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on Technology and Industrial Dynamics |
| By: | César Hidalgo; Pierre-Alexandre Balland; Ron Boschma; Mercedes Delgado; Maryann Feldma; Koen Frenken; Edward Glaeser; Canfei He; Dieter F. Kogler; Andrea Morrison; Frank Neffke; David Rigby; Scott Stern; Siqi Zheng; Shengjun Zhu |
| Abstract: | The idea that skills, technology, and knowledge, are spatially concentrated, has a long academic tradition. Yet, only recently this hypothesis has been empirically formalized and corroborated at multiple spatial scales, for different economic activities, and for a diversity of institutional regimes. The new synthesis is an empirical principle describing the probability that a region enters - or exits - an economic activity as a function of the number of related activities pre- sent in that location. In this paper we summarize some of the recent empirical evidence that has generalized the principle of relatedness to a fact describing the entry and exit of products, industries, occupations, and technologies, at the national, regional, and metropolitan scales. We conclude by describing some of the policy implications and future avenues of research implied by this robust empirical principle. |
| Keywords: | economic complexity, relatedness, economic geography |
| Date: | 2018–07 |
| URL: | http://d.repec.org/n?u=RePEc:egu:wpaper:1830&r=tid |
| By: | Pierre-Alexandre Balland; Cristian Jara-Figueroa; Sergio Petralia; Mathieu Steijn; David Rigby; César Hidalgo |
| Abstract: | Why do some economic activities agglomerate more than others? And, why does the agglomeration of some economic activities continue to increase despite recent developments in communication and transportation technologies? In this paper, we present evidence that complex economic activities concentrate more in large cities. We find this to be true for technologies, scientific publications, industries, and occupations. Using historical patent data, we show that the urban concentration of complex economic activities has been continuously increasing since 1850. These findings suggest that the increasing urban concentration of jobs and innovation might be a consequence of the growing complexity of the economy. |
| Keywords: | economic complexity, complexity, scaling, occupations, cities, agglomeration |
| Date: | 2018–07 |
| URL: | http://d.repec.org/n?u=RePEc:egu:wpaper:1829&r=tid |
| By: | Rodríguez-Pose, Andrés; Wilkie, Callum |
| Abstract: | Not all economically-disadvantaged – 'less developed' or 'lagging' – regions are the same. They are, however, often bundled together for the purposes of innovation policy design and implementation. This paper attempts to determine whether such bundling is warranted by conducting a regional level investigation for Canada, the United States, on the one hand, and Europe, on the other, to (a) identify the structural and socioeconomic factors that drive patenting in the less developed regions of North America and Europe, respectively; and (b) explore how these factors differ between the two contexts. The empirical analysis, estimated using a mixed-model approach, reveals that, while there are similarities between the drivers of innovation in North America's and Europe's lagging regions, a number of important differences between the two continents prevail. The analysis also indicates that the territorial processes of innovation in North America's and Europe's less developed regions are more similar to those of their more developed counterparts than to one another. |
| Keywords: | Canada; Europe; Innovation; lagging regions; patenting; R&D; United States |
| JEL: | O32 O33 R11 R12 |
| Date: | 2018–07 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:13048&r=tid |
| By: | Cristian Jara-Figueroa; Bogang Jun; Edward Glaeser; Cesar Hidalgo |
| Abstract: | How do regions acquire the knowledge they need to diversify their economic activities? How does the migration of workers among firms and industries contribute to the diffusion of that knowledge? Here we measure the industry, occupation, and location specific knowledge carried by workers from one establishment to the next using a dataset summarizing the individual work history for an entire country. We study pioneer firms?firms operating in an industry that was not present in a region?because the success of pioneers is the basic unit of regional economic diversification. We find that the growth and survival of pioneers increase significantly when their first hires are workers with experience in a related industry, and with work experience in the same location, but not with past experience in a related occupation. We compare these results with new firms that are not pioneers and find that industry specific knowledge is significantly more important for pioneer than non-pioneer firms. To address endogeneity we use Bartik instruments, which leverage national fluctuations in the demand for an activity as shocks for local labor supply. The instrumental variable estimates support the finding that industry related knowledge is a predictor of the survival and growth of pioneer firms. These findings expand our understanding of the micro-mechanisms underlying regional economic diversification events. |
