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on Technology and Industrial Dynamics |
| By: | Asturias, Jose (Georgetown University Qatar); Hur, Sewon (Federal Reserve Bank of Cleveland); Kehoe, Timothy J. (Federal Reserve Bank of Minneapolis); Ruhl, Kim J. (University of Wisconsin) |
| Abstract: | Applying the Foster, Haltiwanger, and Krizan (FHK) (2001) decomposition to plant-level manufacturing data from Chile and Korea, we find that the entry and exit of plants account for a larger fraction of aggregate productivity growth during periods of fast GDP growth. Studies of other countries confirm this empirical relationship. To analyze this relationship, we develop a simple model of firm entry and exit based on Hopenhayn (1992) in which there are analytical expressions for the FHK decomposition. When we introduce reforms that reduce entry costs or reduce barriers to technology adoption into a calibrated model, we find that the entry and exit terms in the FHK decomposition become more important as GDP grows rapidly, just as they do in the data from Chile and Korea. |
| Keywords: | Entry; Exit; Productivity; Entry costs; Barriers to technology adoption; |
| JEL: | E22 O10 O38 O47 |
| Date: | 2019–02–01 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedcwq:190300&r=all |
| By: | Marcela Eslava; John Haltiwanger; Alvaro Pinzón |
| Abstract: | There is growing consensus that a key difference between the U.S. and developing economies is that the latter exhibit slower employment growth over the life cycle of the average business. At the same time, the rapid post entry growth in the U.S. is driven by an "up or out dynamic". We track manufacturing establishments in Colombia vs. the US and find that slower average life cycle growth in Colombia is driven by a less enthusiastic contribution of extraordinary growth plants and less dynamic selection of young underperforming plants. As a consequence, the size distribution of non-micro plants exhibits more concentration in small-old plants in Colombia, both in unweighted and employment-weighted bases. These findings point to a shortage of high-growth entrepreneurship and a relatively high likelihood of long-run survival for small, likely unproductive plants, as two key elements at the heart of the development problem. An extreme concentration of resources in micro plants is the other distinguishing feature of the Colombian manufacturing sector vis a vis the US. |
| Keywords: | Entrepreneurship; SMEs; employment growth |
| JEL: | O47 O14 |
| Date: | 2019–02–07 |
| URL: | http://d.repec.org/n?u=RePEc:col:000518:017143&r=all |
| By: | Paulo Cesar Morceiro; Joaquim Jose Martins Guilhoto |
| Abstract: | In Brazil and in the world, diagnoses of deindustrialization are concentrated in aggregate manufacturing, so policies can be ineffective if deindustrialization has a sector-specific component. This study quantifies and analyzes deindustrialization for the individualized manufacturing sectors. In order to do so, unpublished series from 1970 to 2016 of the manufacturing sectors' share in the Brazilian GDP were created based on official IBGE data. The results show that the manufacturing sectors have deindustrialized at different intensities and periods of aggregate manufacturing, and a sectoral approach reveals traces ignored by the literature on the quality of deindustrialization. It is concluded that the Brazilian deindustrialization is normal (and expected) for the labor-intensive manufacturing sectors, but premature (and undesirable) for the technology-intensive sectors. Therefore, it has negative consequences for the future scientific and technological development of the country. |
| Keywords: | Sectoral deindustrialization, industrial development, sectoral heterogeneity, structural change |
| JEL: | O14 L6 L16 |
| Date: | 2019–01–30 |
| URL: | http://d.repec.org/n?u=RePEc:spa:wpaper:2019wpecon01&r=all |
| By: | Patrick Plane (CERDI - Centre d'Études et de Recherches sur le Développement International - Clermont Auvergne - UCA - Université Clermont Auvergne - CNRS - Centre National de la Recherche Scientifique); Marie-Ange Veganzones-Varoudakis (CERDI - Centre d'Études et de Recherches sur le Développement International - Clermont Auvergne - UCA - Université Clermont Auvergne - CNRS - Centre National de la Recherche Scientifique) |
| Abstract: | We study the interactions between firm-level innovation, productivity and exports in the case of the Indian manufacturing sector. To differentiate the incentives to innovate from the ability to innovate, we distinguish the inputs of innovation (R&D and training), from the outputs. Our findings highlight a virtuous circle between the three components of innovation, as well as between firm-level R&D, innovation and exports. The results suggest a positive effect of R&D on innovation (product innovation in particular), of innovation on exports (product and marketing innovation especially), and of exports on R&D. Furthermore, it seems that training and R&D reinforce each other in the Indian firm-level innovation process: doing R&D incites firms to train their workforce, and training stimulates R&D in return. Productivity of the Indian manufacturing firms seems to benefit from that dynamics, as exporting and innovating would improve firm-level TFP. As for the investment climate, our results suggest that the differences in the Indian firm-level environment participate in the firms' performance gaps. These results are all the more important in the context of the Make in India campaign and the business environment deficiencies. |
