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on Technology and Industrial Dynamics |
| By: | Guillermo Arenas Díaz (Dipartimento di Politica Economica, DISCE, Università Cattolica del Sacro Cuore, Milano, Italy); Mariacristina Piva (Dipartimento di Politica Economica, DISCE, Università Cattolica del Sacro Cuore, Piacenza, Italy); Marco Vivarelli (Dipartimento di Politica Economica, DISCE, Università Cattolica del Sacro Cuore, Milano, Italy – UNU-MERIT, Maastricht, The Netherlands – IZA, Bonn, Germany - Global Labor Organization (GLO), Essen, Germany) |
| Abstract: | This study investigates the relationship between Artificial Intelligence (AI) and innovation inputs in Spanish manufacturing firms. While AI is increasingly recognized as a driver of productivity and economic growth, its role in shaping firms’ innovation strategies remains underexplored. Using firm-level data, our analysis focuses on whether AI complements innovation inputs - specifically R&D and Embodied Technological Change (ETC) - and whether AI can be considered as a Method of Invention, able to trigger subsequent innovation investments. Results show a positive association between AI adoption and both internal R&D and ETC, in a static and a dynamic framework. Furtheremore, empirical evidence also highlights heterogeneity, with important peculiarities affecting large vs small firms and high-tech vs low-tech companies. These findings suggest that AI may act as both a complement and a catalyst, depending on firm characteristics. |
| Keywords: | Artificial Intelligence, Method of Invention, R&D, Innovation Inputs, Innovative Complementarities |
| JEL: | O31 O32 |
| Date: | 2025–11 |
| URL: | https://d.repec.org/n?u=RePEc:ctc:serie5:dipe0052 |
| By: | Koski, Heli; Rouvinen, Petri |
| Abstract: | Abstract The focus of next-generation mobile network development has shifted from infrastructure to data, software, and innovation ecosystems. Leading firms are expanding their R&D investments most rapidly in digital services and semiconductors, while R&D in telecommunications infrastructure has grown more slowly. At the same time, global technological leadership has increasingly concentrated in the United States and Asia. Europe’s share has declined across nearly all domains central to 5G and 6G technologies, and its position in data-driven innovation, software, and commercial scaling has weakened. The EU’s digital regulation has become a double-edged sword: it strengthens privacy and consumer protection but simultaneously increases the costs of innovation and business growth, particularly in data-intensive sectors. Competitiveness in the 6G era will require a balance between regulation, innovation, and investment. Europe must strengthen the conditions for data utilization and ease regulatory constraints that hinder innovation. In the long term, competitiveness will depend not only on the creation of new firms but also on Europe’s ability to grow and sustain its own global players that can create value across the key layers of the data-driven economy. |
| Keywords: | 5G, 6G, Global markets, Regulation, Innovation capabilities, Patents, R&D |
| JEL: | E62 E63 H30 |
| Date: | 2025–12–10 |
| URL: | https://d.repec.org/n?u=RePEc:rif:briefs:169 |
| By: | Katharina Ledebur (Supply Chain Intelligence Institute Austria); Ladislav Bartuska (Supply Chain Intelligence Institute Austria); Klaus Friesenbichler; Peter Klimek (Supply Chain Intelligence Institute Austria) |
| Abstract: | The automotive industry is undergoing a profound transformation, driven by the electrification of powertrains, the rise of software-defined vehicles, and the adoption of circular economy concepts. These trends are increasingly blurring the boundaries between the automotive sector and other industries. The pace of adaptation to electrification varies considerably between regions and firms. Unlike internal combustion engine (ICE) production, where mechanical capabilities dominated, competitiveness in electric vehicle (EV) production increasingly depends on expertise in electronics, batteries, and software. This study investigates whether and how firms' ability to leverage cross-industry diversification contributes to their competitive advantage in this evolving landscape. We develop a country-level product space covering all industries, and an industry-specific product space covering over 900 automotive components. This allows us to identify clusters of parts which are exported together, revealing shared manufacturing capabilities. Closeness centrality in the country-level product space, rather than simple proximity, is a strong predictor of where new comparative advantages are likely to emerge. First, we examine this relationship across all industrial sectors to establish general patterns of path dependency, diversification and capability formation. Then, we focus specifically on the electric vehicle (EV) transition. It is argued that new strengths in vehicles and aluminum products in the EU will generate 5 and 4.6 times more EV-specific strengths, respectively, than other EV-relevant sectors over the next decade. In contrast, these sectors are expected to generate only 1.6 and 4.5 new strengths, respectively, in already diversified China. A different pattern emerges when these country-level results are compared to the firm-level product space. Countries such as South Korea, China, the USA and Canada show the greatest potential for diversification into EV-related products. Established producers in the EU are likely to come under pressure. These findings suggest that the success of the automotive transformation will depend on the ability of regions to mobilize existing industrial capabilities, particularly in related sectors such as machinery and electronic equipment. |
