|
on Technology and Industrial Dynamics |
| By: | Corinne Autant-Bernard (Univ Lyon, UJM Saint-Etienne, GATE UMR 5824, F-42023 Saint-Etienne, France); James P. LeSage (Fields Endowed Chair in Urban and Regional Economics, McCoy College of Business Administration, Texas State University, San Marcos, Texas 78666) |
| Abstract: | Past literature has used conventional spatial autoregressive panel data models to relate patent production output to knowledge production inputs. However, research conducted on regional innovation systems points to regional disparities in both regions ability to turn their knowledge inputs into innovation and to access external knowledge. Applying a heterogeneous coefficients spatial autoregressive panel model, we estimate region-specific knowledge production functions for 94 NUTS3 regions in France using a panel covering 21 years from 1988 to 2008 and 4 high-technology industries. A great deal of regional heterogeneity in the knowledge production function relationship exists across regions, providing new insights regarding spatial spillin and spillout effects between regions. |
| Keywords: | knowledge production, spatial econometrics, region-specific parameters |
| JEL: | C21 O31 O52 R12 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:gat:wpaper:1814&r=tid |
| By: | Pedro Bento; Diego Restuccia |
| Abstract: | We construct a new dataset for the average employment size of establishments across sectors and countries from hundreds of sources. Establishments are larger in manufacturing than in services, and in each sector they are larger in richer countries. The cross-country income elasticity of establishment size is remarkably similar across sectors, about 0.3. We discuss these facts in light of several prominent theories of development such as entry costs and misallocation. We then quantify the sectoral and aggregate impact of entry costs and misallocation in an otherwise standard two-sector model of structural transformation with endogenous firm entry and firm-level productivity. We find that observed measures of misallocation account for the entire range of establishment-size differences across sectors and countries and almost 50 percent of the difference in non-agricultural GDP per capita between rich and poor countries. |
| JEL: | E02 E1 O1 O4 |
| Date: | 2018–08 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:24968&r=tid |
| By: | Ufuk Akcigit; John Grigsby; Tom Nicholas; Stefanie Stantcheva |
| Abstract: | This paper studies the effect of corporate and personal taxes on innovation in the United States over the twentieth century. We use three new datasets: a panel of the universe of inventors who patent since 1920; a dataset of the employment, location and patents of firms active in R&D since 1921; and a historical state-level corporate tax database since 1900, which we link to an existing database on state-level personal income taxes. Our analysis focuses on the impact of taxes on individual inventors and firms (the micro level) and on states over time (the macro level). We propose several identification strategies, all of which yield consistent results: i) OLS with fixed effects, including inventor and state-times-year fixed effects, which make use of differences between tax brackets within a state-year cell and which absorb heterogeneity and contemporaneous changes in economic conditions; ii) an instrumental variable approach, which predicts changes in an individual or firm's total tax rate with changes in the federal tax rate only; iii) a border county strategy, which exploits tax variation across neighboring counties in different states. We find that taxes matter for innovation: higher personal and corporate income taxes negatively affect the quantity, quality, and location of inventive activity at the macro and micro levels. At the macro level, cross-state spillovers or business-stealing from one state to another are important, but do not account for all of the effect. Agglomeration effects from local innovation clusters tend to weaken responsiveness to taxation. Corporate inventors respond more strongly to taxes than their non-corporate counterparts. |
| JEL: | H24 H25 H31 J61 O31 O32 O33 |
| Date: | 2018–09 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:24982&r=tid |
| By: | Iwasaki, Ichiro; Kim, Byung-Yeon |
| Abstract: | In this paper, we trace the survival status of more than 110,000 Russian firms in the years of 2007–2015 and examine the determinants of firm survival across periods of economic crisis and growth. Applying the Cox proportional hazards model, we find that the effects of some variables regarded as key determinants of firm survival are not always robust across business cycles. Among the variables that constantly affect firm survival across business cycles and industries, concentration of ownership, the number of board directors and auditors, firm age, and business network are included. By contrast, the effects of some ownership-related variables on firm survival vary depending on the nature of economic recessions such as a global crisis and a local one. There is also evidence that an international audit firm increases the probability of firm survival; however, gaps in the quality between international audit firms and those from Russia decrease over time. These findings suggest that one should not make hasty generalizations regarding the determinants of firm survival by looking at a specific economic period or industry. |
| Keywords: | Firm failure, Economic crises and growth, Cox proportional hazards model, Russia |
| JEL: | D22 G01 G33 G34 P34 |
| Date: | 2018–06 |
| URL: | http://d.repec.org/n?u=RePEc:hit:rrcwps:76&r=tid |
| By: | Bernhard Ganglmair; Timothy Simcoe; Emanuele Tarantino |
| Abstract: | Motivated by a descriptive analysis of standards development within the Internet Engineering Task Force, we develop a dynamic discrete choice model of R&D that highlights the decision to continue or abandon a line of research. Our estimates imply that sixty percent of IETF proposals are publishable, but only one-third of those good ideas survive the review process. Increased attention and author experience are associated with faster learning. We simulate two counterfactual innovation policies: an R&D subsidy and a publication-prize. Subsidies have a larger impact on research output, though prizes perform better when accounting for researchers' opportunity costs. |
| Keywords: | Learning, Experimentation, Standardization, Dynamic Discrete Choice |
| JEL: | D83 O31 O32 |
| Date: | 2018–09 |
| URL: | http://d.repec.org/n?u=RePEc:bon:boncrc:crctr224_041_2018&r=tid |
| By: | Everett Grant (Federal Reserve Bank of Dallas) |
