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on Technology and Industrial Dynamics |
| By: | Benoit, Florence (European Commission, Directorate-General for Research and Innovation); Di Girolamo, Valentina (European Commission, Directorate-General for Research and Innovation); Diodato, Dario (European Commission, Directorate-General for Research and Innovation); Canton, Erik (European Commission, Directorate-General for Research and Innovation); Ravet, Julien (European Commission, Directorate-General for Research and Innovation) |
| Abstract: | In today’s economy, knowledge represents a critical resource for long-term economic growth (Romer, 1990). Knowledge tends to accumulate in densely populated areas, where geographical proximity facilitates spillovers, rapid idea diffusion, and the recombination of capabilities. This localised concentration can further be enriched by global knowledge flows through collaborations and networks. Through this process, economies can obtain a set of capabilities that form the basis for the development of unique technological assets (Storper & Venables, 2004). These unique assets, which are difficult to replicate, become the cornerstone of a sustainable competitive advantage and contribute significantly to long-term economic development and resilience. |
| JEL: | O32 O52 |
| Date: | 2025–01 |
| URL: | https://d.repec.org/n?u=RePEc:eug:wpaper:ki-01-25-015-en-n |
| By: | Manyane Kpatoumbi Kankpe (Université Jean Monnet, Université Lyon 2, emlyon, GATE, CNRS, 42100, Saint Etienne) |
| Abstract: | Abstract: This study examines the impact of design activities on innovation and identifies the main determinants influencing firms’ investment in design. We use a cross-sectional database built from three sources: the French Community Innovation Survey (CIS) 2018, the Annual Declaration of Social Data (DADS), and the structural business statistics (FARE) for the period 2015–2017. By adopting an instrumental variable (IV) approach that accounts for the endogeneity of design, our results provide clear evidence that integrating design significantly increases the likelihood of innovation. A doubling of the number of designers within a firm more than doubles the probability of innovating in product or process. This impact of design is greater than that of R&D or marketing, indicating its central role in the innovation process. However, failing to consider the endogeneity of design leads to an underestimation of its true effect. Similarly, our results confirm the endogeneity of R&D, as demonstrated by Crépon et al. (1998), and ignoring this dimension also results in an underestimation of its impact on innovation. Regarding the determinants of design, we find that the concentration of designers within a sector and a region, public financial support, and export intensity foster its adoption. By introducing a time lag between innovation activities and their outcomes, certain limitations of cross-sectional studies—particularly simultaneity bias—are overcome, despite the use of the IV approach. |
| Keywords: | Design, Innovation, R&D, Marketing, Endogeneity |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:gat:wpaper:2521 |
| By: | Brüll, Eduard; Mäurer, Samuel; Rostam-Afschar, Davud |
| Abstract: | We provide experimental evidence on how employers adjust expectations to automation risk in high-skill, white-collar work. Using a randomized information intervention among tax advisors in Germany, we show that firms systematically underestimate automatability. Information provision raises risk perceptions, especially for routine-intensive roles. Yet, it leaves short-run hiring plans unchanged. Instead, updated beliefs increase productivity and financial expectations with minor wage adjustments, implying within-firm inequality like limited rent-sharing. Employers also anticipate new tasks in legal tech, compliance, and AI interaction, and report higher training and adoption intentions. |
| Keywords: | Artificial Intelligence, Automation, Technological Change, Innovation, Technology Adoption, Firm Expectations, Belief Updating, Expertise, Labor Demand, White Collar Jobs, Training |
| JEL: | J23 J24 D22 D84 O33 C93 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:glodps:1683 |
| By: | Patrick Bennett; Julian Vedeler Johnsen |
| Abstract: | We study how the labor market shocks of automation and immigration interact to shape workers’ outcomes. Using matched employer–employee data from Norwegian administrative registers, we combine an immigration shock triggered by the European Union’s 2004 enlargement with an automation shock based on the adoption of industrial robots across Europe. Although these shocks largely occur in separate industries, we show that automation reduces earnings not only in manufacturing but also in construction, where tasks overlap with robot-exposed sectors. Importantly, workers jointly exposed to automation and immigration suffer earnings losses greater than those facing either shock in isolation. These losses are driven by downward occupational mobility into low-wage services and re-sorting into lower-premium firms. Even within the Norwegian welfare system, the ability of social insurance to offset these long-run earnings declines is limited. Our findings underscore the importance of analyzing labor market shocks jointly, rather than in isolation, to fully understand their distributional consequences. |
