|
on Technology and Industrial Dynamics |
| By: | Philippe Aghion; Antonin Bergeaud; Matthieu Lequien; Marc Melitz |
| Abstract: | We analyze how demand conditions faced by a firm impacts its innovation decisions. To disentangle the direction of causality between innovation and demand conditions, we construct a firm-level export demand shock which responds to aggregate conditions in a firm's export destinations but is exogenous to firm-level decisions. Using exhaustive data covering the French manufacturing sector, we show that French firms respond to exogenous growth shocks in their export destinations by patenting more; and that this response is entirely driven by the subset of initially more productive firms. The patent response arises 3 to 5 years after a demand shock, highlighting the time required to innovate. In contrast, the demand shock raises contemporaneous sales and employment for all firms, without any notable differences between high and low productivity firms. We show that this finding of a skewed innovation response to common demand shocks arises naturally from a model of endogenous innovation and competition with firm heterogeneity. The market size increase drives all firms to innovate more by increasing the innovation rents; yet by inducing more entry and thus more competition, it also discourages innovation by low productivity firms. |
| Keywords: | innovation, export, demand shocks, patents |
| JEL: | D21 F13 F14 F41 O30 O47 |
| Date: | 2019–10 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp1657&r=all |
| By: | Bräuer, Richard; Mertens, Matthias; Slavtchev, Viktor |
| Abstract: | This study analyses empirically the effects of import competition on firm productivity (TFPQ) using administrative firm-level panel data from German manufacturing. We find that only import competition from high-income countries is associated with positive incentives for firms to invest in productivity improvement, whereas import competition from middle- and low-income countries is not. To rationalise these findings, we further look at the characteristics of imports from the two types of countries and the effects on R&D, employment and sales. We provide evidence that imports from high-income countries are relatively capital-intensive and technologically more sophisticated goods, at which German firms tend to be relatively good. Costly investment in productivity appears feasible reaction to such type of competition and we find no evidence for downscaling. Imports from middle- and low-wage countries are relatively labour-intensive and technologically less sophisticated goods, at which German firms tend to generally be at disadvantage. In this case, there are no incentives to invest in innovation and productivity and firms tend to decline in sales and employment. |
| Keywords: | productivity,multi-product firms,import competition |
| JEL: | D22 D24 F10 F14 F60 F61 L25 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:iwhdps:202019&r=all |
| By: | MATSUURA Toshiyuki |
| Abstract: | This paper empirically investigates the effect of import competition on within-firm employment reorganization using Japanese firm-level data sets. We conduct a firm-level examination of whether the import competition against low wage countries leads to the shift from manufacturing activity to non-manufacturing activity, such as headquarter services or R&D. Moreover, we explore the heterogeneity of impacts of import competition according to firm size and export status. We find that competition from Chinese imports induces manufacturing firms to increase their share of service workers, especially those workers that engage in wholesale & retail, and in other service activities. |
| Date: | 2019–10 |
| URL: | http://d.repec.org/n?u=RePEc:eti:dpaper:19086&r=all |
| By: | Takano, Keisuke; Okamuro, Hiroyuki |
| Abstract: | This paper compares the effects of local R&D support programs on firm performance between neighboring three prefectures in the same district in Japan. Particularly, we evaluate the policy effect on regional and sectoral diversification of transaction networks. One of these prefectures, A, has a large industrial agglomeration around world-leading manufacturers, which is not the case for the other prefectures, B and C. Empirical evaluation based on firm-level dataset available through TDB-CAREE shows that the programs in Prefectures B and C promoted market development of recipient firms in unexplored sectors or regions, whereas Prefecture A’s program did not. |
| Keywords: | place-based policy, R&D support, interregional trade, diversification |
| JEL: | L25 L52 O38 R11 R12 R58 |
| Date: | 2019–10 |
| URL: | http://d.repec.org/n?u=RePEc:hit:tdbcdp:e-2019-02&r=all |