| Keywords: | diversification, car industry, automotive, electric cars, supply chains, network, product space, regions, firms, transition, complexity |
| Date: | 2025–12–15 |
| URL: | https://d.repec.org/n?u=RePEc:wfo:wpaper:y:2025:i:717 |
| By: | Godøy, Anna; Isaksen, Elisabeth |
| Abstract: | Many governments have set ambitious climate goals that require a shift away from fossil fuel-intensive industries toward climate-neutral jobs. We use rich administrative register data to estimate green wage premiums in the presence of nonrandom sorting of workers across firms. On average, green firms pay statistically significant and economically meaningful wage premiums, consistent with a pattern of rent-sharing in high-revenue, highly innovative green firms. The premium is larger for non-college workers and those in low-skilled occupations. However, the average estimated wage premium for high-carbon firms is roughly twice as large as the green wage premium. This finding suggests that while the expansion of high-wage green firms may help mitigate the earnings losses associated with decarbonization, it is unlikely to fully offset them. |
| Keywords: | green jobs; wage premium; polluting jobs; employment; technology |
| JEL: | J31 J21 Q52 Q55 |
| Date: | 2025–11 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:130458 |
| By: | Giulio Valerio Corbelli (Università degli Studi di Ferrara; SEEDS, Italy) |
| Abstract: | This working paper investigates how Italian innovative startups integrate sustainability, innovation, and inclusion within their strategic and organizational frameworks. Drawing on a national survey of 1, 000 firms registered under the Italian Start-up Act, the study examines the structural, behavioral, and perceptual dimensions of sustainability-oriented entrepreneurship. The empirical analysis combines descriptive, comparative, and multivariate methods—including hierarchical and K-means cluster analyses—to identify typologies of startups that reflect different configurations of technological intensity, environmental commitment, and inclusiveness. The results show that Italian innovative startups are predominantly small, recently founded, and highly research-oriented, with a strong concentration in knowledge-intensive sectors. Sustainability- oriented startups—those identifying as “green†or “partially green†—represent almost half of the sample. They tend to be younger, employ a higher share of R&D personnel, and meet a greater number of legal requirements for innovative status. However, gender inclusiveness remains limited: female participation among founders and managers is low, and only a minority of startups implement formal inclusion policies. Cluster analysis reveals two main archetypes: (1) Technological Mainstream startups—larger, R&D- intensive firms focused on technological performance—and (2) Sustainable and Gender- Balanced startups—smaller but more inclusive and institutionally embedded. Within the subset of sustainability-oriented firms, two additional groups emerge: Tech-Green Operative Firms, focused on eco-efficiency and technological solutions, and Sustainable & Inclusive Champions, integrating environmental, social, and economic objectives. Finally, a set of econometric models was estimated to assess whether sustainability orientation systematically predicts key performance, innovation, and perception outcomes. The results confirm that green and partially green startups display distinct behavioral and strategic patterns even after controlling for size, age, sector, and regional factors. |
| Keywords: | Sustainable entrepreneurship; Innovation ecosystems; Startups; Italy; Inclusion; Resource Based View; Institutional Theory; Cluster analysis. |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:srt:wpaper:1425 |
| By: | Konrad Adler (University of St. Gallen - School of Finance; Swiss Finance Institute); Oliver Rehbein (Vienna University of Economics and Business); Matthias Reiner (Vienna University of Economics and Business); Jing Zeng (University of Bonn; Centre for Economic Policy Research (CEPR)) |
| Abstract: | This paper proposes a simple but effective tool to measure firms' exposure to climate risk: the market. We develop a model showing that abnormal stock returns around significant climate policy events measure a firm's exposure to climate risk. Building on this theoretical foundation, we create market-based greenness measures based on abnormal returns around UN climate conferences. Our measurement of climate risk covers around 36, 000 international firms, a tenfold increase relative to existing measures. It is associated with lower present and future carbon emissions and provides explanatory power distinct from existing climate risk measures. Market-based green firms are more likely to file green patents, have lower stock-price volatility, and tend to be financially more robust. At the country level, market-based greenness is associated with lower emission intensity and a larger share of renewable energy. |
| Keywords: | greenness, green firms, climate risk, climate change |
| JEL: | G14 G32 G38 Q54 |
| Date: | 2025–02 |
| URL: | https://d.repec.org/n?u=RePEc:chf:rpseri:rp25104 |
| By: | Engbom, Niklas (NYU – Stern); Malmberg, Hannes (Minnesota); Porzio, Tommaso (Columbia); Rossi, Federico (University of Warwick); Schoellman, Todd (Minneapolis Fed) |