| Keywords: | automation, immigration, labor market shocks |
| JEL: | J01 J61 J24 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12217 |
| By: | KOIKE-MORI, Yasutaka; OKUMURA, Koki |
| Abstract: | This paper investigates how production networks shape firms’ R&D decisions and the resulting aggregate inefficiencies. We develop a dynamic model in which firms form supply chains through a persistent matching process and rely on those links to trade both existing products and newly developed products from R&D. The model features two sources of misallocation: market-power distortions and a network-formation externality. The second novel externality leads firms to fail to internalize that their R&D makes them more attractive to potential partners. We estimate the model using Japanese firm-to-firm transaction and patent data and show that the first-best allocation lies close to the decentralized outcome. Market-power corrections raise R&D incentives for older firms by relieving double marginalization along their long supply chains. Instead, internalizing the network-formation externality tilts R&D toward younger firms that expand their supply chains rapidly. These opposing forces largely offset each other, leaving the planner’s allocation near the decentralized one. |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:hit:tdbcdp:e-2025-01 |
| By: | Francesco Molica; Francesco Cappellano; Teemu Makkonen |
| Abstract: | Since a few years, the international economic system has been experiencing growing fragmentation and uncertainty. However, research on Regional Innovation Systems (RIS) has yet to comprehensively engage with this phenomenon, despite its (spatial) significance. The paper contributes to addressing this gap, in particular by exploring the potential implications for RIS arising from the decline and disruptions of international knowledge flows associated with economic de-globalization. The study seeks to define a theoretical approach grounded in evolutionary geography to assess this trend. It applies such perspective to three types of RIS—metropolitan, old industrial, and peripheral—across five analytical dimensions that capture the structural and relational factors shaping RIS exposure and resilience to de-globalization. The discussion highlights that, in the face of knowledge and technological disruptions arising from international instability, metropolitan RIS may leverage their diversified knowledge bases, dense institutional frameworks, and strong global connectivity to successfully reconfigure external linkages; old industrial RIS may follow mixed trajectories, with the risk of deepening economic and policy lock-ins; while peripheral RIS—due to their reliance on external knowledge sources and limited endogenous innovation capacity—emerge as the most vulnerable. |
| Keywords: | De-globalization; Knowledge flows; Regional innovation system; Resilience |
| Date: | 2025–10–22 |
| URL: | https://d.repec.org/n?u=RePEc:ict:wpaper:2013/395461 |
| By: | Colombo, Massimo G.; Füner, Lena; Guerini, Massimiliano; Hottenrott, Hanna; Souza, Daniel |
| Abstract: | This paper replicates and extends the framework of Guzman and Stern (2020) to examine the evolution of entrepreneurial activity in Europe, focusing on France, Germany, and the United Kingdom between 2009 and 2023. Using harmonized national business registry data, we construct measures of both the quantity and quality of entrepreneurship across regions. In particular, we adapt the Entrepreneurial Quality Index (EQI), the Regional Entrepreneurship Cohort Potential Index (RECPI), and the Regional Entrepreneurial Acceleration Index (REAI) to capture the number of new ventures, their ex-ante growth potential, and the extent to which ecosystems translate this potential into realized outcomes. Our findings support the generalizability of this framework in the European context while revealing substantial heterogeneity across countries and regions. Major metropolitan centers such as Paris, London, and Munich combine high rates of entry with high entrepreneurial quality, but smaller knowledge- and research-intensive regions - including Cambridge, Oxford, Bonn, and Heidelberg - also emerge as important hubs. With respect to ecosystem performance, France and the UK initially exceeded expectations but later experienced steady declines, whereas Germany maintained relatively stable performance, with notable overperformance between 2012 and 2016. Moreover, we find a stronger positive correlation between entrepreneurial quantity and quality in Europe, suggesting that ecosystems capable of generating more start-ups are also more likely to produce high-quality firms. This study provides important insights for the comparative analysis of entrepreneurial ecosystems and builds a foundation for designing policies aimed at fostering high-quality, innovation-driven entrepreneurship in Europe. |
| Keywords: | Entrepreneurial Quality, Entrepreneurial Ecosystem, High-Growth Firms, Regional Innovation |