| Keywords: | Innovation,Productivity,Exports,Investment climate,Manufacturing,Firm-level data. |
| Date: | 2019–01–23 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-01990327&r=all |
| By: | Milene Simone Tessarin; Wilson Suzigan, Joaquim Jose Martins Guilhoto |
| Abstract: | This article analyze the innovative effort of the manufacturing companies that cooperated to innovate from those that innovated without cooperation, segmented by technological categories and origin of controlling capital. Special data with information’s from Pintec/IBGE has been used. The contribution is contrasting companies that innovated with and without cooperation, since this comparison has not yet been studied. Results showed that cooperation is decisive to differentiate innovative efforts, regardless of the technological category. The origin of controlling capital did not represent a distinctive factor. The cooperation was mainly made with customers and suppliers, and another group company overseas to foreign firms, despite the literature focus on cooperation with universities and research institutes. It is concluded that innovating with cooperation generates better innovative efforts, thus, stimulate companies to cooperate can increase Brazilian innovation |
| Keywords: | Innovation; Cooperation to innovate; Manufacturing; Technological intensity; Industrial development. |
| JEL: | O32 P13 L10 |
| Date: | 2019–02–06 |
| URL: | http://d.repec.org/n?u=RePEc:spa:wpaper:2019wpecon06&r=all |
| By: | Jakub Growiec |
| Abstract: | The article proposes a new conceptual framework for capturing production, R&D, and economic growth in aggregative models which extend their horizon into the digital era. Two key factors of production are considered: hardware, including physical labor, traditional physical capital and programmable hardware, and software, encompassing human cognitive work, pre-programmed software, and artificial intelligence (AI). Hardware and software are complementary in production whereas their constituent components are mutually substitutable. The framework generalizes, among others, the standard model of production with capital and labor, models with capital–skill complementarity and skill-biased technical change, and unified growth theories embracing also the pre-industrial period. It offers a clear conceptual distinction between mechanization and automation as well as between robotization and the development of AI. It delivers sharp, economically intuitive predictions for long-run growth, the evolution of factor shares, and the direction of technical change |
| Keywords: | production function, R&D equation, technological progress, complementarity, automation, artificial intelligence. |
| JEL: | O30 O40 O41 |
| Date: | 2019–02 |
| URL: | http://d.repec.org/n?u=RePEc:sgh:kaewps:2019042&r=all |
| By: | Maryam Farboodi; Roxana Mihet; Thomas Philippon; Laura Veldkamp |
| Abstract: | We study a model where firms accumulate data as a valuable intangible asset. Data accumulation affects firms’ dynamics. It increases the skewness of the firm size distribution as large firms generate more data and invest more in active experimentation. On the other hand, small data- savvy firms can overtake more traditional incumbents, provided they can finance their initial money- losing growth. Our model can be used to estimate the market and social value of data. |
| JEL: | D21 E01 L1 |
| Date: | 2019–01 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:25515&r=all |
| By: | Daniel P. Gross |
| Abstract: | This paper studies the effects of the USPTO's patent secrecy program in World War II, under which approximately 11,200 U.S. patent applications were issued secrecy orders which halted examination and prohibited inventors from disclosing their inventions or filing in foreign countries. Secrecy orders were issued most heavily in areas important to the war effort — such as radar, electronics, and synthetic materials — and nearly all rescinded en masse at the end of the war. I find that compulsory invention secrecy was effective at keeping affected technology out of the public domain, but it appears to have reduced and delayed follow-on invention, reduced entry into patenting, and restricted commercialization. The results shed light on the consequences of invention secrecy, which is widely used by inventors to protect and appropriate the returns to innovation, and yield lessons for ongoing policy debates over potential measures to protect U.S. invention against the growing incidence of foreign IP theft today. |
| JEL: | N42 N72 O31 O32 O34 O38 |
| Date: | 2019–02 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:25545&r=all |
| By: | Laurent Cavenaile (University of Toronto); Pau Roldan (Banco de España) |
