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on Technology and Industrial Dynamics |
| By: | Daryna Grechyna; Pamela Efua Ofori |
| Abstract: | This study examines the impact of Conference of the Parties (COP) summits on innovation using an event study framework. Innovation is measured by patent grants, distinguishing between the total number of patents and the number of patents in environmental technologies, based on the World Intellectual Property Organization classification. We find that hosting a COP summit leads to a significant and lasting increase in the total number of patent grants, with an average rise of about 35 percent per year from the seventh to the thirteenth year after the summit, but has only a limited effect on the number of patent grants in environmental technologies. We further examine potential heterogeneity in the effects of COP summits by analyzing the impact of hosting a summit on patents in environmental technology compared to other technologies separately for each host country. The results suggest that while hosting a COP summit generally promotes environmental patenting, the effect is negative in some countries. We discuss possible reasons, including diminishing returns in green innovation and the influence of large industrial emitters. The findings are robust across alternative estimators, the inclusion of control variables, and different measures of patenting activity. |
| Keywords: | COP summits, environmental technologies, patents, innovation, event study |
| JEL: | O34 O44 Q54 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12120 |
| By: | Martin, Ralf; Solorzano Mosquera, Jenniffer; Thomas, Catherine; Verhoeven, Dennis |
| Abstract: | We examine the relationship between firms' markups and the economic value of their innovation, including both the private value captured by the innovating firm and the knowledge spillovers that benefit other firms. Using a sample of over 14, 500 EU firms and 2, 400 US firms granted patents between 2005 and 2014, we find that innovation by high-markup firms is more valuable privately and also creates more external value. These associations are robust to controlling for the stock of past innovation and to estimating innovation value in various ways. |
| JEL: | D24 L11 O31 O33 |
| Date: | 2025–09–30 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:129003 |
| By: | Howell, Sabrina T.; Rathje, Jason; Van Reenen, John; Wong, Jun |
| Abstract: | For governments procuring innovation, one choice is whether to specify desired products (a “Conventional” approach) or allow firms to suggest ideas (an “Open” approach). Using a U.S. Air Force R&D grant program, where Open and Conventional competitions were held simultaneously, we find that Open awards increase both commercial innovation and technology adoption by the military. In contrast, Conventional awards have no positive effects on new technology, but do create more program lock-in. We present evidence that openness matters independently from inducing differential selection, for example of less well-established firms. These results suggest benefits from open approaches to innovation procurement. |
| Keywords: | innovation; defense; R&D; procurement |
| JEL: | O31 O32 O38 H56 H57 |
| Date: | 2025–09–10 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:128343 |
| By: | Bijan Aghdasi; Abhijit Tagade |
| Abstract: | Do markets price knowledge spillovers? We show that patent grants influence the stock returns of firms that are connected through technological knowledge dependencies. Using directed patent citations among publicly listed companies in the United States, we construct a granular measure of each firm's exposure to new patents granted to its technologically upstream firms. Patents granted to these upstream companies significantly boost its abnormal stock returns during the week of the grant. We find that these financial spillovers are predominantly localized within a firm's immediate technological connections. Additionally, we provide a novel empirical decomposition of financial spillovers generated from patent grants, by distinguishing those spillovers emerging from sources of technological knowledge, from those emerging from product market rivals (negative effect) and suppliers (positive effect). Our findings are robust to alternative specifications and placebo tests, and they suggest that technological knowledge spillovers create important market-priced ties between firms that are not fully captured by traditional product market relationships. |
| Keywords: | innovation, networks, spillovers, patents, stock returns, supply chains |
| Date: | 2025–08–13 |
| URL: | https://d.repec.org/n?u=RePEc:cep:cepdps:dp2117 |
| By: | Gaia Dossi; Marta Morando |
| Abstract: | We document that inventors patent and cite technologies aligned with the views of their political party. We link inventors to US voter registration data and map politically polarized issues to technologies. Compared to Republicans, Democrats are one-third more likely to patent technologies addressing climate change mitigation or women's reproductive health and one-third less likely to patent weapons. This holds across economic returns and organization characteristics. Republicans and Democrats are also 20% differently likely to cite these technologies. These findings highlight the importance of inventors' identity - specifically, their party affiliation - in shaping the content and diffusion of their innovation. |