| Abstract: | We use daily equity returns to estimate global inter-firm networks across all major industries from 1981-2016 and test whether the network is robust or fragile, relating multinational firms' overall health with global integration. More connected firms are less likely to be in distress and have higher profit growth and equity returns, but are also more exposed to direct contagion from distressed neighboring firms and network level crises. Our machine learning analysis reveals the centrality of finance in the international firm network and increased globalization over time, with greater potential for crises to spread globally when they do occur. |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:red:sed018:506&r=tid |
| By: | Dai, R.; Mookherjee, D.; Munshi, K.; Zhang, X. |
| Abstract: | This paper identifies and quantifies the role played by birth-county-based community networks in the growth of private enterprise in China. We develop a network-based model that generates predictions for the dynamics of firm entry, concentration, and firm size across birth counties with varying social connectedness (measured by population density). These predictions are verified over the 1990-2009 period with administrative data covering the universe of registered firms. Competing non-network-based explanations can explain some, but not all, of the results. Moreover, supplementary evidence indicates that network spillovers occur within the birth county and, going down even further, within clans within the county. Having validated the model, we estimate its structural parameters and conduct counter-factual simulations, which estimate that entry over the 1995-2004 period would have been 40% lower (with a comparable decline in the stock of capital) in the absence of community networks. Additional counter-factual simulations shed light on misallocation and industrial policy in economies where networks are active. |
| Keywords: | Community Networks, Entrepreneurship, Misallocation, Institutions, Growth and Development. |
| JEL: | J12 J16 D31 I3 |
| Date: | 2018–09–11 |
| URL: | http://d.repec.org/n?u=RePEc:cam:camdae:1850&r=tid |
| By: | Carlo Menon; Timothy DeStefano; Francesco Manaresi; Giovanni Soggia; Pietro Santoleri |
| Abstract: | The report provides an independent and comprehensive evaluation of the economic and social impact of the Italian policy framework for innovative start-ups, also known as the “Start-up Act”, first introduced by the Decree-law 179 in 2012. The policy aims at creating a more favourable environment for small innovative start-ups through a number of complementary instruments, including “fast-track” and zero cost incorporation, simplified insolvency procedures, tax incentives for equity investments, and a public guarantee scheme for bank credit. While the report focuses only on Italy, the “Start-up Act” can be seen as a very useful “laboratory” to inform policies for innovative entrepreneurship across OECD member countries. The evaluation highlights that the impact of the policy on beneficiary firms has been positive overall, but that complementary policy actions in other areas are required in order to further realise the full potential of Italian innovative start-ups. |
| Date: | 2018–09–26 |
| URL: | http://d.repec.org/n?u=RePEc:oec:stiaac:54-en&r=tid |
| By: | Vergara, Sebastian |
| Abstract: | Productive and technological capabilities matter. Several strains of the literature have emphasized them as major engines of export, growth and development. But how they matter is less clear. In fact, many open questions remain on how capabilities influence export dynamics at microeconomic level. This paper empirically investigates their role on export dynamics in 40 developing countries between 2002 and 2012. In doing so, the paper exploits a country-sector-year database containing exporter-level statistical information. The empirical analysis shows that, within sectors, there is a larger number of exporters in countries with more productive capacities, and the exporters are larger and have higher prices for their products, even after controlling for level of development, size of the economy, commodity-dependency and other variables. Also, the results confirm a positive relationship between technological capabilities and diversification: within sectors, exporters in countries with more capabilities tend to export a higher number of products and to more destination markets. Furthermore, capabilities in high-technology exporters seem to play a crucial role regarding market diversification. Thus, the paper shows that, even just comparing exporters' behaviour among the developing countries, stronger productive and technological capabilities are significantly related to the "extensive" and "intensive" margin of exports, the diversification across products and destinations, and the product quality, all relevant aspects of developing countries' insertion in global trade markets. Overall, the paper underscores the role of capabilities not only on developing countries' macroeconomic resilience to trade shocks, but also on their medium-term development prospects. |
| Keywords: | Capabilities, Export Dynamics, R&D Investments, Developing Countries |
| JEL: | F14 O3 |
| Date: | 2018–09–07 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:88937&r=tid |
| By: | Johannes Boehm (Princeton University); Jan Sonntag (Sciences Po Paris) |
| Abstract: | This paper studies the prevalence of market foreclosure using a novel dataset on U.S. and international buyer-seller relationships, and across a large range of industries. We find that relationships are more likely to break when suppliers vertically integrate with one of the buyers' competitors than when they vertically integrate with an unrelated firm. We establish causality using the prevalence of past vertical integration among related parties as an instrument. Foreclosure is more prevalent when suppliers have more market power. Furthermore, we find a substantial drop in performance among foreclosed firms. |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:red:sed018:677&r=tid |
| By: | Jaumandreu, Jordi; Lin, Shuheng |
| Abstract: | We study how firms' innovations impact prices with endogenous productivity and markup, under imperfect competition and dynamic pricing. Absent innovation, productivity plus markup changes curb price growth to half of variable inputs cost growth. Innovation's additional impact on costs is negatively correlated with markup changes. We detect two prevalent strategies. When marginal cost goes down, firms cash-in innovation by increasing the markups to enlarge profits. When marginal cost goes u firms practice countervailing pricing by decreasing markups. With no innovation aggregate manufacturing price growth had multiplied by 1.4, but innovation without cash-in strategies had multiplied it by 0.8. |
| Keywords: | Innovation; marginal cost; markup; price indices |
| JEL: | D43 L11 L16 O31 |
| Date: | 2018–08 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:13146&r=tid |