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on Technology and Industrial Dynamics |
| By: | Ali-Yrkkö, Jyrki; Pajarinen, Mika; Ylhäinen, Ilkka |
| Abstract: | Abstract In recent years, business angels have invested in a few hundred Finnish firms annually. The target firms are mainly young and small: 75% of them employ fewer than 10 workers and are less than 8 years old. These firms are most likely to be found in the ICT and professional service industries and manufacturing. Although many angel-funded firms have faster employment growth compared to matched nonfunded firms, the average growth rates do not significantly differ when we control for receiving public innovation funding and other firm characteristics. As many as 75% of the firms funded by business angels have also received public innovation funding in some phase, and 57% have received it before angel funding. However, no robust indication was found that combining these two sources of funds would give an extra boost to growth. |
| Keywords: | Business angels, Innovation subsidies, R&D, Firm growth |
| JEL: | D22 G24 G30 L53 O31 |
| Date: | 2019–12–04 |
| URL: | http://d.repec.org/n?u=RePEc:rif:report:97&r=all |
| By: | Enrico Moretti; Claudia Steinwender; John Van Reenen |
| Abstract: | In the US and many other OECD countries, expenditures for defense-related R&D represent a key policy channel through which governments shape innovation, and dwarf all other public subsidies for innovation. We examine the impact of government funding for R&D - and defense-related R&D in particular - on privately conducted R&D, and its ultimate effect on productivity growth. We estimate models that relate privately funded R&D to lagged government-funded R&D using industry-country level data from OECD countries and firm level data from France. To deal with the potentially endogenous allocation of government R&D funds we use changes in predicted defense R&D as an instrumental variable. In both datasets, we uncover evidence of “crowding in” rather than “crowding out,” as increases in government-funded R&D for an industry or a firm result in significant increases in private sector R&D in that industry or firm. A 10% increase in government-financed R&D generates 4.3% additional privately funded R&D. An analysis of wages and employment suggests that the increase in private R&D expenditure reflects actual increases in R&D employment, not just higher labor costs. Our estimates imply that some of the existing cross-country differences in private R&D investment are due to cross-country differences in defense R&D expenditures. We also find evidence of international spillovers, as increases in government-funded R&D in a particular industry and country raise private R&D in the same industry in other countries. Finally, we find that increases in private R&D induced by increases in defense R&D result in significant productivity gains. |
| JEL: | O3 O30 O31 O33 O38 |
| Date: | 2019–11 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:26483&r=all |
| By: | Ernest MIGUELEZ; Julio RAFFO; Christian CHACUA; Massimiliano CODA-ZABETTA; Deyun YIN; Francesco LISSONI, Gianluca TARASCONI |
| Abstract: | In this paper we exploit a unique and rich dataset of patent applications and scientific publications in order to answer several questions concerned with two current phenomena on the way knowledge is produced and shared worldwide: its geographical spread at the international level and its spatial concentration in few worldwide geographical hotspots. We find that the production of patents and scientific publications has spread geographically to several countries, and has not kept within the traditional knowledge producing economies (Western Europe, Japan and the U.S.). We observe that part of this partial geographical spread of knowledge activities is due to the setting up of Global Innovation Networks, first toward more traditional innovative countries, and then towards emerging economies too. Yet, despite the increasing worldwide spread of knowledge production, we do not see the same spreading process within countries, and even we see some increased concentration in some of them. This may have, of course, important distributional consequences within countries. Moreover, these selected areas also concentrate a large and increasing connectivity, within their own country to other hotspots, and across countries through Global Innovation Networks. |
| Keywords: | patents, scientific publications, geocoding, global innovation networks, clusters, geography of innovation |
| JEL: | O30 F20 F60 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:grt:wpegrt:2019-16&r=all |
| By: | Nicholas Crafts; Alexander Klein |
| Abstract: | We re-examine the long-run geographical development of U.S. manufacturing industries using recent advances in spatial concentration measures. We construct spatially-weighted indices of the geographical concentration of U.S. manufacturing industries during the period 1880 to 1997 using data from the Census of Manufactures and Bureau of Labor Statistics. Doing so we improve upon the existing indices by taking into account industrial structure and checkerboard problem. Several important new results emerge. First, we find that average spatial concentration was much lower in the late 20th- than in the late 19th-century and that this was the outcome of a continuing reduction over time. Second, spatial concentration of industries did not increase in early twentieth century as shown by traditional indices but rather declined, implying that we do not find an inverted-U shape pattern of long-run spatial concentration. Third, the persistent tendency to greater spatial dispersion was characteristic of most manufacturing industries. Fourth, even so, economically and statistically significant spatial concentration was pervasive throughout this period. |
| Keywords: | manufacturing belt; spatial concentration; transport costs |
| JEL: | N62 N92 R12 |
| Date: | 2019–12 |
| URL: | http://d.repec.org/n?u=RePEc:ukc:ukcedp:1910&r=all |
| By: | Ndubuisi, Gideon |