| Keywords: | industry, occupation, knowledge, firm, survival |
| Date: | 2018–07 |
| URL: | http://d.repec.org/n?u=RePEc:egu:wpaper:1828&r=tid |
| By: | KANI Masayo; MOTOHASHI Kazuyuki |
| Abstract: | This paper provides empirical analyses to understand the management of external technology sourcing using a novel dataset of new product development (NPD) projects in Japanese firms, focusing on the difference between bilateral and unilateral contract-based alliances. External technology sourcing takes on various forms that can be divided into two categories: bilateral alliances, such as joint research and development (R&D), and unilateral alliances, such as licensing and commissioned R&D. The former style involves the cooperation process of joint R&D with a partner, whereas the latter involves the straightforward process of technology acquisition from a partner. In this paper, the determinants of the sourcing strategy for each contract type are investigated, and we find that a firm is likely to use external technology sourcing in exploratory projects, and that the type of sourcing will differ between large and small firms. Furthermore, a bilateral alliance is likely found to be used for market pull-type projects, while technology push-type ones are more often managed by unilateral alliances. |
| Date: | 2018–06 |
| URL: | http://d.repec.org/n?u=RePEc:eti:dpaper:18042&r=tid |
| By: | Stiebale, Joel; Vencappa, Dev |
| Abstract: | Recent theoretical contributions provide conflicting predictions about the effects of product market competition on firms' organizational choices. This paper uses a rich firm-product-level panel data set of Indian manufacturing firms to analyze the relationship between import competition and vertical integration. Exploiting exogenous variation from changes in India's trade policy, we find that foreign competition, induced by falling output tariffs, increases backward vertical integration by domestic firms. The effects are concentrated in rather homogenous product categories, among firms that mainly operate on the domestic market, and in relatively large firms. Our results are robust towards different sub-samples and hold with or without conditioning on various firm- and product-level characteristics including input tariffs and firm-year fixed effects. We also provide evidence that vertical integration is associated with higher physical productivity, lower marginal costs and rising markups. |
| Keywords: | Trade Liberalization,Competition,Vertical Integration,Innovation |
| JEL: | F14 L25 L22 L23 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:dicedp:293&r=tid |
| By: | Cédric Durand (Centre d'Économie Paris Nord, Université Paris 13); William Milberg (Department of Economics, New School for Social Research) |
| Abstract: | More than two decades of scholarship on global value chains (GVCs) has reshaped our understanding of the global economy while tracking the international fragmentation of productive process and its socioeconomic consequences. In this paper we focus on the effort by lead firms to capture market power in the provision of and production of intangible assets. The analysis builds on Pagano’s (2014) notion of “intellectual monopoly”, where government protections of intellectual property have the effect of locking in the monopoly power from intangible asset creation. We extend it to the presence of scale economies and network externalities associated with the production of intangible assets. |
| Keywords: | Global Value Chains, Intellectual Property Rights, Intangible Assets |
| JEL: | D43 F13 F23 |
| Date: | 2018–07 |
| URL: | http://d.repec.org/n?u=RePEc:new:wpaper:1807&r=tid |
| By: | Giuseppe Berlingieri; Sara Calligaris; Chiara Criscuolo |
| Abstract: | Ever since Moore (1911) a large empirical and theoretical literature has established the existence of a firm size-wage premium. At the same time, a second regularity in empirical work, linking size and productivity, has inspired a vast literature in multiple fields. However, the majority of the existing evidence is based on manufacturing data only. With manufacturing nowadays accounting for a very small share of the economy in many countries, whether productivity, size, and wages are closely linked, and how tight this link is across sectors, is still an open question. Using a unique dataset that collects micro-aggregated firm-level information on productivity, size, and wages for the entire economy in 17 countries over the 1994-2012 period, this paper unveils a much more subtle picture. First, while in the manufacturing sector both productivity and wages increase monotonically with firm size, the same is not true in the service sector. Second, a tight and positive link between wages and productivity is instead found in both manufacturing and services. The combination of these results suggests that, when looking at data for a much larger share of the economy, the ``size-wage premium' becomes more a "productivity-wage premium'". Unbundling the relationship between size, wages, and productivity has first-order policy implications for both workers and firms. |
