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on Technology and Industrial Dynamics |
| By: | Gaétan de Rassenfosse (Ecole polytechnique federale de Lausanne); Ling Zhou (Ecole polytechnique federale de Lausanne); |
| Abstract: | A patent system is a central tool in innovation policy. The prospect of monopolistic pricing supposedly encourages firms to innovate. However, there is scant empirical evidence supporting the existence of higher markups for patent-protected products. Using an original dataset that links consumer products to the patents that protect them, we study the impact of patent protection on product prices. Exploiting exogenous variations in patent status, we find that a loss of patent protection leads to an 8–10 percent drop in product prices. The price drop is larger for more important patents and is more pronounced in more competitive product markets. |
| Keywords: | innovation; markup; patent system; product; R&D incentive |
| JEL: | O31 O34 L11 D42 K11 |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:iip:wpaper:29 |
| By: | Kazuyuki MOTOHASHI; Naotoshi TSUKADA; Kenta IKEUCHI |
| Abstract: | Corporate scientists that are involved in scientific activities, often leading to research paper publications, are important for corporate innovation, since science-based innovation tends to be transformative, spanning the boundaries of existing R&D pipelines. Such scientists can also play a role as a bridge between academic researchers, injecting scientific knowledge from outside the firm. However, the publication of internal corporate scientific activities could benefit competitor firms, providing them with input towards their own transformative innovation. In this study, we analyze this trade-off using a linked dataset of research papers and patents (disambiguated by paper author and patent inventor information and patent citation in research papers) of Japanese firms. Specifically, we analyzed two aspects, (1) contribution of corporate scientist research papers to in-house innovation (patent) and (2) capacity of corporate scientists to absorb scientific findings from outside their firms to obtain high quality patents. Our findings indicate that corporate scientists contribute to both aspects of innovation in their firms. |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:eti:dpaper:25089 |
| By: | Tsambou, André Dumas; Diallo, Thierno Malick |
| Abstract: | Despite the growing evidence on the importance of African countries' participation in global value chains (GVCs), relatively little is known about the role of innovation. This paper tends to fill this gap by examining the effects of innovation on firms' GVC participation in francophone Africa. We rely on survey data covering over 9535 firms in 18 countries. Using propensity score matching and instrumental variable methods, we find strong evidence that innovation is positively related to firms' GVC participation, with large variation across innovation and GVC measures. We also find that the innovation impact varies according to firm size, with significant effects for small firms. |
| Keywords: | Innovation, Global Value Chains, Firm, Francophone Africa |
| JEL: | Q55 F14 D24 O55 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:sgscdp:327117 |
| By: | Federico Fabio Frattini (Fondazione Eni Enrico Mattei); Francesco Vona (University of Milan and Fondazione Eni Enrico Mattei); Filippo Bontadini (Luiss University and SPRU - University of Sussex); Italo Colantone (Bocconi University, GREEN Research Center, Baffi Research Centre, CESifo and Fondazione Eni Enrico Mattei) |
| 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: | Green industrialisation, Local job multipliers, Employment effects of the green transition, Shift-share IV design, Difference-in-differences |
| JEL: | J21 O14 R11 |
| Date: | 2025–06 |
| URL: | https://d.repec.org/n?u=RePEc:fem:femwpa:2025.13 |
| By: | Atsuki KOTANI; Kentaro NAKAJIMA; Tetsuji OKAZAKI; Yukiko SAITO |
| Abstract: | Innovations in military technology potentially drive significant societal transformations through applications to civilian use. This study aims to quantitatively measure the impact of military technology development on civilian innovation activities using prewar and wartime Japanese patent data from 1916 to 1945. By exploiting Japan's secret patent system, which classified particularly critical military-related technologies not disclosed to the public, we identify important technological developments. The result shows that the filing of secret patents led to a significant increase in the number of patents within the corresponding technological classifications. Furthermore, this effect is not limited to organizations that registered secret patents; a significant impact is also observed among organizations that did not register secret patents. This suggests that the development of militarily important technologies generates a substantial spillover effect on other organizations. |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:eti:dpaper:25093 |