| Abstract: | This paper contributes to the literature on the innovation effect of social trust by analyzing the mechanisms linking social trust and R&D Investments. High social trust level can ease firms’ credit constraints by reducing moral hazards and information asymmetries problems which make raising external capital difficult and expensive for firms. It can also reduce relational risks that expose firms to ex-post holdup or outright intellectual property expropriation. Using data from 20 OECD countries, I test these mechanisms by evaluating whether more external finance dependent and relational risks vulnerable sectors exhibit disproportional higher R&D investments in countries with high social trust level. The empirical results confirm that high social trust level encourages investments in R&D. Importantly, the results indicate that sectors which depend more on external finance and those sectors that are more vulnerable to relational risks experience a relatively greater increase in R&D investments in countries with high social trust. The results underline access to external credit and reduction in relational risks as causal pathways linking social trust and R&D investment. |
| Keywords: | Social Trust, Innovation; R&D Investments; Relational Risks; Credit Constraints |
| JEL: | A13 O17 O31 O43 |
| Date: | 2019–11 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:97043&r=all |
| By: | Jakub Growiec (Department of Quantitative Economics, Warsaw School of Economics, Poland; Rimini Centre for Economic Analysis) |
| Abstract: | The article proposes a new conceptual framework for capturing production, R&D, and economic growth in aggregative economic 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 and pre-programmed software, including 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 of production. It delivers sharp, empirically testable and 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: | 2019–12 |
| URL: | http://d.repec.org/n?u=RePEc:rim:rimwps:19-18&r=all |
| By: | David C. Maré; Arthur Grimes (Motu Economic and Public Policy Research); Richard Fabling (Independent researcher) |
| Abstract: | We examine whether ultra-fast broadband (UFB) has selective complementarities with certain types of labour. Using longitudinal data on New Zealand firms’ internet connection type (UFB versus other forms of broadband) we find that, following UFB adoption by a firm, the wages of certain skilled incumbent employees rise. This is particularly so for males with STEM qualifications, plus males with university level qualifications (and possibly Masters level female graduates) without STEM qualifications. Wages of male employees without qualifications and of female employees with both lower level and no qualifications tend to fall relative to those in firms that do not adopt UFB. These results are consistent with the existence of skill-biased technical change. More puzzling is why these skill-biased changes have differential effects for incumbent male versus female workers. |
| Keywords: | Broadband, ultra-fast, wages, skill-biased technical change, gender wage gap |
| JEL: | D22 H54 J24 O33 |
| Date: | 2019–12 |
| URL: | http://d.repec.org/n?u=RePEc:mtu:wpaper:19_23&r=all |
| By: | Link, Albert (University of North Carolina at Greensboro, Department of Economics); Scott, John (Dartmouth College) |
| Abstract: | This paper presents and explains an approach for measuring technological change in the production of new scientific knowledge. The paper expands our previous work on this topic. Our approach is illustrated by using as an example new scientific journal publications from the U.S. National Institute of Standards and Technology. The empirical findings are consistent with the expectation that resource constraints will cause a breakdown in the process of creating new scientific knowledge and with the evidence that scientific research has been less productive in recent decades. |
| Keywords: | scientific publications; technological change; R&D; knowledge production function; |
| JEL: | O33 O38 |
| Date: | 2019–12–10 |
| URL: | http://d.repec.org/n?u=RePEc:ris:uncgec:2019_014&r=all |
| By: | Caroline Paunov (OECD); Dominique Guellec (OECD); Nevine El-Mallakh (Université Paris 1 Panthéon-Sorbonne); Sandra Planes-Satorra (OECD); Lukas Nüse (Bertelsmann Foundation) |
| Abstract: | This paper investigates how digital technologies have shaped the concentration of inventive activity in cities across 30 OECD countries. It finds that patenting is highly concentrated: from 2010 to 2014, 10% of cities accounted for 64% of patent applications to the European Patent Office, with the top five (Tokyo, Seoul, San Francisco, Higashiosaka and Paris) representing 21.8% of applications. The share of the top cities in total patenting increased modestly from 1995 to 2014. Digital technology patent applications are more concentrated in top cities than applications in other technology fields. In the United States, which has led digital technology deployment, the concentration of patent applications in top cities increased more than in Japan and Europe over the two decades. Econometric results confirm that digital technology relates positively to patenting activities in cities and that it benefits top cities, in particular, thereby strengthening the concentration of innovation in these cities. |
| Keywords: | cities, digital technologies, geography of innovation, innovation, local knowledge spillovers, OECD countries, patenting |
| JEL: | R12 O31 O34 |
| Date: | 2019–12–16 |
| URL: | http://d.repec.org/n?u=RePEc:oec:stiaac:85-en&r=all |
| By: | Inés Macho-Stadler; Noriaki Matsushima; Ryusuke Shinohara |
| Abstract: | We analyze firms' decisions to adopt a vertical integrated or decentralized structure taking into account the characteristics of both the final good competition and the R&D process. We consider two vertical chains, where R&D is conducted by upstream sectors. R&D investment determines the production costs of the downstream sector and has spillovers on the rivals' costs. In a general setup, we show that equilibrium organizational structure depends on whether the situation considered belongs to one of four possible cases and we study how final good market competition, spillover, and incentives in innovation interact to determine the optimal vertical structure. |
| Date: | 2019–11 |
| URL: | http://d.repec.org/n?u=RePEc:dpr:wpaper:1069&r=all |