| JEL: | G24 G32 L25 L26 M13 R12 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:zewdip:330316 |
| By: | Tiago Cavalcanti; Kamiar Mohaddes; Hongyu Nian; Haitao Yin |
| Abstract: | This paper investigates the pass-through of environmental compliance costs along supply chains. We compile a firm-level dataset linking regulated firms in pollution-intensive industries with their top five clients and suppliers. We find that clients of regulated firms invest less in R&D, employ fewer skilled R&D staff, and produce fewer innovations than clients of less regulated firms, while no comparable effects are observed for suppliers. The pass-through is stronger with larger trade volumes, higher input prices faced by clients, and in markets where regulated firms hold greater market power or clients face intense competition. Policy simulations suggest that green technology incentives for regulated firms and R&D subsidies for their clients can mitigate these adverse effects and raise social welfare by enhancing both innovation and environmental quality. |
| Keywords: | environmental compliance, supply chain, pass-through, R&D, innovation |
| JEL: | O30 Q01 Q55 |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:een:camaaa:2025-55 |
| By: | Svenja Flechtner (Siegen University); Martin Middelanis (Freie Universitat Berlin) |
| Abstract: | The relationship between income inequality and carbon emissions remains ambiguous in both theory and evidence. A declining–marginal–propensity-to-emit (MPE) framework predicts a short-term trade-off between reducing inequality and limiting emissions, whereas political-economy perspectives suggest that higher structural inequality increases carbon output. Empirical studies often report negative associations, but these frequently conflate within-country dynamics with cross-country differences. We argue that distinguishing these levels can reconcile the evidence: the MPE mechanism primarily operates within countries over time, while political-economy channels shape structural, cross-country variation. Using data from the World Inequality Database, we conduct two complementary analyses. First, simulations on a global sample of 162 countries from 2019 test whether shifts in national income distributions alter carbon emissions at constant GDP, isolating the within-country MPE effect. Second, cross-sectional panel analyses examine whether households at equivalent income levels generate more emissions in more unequal societies. Our results show a modest within-country trade-off â۠most pronounced in low- and middle-income countries and when the income share of the middle class rises â۠alongside a cross-country pattern in which higher inequality is systematically associated with higher emissions across the income distribution. These findings highlight the coexistence of opposing dynamics and underscore that climate policy should balance short-term trade-offs against the structural benefits of reducing inequality. |
| Keywords: | Inequality, Carbon emissions, Climate change, Marginal propensity to emit, Redistribution |
| JEL: | D31 Q53 Q54 Q56 |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:inq:inqwps:ecineq2025-687 |
| By: | Colleen Cunnningham (University of Utah); Florian Ederer (Boston University); Charles Hodgson (Yale University); Zhichun Wang (Yale University) |
| Abstract: | Policies that mandate disclosure of innovative project outcomes aim to increase innovation by limiting wasteful duplicative innovation. Yet, such policies change not only the ex-post information environment but also firms' ex-ante innovation incentives. Firms may slow down their own innovation efforts in anticipation of increased disclosure by others. We examine the innovation-related impacts of the 2017 FDA Final Rule amendment, which mandates disclosure of clinical trial results for pharmaceutical firms. We show that the policy hastened and increased disclosure of results for clinical trials post-completion, but also increased the time to completion of clinical trials, the time between early phases of clinical trials, and delays in development-related investments. We provide evidence consistent with mandated disclosure leading firms to wait to learn from their competitors. Our results suggest that mandating disclosure may slow innovation when there is value to waiting. |
| Date: | 2025–10–08 |
| URL: | https://d.repec.org/n?u=RePEc:cwl:cwldpp:2465 |
| By: | \v{S}imon Trlifaj |
| Abstract: | Does government transparency affect innovation? I evaluate the launch of a government database with detailed technical information on the universe of wireless-enabled products on the U.S. market (N 347 thousand). The results show the launch approximately doubled the use of new technologies in the following ten years, an indicator of follow-on innovation. The increase affected both products in the same and new product classes, suggesting novelty; waned over several years, potentially due to an increase in secrecy and patenting; and boosted foreign more than U.S. domestic competitors. These results highlight the importance of information for private sector innovation. |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2510.19377 |