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on Technology and Industrial Dynamics |
| By: | Raphael Franck; Oded Galor |
| Abstract: | This research explores the effect of industrialization on the process of development. In contrast to conventional wisdom that views industrial development as a catalyst for economic growth, the study establishes that while the adoption of industrial technology was conducive to economic development in the short-run, it has detrimental effects on the standard of living in the long-run. Exploiting exogenous geographic and climatic sources of variation in the diffusion and adoption of steam engines across French departments during the early phases of industrialization, the research establishes that intensive industrialization in the middle of the 19th century increased income per capita in the subsequent decades but diminished it by the turn of the 21st century. The analysis further suggests that the adverse effect of earlier industrialization on long-run prosperity can be attributed to the negative impact of the adoption of unskilled-intensive technologies in the early stages of industrialization on the long-run level of human capital and thus on the incentive to adopt skill-intensive technologies in the contemporary era. Preferences and educational choices of second generation migrants within France indicate that industrialization has triggered a dual techno-cultural lock-in characterized by a reinforcing interaction between technological inertia, reflected by the persistence predominance of low-skilled-intensive industries, and cultural inertia, in the form of a lower predisposition towards investment in human capital. These findings suggest that the characteristics that permitted the onset of industrialization, rather than the adoption of industrial technology per se, have been the source of prosperity among the currently developed economies that experienced an early industrialization. Thus, developing economies may benefit from the allocation of resources towards human capital formation and skilled intensive sectors rather than toward the promotion of traditional unskilled-intensive industrial sectors. |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:bro:econwp:2018-7&r=tid |
| By: | Nicholas Bloom; Hong Cheng; Mark Duggan; Hongbin Li; Franklin Qian |
| Abstract: | We analyze a new management survey for around 1,000 firms and 10,000 employees across two large provinces in China. The unique aspect of this survey is it collected management data from the CEO, a random sample of senior managers and workers. We document four main results. First, management scores, much like productivity, have a wide spread with a long left-tail of poorly managed firms. This distribution of management scores is similar for CEOs, senior managers and workers management, and appears broadly reasonably compared to US scores for similar questions. Moreover, for all groups these scores correlate with firm performance, suggesting all employees within the firm are (at least partly) aware of the their firms’ managerial abilities. Second, the scores across the groups are significantly cross-correlated, but far from completely. This suggests that while different levels of the firm have similar views on the firms’ management capabilities, they do not fully agree. Third, we find that the CEO’s management scores are the most predictive of firm performance, followed by the senior managers and then the workers. Hence, CEOs do appear to know best about their firms management strengths and weaknesses. Fourth, within-firm management score dispersion is negatively correlated with investment and R&D intensity, suggesting long-run planning is linked with greater consistency in management across levels in firms. |
| JEL: | J0 |
| Date: | 2018–06 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:24760&r=tid |
| By: | Galina Besstremyannaya (Centre for Economic and Financial Research at New Economic School); Richard Dasher (Stanford University); Sergei Golovan (New Economic School) |
| Abstract: | The paper develops a growth model with acquisition of endogenous innovations. The model builds on the microeconomic evidence about acquisitions in the technology economy: acquirers are innovative firms, which regard acquisitions as a complementary strategy to their R&D investment. Targets are small firms and leaders on the markets for their products. Acquirers are capable of implementing a higher quality improvement of the products of the targets. The model includes the government, which collects corporate profit tax and redistributes it to provide subsidies for innovations and acquisitions. We quantify the model using the 2000-2016 financial data for Japanese firms, matched with their patents. The estimates prove the model's predictions about a positive effect of acquisitions on growth. The impact of acquisitions on the R&D intensity is related to the type of complementarity between innovation and acquisition strategies. The effect of subsidies towards the acquisitions is linked to the parameters of the cost function and reflects the association between the costs of acquisitions and R&D. |
| Keywords: | innovation, endogenous growth, acquisition, social planner, patents |
| JEL: | O11 O38 O40 O53 |
| Date: | 2018–08 |
| URL: | http://d.repec.org/n?u=RePEc:cfr:cefirw:w0247&r=tid |
| By: | Daniel A. Dias; Carlos Robalo Marques |
