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on Technology and Industrial Dynamics |
| By: | Daron Acemoglu; Ufuk Akcigit; Nicholas Bloom; William R. Kerr |
| Abstract: | We build a model of firm-level innovation, productivity growth and reallocation featuring endogenous entry and exit. A key feature is the selection between high- and low-type firms, which differ in terms of their innovative capacity. We estimate the parameters of the model using detailed US Census micro data on firm-level output, R&D and patenting. The model provides a good fit to the dynamics of firm entry and exit, output and R&D, and its implied elasticities are in the ballpark of a range of micro estimates. We find industrial policy subsidizing either the R&D or the continued operation of incumbents reduces growth and welfare. For example, a subsidy to incumbent R&D equivalent to 5% of GDP reduces welfare by about 1.5% because it deters entry of new high-type firms. On the contrary, substantial improvements (of the order of 5% improvement in welfare) are possible if the continued operation of incumbents is taxed while at the same time R&D by incumbents and new entrants is subsidized. This is because of a strong selection effect: R&D resources (skilled labor) are inefficiently used by low-type incumbent firms. Subsidies to incumbents encourage the survival and expansion of these firms at the expense of potential high-type entrants. We show that optimal policy encourages the exit of low-type firms and supports R&D by high-type incumbents and entry. |
| Keywords: | industrial policy, productivity growth, innovation, R&D |
| JEL: | E02 L1 O31 O32 O33 |
| Date: | 2013–05 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp1216&r=tid |
| By: | Wladimir Raymond; Jacques Mairesse; Pierre Mohnen; Franz Palm |
| Abstract: | This paper introduces dynamics in the R&D to innovation and innovation to productivity relationships, which have mostly been estimated on cross-sectional data. It considers four nonlinear dynamic simultaneous equations models that include individual effects and idiosyncratic errors correlated across equations and that differ in the way innovation enters the conditional mean of labor productivity: through an observed binary indicator, an observed intensity variable or through the continuous latent variables that correspond to the observed occurrence or intensity. It estimates these models by full information maximum likelihood using two unbalanced panels of Dutch and French manufacturing firms from three waves of the Community Innovation Survey. The results provide evidence of robust unidirectional causality from innovation to productivity and of stronger persistence in productivity than in innovation. <P>Dans ce papier, nous introduisons de la dynamique dans le modèle Crépon-Duguet-Mairesse (CDM), à la fois entre la R-D et l’innovation et entre l’innovation et la productivité. Le modèle CDM a généralement été estimé sur des données en coupe transversale. Nous proposons quatre modèles dynamiques à équations simultanées avec des effets individuels et des effets idiosyncratiques corrélés entre équations. Ces modèles diffèrent dans la façon dont l’innovation apparaît dans l’équation de productivité : à travers une variable binaire ou une variable continue, et à travers une mesure observée ou une mesure latente de l’innovation. Les modèles sont estimés par maximum de vraisemblance sur des données panel d’entreprises françaises et néerlandaises provenant de trois vagues des enquêtes communautaires d’innovation. Les résultats sont robustes et montrent que la causalité est unidirectionnelle allant de l’innovation à la productivité, et que la persistance est plus forte dans la productivité que dans l’innovation. |
| Keywords: | R&D, Innovation, Productivity, Panel data, Dynamics, Simultaneous equations, R-D, innovation, productivité, données panel, dynamique, équations simultanées |
| Date: | 2013–05–01 |
| URL: | http://d.repec.org/n?u=RePEc:cir:cirwor:2013s-12&r=tid |
| By: | Fernandes, Cristina; Ferreira, João; Raposo, Mario |
| Abstract: | This research aims to analyse the drivers to company innovation and their effects on the financial performance. This study is based upon a sample of companies, located in two neighbouring countries (Portugal and Spain). Linear regression was the methodology deployed to analyse the importance of innovation types (differences between Portugal and Spain). To analyse the extent to which the innovation capacity variables influence financial performance (turnover), we made recourse to Probit Regression models. Our results show significant differences in terms of both the drivers and inhibitors to innovation in these two countries. The introduction of products into new markets only proved significant at Spanish companies whilst innovations in both products and processes are significant in both sets of Iberian companies. |
| Keywords: | innovation firm, innovation capacities, financial performance, Iberian countries |
| JEL: | M1 M10 M21 |
| Date: | 2013–05 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:46776&r=tid |