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on Technology and Industrial Dynamics |
| By: | Cyril Verluise (QuantumBlack); Gabriele Cristelli (London School of Economics); Kyle Higham (Motu Economic and Public Policy Research); Gaetan de Rassenfosse (Ecole polytechnique federale de Lausanne) |
| Abstract: | This study introduces in-text patent-to-patent citations—references embedded in the body of patent documents—as a novel data source to trace knowledge flows. Unlike front-page citations, which often reflect legal requirements, in-text citations are more likely to originate from inventors and signal meaningful technological linkages. We show that they exhibit stronger geographic and semantic proximity, greater self-referentiality, and closer alignment with inventor knowledge. Though less frequent than front-page citations, they yield robust results in models of knowledge diffusion. We release a validated dataset and reproducible code to support future research. Our findings offer new opportunities for strategy scholars interested in the microfoundations of innovation, the geography of knowledge flows, and the role of inventors in shaping firms’ knowledge trajectories. |
| Keywords: | citation; patent; knowledge flow; open data; spillover |
| JEL: | O31 O33 R12 C81 D83 |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:iip:wpaper:30 |
| By: | Huben Liu; Dimitris Papanikolaou; Lawrence D.W. Schmidt; Bryan Seegmiller |
| Abstract: | We use recent advances in natural language processing and large language models to construct novel measures of technology exposure for workers that span almost two centuries. Combining our measures with Census data on occupation employment, we show that technological progress over the 20th century has led to economically meaningful shifts in labor demand across occupations: it has consistently increased demand for occupations with higher education requirements, occupations that pay higher wages, and occupations with a greater fraction of female workers. Using these insights and a calibrated model, we then explore different scenarios for how advances in artificial intelligence (AI) are likely to impact employment trends in the medium run. The model predicts a reversal of past trends, with AI favoring occupations that are lower-educated, lower-paid, and more male-dominated. |
| JEL: | J23 J24 N3 O3 O4 |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34386 |
| By: | Gabriel Chaves Bosch (Queen Mary University of London); Cem Özgüzel (Centre d'Economie de la Sorbonne, Paris School of Economics et IZA) |
| Abstract: | Does the presence of migrants influence innovation at the local level? This paper answers this question using novel data containing fine-grained information on the migrant population and geo-coded data on patent locations for a large set of 19 OECD countries over the 1990-2014 period. We find that a one percentage point increase in the local migrant share increases patent applications by 2.5%. This effect is driven by more urbanised and economically developed localities, where innovation levels are already higher to begin with. However, this impact becomes insignificant when aggregating observations at larger geographical levels, suggesting that the effect of migration on innovation is concentrated in space and features high rates of spatial decay |
| Keywords: | Migration; Innovation; Patents; OECD countries; local |
| JEL: | O31 J61 R11 |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:mse:cesdoc:25021 |
| By: | Damián Tojeiro-Rivero (University Rovira i Virgili); Rosina Moreno (AQR-IREA, University of Barcelona) |
| Abstract: | Prior literature has argued that, although both captive knowledge sourcing (CKS) and non-captive knowledge sourcing (NCKS) are effective strategies for enhancing firm innovativeness, the former plays a more defined role in determining the likelihood of a firm achieving product innovations. However, we contend that the focus should not only be on the decision to innovate but, more importantly, on the profitability firms derive from such innovations. Given that knowledge acquired from external sources can provide firms with ideas that differ from their existing competencies, NCKS may be more advantageous, as the resulting innovations are likely to exhibit higher levels of novelty. Additionally, we examine the complementarity or substitutability between CKS and NCKS in driving innovation. Our findings for Spanish firms suggest that NCKS yields greater benefits than CKS. Moreover, adopting both strategies simultaneously does not result in higher benefits; instead, a minimum threshold of NCKS, above the median, is necessary to realize observable gains. This indicates that firms must demonstrate a substantial level of commitment to NCKS to effectively exploit its potential for generating returns from their most novel innovations. |