| Abstract: | Chandler (1977) shows that large firms require hierarchies of white-collar workers to coordinate complex production. We document that this insight continues to hold globally today, and we show that low education levels in developing countries limit the supply of white-collar workers and constrain firm size. We extend the occupational choice model of Lucas (1978) to allow entrepreneurs to reorganize their firms by allocating administrative tasks to hired professionals, which brings the firm closer to constant returns to scale. We calibrate the model to be consistent with cross-sectional microdata and validate it using quasi-experimental and experimental evidence on the effects of educational expansions and management training interventions. Skills explain two-thirds of the reorganization of production into large firms with economic development, while structural transformation and reductions in barriers are needed to explain the remaining shift |
| Keywords: | skills ; white-collar workers ; returns to scale ; firm size ; endogenous duality |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:wrk:warwec:1591 |
| By: | Ziran Ding; Adam Hal Spencer; Zinan Wang |
| Abstract: | Amid ongoing geoeconomic tensions, industrial policy has emerged as a prominent tool for policymakers. What are the dynamic and welfare effects of these policies? How does the short-sightedness of policymakers influence their choice of instruments? What are the distributional consequences of these protectionist measures? We address these questions with a dynamic two-country general equilibrium framework that incorporates ï¬ rm heterogeneity, trade, and the offshoring of tasks. By calibrating the model to the contexts of the US and China, we explore the effects of three popular industrial policies: import tariffs, domestic production subsidies, and entry subsidies. Our findings indicate that, from an initial state free of interventions, myopic policymakers are incentivized to subsidize production, while more forward-looking ones favor imposing import tariffs. Although all of these policies initially reduce wage inequality, some result in aggregate welfare losses, either in the short run or the long run. |
| Keywords: | macroeconomic dynamics, firm heterogeneity, trade, trade-in-tasks, industrial policies, welfare, global value chains |
| JEL: | F23 F41 F51 F62 L51 |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:een:camaaa:2025-67 |
| By: | Dominik Boddin; Thilo Kroeger |
| Abstract: | This paper studies the labor market impact of structural change by distinguishing between industry- and occupation-based measures of manufacturing and service employment. Using German data from 1975–2019, we find that 67% of manufacturing jobs lost in manufacturing industries are offset by new manufacturing jobs in service industries. Linking these aggregate patterns to worker-level outcomes, we show that the severity of displacement costs depends on the occupation–sector characteristics of the next job. Workers who retain manufacturing occupations in the service sector experience employment trajectories comparable to those remaining in manufacturing, indicating that structural change is less disruptive than commonly perceived. |
| Keywords: | Employment Structure, Structural Change, Displacements, Layoffs, Occupations, Manufacturing decline, Germany |
| JEL: | E24 J21 J24 J31 J63 L23 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:diw:diwwpp:dp2144 |
| By: | Calza Elisa (European Commission - JRC); Napolitano Lorenzo (European Commission - JRC); Soguero Escuer Jorge (European Commission - JRC); De Prato Giuditta (European Commission - JRC); Tuebke Alexander (European Commission - JRC); Tuebke Alexander (European Commission - JRC) |
| Abstract: | We analyse the advanced manufacturing (AM) industrial landscape via the Digital Techno-Eco-nomic ecoSystem (DGTES) and position the EU Industrial R&D Investment Scoreboard firms. Over 70% of global AM firms are concentrated in China (45%), the US (17%), and Europe (10%), pointing to a clear regional dominance in the DGTES AM ecosystem. The EU is still well positioned relative to its number of activities in critical technologies for the AM industry, like´3D Printing´. The EU and Japan have higher R&D investment and patent filings of Scoreboard firms compared to the broader DGTES AM ecosystem (e.g., 16% vs. 10% in the EU) making them candidates for driving the uptake of AM technologies. However, China leads in overall AM ecosystem patent activity. ´3D printing´ dominates the AM ecosystem (27%), but Scoreboard firms excel in ´Power Electronics´ (35% vs. 20%). The manufacturing sector leads in both (47% overall, 68% for Scoreboard firms), with significant presence in ´ICT´ and ´professional services´. |
| Date: | 2025–11 |
| URL: | https://d.repec.org/n?u=RePEc:ipt:iptwpa:jrc142720 |
| By: | Dror Shvadron |
| Abstract: | Why do firms produce scientific research and make it available to the public, including their rivals? Prior literature has emphasized the tension between imitation risks from disclosure and scientists' preferences for publication. This study examines an additional managerial consideration: the value of follow-on research conducted by external scientists building upon firms' publications. Using data on U.S. public firms' scientific publications from 1990 to 2012, and a novel instrumental variable based on quasi-random journal issue assignment, I find that accumulation of follow-on research is associated with increased subsequent scientific investments, improved patenting outcomes, and greater employee retention by the originating firms. Benefits are more pronounced for firms with complementary assets and those operating in emerging research fields. Beyond serving as direct input into innovation, follow-on research provides external validation of internal research programs, helping managers allocate resources under conditions of scientific uncertainty. These findings demonstrate that firms benefit when their scientific disclosures inspire follow-on research by the broader scientific community. |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2512.04400 |