| Abstract: | This paper analyzes the implications of advertising for firm dynamics and economic growth through its interaction with R&D investment at the firm level. We develop a model of endogenous growth with firm heterogeneity that incorporates advertising decisions. We calibrate the model to match several empirical regularities across firm size using U.S. data. Through a novel interaction between R&D and advertising, our model provides microfoundations for the empirically observed negative relationship between both firm R&D intensity and growth, and firm size. Our model predicts substitutability between R&D and advertising at the firm level. Lower advertising costs are associated with lower R&D investment and slower economic growth. We provide empirical evidence supporting substitution between R&D and advertising using exogenous changes in the tax treatment of R&D expenditures across U.S. states. Finally, we find that R&D subsidies are more effective under an economy that includes advertising relative to one with no advertising. |
| Keywords: | endogenous growth, advertising, innovation, research and development, firm dynamics, policy |
| JEL: | E20 L10 M30 O31 O32 O33 O41 |
| Date: | 2019–02 |
| URL: | http://d.repec.org/n?u=RePEc:bde:wpaper:1902&r=all |
| By: | Damián Tojeiro-Rivero (AQR-IREA Research Group, University of Barcelona. Department of Econometrics, Statistics and Applied Economics. Av. Diagonal 690, 08034 Barcelona, Spain. Tel.(+34) 934 021 412.); Rosina Moreno (AQR-IREA Research Group, University of Barcelona. Av. Diagonal 690 - 08034 Barcelona (Spain). Tel. +34934021823 - Fax +34934021821.) |
| Abstract: | Much has been said about the role that technological networking activities play on the innovative performance of firms, but little is known about the relevance of the context where the firm is locate shaping the efficiency of such networking activities. In this article we hypothesize that the transformation of firms' networking activities into innovation may vary depending on the regional environment in which the firm is located. For Spanish manufactures in the period 2000-12 and through the use of a multilevel framework, we obtain that after controlling for the firm's characteristics, the regional context has not only a direct effect on firms' innovation performance, but it also conditions the returns to firms' networking activities, although differently in the case of cooperation and outsourcing. Cooperating in innovation activities is more beneficial for those firms located in a knowledge intensive region, whereas R&D outsourcing seems to be more profitable for firms in regions with a low knowledge pool. |
| Keywords: | Technological cooperation, R&D Outsourcing, Local Knowledge Spillovers; Multilevel; Panel data; Spanish Firms, Manufactures. JEL classification: D21, D22, O31, R10, R15 |
| Date: | 2019–02 |
| URL: | http://d.repec.org/n?u=RePEc:ira:wpaper:201904&r=all |
| By: | Jaehyuk Park; Ian Wood; Elise Jing; Azadeh Nematzadeh; Souvik Ghosh; Michael Conover; Yong-Yeol Ahn |
| Abstract: | Groups of firms often achieve a competitive advantage through the formation of geo-industrial clusters. Although many exemplary clusters, such as Hollywood or Silicon Valley, have been frequently studied, systematic approaches to identify and analyze the hierarchical structure of the geo-industrial clusters at the global scale are rare. In this work, we use LinkedIn's employment histories of more than 500 million users over 25 years to construct a labor flow network of over 4 million firms across the world and apply a recursive network community detection algorithm to reveal the hierarchical structure of geo-industrial clusters. We show that the resulting geo-industrial clusters exhibit a stronger association between the influx of educated-workers and financial performance, compared to existing aggregation units. Furthermore, our additional analysis of the skill sets of educated-workers supplements the relationship between the labor flow of educated-workers and productivity growth. We argue that geo-industrial clusters defined by labor flow provide better insights into the growth and the decline of the economy than other common economic units. |
| Date: | 2019–02 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1902.04613&r=all |
| By: | Marie-Laure Cabon-Dhersin (CREAM - Centre de Recherche en Economie Appliquée à la Mondialisation - UNIROUEN - Université de Rouen Normandie - NU - Normandie Université - IRIHS - Institut de Recherche Interdisciplinaire Homme et Société - UNIROUEN - Université de Rouen Normandie - NU - Normandie Université); Romain Gibert (CREAM - Centre de Recherche en Economie Appliquée à la Mondialisation - UNIROUEN - Université de Rouen Normandie - NU - Normandie Université - IRIHS - Institut de Recherche Interdisciplinaire Homme et Société - UNIROUEN - Université de Rouen Normandie - NU - Normandie Université) |
| Abstract: | In this paper, we compare the distributions of socially optimal public funding between private and public research sectors in cooperative and non-cooperative R&D settings in the presence of externalities. We show that the proportion of public funding allocated to the private sector research always increases with the level of inter-firm spillovers but decreases with the concentration of the industry. This share is smaller (larger) when firms cooperate in R&D than when they do not for high (low) spillovers. Moreover, increases in public knowledge externalities to the private sector due to a closer proximity between the two research sectors increase the share allocated to the public sector regardless of whether firms cooperate or not in R&D. |
| Keywords: | Oligopoly,R&D Cooperation,Spillovers,Knowledge public exter-nalities,public and private research,proximity,Public policy |
| Date: | 2019–02–04 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-02006489&r=all |