| Keywords: | Radical Innovation, Captive Knowledge Sourcing; Non-Captive Knowledge Sourcing; Spanish firms; Panel data; Complementarity/Substitutability JEL classification: |
| Date: | 2025–05 |
| URL: | https://d.repec.org/n?u=RePEc:aqr:wpaper:202503 |
| By: | Giovanni Dosi; Federico Riccio; Maria Enrica Virgillito |
| Abstract: | This paper examines how the fragmentation of production across Global Value Chains (GVCs) generates both economic and environmental inequalities. Building on the "smile curve" framework (Mudambi, 2008; Meng et al., 2020), we show that developing countries specialize in low-value-added, high-emission production stages, while advanced economies capture high-value, low-emission activities like R&D and design (Riccio et al., 2025). Using OECD ICIO and CO2 emissions data, we demonstrate that GVC integration exacerbates a "double harm": production workers -particularly in middle-stage manufacturing- face wage suppression, while these same stages exhibit higher carbon intensity per unit of value added. This aligns with the Pollution Haven Hypothesis (Cole, 2004), as emissions are displaced to regions with weaker regulations. Our analysis reveals an environmental smile curve, where environmental and economic downgrading co-occur in middle segments of GVCs, reinforcing global inequalities. These disparities intensify with deeper GVC penetration, challenging the decoupling narrative of green growth. By integrating labour and emissions data, we provide novel evidence of how GVCs structurally embed unequal ecological and economic burdens. |
| Keywords: | Smile Curve, Ecological Economics, Global Value Chain, Embodied emissions, Environmental and Income Inequality. |
| Date: | 2025–10–21 |
| URL: | https://d.repec.org/n?u=RePEc:ssa:lemwps:2025/35 |
| By: | Ting-Wei Lai; Shin-Kun Peng; Raymond G. Riezman; Ping Wang |
| Abstract: | We examine global trends in productivity and sectoral dominance across countries and industries, asking whether changes are driven by productivity catch-up or shifts in factor endowments. To address this, we develop a general-equilibrium, multi-country, multi-sector model with a global production network based on international input--output linkages. The model incorporates country-specific technologies, factor endowments (skilled and unskilled labor and capital), and tariffs. Calibrating the model to international data from 1996 to 2007, we find that in high-income countries productivity changes are mainly driven by technology, while in middle-income countries capital is most crucial. We then assess whether these changes explain structural transformation in global output shares. For most industries where one group of countries overtakes another, the primary cause is the change in capital and skilled labor, rather than factor-induced productivity improvements. Overall, factor endowment shifts play the central role in explaining changes in sectoral dominance across countries and industries. |
| JEL: | E23 F11 F62 O11 |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34393 |
| By: | Jacob Schaal |
| Abstract: | This paper develops a theory-driven automation exposure index based on Moravec's Paradox. Scoring 19, 000 O*NET tasks on performance variance, tacit knowledge, data abundance, and algorithmic gaps reveals that management, STEM, and sciences occupations show the highest exposure. In contrast, maintenance, agriculture, and construction show the lowest. The positive relationship between wages and exposure challenges the notion of skill-biased technological change if AI substitutes for workers. At the same time, tacit knowledge exhibits a positive relationship with wages consistent with seniority-biased technological change. This index identifies fundamental automatability rather than current capabilities, while also validating the AI annotation method pioneered by Eloundou et al. (2024) with a correlation of 0.72. The non-positive relationship with pre-LLM indices suggests a paradigm shift in automation patterns. |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2510.13369 |
| By: | Nam, Jaejun; Kim, Nayeon |
| Abstract: | We examine the role of knowledge spillovers in shaping economic growth in developing countries, with a focus on their limitations in promoting convergence with advanced economies. Extending Romer (1986) and the North–South model, we construct a theoretical model in which government-funded knowledge accumulation drives long-run growth, while developing countries benefit from costless technology diffusion from advanced economies. Within this framework, we derive steady states for each economy and analyze how policy choices—such as taxation, savings, and technology protection—affect the growth trajectory of both economies through the spillovers. We then test the model’s predictions, setting the United States as the technological frontier. The analysis utilizes fixed-effects regression and incorporates foreign direct investment inflows and imports from the U.S. as proxies for openness to spillovers. Our results suggest that knowledge spillovers alone are insufficient for convergence, requiring substantial domestic investment by developing countries. This highlights the structural challenges these countries face in catching up to advanced economies. Additionally, technology protection ensures the long-term economic dominance of developed countries, but only when paired with significant domestic investment. Finally, we empirically demonstrate a complementary relationship between openness and technological disparity in determining the magnitude of spillovers, lending further support to our findings. |