| Abstract: | Using firm level data, we show that the Portuguese financial crisis had, overall, a cleansing effect on productivity. During the crisis, aggregate productivity gains, both in manufacturing and services, came from relatively higher contributions of entry and exit of firms and from reallocation of resources between surviving firms. At the microlevel, we find that the crisis reduced the probability of survival for high and low productivity firms, but hit low productivity firms disproportionately harder, in line with the cleansing hypothesis. The correlation between productivity and employment growth in manufacturing and services strengthened, but the correlation between productivity and capital growth in the service sector weakened. We attribute this result in part to structural sectoral differences, but mainly to the large negative demand and credit shocks that affected mainly the nontradable services sub-sector. We also find that the probability of exit increased disproportionately for firms operating in more financially dependent industries, but there is no evidence of a scarring effect on productivity stemming from changing credit conditions. |
| JEL: | D24 E32 L25 O47 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:ptu:wpaper:w201818&r=tid |
| By: | Christian Osterhold; Ana Fontoura Gouveia |
| Abstract: | Productivity growth is slowing down among OECD countries, coupled with increased misallocation of resources. A recent strand of literature focuses on the role of non-viable firms ("zombie firms") to explain these developments. Using a rich firm-level dataset for one of the OECD countries with the largest drop in barriers to firm exit and restructure, we assess the role of zombies on firm dynamics, both in the extensive and intensive margins. We confirm the results on the high prevalence of zombie firms, significantly less productive than their healthy counterparts and thus dragging aggregate productivity down. Moreover, while we find evidence of positive selection within zombies, with the most productive restructuring and the least productive exiting, we also show that the zombies' productivity threshold for exit is much lower than that of non-zombies, allowing them to stay in the market, distorting competition and sinking resources. Zombie prevalence curbs the growth of viable firms, in particular the most productive, harming the intra-sectoral resource reallocation. We show that a reduction in exit and restructuring barriers promotes a more effective exit channel and fosters the restructuring of the most productive, highlight the role of public policy in addressing zombies' prevalence, fostering a more efficient resource allocation and enabling productivity growth. |
| JEL: | D24 E22 E24 G33 J24 L25 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:ptu:wpaper:w201811&r=tid |
| By: | Laurent Gobillon (PSE - Paris School of Economics, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Panthéon-Sorbonne - ENS Paris - École normale supérieure - Paris - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique); Wolff Francois Charles (LEMNA - Laboratoire d'économie et de management de Nantes Atlantique - UN - Université de Nantes, INED - Institut national d'études démographiques) |
| Abstract: | In this paper, we investigate the effect on quality, quantity and prices of an innovative fishing gear introduced for a subsample of vessels on a single wholesale fish market in France. Estimations are conducted using transaction data over the 2009-2011 period during which the innovation was introduced. Using a difference-in-differences approach around the discontinuity, we find that for the treated the innovation has a large effect on quality (29.2 percentage points) and prices (23.2 percentage points). A shift in caught fish species is observed and new targeted species are fished very intensively. We also quantify the treatment effect on the treated market from aggregate market data using factor models and a synthetic control approach. We find a sizable effect of the innovation on market quality which is consistent with non-treated vessels adapting their fishing practices to remain competitive. The innovation has no effect on market quantities and prices. |
| Keywords: | difference in differences,discontinuity,fish,innovation,product quality,product prices,synthetic controls,factor models |
| Date: | 2017–01 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-01431160&r=tid |
| By: | Gorodnichenko, Yuriy; Revoltella, Debora; Švejnar, Jan; Weiss, Christoph T. |
| Abstract: | Using a new survey, we show that the dispersion of marginal products across firms in the European Union is about twice as large as that in the United States. Reducing it to the US level would increase EU GDP by more than 30 percent. Alternatively, removing barriers between industries and countries would raise EU GDP by at least 25 percent. Firm characteristics, such as demographics, quality of inputs, utilization of resources, and dynamic adjustment of inputs, are predictors of the marginal products of capital and labor. We emphasize that some firm characteristics may reflect compensating differentials rather than constraints and the effect of constraints on the dispersion of marginal products may hence be smaller than has been assumed in the literature. We also show that cross-country differences in the dispersion of marginal products are more due to differences in how the business, institutional and policy environment translates firm characteristics into outcomes than to the differences in firm characteristics per se. |
| Keywords: | Marginal products,resource allocation,firm-specific factors,economic growth |
| JEL: | O12 O47 O52 D22 D24 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:eibwps:201806&r=tid |
| By: | Polona Domadenik; Bojan Ivanc; Denis Marinšek |
| Abstract: | We analyse productivity differences across non-financial Slovenian firms over the period 1994-2015. In particular, we investigate the impact of different factors (including size, ownership, investment activity and industry characteristics) on firms' total factor productivity (TFP), competitiveness and internationalisation. Large corporates appear to have the highest level of TFP, more than 50% above the average, and show stronger TFP growth. Exporting firms also show higher TFP growth than other firms, particularly after the recent crisis. Using a complete database of R&D subsidies over 1998-2015, the paper identifies R&Dintensive firms and investigates the impact of R&D investment on productivity and profitability. It is found that subsidies did not significantly increase firm-level productivity, once size, industry and year effects are taken into account. This could be because, during the recession (2009-2015), subsidies were granted to firms in difficulties. |