| Keywords: | Diffusion, Innovation, Partisanship, Polarisation, Polarization |
| Date: | 2025–08–13 |
| URL: | https://d.repec.org/n?u=RePEc:cep:cepdps:dp2116 |
| By: | Esther Arenas-Arroyo; Jacob Fabian; Friederike Mengel; Bernhard Schmidpeter; Michel Serafinelli |
| Abstract: | How does firms' skill demand change as the business landscape evolves? We present evidence from the green transition by analyzing how hurricanes impact demand for green skills. These disasters signal the risks of not acting on environmental issues. Using data from U.S. online job postings (2010--2019) and hurricane paths, we create a new measure of green job postings. Firms in areas affected by hurricanes are 6.4% more likely to post jobs that require green skills after the event, particularly those serving local markets. |
| Keywords: | green skills, green transition, online job postings, hurricanes |
| JEL: | J23 Q54 L20 J24 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12110 |
| By: | Ciaschi, Matias; Falcone, Guillermo; Garganta, Santiago; Gasparini, Leonardo; Bertín, Octavio; Ramírez-Leira, Lucía |
| Abstract: | This paper investigates the potential distributional consequences of artificial intelligence (AI) adoption in Latin American labor markets. Using harmonized household survey data from 14 countries, we combine four recently developed AI occupational exposure indices---the AI Occupational Exposure Index (AIOE), the Complementarity-Adjusted AIOE (C-AIOE), the Generative AI Exposure Index (GBB), and the AI-Generated Occupational Exposure Index (GENOE)--to analyze patterns across countries and worker groups. We validate these measures by comparing task profiles between Latin America and high-income economies using PIAAC data, and develop a contextual adjustment that incorporates informality, wage structures, and union coverage. Finally, we simulate first order impacts of AI-induced displacement on earnings, poverty, and inequality. The results show substantial heterogeneity, with higher levels of AI- related risk among women, younger, more educated, and formal workers. Indices that account for task complementarities show flatter gradients across the income and education distribution. Simulations suggest that displacement effects may lead to only moderate increases in inequality and poverty in the absence of mitigating policies. |
| JEL: | O33 J21 D31 |
| Date: | 2025–08 |
| URL: | https://d.repec.org/n?u=RePEc:idb:brikps:14253 |
| By: | Tate, Anya |
| Abstract: | The late 19th-century reforms to the British patenting system reduced the cost of obtaining a patent from over £100 in 1851 to just £4 by 1883. While increasing accessibility, this cost reduction led to an increase of low-quality patents often replicating previous inventions, raising concerns about the system's effectiveness. As a result, the 1902 policy proposed novelty examination for the first time, increasing the cost by 25%. This paper examines whether the implementation of this policy in 1905 had a differential effect on patenting activity across British regions. Despite the significance of this policy, it has received extremely limited academic attention. This research aims to fill this gap and add to the literature on the regional impacts of patent system reforms in this period. This study employs panel regressions using data on every geocoded patent sealed between 1895-1915 in the PatentCity database with regional employment in 28 industries as controls. Results indicate no change in the regional distribution of patenting activity as a result of the novelty examination. These findings are consistent with those of Nicholas (2011) for the 1883 policy and have important implications for the geography of inventive activity and the distributional impacts of invention policies. |
| JEL: | O30 R10 |
| Date: | 2025–08 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:129440 |
| By: | Nils H. Lehr |
| Abstract: | This paper provides evidence that rising misallocation in the R&D sector contributed to the recent slowdown in U.S. productivity growth. I develop a growth accounting framework allowing for misallocation of R&D resources across firms captured by wedges between their marginal cost and benefits of R&D. I show that R&D wedges can be measured from R&D returns and document large and persistent differences in R&D returns across US-listed firms. Combining data and model, I estimate that frictions reduced productivity growth by 18% over 1975–2014 and that rising misallocation in the R&D sector accounts for 25% of the growth slowdown. |
| Keywords: | R&D; productivity growth; growth slowdown |
| Date: | 2025–09–12 |
| URL: | https://d.repec.org/n?u=RePEc:imf:imfwpa:2025/183 |
| By: | Oscar Camacho (The Brattle Group); Michelle Garfinkel (University of California-Irvine); Constantinos Syropoulos (School of Economics, Drexel University); Yoto Yotov (School of Economics, Drexel University) |