| By: | Cesar A. Hidalgo; Viktor Stojkoski |
| Abstract: | We develop a dynamic model of economic complexity that endogenously generates a transition between unconditional and conditional convergence. In this model, convergence turns conditional as the capability intensity of activities rises. We solve the model analytically, deriving closed-form solutions for the boundary separating unconditional from conditional convergence and show that this model also explains the path-dependent diversification process known as the principle of relatedness. This model provides an explanation for transitions between conditional and unconditional convergence and path-dependent diversification. |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2512.10672 |
| By: | Guillem Blasco-Piles (Universitat de Barcelona) |
| Abstract: | This paper provides the first aggregate and disaggregated comprehensive Total Factor Productivity estimates for manufacturing in the Ottoman, Qing and Russian Empires before their collapse, incorporating both the traditional industry and capital estimates. Previous studies relied on modern-only establishments and labor productivity estimates, masking the role of capital and inner economic dynamics, which become essential during structural transformation processes. Using industrial censuses from 1908-1913 and regional reports combined with a novel reconstruction methodology for the traditional industry TFP, our results document extreme internal productivity dualism. Mechanized establishments achieved close to British efficiency levels while traditional non-mechanized plants operated at one-fifth to one-third of the industrial leader. At the aggregate level, lower-productivity traditional establishments seem to determine the aggregate productivity due to their vast weight in the manufacturing landscape. These findings suggest the persistence of the Great Divergence stemmed not from technological adoption incapacity but from the inability to diffuse new technologies beyond modern industrial enclaves—a pattern that illuminates persistent dualism in developing economies today. |
| Keywords: | Empires, Industrialization, Total Factor Productivity, Traditional Industry, Dualism |
| JEL: | L16 L60 N10 N60 O33 O47 O57 |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:hes:wpaper:0291 |
| By: | Garcia-Couto, Santiago |
| Abstract: | This paper constructs harmonized, multi-dimensional measures of occupational task intensities for the United States from 1980-2014 by reconciling the Dictionary of Occupational Titles and O*NET. The resulting indices allow task intensities to vary within occupations over time and are linked to Census and ACS microdata. I document a pronounced rise in the importance of cognitive tasks -"cognitive dominance"- driven by both increasing task intensity and higher associated wage gradients. This mechanism helps explain three major labor-market trends: wage polarization, the rising college wage premium, and the narrowing gender wage gap, with most task changes occurring within occupations. |
| Date: | 2025–12–05 |
| URL: | https://d.repec.org/n?u=RePEc:osf:socarx:bcyk6_v1 |
| By: | Diego Restuccia |
| Abstract: | I examine the empirical properties of firm-level productivity and distortions across countries using the newly released World Bank Enterprise Surveys (WBES). Using a standard framework of production heterogeneity, I show that the gap in productivity and distortions between high and low productivity firms is larger in developing countries, generating large aggregate productivity losses from misallocation. A key empirical property of distortions in developing countries is that they systematically weaken the relationship between firm size and firm productivity. I exploit a unique feature of the WBES data to document which specific aspects of the economic environment faced by firms, such as financial constraints, regulation, corruption, and weak infrastructure, are consistent with the empirical pattern of distortions across countries. |
| Keywords: | Firms, productivity, size, distortions, misallocation, manufacturing, services, regulation. |
| JEL: | O11 O14 O4 |
| Date: | 2025–12–08 |
| URL: | https://d.repec.org/n?u=RePEc:tor:tecipa:tecipa-810 |
| By: | Tjantana Barro; Michal Marencak; Giang Nghiem |
| Abstract: | We provide novel causal evidence that macroeconomic narrative framing, whether a policy is described as a supply or demand shock, significantly shapes household beliefs. In a randomized survey experiment conducted within the Bundesbank household panel, participants received identical information about a climate policy that was framed differently across treatments. While both the supply and demand narratives lower growth expectations, we find that the supply framing increases inflation expectations, whereas the demand framing does not reduce them. This highlights that how structural policies are communicated, not just what is communicated, critically influences expectation formation. Our findings offer new insights for central bank and government communication strategies during economic transitions like the green transition or AI adoption. |
| Keywords: | climate change, expectations, survey experiments, RCT |
| JEL: | C33 D84 E31 E52 Q4 |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:een:camaaa:2025-69 |