| By: | Uluc Aysun (University of Central Florida, Orlando, FL); Zeynep Yom (School of Business, Villanova University) |
| Abstract: | This paper shows that technology shocks have the largest impact on economies when industries adopt innovations of other industries at a high rate, if costs of adopting new technologies and adjusting R&D expenditures are low, and if innovators face a high degree of competition. It is not the level but the spillover of innovations across industries that is the key determinant of these findings. Under the conditions mentioned above, R&D becomes less procyclical and smoother along the business cycle yet R&D driven innovations have a larger impact on output since these innovations spillover at a higher rate. These inferences are drawn from a dynamic stochastic general equilibrium framework describing a real economy with endogenous growth. The latter feature allows us to infer the welfare implications of R&D processes. |
| Keywords: | Research and development, spillover effects, endgenous growth |
| JEL: | E30 E32 O30 O33 |
| Date: | 2019–10 |
| URL: | http://d.repec.org/n?u=RePEc:cfl:wpaper:2019-04ua&r=all |
| By: | Marco Caliendo (University of Potsdam, IZA Bonn, DIW Berlin, IAB Nuremberg); Steffen Künn (Maastricht University and ROA, The Netherlands, IZA Bonn); Martin Weißenberger (University of Potsdam) |
| Abstract: | From an active labor market policy perspective, start-up subsidies for unemployed individuals are very effective in improving long-term labor market outcomes for participants. From a business perspective, however, the assessment of these public programs is less clear since they might attract individuals with low entrepreneurial abilities and produce businesses with low survival rates and little contribution to job creation, economic growth, and innovation. In this paper, we use a rich data set to compare participants of a German start-up subsidy program for unemployed individuals to a group of regular founders who started from nonunemployment and did not receive the subsidy. The data allows us to analyze their business performance up until 40 months after business formation. We find that formerly subsidized founders lag behind not only in survival and job creation, but especially also in innovation activities. The gaps in these business outcomes are relatively constant or even widening over time. Hence, we do not see any indication of catching up in the longer run. While the gap in survival can be entirely explained by initial differences in observable start-up characteristics, the gap in business development remains and seems to be the result of restricted access to capital as well as differential business strategies and dynamics. Considering these conflicting results for the assessment of the subsidy program from an ALMP and business perspective, policy makers need to carefully weigh the costs and benefits of such a strategy to find the right policy mix. |
| Keywords: | Entrepreneurship, Start-up Subsidies, Business Growth, Innovation, Job Creation |
| JEL: | L26 M13 J68 |
| Date: | 2019–10 |
| URL: | http://d.repec.org/n?u=RePEc:pot:cepadp:12&r=all |
| By: | TOMIURA Eiichi; ITO Banri; KANG Byeongwoo |
| Abstract: | We distributed a questionnaire to large- and mid-sized firms in the manufacturing, wholesale, and information-related service industries in Japan to investigate the firms' responses to regulations governing cross-border data transfers. Only a limited fraction of the surveyed firms regularly transfer data across national borders. However, among the firms active in collecting data from Internet of Things (IoT) devices from overseas, the EU's General Data Protection Regulation (GDPR) affects more than 20% of firms and the number of firms affected by the Cyber Security Act of China and similar regulations in other countries exceeds the number of firms that have not noticed an impact. The affected firms have responded to the regulations through measures such as changing the location of their data processing/storage, introducing firewalls, and/or assigning staff to address the issues. However, many firms have not yet taken any action. |
| Date: | 2019–10 |
| URL: | http://d.repec.org/n?u=RePEc:eti:dpaper:19088&r=all |
| By: | Nikolay Chichkanov (National Research University Higher School of Economics) |