| Abstract: | How do geopolitical frictions matter for the diffusion of technology? Based on a guns-versus-butter model involving two countries (a technology leader and a technology laggard), we study the direct and indirect effects dual-use (or general-purpose) technology transfers on the countries' payoffs and hence their preferences over such transfers. A central finding is that, when the initial technological distance between the two countries is large whereas the degree of output security is low and the laggard's capacity to absorb state-of-the-art technologies is relatively limited, the leader has an incentive to block a transfer to the laggard. The analysis also unveils the possible emergence of a "low-technology trap."" Using data on cross-border patent flows as a proxy for technology transfers and sanctions as a proxy for conflict over the 1995-2018 period, we present evidence in support of the theory. |
| Keywords: | output insecurity, arming policies, power, sanctions, low-technology trap |
| JEL: | D30 D74 F51 O33 |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:drx:wpaper:202535 |
| By: | Eric Budish; Maya M. Durvasula; Benjamin N. Roin; Heidi L. Williams |
| Abstract: | For large classes of potential inventions, intellectual property rights that are available on paper are either not possible or not profitable for firms to enforce in practice. In this paper, we show that these missing incentives yield quantitatively significant underinvestment in research and development. We develop a simple model that formalizes the conditions under which such missing markets for innovation arise. We identify an empirical setting—research into new uses for existing drugs—in which there is sharp variation in the enforceability of intellectual property rights on otherwise comparable inventions over time. We show that when intellectual property rights become unenforceable, research investment and commercialization nearly cease. In doing so, we test two claims central both to our model and the innovation literature more generally—that stronger intellectual property protection does, in fact, induce investment, and that heterogeneity in the availability of these rights distorts investment. The welfare consequences of inadequate incentives in our empirical context are large. Our estimates suggest that 200-800 new uses for existing drugs would have been developed under counterfactual policies. Measures of the value of these uses drawn from existing literature suggest that the social cost of this particular missing market is on the order of several trillion dollars. |
| JEL: | D47 I10 I18 K23 L65 O0 O3 O30 O34 |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34222 |
| By: | Yubo Cheng |
| Abstract: | This paper examines how digital transformation reshapes employment structures within Chinese listed firms, focusing on occupational functions and task intensity. Drawing on recruitment data classified under ISCO-08 and the Chinese Standard Occupational Classification 2022, we categorize jobs into five functional groups: management, professional, technical, auxiliary, and manual. Using a task-based framework, we construct routine, abstract, and manual task intensity indices through keyword analysis of job descriptions. We find that digitalization is associated with increased hiring in managerial, professional, and technical roles, and reduced demand for auxiliary and manual labor. At the task level, abstract task demand rises, while routine and manual tasks decline. Moderation analyses link these shifts to improvements in managerial efficiency and executive compensation. Our findings highlight how emerging technologies, including large language models (LLMs), are reshaping skill demands and labor dynamics in Chinas corporate sector. |
| Date: | 2025–06 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2506.23230 |
| By: | Basihos, S. |
| Abstract: | Since the mid-1990s computing revolution, advanced economies have shown several striking regularities. After a decade-long boom, labor productivity growth has slowed, falling below its historical trend. Meanwhile, the labor share has declined sharply, and capital efficiency has decreased. This paper argues that these developments are not isolated but reflect a common structural change, with one possible driver being the faster obsolescence of capital in use due to the rapid advances of the computing revolution. Evidence from U.S. data suggests a significant rise in the capital obsolescence rate. To interpret these dynamics, I draw on an endogenous growth model of the U.S. economy. The model shows that while accelerated capital replacement initially boosts productivity, it ultimately leads to less effective use of resources under labor–capital complementarity, because labor skill creation lags behind the rapid introduction of new capital. As a result, the long-run outcomes under this regime are slower productivity growth, a lower labor share, and reduced capital efficiency. The quantitative model outputs are largely consistent with recent trends observed in advanced economies. |
| Keywords: | Obsolescence, Productivity Growth, Labor Share |
| JEL: | E20 O40 |
| Date: | 2025–05–12 |
| URL: | https://d.repec.org/n?u=RePEc:cam:camjip:2522 |