| By: | Ufuk Akcigit; Harun Alp; Jeremy Pearce; Marta Prato |
| Abstract: | This paper studies how individuals sort into entrepreneurship and invention-related occupations and how their interactions shape innovation and economic growth. We develop an endogenous growth model in which occupational sorting jointly determines the supply of R&D talent and entrepreneurs’ demand for it. Empirically, using Danish microdata, we show that transformative entrepreneurs—those who hire R&D workers—tend to have higher IQ and education and build faster-growing firms than other entrepreneurs. Quantitatively, the estimated model indicates that financial barriers to education misallocate talent; alleviating them through education subsidies increases both demand and supply of R&D workers, raising innovation and long-run growth. Broad startup subsidies are ineffective. |
| Keywords: | entrepreneurship; R&D Policy; innovation; IQ; endogenous growth |
| JEL: | O31 O38 O47 J24 |
| Date: | 2025–09–01 |
| URL: | https://d.repec.org/n?u=RePEc:fip:fednsr:101780 |
| By: | Alessandra Bonfiglioli; Rosario Crinò; Mattia Filomena; Gino Gancia |
| Abstract: | We study the environmental impact of artificial intelligence (AI) using a novel dataset that links measures of AI penetration, the location of data centers and power plants, and CO2 emissions across US commuting zones between 2002 and 2022. Our analysis yields four main findings. First, exploiting a shift–share identification strategy, we show that localities more exposed to AI experience relatively faster emissions growth. Second, decomposition results indicate that scale effects dominate, while changes in industrial composition exert at most a weak mitigating effect; at the same time, electricity generation becomes more carbon intensive. Third, AI penetration raises dependence on non-renewable electricity. Fourth, proximity to data centers is a key driver of this effect, as nearby power plants shift toward greater fossil fuel use. These findings suggest that, absent a rapid decarbonization of power generation, the diffusion of AI is likely to exacerbate environmental externalities through the energy demand of data centers. |
| Keywords: | artificial intelligence, data centers, environment, emissions, pollution |
| JEL: | O33 Q55 R11 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12158 |
| By: | Matteo Cervellati; Gerrit Meyerheim; Uwe Sunde |
| Abstract: | The relation between income and democracy remains debated, empirically and theoretically. We propose a broader perspective that goes beyond a uni-directional and monocausal interpretation of the income-democracy nexus by focusing on the neglected role of the transition from economic stagnation to sustained growth. We illustrate our argument with an integrated model of long-run growth and democratisation that delivers two general insights. First, rather than higher income levels \emph{per se}, it is the onset of sustained growth that increases the likelihood of democratisation. Intuitively, the faster accumulation of productive factors, such as human capital, reduces conflicts of interest and hence the elite's resistance to democracy. Second, the economic consequences of democracy are amplified when democratisation occurs after the transition to growth. We explore the validity of these novel predictions by revisiting influential empirical studies and exploiting variation in the timing of the transition to sustained growth. Our evidence is consistent with the theoretical predictions, shedding new light on the interpretation of earlier mixed findings. |
| Keywords: | democratisation, demographic transition, unified growth model, comparative development |
| JEL: | D72 J11 O10 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12174 |
| By: | Ritam Chaurey; Gaurav Nayyar; Siddharth Sharma; Eric Verhoogen |
| Abstract: | Knowledge spillovers among firms are widely viewed as a key driver of agglomeration and growth, but are difficult to estimate cleanly. We randomly allocated an energy-efficient motor --- a “servo'” motor --- among leather-goods firms in Dhaka, Bangladesh, and tracked adoption, information flows, beliefs about energy savings, and other variables. We use the difference between actual exposure and expected exposure (from simulated randomization draws) to identify the effect of exposure. We find a robust positive effect of exposure to treated neighbors within a small geographic area (500 meters in our baseline specification) on information flows and adoption. A marginal value of public funds (MVPF) calculation taking learning spillovers into account yields a significantly larger value than one considering only treated firms and suggests that adoption subsidies would be a cost-effective policy intervention. |