| JEL: | D22 D24 L25 |
| Date: | 2018–03 |
| URL: | http://d.repec.org/n?u=RePEc:euf:dispap:078&r=tid |
| By: | Marin, Giovanni; Vona, Francesco |
| Abstract: | This paper evaluates the historical influence of energy prices on a series of measures of environmental and economic performance for a panel of French manufacturing establishments over the period 1997-2010. The focus on energy prices is motivated by the fact that changes in environmental and energy policies have been dominated by substantial reductions in discounts for large consumers, making the evaluation of each policy in isolation exceedingly difficult. To identify price effects, we construct a shift-share instrument that captures only the exogenous variation in establishment-specific energy prices. Our results highlight a trade-off between environmental and economic goals: although a 10 percent increase in energy prices brings about a 6 percent reduction in energy consumption and an 11 percent reduction in CO2 emissions, such an increase also has a modestly negative impact on employment (-2.6 percent) and very small impact on wages and productivity. The negative employment effects are mostly concentrated in energy-intensive and trade-exposed sectors. Simulating the effect of a carbon tax, we show that job losses for the most exposed sectors can be quite large. However, these effects are upper bounds and we show that they are significantly mitigated in multi-establishment firms by labor reallocation across establishments. |
| Keywords: | Resource /Energy Economics and Policy |
| Date: | 2017–12–21 |
| URL: | http://d.repec.org/n?u=RePEc:ags:feemes:266284&r=tid |
| By: | Gaurav Khanna; Munseob Lee |
| Abstract: | Economists have identified product entry and exit as a primary channel through which innovation impacts economic growth. In this paper, we document how high-skill immigration affects product reallocation (entry and exit) at the firm level. Using data on H-1B Labor Condition Applications (LCAs) matched to retail scanner data on products and Compustat data on firm characteristics, we find that H-1B certification is associated with higher product reallocation and revenue growth. A ten percent increase in the share of H-1B workers is associated with a two percent increase in product reallocation rates -- our measure of innovation. These results shed light on the economic consequences of innovation by high-skill immigrant to the United States. |
| JEL: | D22 D24 F22 J61 |
| Date: | 2018–07 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:24824&r=tid |
| By: | Dohse, Dirk; Fornahl, Dirk; Vehrke, Julian |
| Abstract: | Since the mid-1990s German technology policy has experienced a paradigmatic shift from standard grant schemes towards a region-oriented and competition-based R&D policy. Currently, a new policy experiment, the InterClust contest, is under way, trying to simultaneously foster place-based innovation, R&D internationalization and the internationalization of innovative places. The current paper analyses the new policy, relating it to the recent literatures on heterogeneous firms and on cluster-life cycles, and presents results from a firm survey performed in 21 winner regions of InterClust. Findings show that the new funding scheme takes insights from recent theoretical developments into account and addresses important impediments to firm and cluster internationalization. Although it is too early for an overall assessment, it is argued that the long-term impact will critically depend on the inflow of heterogeneous knowledge and the strength of intra-regional mobilization effects. |
| Keywords: | industrial clusters,knowledge spillovers,technology policy |
| JEL: | O30 R11 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ifwkie:180843&r=tid |
| By: | Naomitsu Yashiro; Stephanie Lehmann |
| Abstract: | This paper reviews policies to strengthen Germany’s productivity growth and prepare for changes in labour markets brought about by new technologies. This paper also discusses how social protection and the bargaining framework should be reformed for the future of work. Germany enjoys a relatively high labour productivity level but productivity growth has been modest in recent years. There is room to boost productivity growth by accelerating the diffusion of new technologies throughout the economy. Vigorous entrepreneurship and innovation by small and medium enterprises are key for such technology diffusion while strong broadband and mobile networks widen the scope of data-intensive technologies that can be exploited to increase productivity. Widespread use of new technologies will bring about significant changes in skill demand and work arrangements. As in many countries, Germany saw a decline in the share of middle-skilled jobs in employment. A relatively high share of jobs is expected to be automated or undergo significant changes in task contents as a result of technological change. New technologies are also likely to increase individuals engaging in new forms of work, such as gig work intermediated by digital platforms. Such workers are less covered by public social safety nets such as unemployment insurance than regular employment. |
| Keywords: | automation, digital platform, entrepreneurship, Productivity, self-employment, technology diffusion |
| JEL: | J23 J24 J29 O33 O38 O43 O52 |
| Date: | 2018–08–17 |
| URL: | http://d.repec.org/n?u=RePEc:oec:ecoaaa:1502-en&r=tid |