| Abstract: | Despite the growing interest to the field of coproduction from the service-dominant logic literature, this concept is still being emerging and most of the existing papers do not provide any empirical evidence. The aim of the study is to investigate whether those KIBS firms that involve their customers in coproduction of services are more innovative. This paper explores the relationships between a set of innovation drivers and implementation of innovations in KIBS based on a sample of 441 firms operating in Russia. The results show that coproduction of services increases the possibility of both technological and non-technological innovations in KIBS to be implemented. This finding suggests that in addition to the service offerings quality improvement, coproduction of KIBS also acts as an innovation driver, which requires an attention from innovation managers |
| Keywords: | KIBS, coproduction, client involvement, innovation, innovation drivers |
| JEL: | O30 O31 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:hig:wpaper:100sti2019&r=all |
| By: | Holger Graf (Friedrich Schiller University Jena, Economics Department); Tom Broekel (University of Stavanger, Business School, Stavanger, Norway, and Centre for Regional and Innovation Economics, University of Bremen, Germany) |
| Abstract: | Cluster policies are often intended and designed to promote interaction in R&D among co-located organisations, as local knowledge interactions are perceived to be underdeveloped. In contrast to the popularity of the policy measure little is known about its impact on knowledge networks, because most scientific evaluations focus on impacts at the firm level. Using the example of the BioRegio contest, we explore cluster policy effects on local patent co-application and co-invention networks observed from 1985 to 2013, in 13 German regions. We find that the initiative increases network size and innovation activities during the funding period but not afterwards. The impact of the BioRegio contest on network cohesion is moderate. In contrast, general project-based R&D subsidisation is found to support cohesion more robustly. |
| Keywords: | Cluster Policy, Knowledge Networks, Network Analysis, Patent Data, Regional Innovation, Policy Evaluation |
| JEL: | O31 Z13 |
| Date: | 2019–10–09 |
| URL: | http://d.repec.org/n?u=RePEc:jrp:jrpwrp:2019-007&r=all |
| By: | Astrid Marinoni; John Voorheis |
| Abstract: | The question of who gains from high-quality entrepreneurship is crucial to understanding whether investments in incubating potentially innovative start-up firms will produce socially beneficial outcomes. We attempt to bring new evidence to this question by combining new aggregate measures of local area income inequality and income mobility with measures of entrepreneurship from Guzman and Stern (2017). Our new aggregate measures are generated by linking American Community Survey data with the universe of IRS 1040 tax returns. In both fixed effects and IV models using a Bartik-style instrument, we find that entrepreneurship increases income inequality. Further, we find that this increase in income inequality arises due to the fact that almost all of the individual gains associated with increased entrepreneurship accrue to the top 10 percent of the income distribution. While we find mixed evidence for small positive effects of entrepreneurship lower on the income distribution, we find little if any evidence that entrepreneurship increases income mobility. |
| Keywords: | entrepreneurship, innovation, income inequality |
| JEL: | L26 D63 |
| Date: | 2019–10 |
| URL: | http://d.repec.org/n?u=RePEc:cen:wpaper:19-29&r=all |
| By: | Ksenia Gonchar (National Research University Higher School of Economics, Moscow); Maria Kristalova (Bremen University and Friedrich-Schiller-University Jena) |
| Abstract: | This paper studies how innovation strategies of Russian manufacturing firms affect various features of firm performance. A multi stage model is used, which relates the firm's decision to undertake R&D to its innovation output, technical efficiency, labor productivity, and growth. We also include imports into the knowledge production function, because catching up economies may adopt technologies embodied in imported hardware. Additionally, we link productivity and innovation output to survival. We find that both types of knowledge input - R&D and imports - strongly determine innovation. Innovations yield the strongest performance return in the case of catching up to technological frontier. Product innovation is more beneficial than process innovation in all performance features except for labor productivity. However, higher efficiency does not improve the growth rates or survival time of manufacturing firms. Taken together, these results show that innovation is not uniformly rewarded across all features of firm performance. |
| Keywords: | innovation, productivity, growth, survival, Russia |
| JEL: | C30 D24 O30 |
| Date: | 2019–02–25 |
| URL: | http://d.repec.org/n?u=RePEc:jrp:jrpwrp:2019-001&r=all |