional comparative advantages. The challenge to the European economy is compounded by having been left behind in some of the most innovative areas and branches of economic activity (IT, most recently AI, quantum and cloud computing) and also lagging behind in important technological shifts in more traditional industries (such as EVs in the transport equipment industry). On top of this – but also linked to global economic developments – have come rather big ruptures in geo-political relationships such as the decline of multilateral institutions and increasing conflictual relationships amongst the major acting powers on the global political stage. We discuss in this paper the challenges that EU industrial policy has to meet given the trends in geo-politics and geo-economics. |
| Keywords: | EU, industrial policy, geo-economics, geo-politics, industrial restructuring |
| JEL: | F02 F42 F51 F6 L5 L16 L52 O25 O31 O33 |
| Date: | 2025–06 |
| URL: | https://d.repec.org/n?u=RePEc:wii:pnotes:pn:96 |
| By: | Yaroshevskyi, Artem |
| Abstract: | This study investigates how the transition to a green economy affects internal migration patterns across European Union regions. As carbon-intensive sectors decline due to decarbonization policies, certain regions experience structural economic changes that prompt labor reallocation and demographic shifts. Using a novel panel dataset at the NUTS-3 level (2011–2021), this paper estimates a series of random-effects models to assess how carbon-intensive regions differ in migration trends compared to unaffected areas. The analysis incorporates a range of socio-demographic and economic variables to test five hypotheses on the drivers of outmigration, including youth share, elderly population, regional wealth, and median male age. Results indicate that regions classified as “affected” by the green transition exhibit significantly higher outmigration rates. Moreover, interaction effects show that aging male populations amplify these migration trends, while other moderators—such as GDP per capita and youth share—have no significant impact. These findings contribute to the literature on just transitions by highlighting how demographic composition mediates the adverse effects of green restructuring. The paper emphasizes the need for targeted regional policies, particularly in aging and economically vulnerable areas, to ensure equitable outcomes of green economic transitions. |
| Keywords: | Green transition, internal migration, carbon-intensive regions, demographic structure, panel data, just transition, NUTS-3 regions, labor mobility. |
| JEL: | Q20 Q40 Q50 |
| Date: | 2025–05–01 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:124870 |