| Keywords: | Knowledge Spillovers, Romer (1986), North–South Framework, Endogenous Growth Model, Technology Protection |
| JEL: | F43 O33 O41 |
| Date: | 2025–10–04 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:126362 |
| By: | Sebastián Bustos (Harvard Growth Lab, Harvard University); Miguel Ángel Santos (School of Government and Public Transformation, Tecnológico de Monterrey) |
| Abstract: | The global resurgence of industrial policy has revived the appeal of downstream diversification (beneficiation)—adding value to raw materials—as a development strategy. Despite this intuitive appeal, empirical evidence of its effectiveness remains scarce, with few real-world success stories. We address this gap through a novel empirical analysis of export product co-location and new relatedness metrics to explain observed diversification patterns. Our results show that product co-location patterns are driven primarily by similarities in occupational structures. Industries sharing high-skill occupations (and, to a lesser extent, non-tradable inputs) are strong predictors of diversification. Conversely, relatedness metrics based on value-chain linkages (existing upstream inputs) have weak to no predictive power. These findings suggest rethinking development strategies focused on adding value to raw materials. Instead, countries should promote industries that build on existing know-how—particularly those with similar occupational structures or non-tradable capabilities already present in the economy. |
| Keywords: | Foreign industrial policy, productive diversification, beneficiation, knowledge-based development, export relatedness, occupational structures, economic complexity, value chains, development strategy |
| JEL: | O14 O25 O33 F14 L16 |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:gnt:wpaper:13 |
| By: | Michael Fritsch (Friedrich Schiller University Jena); Maria Greve (University of Utrecht); Michael Wyrwich (University of Groningen) |
| Abstract: | This paper examines how the legacy of socialist regime in countries of Central and Eastern Europe has affected innovation and R&D cooperation and compares this to Western Europe. Our analysis reveals that the negative impact of socialism on innovation Central and Eastern European countries is mediated by interpersonal trust and the quality of government. These findings highlight the significance of historical context for innovation activity. Our insights are particularly relevant for policymakers who are trying to create effective strategies to encourage technological development in post-socialist regions. |
| Keywords: | Innovation, socialist legacy, institutional quality, trust |
| JEL: | O31 O43 P20 R11 |
| Date: | 2025–10–16 |
| URL: | https://d.repec.org/n?u=RePEc:jrp:jrpwrp:2025-0010 |
| By: | Valerio Dionisi |
| Abstract: | Industry dimension is increasingly dominant to investigate the upward trend of inequality. This paper examines the key drivers of U.S. wage inequality through a general equilibrium model, emphasising the role of heterogeneous capital-labour substitution elasticities across industries in shaping wage dispersion. Key is the distinction of a quantity effect (changes in the composition of capital and labour inputs) and a structural effect (reflecting technological transformations in inputs substitutability) from Skill-Biased Technological Change (SBTC). Findings suggest that industry-level transformations on the labour side − differentials in job tasks substitutability and workforce composition − constitute the principal drivers of real wage inequality, overshadowing the contribution of capital-side adjustments. A structural estimation of the model reveals that trend-asymmetries in the elasticities of substitution between ICT capital, routine and non-routine workers account for 94% of observed wage variance, while stronger sorting and segregation effects further exacerbate such dispersion. Upon neutralising structural differences between industries, SBTC reckons merely 6-15% of the observed wage inequality. |
| Keywords: | wage inequality, structural transformations, industry, tasks, labour force composition, elasticity of substitution |
| JEL: | E24 J31 J82 L16 O33 |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:mib:wpaper:558 |