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on Technology and Industrial Dynamics |
| By: | Bing Guo; David Pérez-Castrillo; Anna Toldrà-Simats |
| Abstract: | We study the effect of analyst coverage on firms’ innovation strategy and outcome. By considering three different channels that allow firms to innovate: internal R&D, acquisitions of other innovative firms, and investments in corporate venture capital (CVC), we are able to distinguish between the pressure and information effect of analysts. Using the data of US firms from 1990 to 2012, we find evidence that: i) an increase in financial analysts leads firms to cut R&D expenses, and ii) more analyst coverage leads firms to acquire more innovative firms and invest in CVC. We attribute the first result to the effect of analyst pressure, and the second to the informational role of analysts. In line with the previous literature, we also find that analyst coverage has a negative effect on firms’ future patents and citations; however, this negative effect becomes not significant when firms’ in-house R&D spending and external innovation channels are taken into account. We find that more financial analysts encourage firms to make more efficient investments related to innovation, which increase their future patents and citations. We address endogeneity with an instrumental variables approach and a difference-in-differences strategy where exogenous variation in analyst coverage comes from brokerage house mergers. |
| Keywords: | financial analysts, innovation, corporate venture capital, acquisition |
| JEL: | G34 G24 O31 |
| Date: | 2017–07 |
| URL: | http://d.repec.org/n?u=RePEc:bge:wpaper:980&r=tid |
| By: | Seker, Murat; Ulu, Mehmet Fatih |
| Abstract: | The regulatory environment in a country is an important factor affecting firm performance. This study investigates the impact of a particular regulation, namely license requirements for certain firm activities, on the innovation performance of Indian firms. Using a firm level panel data set, it shows that removal of license requirements led to roughly eight percentage points faster innovation rates within two years following the reform where innovation is measured as introduction of new product varieties that had not existed in the market. When the residual increase in sales revenues even after controlling for product innovation is called as process innovation, substantial improvements in process innovation are also observed. The results are robust to inclusion of controls for the other policy reforms that occurred during the period of licensing reform, and persist in different subcategories of firms. |
| Keywords: | Innovation, research and development, regulatory environment, regulations, industrial policy, India. |
| JEL: | L11 L52 O14 O31 O38 |
| Date: | 2017–07–26 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:80382&r=tid |
| By: | Bamieh, Omar; Fiorini, Matteo; Hoekman, Bernard; Jakubik, Adam |
| Abstract: | We present evidence that the negative effect of the China shock on US manufacturing employment is lower for industries that use services inputs more intensively. Different potential mechanisms for this finding are analyzed. This reveals significant heterogeneity across different types of services and their potential role in affecting labor demand and supply responses to greater import competition. |
| Keywords: | China shock; import competition; Manufacturing employment; services input use; servicification |
| JEL: | F16 L8 |
| Date: | 2017–07 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:12173&r=tid |
| By: | Neil Lee (Department of Geography & Environment, London School of Economics & Political Science); Stephen Clarke (The Resolution Foundation) |
| Abstract: | Do residents benefit from the growth of high-technology industries in their local economy? Policymakers invest considerable resources in attracting and developing innovative, high-tech industries, but there is relatively little evidence on this question. This paper investigates the labour market impact of high-tech growth on low and mid-skilled workers, using data on UK local labour markets from 2009-2015. It shows that high-tech industries – either traditional ‘high-tech’ or the digital economy – have a positive jobs multiplier, with each high-tech job creating around 0.9 local nontradeable service jobs, around 0.6 of which go to low-skilled residents. Employment rates for midskilled workers do not increase, but they benefit from higher wages. Yet the benefits for low-skilled workers come with a catch: they gain from increased employment rates, but lose as new jobs are poorly paid service work so lower average wages. |
| Keywords: | living standards; wages; multipliers; high-technology; cities; inequality |
| Date: | 2017–07 |
| URL: | http://d.repec.org/n?u=RePEc:sru:ssewps:2017-14&r=tid |
| By: | Sara, Amoroso (Joint Research Centre, European Commission); Albert, Link (University of North Carolina at Greensboro, Department of Economics) |
| Abstract: | An increasing number of theoretical and empirical analyses address the role of innovation as one of the main sources of firm growth. More recently, studies have looked at the role of gen-der diversity as a possible determinant of innovation and entrepreneurial performance. How-ever, the relationship between gender and employment growth —a dimension of entrepreneurial performance— still remains unexplored to a large degree. This paper contributes to the empiri-cal literature on gender and entrepreneurial performance in several ways. First, it examines the role played by both innovation and gender ownership as determinants of employment growth rates of young, knowledge intensive entrepreneurial (KIE) firms. Second, it investigates the indirect impact of contributing factors —such as the characteristics of the market, knowledge-based capital, and human capital— on employment growth. And third, it relies on a rich new cross-sectional data set on young, KIE firms across European Union (EU) countries. The data set contains information not only on the gender of the firm’s founders, but also on the market environment, business strategy, and innovative and economic performance of firms. |
| Keywords: | innovation; entrepreneurship; employment growth; gender |
| JEL: | J16 L26 O31 |
| Date: | 2017–07–24 |
| URL: | http://d.repec.org/n?u=RePEc:ris:uncgec:2017_009&r=tid |
| By: | David Mayer-Foulkes (Division of Economics, CIDE); Kurt A. Hafner (Heilbronn University) |
| Abstract: | Technological creation and mass production are usually associated with large-scale production, while technological absorption is found more often in small-scale competitive firms. Thus, the link between the innovative and absorptive sectors defines a technological and market power gradient that is a key endogenous feature of the economy. We construct a stylized two sector mass market economy model, one with monopolistic and the other with perfect competition, that innovate and absorb technologies. Innovation profits are concentrated among a few owners of large-scale innovation, and economy-wide wage levels reflect the lagging average technological level. The model shows there are innovative-distributive policies that can increase profits. Cointegration and weak-exogeneity results based on our study corroborate the assertion that the large-scale sector drives aggregate employment, wages and inequality. |
| Keywords: | Innovation and absorption, large and small scale technological change, technological gradient, long term inequality, long term market inefficiency, innovative-distributive policies. |
| Date: | 2017–04 |
| URL: | http://d.repec.org/n?u=RePEc:emc:wpaper:dte606&r=tid |
| By: | Alex Chernoff |
| Abstract: | This paper develops a model of firm heterogeneity, technological adoption, and urbanization. In the model, welfare is measured by household real income, and urbanization is measured by population density. I use the model to derive statistics that measure the effect of a new technology on productivity, welfare, and urbanization. The empirical application of the paper estimates these effects using nineteenth-century firmlevel data on mechanical steam power in the Canadian manufacturing sector, and townshiplevel population data. The results indicate that the introduction of steam power increased productivity by 22.8 percent, and welfare by 6.0 percent. By comparing the model predicted change in urbanization to observed population density growth, I find that the introduction of mechanical steam power accounts for approximately 6.2 percent of the observed variation in urbanization during this period. |
| Keywords: | Economic models; Productivity; Regional economic developments |
| JEL: | O14 R13 N61 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:bca:bocawp:17-27&r=tid |