| JEL: | L23 L67 O12 O14 R11 |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34296 |
| By: | Dijkstra, Lewis; Kompil, Mert; Proietti, Paola |
| Abstract: | Between 2001 and 2021, capital metro regions had the fastest productivity growth in the EU, followed by non-metro regions, while it was much lower in other metro regions. Capitals reduced their sectoral concentration, while the other regions increased it. Our shift-share analysis confirms that capitals relied entirely on productivity growth within sectors, while the other two types benefitted also from shifting jobs to more productive sectors. Our regression analysis showed that convergence and being a capital boosted productivity growth. Population density also strengthened productivity growth, but not enough to prevent other-metro regions from lagging behind the non-metro regions. |
| Keywords: | growth; productivity; employment; capital; metro; regions; Europe; EU; ARDECO |
| JEL: | E24 O18 O32 P25 R12 |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:129664 |
| By: | Boyan Jovanovic; Peter L. Rousseau |
| Abstract: | We model several ways in which AI may improve decisions, raise the productivity of firms, and raise human capital growth. Each focuses on activities that involve problem solving, with solutions being guided by signals. If AI raises the accuracy of the signals, humans will then make better decisions — individually and in groups. |
| JEL: | O32 O33 |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34295 |
| By: | Frédéric Marty (Université Côte d'Azur, GREDEG, CNRS, France); Thierry Warin (HEC Montréal; CIRANO, OBVIA, GPAI/CEIMIA) |
| Abstract: | Digital markets are increasingly dominated by entities that leverage technical specificities such as network effects, economies of scale, and scope, as well as significant advantages in data access and critical infrastructure, including computing power and cloud capacities. The advent of generative artificial intelligence (AI) marks a potential inflection point in this landscape. In this context, the primary barriers to entry are no longer merely data and open source foundation models but the availability of large, high-quality datasets and substantial computing power. This paper examines whether these barriers will entrench the dominant positions of Big Tech companies or if they will catalyze a reshuffling of competitive dynamics. By focusing on the dual challenges of data and computing power, this study identifies the key factors that will shape the future competitive landscape of the generative AI industry. This article contributes to the ongoing debate in industrial economics and strategic management regarding the potentially disruptive effects of generative AI on the market power of Big Tech firms. Can this technological shift recalibrate competitive dynamics, or will it ultimately serve to entrench existing power structures? At its core, the article seeks to interrogate a prevailing narrative - namely, the notion that innovation inherently sustains competitive processes, even in the face of short-term lock-in effects. |
| Keywords: | Generative AI, data-based advantage, digital ecosystems, Big Techs |
| JEL: | K21 L12 L13 L41 |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:gre:wpaper:2025-38 |
| By: | Dionysia Rallatou; Michail Tsagris; Vangelis Tzouvelekas (Department of Economics, University of Crete, Greece) |
| Abstract: | This paper investigates the link between political polarisation and inequality in Europe from 1989 to 2024. Using Bayesian Aldrich-McKelvey scaling, the DER polarisation index, and Araar decomposition, it traces polarisation's regional and structural foundations. Results show that polarisation has risen steadily, with Mediterranean and Central/Eastern Europe consistently more polarised than Western and Northern regions. Araar decomposition reveals that polarisation stems mainly from between-group alienation, not within-group identification. Divides over EU membership, class, and urban-rural residence account for much of the increase, with radical groups contributing disproportionately. Fixed-effects regressions confirm that inequality is the strongest determinant of polarisation: higher Gini values consistently predict greater antagonism. Economic growth reduces polarisation only under egalitarian conditions; when coupled with inequality, it amplifies divides. These findings highlight |
| Keywords: | political polarisation, inequality, EU, economic growth, affective polarisation |
| JEL: | C23 C38 D31 D72 |
| Date: | 2025–09–26 |
| URL: | https://d.repec.org/n?u=RePEc:crt:wpaper:2501 |