| Keywords: | productivity, size-premium, wages |
| JEL: | E2 D2 J3 |
| Date: | 2018–07 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp1557&r=tid |
| By: | Hagspiel, V. (Tilburg University, Center For Economic Research); Huisman, Kuno (Tilburg University, Center For Economic Research); Kort, Peter (Tilburg University, Center For Economic Research); Lavrutich, Maria (Tilburg University, Center For Economic Research); Nunes, Claudia; Pimentel, Rita |
| Abstract: | Rapid technological developments are inducing the shift in consumer demand from existing products towards new alternatives. When operating in a declining market, the profitability of incumbent firms is largely dependent on the ability to correctly time the introduction of product innovations. This paper contributes to the existing literature on technology adoption by considering the optimal innovation investment in the context of the declining market. We study the problem of a firm that has an option to undertake the innovation investment and thereby either to add a new product to its portfolio (add strategy) or to replace the established product by the new one (replace strategy). We are able to quantify the value of the option to adopt a new technology, as well as the optimal timing to exercise it. We find that it can be optimal for the firm to innovate not only because of the significant technological improvement, but also due to demand saturation. In the latter case profits of the established product may become so low that the firm will adopt a new technology even if the newest available innovation has not improved for some time. This way, our approach allows to explicitly account for the effect of a decline in the established market on technology adoption. Furthermore, we find that under certain conditions an inaction region exists, in which the firm does not innovate, while for lower technology levels it applies the add strategy and for higher technology levels the replace strategy. |
| Keywords: | Technology adoption; Declining demand; Product innovation; Dynamic programming |
| JEL: | C61 D81 O33 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:tiu:tiucen:b039cdad-73d9-4db0-a4f6-eb044f0b83a9&r=tid |
| By: | Töpfer, Marina |
| Abstract: | This paper elaborates whether women bringing their diversity, cross-cultural awareness and transformational leadership skills to corporate boards offer strategic advantages for firms. In the analysis the effect of women in the board room on innovation activity and corporate firm performance as well as the joint consequences of female directors and innovation activity on the firm's success are examined. The latter may be particularly important in the context of gender diversity as more gender-diverse boards allow for higher levels of creativity and hence innovation. In order to account for endogeneity issues, different model specifications are employed (two-way fixed effects models and linear dynamic panel data models). Unconditional quantile regressions are used in order to go beyond the mean. The analysis is conducted using Chinese firm-level data from 2006-2015. The results suggest positive effects of gender diversity in corporate boards and patenting activities on firm performance. Women directors are found to have statistically significant effects on both input-(positive) and output-oriented (negative) innovation activity. |
| Keywords: | Women Directors,Innovation Activity,Firm Performance,Gender-diverse Boards,Unconditional Quantile Regression |
| JEL: | G30 J16 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:hohdps:152018&r=tid |
| By: | Claudia Noumedem Temgoua |
| Abstract: | This paper investigates the role of Chinese and Indian highly skilled diaspora in the internationalization of knowledge networks, for a sample of OECD destination countries. We mainly focus on two types of knowledge networks: co-inventorship and co-authorship. We jointly exploit country-level data on highly skilled migration and information on co-authorship and co-inventorship from publication and patent data. Based on a gravity model regression analysis, we find that OECD country pairs hosting sizeable portions of the Indian or Chinese highly skilled diasporas tend to collaborate more on publications and patents, after controlling for other migration trends. When extending the analysis to other countries, we find similar results for Vietnam, Pakistan and Iran. |
| Keywords: | migration, highly skilled, publications, R&D cooperation, diffusion, patent |
| JEL: | C8 F22 J61 O31 O33 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:grt:wpegrt:2018-16&r=tid |